CMG

Wealth through ingenuity

Linkedin

Virtual Strategic Investment Conference 2020: Notes from Interview of Ian Bremmer

  • Share This:
Print Friendly, PDF & Email

Virtual Strategic Investment Conference 2020

Interview of Ian Bremmer by Jared Dillian

Please note: A substantial portion of the notes below are a transcription of the interview.
Please forgive any typographic or grammatical errors.

On Friday, May 15, 2020, Mauldin Economics’ Jared Dillian interviewed Ian Bremmer at the Virtual SIC 2020.

Conference host Ed D’Agostino introduced Ian Bremmer: “Ian is one of the nation’s top political scientists. He’s taught at NYU and Columbia University and he’s the founder of Eurasia Group and GZERO Media. GZERO Media publishes a really great email letter called Signal. I read it regularly and John reads it as well. You might want to subscribe to it. It’s a free service. Earlier this week, Ian joined a small but growing chorus calling today’s environment a global depression, but that might be okay. I’ll let Ian explain.”

I begin by providing you with a quick summary, then the full piece. Let’s go…

SUMMARY

IAN BREMMER:  It is pretty obvious to me that this is by far the biggest crisis any of us have experienced in our lifetimes, both because of the scale of the pandemic, truly global, impacting every country in the world, and the scale of the resulting and linked economic crisis, the supply and the demand side affecting every corner of the world. And also happening against the backdrop of a geopolitical recession, what I call G-Zero world, an absence of global leadership.

  • You put those things together, it’s very clear to me this is gonna be a lot worse than the Great Recession in scope, in impact, and in time frame. Until we get a vaccine, we’re not coming back to the new normal. And, you know, when you think about what a depression is, it’s global. It’s greater in duration and larger in scale than a recession.
  • Well, you know, this hits all those boxes for me by a long margin from the great recession in 2008, especially given the political challenges coming on the back of it.
  • Let’s keep it clear that in 2008, 2009, the United States set up the G20 at the head of state level and we responded. Together, domestically, the country was much less divided with our allies and even with the Chinese, trying to ensure that consumer sentiment was solid, trying to ensure that we avoided a Great Depression.
  • If we think about the global economy with three different major players out there, the US, China, and Europe, how does this crisis affect the way we think about those three?
  • Well, I would argue that all three of them over the course of the past decades have shown increasingly that they have a really big superpower. For China, the really big superpower is they can top-down with the state, make huge strategic long-term investments, long-term bets, efficient, inefficient, but they can make them in a way that no other single player in the world can. And coming out of this crisis, not only will that be stronger for China because they are, of course, the economy that is backup and functioning much faster than we are in the US and Europe.
  • When you’re looking at locking up commodities long term, especially in an environment where a lot of companies can’t invest in fossil fuels and coal anymore, a lot of the institutional investors, who’s going to be in a position to make the biggest bets on that long term at really cheap? China. That’s a huge advantage.
  • Now, the disadvantage, the caveat that comes with that is that coming out of this crisis, China is going to have an enormous amount of the most geopolitically vulnerable and geo-economically vulnerable portfolios in the world. They’re going to be dominant in all of the really weak and poor performing economies. I mean, 80% of sub-Saharan Africa’s external debt is held by China. That number’s going up. They’re going to be the dominant technology player, the dominant digital economy player in sub-Saharan Africa, in Southeast Asia, in much of Latin America, in South and Eastern Europe, the poorest parts of Europe. That’s going to grow. Their dependence on Beijing is going to grow. That globalization doesn’t go away. It’s all hub and spoke. And China will be able to use that politically. And yet China will have a harder time and it will be more decoupled from the United States—we’ll get into that—more decoupled from the wealthier countries in Europe, from Japan, from Canada, probably from Mexico as well, on the back of the United States, moving towards more of a cold war footing with the Chinese and bringing our allies along with us, especially around technology.
  • So China’s advantage comes with a caveat. That caveat being that the amount of control they have, which is growing significantly, is going to be over the most politically vulnerable, most politically unstable, poorest parts of the world that will also perform badly the next time we have a major crisis. And not only that but through this crisis.
  • Then the United States, we’ve got a superpower and our superpower is that no matter what you think about how badly we’re governed, what you think about how broken Congress is, how incompetent Trump is, how much you can’t stand the mainstream media. All that stuff. No matter what you think about that, we don’t get in the way of our entrepreneurs. We have by far the best tech companies and individual entrepreneurs in the world. Now, you may not like them, right? I mean, Elon Musk does not seem like someone you’d want to hang out with and be friendly with on a regular… I’m not sure you want your kids to be watched by him. You know, Jeff Bezos, right? Even Bill Gates, right? I mean, we had Steve Jobs, when he was alive. We produce those people. When we don’t produce them, when they come from other countries like Elon, they want to come to the United States. I don’t see that changing. I really don’t see that changing.
  • That’s a superpower. And by the way, that superpower is a lot stronger coming out of this crisis because the tech companies are the big winners. Elizabeth Warren six months ago saying she wants to break up the tech companies. She ain’t saying that coming out of this crisis. Not when we are desperately relying on them to get us out of this, when they are the ones that are performing, and when we’re fighting against the Chinese over tech supremacy. So it’s unpatriotic to be going after ours, no, no, no.

JARED: What is your view for society if we don’t get a vaccine?

IAN: Well, I think that if no vaccine comes, then eventually we’re getting closer and closer to herd immunity, which we generally think is something like 55 to 70% of a population gets the disease and has antibodies. Those antibodies will not be as effective as a good functioning vaccine, but it will allow more and more people to go to work.

  • We don’t yet know what level of antibody you need to go back to work, whether you know, the fact—if you got the disease but you were asymptomatic, is that enough? That’s a big question about whether or not Sweden is getting close in Stockholm to herd immunity or not. Is it a matter of months or years? We don’t know that, but there’s still too much about the disease we don’t know. But if that were the pattern, then you’d definitely see societies moving towards immunity passports with a QR code that is, you know, randomly generated, almost impossible to hack, and that would allow increasingly large numbers of society incrementally to start functioning normally in the economy again.

Following are my detailed bullet point notes:

ED: Ian Bremmer, thank you. Welcome to the Strategic Investment Conference.

IAN: Happy to be with you. Wasn’t expecting to be doing this virtually, but of course, none of us did. I loved seeing you guys in person in the past. At least the weather today in New York is not so dissimilar to what we’ve had at the real life SIC in the past. Anyway, I hope there are a lot of folks joining in and I’m looking forward to a bunch of questions, but to start off, yeah, yeah, okay.

  • I’m a political scientist, not an economist. So to be clear, I’m not the person that you want to ask about what equity prices should be like and where interest rates are going. But it is pretty obvious to me that this is by far the biggest crisis any of us have experienced in our lifetimes, both because of the scale of the pandemic, truly global, impacting every country in the world, and the scale of the resulting and linked economic crisis, the supply and the demand side affecting every corner of the world. And also happening against the backdrop of a geopolitical recession, what I call G-Zero world, an absence of global leadership.
  • You put those things together, it’s very clear to me this is gonna be a lot worse than the Great Recession in scope, in impact, and in time frame. Until we get a vaccine, we’re not coming back to the new normal. And, you know, when you think about what a depression is, it’s global. It’s greater in duration and larger in scale than a recession. Well, you know, this hits all those boxes for me by a long margin from the great recession in 2008, especially given the political challenges coming on the back of it. Let’s keep it clear that in 2008, 2009, the United States set up the G20 at the head of state level and we responded. Together, domestically, the country was much less divided with our allies and even with the Chinese, trying to ensure that consumer sentiment was solid, trying to ensure that we avoided a Great Depression.
  • This time around, we’re blaming the Dems, the Dems are blaming the Republicans. We’ve got the United States vastly divided. I mean, the top that Trump has done is 46% approval in this environment. After 9/11, Bush was at 92. So that was double. The Europeans, of course, are much more divided, both coming into this, but also on the back of it. And the Americans and the Europeans are not coordinated in response, whether it’s on the World Health Organization or it’s trying to come up with a vaccine.
  • The Americans and the Chinese, of course, decoupling to a much greater degree and also blaming each other and it’s possible we will come out of this crisis in a cold war, a new cold war, and I’ll talk about that, too.
  • So, I mean, if this is obviously so much worse in those ways from a great recession then you don’t need to be an economist to say that means this is a depression.
  • And I think a lot of people don’t want to call it a depression precisely because they think back on what the depression was and they say, well, we’re not feeling that. But in part, that’s because one hundred years ago, we had a lot less wealth.
  • So, I mean, if you take 10% out of the pie today for everyone, even in middle-income economies, the new middle class there is today wealthier at an absolute level than the middle class in the US with advanced industrial economies back when we were at the time of the Great Depression. So our resilience, our ability to respond to that kind of shock and contraction for years is greater than it was. And that is a silver lining.
  • There’s another silver lining, and it’s a really important one in my view, and that is that maybe this is the crisis we need. 2008, 2009 was not. 9/11 was not. Both of those in the context of a US-led global order, we knew at the time that global inequality was growing and growing. We knew that the US and China were coming to greater loggerheads. We knew that Europe in some ways was badly governed and kind of unsustainable in terms of lack of fiscal union despite monetary union, and how do you possibly make the South grow? We knew all of those things, but we thought we could continue to kick them down the road. We didn’t address them and think about it.
  • I mean, eight years of Obama, three years of Trump, inequality in the US still growing, anti-establishment sentiment, populism still growing, still growing in Europe, still growing even in some of the middle-income democracies around the world because the crises that we had weren’t large enough to make us respond to them. This time around, the crisis is a lot bigger and the potential that we have to actually respond to some of the broader structural issues in terms of what it means for inequality, what it means when you have long-term double-digit unemployment in a country like the United States, and how you possibly try to make those people whole, when labor and capital become much more disentangled outside of the knowledge economy.
  • I think that that actually is more promising and it’s particularly more promising because the one group of winners that you can talk about in this environment are the knowledge economy people, are the digital players, the tech players. We couldn’t have this conference if it wasn’t for that. We don’t get to keep the economy growing if it wasn’t for the virtual digital economy. We don’t get to come out of the other side of this crisis if we don’t have the real-time surveillance, the geo tracking and tracing that will be provided by the big tech companies.
  • Now, imagine, if you will, that the crisis that we’re presently experiencing, same size economically, so if it’s 10% off the top, right, take 10% off the top, that’s what it is. But instead of a pandemic, let’s imagine it was a cyberattack, one of the things we’ve been worried about, let’s say, from the Russians, and instead of hitting the economy the way it did, it’s the same size, but it hits the virtual economy. It hits the banks. It makes us no longer trust those transactions, no longer trust our ability to have virtual identities, to be secure in the virtual world.
  • Now, in that environment, the stock market returns would be very different. The companies that would do the best would be the brick and mortar, the real economy, while the virtual companies would be sucking wind right now. I’d be vastly more pessimistic about our ability to emerge well from that kind of crisis, even though the scale of it economically were the same, because that would mean that the companies with the money and the returns would be those that were most oriented towards the 20th century and not towards the kind of innovation we need to deal with the transformations and the global challenges coming down the pike.
  • And now, the companies that are doing the best, that will have the most money to buy and invest and innovate are those that are already most oriented towards the 21st century, towards artificial intelligence, towards dealing with a new greener economy and climate change and the costs that come from that.
  • So even though our institutions are structurally pretty broken and eroded, nonetheless, the orientation and the weighting of capital coming out of this crisis really is much more aligned towards fixing these challenges, addressing them effectively than we have historically.
  • And for a minute let me make another sort of big macro point. If we think about the global economy with three different major players out there, the US, China, and Europe, how does this crisis affect the way we think about those three?
  • Well, I would argue that all three of them over the course of the past decades have shown increasingly that they have a really big superpower. For China, the really big superpower is they can top-down with the state, make huge strategic long-term investments, long-term bets, efficient, inefficient, but they can make them in a way that no other single player in the world can. And coming out of this crisis, not only will that be stronger for China because they are, of course, the economy that is back up and functioning much faster than we are in the US and Europe.
  • They’re going to have a flat year while in the US and Europe we can track so they’re catching up faster, but also because so many of the assets are going to be so distressed around the world. And so that means that, you know, when you’re looking at locking up commodities long term, especially in an environment where a lot of companies can’t invest in fossil fuels and coal anymore, a lot of the institutional investors, who’s going to be in a position to make the biggest bets on that long term at really cheap? China. That’s a huge advantage.
  • Now, the disadvantage, the caveat that comes with that is that coming out of this crisis, China is going to have an enormous amount of the most geopolitically vulnerable and geo-economically vulnerable portfolios in the world. They’re going to be dominant in all of the really weak and poor performing economies. I mean, 80% of sub-Saharan Africa’s external debt is held by China. That number’s going up. They’re going to be the dominant technology player, the dominant digital economy player in sub-Saharan Africa, in Southeast Asia, in much of Latin America, in South and Eastern Europe, the poorest parts of Europe. That’s going to grow. Their dependence on Beijing is going to grow. That globalization doesn’t go away. It’s all hub and spoke. And China will be able to use that politically. And yet China will have a harder time and it will be more decoupled from the United States—we’ll get into that—more decoupled from the wealthier countries in Europe, from Japan, from Canada, probably from Mexico as well, on the back of the United States, moving towards more of a cold war footing with the Chinese and bringing our allies along with us, especially around technology.
  • So China’s advantage comes with a caveat. That caveat being that the amount of control they have, which is growing significantly, is going to be over the most politically vulnerable, most politically unstable, poorest parts of the world that will also perform badly the next time we have a major crisis. And not only that but through this crisis.
  • Then the United States, we’ve got a superpower and our superpower is that no matter what you think about how badly we’re governed, what you think about how broken Congress is, how incompetent Trump is, how much you can’t stand the mainstream media. All that stuff. No matter what you think about that, we don’t get in the way of our entrepreneurs. We have by far the best tech companies and individual entrepreneurs in the world. Now, you may not like them, right? I mean, Elon Musk does not seem like someone you’d want to hang out with and be friendly with on a regular… I’m not sure you want your kids to be watched by him. You know, Jeff Bezos, right? Even Bill Gates, right? I mean, we had Steve Jobs, when he was alive. We produce those people. When we don’t produce them, when they come from other countries like Elon, they want to come to the United States. I don’t see that changing. I really don’t see that changing. That’s a superpower. And by the way, that superpower is a lot stronger coming out of this crisis because the tech companies are the big winners. Elizabeth Warren six months ago saying she wants to break up the tech companies. She ain’t saying that coming out of this crisis. Not when we are desperately relying on them to get us out of this, when they are the ones that are performing, and when we’re fighting against the Chinese over tech supremacy. So it’s unpatriotic to be going after ours, no, no, no.
  • And the Europeans saying we need our privacy. Well, I mean, you may need your privacy, but you saw Germany just flipped and said, okay, we’ll use the Google Apple app. France didn’t like it. They’re all going to have to because they can’t build an alternative. So they’re going to be so much more reliant on American data, American surveillance, American platforms. That’s a superpower. There’s a caveat. The caveat is that lots of Americans are getting so much more displaced because the disruption of technology and technology firms is happening so much faster than it was before.
  • I mean, if you’re in the knowledge economy, God bless. If you’re not in the knowledge economy and this is getting disrupted, five, 10 years of speed and progress in 18 months, your jobs are going away. And those jobs are, I’m not just talking about jobs that are easily automated in manufacturing and then food processing, though that’s clearly happening. But I’m also talking about knowledge economy workers on the low rungs, where big data and deep learning, when well applied, can actually get a lot of those people out of the equation. I mean, companies that are going to be stretched thin and need to ensure that they can run are going to remove a lot of those people from the rolls. So that’s the problem in the US. You’ve got a larger number of folks that say the social contract does not work. It’s rigged against me and my family and my local community. So that’s the give and take.
  • Then you’ve got Europe, and in Europe, the superpower, they don’t have the entrepreneurs. And Lord knows they don’t have the ability to strategically invest. But they do have a superpower in regulation. They are the rule setters. The European Union is the largest common market in the world, and they’re the ones that have the strong bureaucrats that can actually say going forward, these are the rules that apply if you want to play in our market. And here’s the problem.
  • I actually think that they’re going to lose their superpower over the course of this crisis for a lot of reasons. I mean, I already mentioned the tech reason, which is that their ability to set the rules around technology will take a backseat to get out of this depression. That’s number one. Number two, the UK is out. And they’ve been a strong piece of that. That obviously weakens the EU. Number three, a lot of the weaker economies in Europe are going to align with the Chinese and they’re going to set aside the regulatory mandates that come out of Brussels to make sure that they can work with the Chinese while the wealthier countries in northern Europe are not and are more aligned with the Americans.
  • And then you have all sorts of other reasons why the existential question of European existence gets more challenged, like are we working together to bring back open borders? What are we doing as forced migration and refugees become a much bigger issue in the coming years? How are we defending the Med? Are we doing that together? How are we ensuring that countries in the south and east have sustainable growth, plausible sustainable growth going forward? Is there mutualization of debt or are we going to see much more turn inwards, turn towards nationals? And as they do that, the fact that it’s not just Hungary but other countries that are fundamentally subverting the rule of law and Europe and the Europeans have no ability to actually police that because one veto stops it from happening. That’s going to grow.
  • So this is an environment where I see the Chinese mopping up with weaker economies, the Americans aligning more but unilaterally, hub and spoke, not multilaterally with stronger economies. And the Europeans neither nor.
  • And so that really does change. First of all, if you think about what it means to the strength of the dollar coming out of this, despite the massive amount of spending, deficit spending the US is doing, I would say larger for longer because the asymmetric capacity of the Americans to leverage its strength, vis-a-vis other countries that are major creditors to the United States. I mean, the Japanese suddenly say in five or 10 years, I don’t know about all this debt I’m holding in America. It might not be sustainable. And the US says, okay, well, we might really not want to provide your security umbrella, which is only going to be more important in this environment. Japanese, rethink that.
  • The same thing with the American tech companies and Northern Europe, for example. Same thing as your supply chains get more disrupted, and there’s more nationalism and export controls on critical things like energy and food going forward. And the Americans actually are exporters, significant exporters of both, while our allies are not.
  • So all of that implies to me that we’re going to see not the end of globalization, but much more fragmentation. This becomes particularly important when you think about the United States versus China, because there’s no trust in that relationship and there wasn’t under Obama either. There was a lot of interdependence, a lot of interlinkage that is now unraveling, unraveling on the tech side, which was already happening before this crisis, the tech cold war, but also unraveling because just-in-time supply chains are dangerous and getting disrupted from the pandemic. So a lot of companies are saying we need to have our workforce much closer to home to where the consumers are. Because as you see, larger amounts of stimulus are required on the back of taxpayers, ours and our allies, but massive unemployment, some of the conditionality will be, you take that cash out of China, you move it back to the United States, the capital and the people. Strategic sectors aren’t just tech, aren’t just military-industrial, but it’s also pharma. It’s medical supplies and it’s labor.
  • So it’s a significant expansion of industrial policy, which has always existed in the United States, but was really only about really high-tech national defense stuff. And suddenly it becomes about a much bigger, much more structural piece of the US economy. True if Trump wins, true if Biden wins. It comes with different strings attached, comes with different reasons why you’re doing it, but still seems to be one of the most fundamental places where bipartisan Americans are actually coming together. And that will mean more unilateralism in policy approaches internationally, not isolationism, but unilateralism from the United States, kind of like what you’re presently seeing from China. That all implies more of a G-Zero world in the next three to five years, not less.
  • Now, a lot of people asked me, are we going to come out of this and see a new global order? And my answer to that largely is no, not a new global order, but rather it might feel new to a lot of people that were ignoring that the old global order has been falling apart for a long time.
  • In fact, what we’re really seeing is that a lot of underlying trends globally that have been incrementally coming into place over the course of the last years are now speeding up dramatically. We’re experiencing five to 10 years of those things in a matter of months, let’s say 18 months, like the growth of inequality, like the displacement of technology, like the decoupling of globalization, like the unsustainability of Europe, and like, critically, the confrontation between the United States and China.
  • And I do think that we are presently heading towards an overall cold war with the Chinese. I wouldn’t make a prediction yet, that that is where we’re going to be in the next six months. But I think there’s a pretty good chance, 25%, 33%. Something like that.
  • And it’s on the American and the Chinese side. The Americans definitely see that with Trump promising that, you know, if we get under a hundred thousand deaths, that’s a good story. That means I’ve succeeded. He really shouldn’t have been a cheerleader, right? We’re not getting under a hundred thousand deaths. We’re probably getting them in the Washington model that they were using, the CDC and Fauci and Trump promoted was the most conservative and cautious of them were saying 60 to 80 thousand deaths, are now saying 147,000 by August. So, I mean, you’re not going… and Trump, of course, will pivot and say, well, I really meant one million to 2.2 million a year. That’s what it would have been if we hadn’t done anything or if Obama were president, right?
  • But it’s hard to pull that off. And, of course, you also have Mnuchin and Kudlow and others that are saying that the economy is going to be great by the third quarter, it’s going to be picking up. Well, they’ve got to moderate that right now, and I mean, I honestly have a hard time seeing that this economy is going to look fantastic and rebounding in a V shape in the third quarter. There’s no CEO, major CEO I talk to that feels that optimistically, privately. Certainly no one I talked to that runs any of the international financial institutions feels that way, or multilateral organizations feels that way. So, I mean, yeah, Trump can blame Obama. He can blame blue state governors, you know. But fundamentally, he needs something bigger than that, and that’s China. Blaming China really helps, and especially because China is responsible.
  • Now, I mean, not that I believe that it came out of a lab in Wuhan, the intelligence provided by Pompeo and others internationally, even our allies like Australia, who are really looking for a reason to blame the Chinese and calling for investigations have said publicly there’s no there there to this intelligence. There’s no smoking gun. So we don’t know that, but we are pretty convinced that it came from China and we’re completely convinced, and this includes conversations I’ve had at the high levels with the WHO that the Chinese obscured the initial outbreak, human to human, obscured the cover-up. Right? I mean, there was a month where five million Chinese left Wuhan. Business as usual, 460,000 left Wuhan for international destinations during the month when the Chinese government knew there was human-to-human transfer and did nothing about it.
  • And so we, the United States, and other countries, are going to blame them in an election period. There are gonna be hearings. We’re going to go after them hard, the DOJ, the Intelligence Committee, and the Senate. And we’re gonna tie Biden to being soft on China and Hunter for being on Air Force Two with his dad, when he was vice president, going to China, coming back and picking up $150 million dollars in investment to a financial institution that Hunter was repping. Now, they’re much more vulnerable on that, frankly, than they were ever on anything around Burisma and Ukraine.
  • But my point here is not to say that there’s a smoking gun on either side. My point is that the politics are moving towards beating the hell out of China. And right now, Trump has not yet wanted to break the Phase One trade deal. He understands that more tariffs on Chinese goods are going to hurt voters for him, but he’s moving in that direction. He’s moving sharply in that direction. And with Maria Bartiromo yesterday, he said, well, I could just break this relationship and it would save us $500 billion. It doesn’t show a great understanding of how the economy actually works, but it doesn’t matter. It’s a good line, and he’s now talking about the plague from China again, which he stopped doing after he talked to Xi Jinping about a month ago. Now he says, I don’t want to talk to Xi Jinping anymore, I’m angry at him. You know, we did the deal, the trade deal, but then he covers up the virus. That’s 100 times worse than the trade deal, which I mean, to be fair, the hundred X number is probably close to true, but unrelated.
  • And there is a question. I think if Trump feels like he’s going to win the election and if the campaign is going pretty well, he doesn’t need to break the glass. But if you ask me over the coming three months, is Trump going to stay in the 40s or is his popularity going to sink to the 30s on the back of the death toll getting higher and the partisanship getting stronger and the economy getting worse, and Trump looking for folks to blame, I’m—if you make me make the call, and it’s close, but if you make me make a call, I think he’s breaking the deal.
  • I think the tariffs are coming back on. I think the Chinese are going to hit the Americans hard in response to that. And I don’t just mean in reciprocal tariffs. I mean making American companies unwelcome, going after Apple, for example, saying that a Chinese student should no longer study in the United States. I think we’re heading in that direction. Doesn’t mean a cold war, no holds barred across the board. But it does mean the relationship between the two countries is going to get a hell of a lot more dangerous.
  • So you’ve got the worst economic crisis of our lifetimes. You’ve got a backdrop of no geopolitical coordination, and you have the two largest economies in the world, not only not coordinating, but increasingly beating the hell out of each other.
  • Let’s also remember that Xi Jinping is also vulnerable. Now, he doesn’t have to worry about getting thrown out in an election, but he did get rid of term limits and he is facing a question of whether he’ll get a third term in 2022. And senior party leaders that I’ve talked to in the last few weeks tell me that they’re not convinced at all that Xi Jinping gets a third term. I mean, they came out a week ago and the head of the Chinese version of the CDC apologized for all the mistakes that he made and his institution made in mishandling coronavirus to begin with, and, you know, the initial whistleblower, the doctor in China who made everyone aware in Wuhan, made the recommendation that this needs to be taken care of and was reprimanded by the Chinese government, they’ve made him into a hero, the Chinese government.
  • So, I mean, this is by far the biggest crisis for Xi Jinping and he’s taking some accountability for it and if it turns out that they end up in a real fight, an economic fight with the Americans, that is something the senior leadership in China does not want. And Xi Jinping is becoming more risk accepting, that he needs to win this fight, so his willingness to show the Americans that this is going to cause some real damage and they need to back down, also true.
  • So you’ve got more risk accepted behavior from both the Americans and the Chinese. Very different than, say, at the beginning of this year, oh, it feels like so long ago, when the Americans assassinated Soleimani in Iran and everyone was saying, oh, it’s World War III. And my perspective was, guys, guys, guys, no. This is a risk- averse Iranian government. They do not want war. They did not understand what the red lines were. They were pushing very cautiously. Suddenly, they got a couple of Americans in this base in Iraq. Trump shows them what the red line is, kills their military leader. Now they’re backing off. I mean, they’re waving the white flag. They’re surrendering. And in fact, I mean, since then, the funny thing, no one’s asked me about Iran anymore except a little bit around the oil prices and the crisis, but, with, you know, the clash between the Saudis and the Russians and what the hell Iran is going to do. But the Iranians are even trying to make nice with the Saudis these days, there was some… some hostages, some prisoners that were exchanged. They’re moving towards a more lasting cease fire in Yemen, being brokered by Antonio Guterres in the UN. I mean, so it’s not like the Iranians are suddenly nice, nice with the Americans, but I mean, frankly, that was a big win for Trump.
  • This one, the pandemic and the fight with China, a lot more costly and a lot harder for both sides, for either side to back down on this, a lot more to play for. So I’m deeply worried about that.
  • A couple more points before we head to questions. I mentioned already that I think the United States and China in different ways are winners coming out of this. Who else is a winner? You know, here’s a funny one and you probably wouldn’t expect it from me—Sub- Saharan Africa, mostly a winner.
  • And it’s funny because, you know, most crises around the world always hit the poorest countries the worst. But in the case of sub-Saharan Africa, they’re going to have a hell of a lot of cases. They’ve got virtually no health care to speak of in most of these countries. They’re doing no testing. Most cases 100, sometimes 1,000 per capita testing we’re doing in the United States right now. But they also, the average age in many of these economies is under 20, which means everyone gets it, they don’t die. In fact, most of them don’t even get sick, don’t even show symptoms.
  • So this goes through their economies. They’re also… I mean, globalization is really getting disrupted, but most of these countries aren’t that connected to the global supply chain. A lot of agriculture, a lot of local economies, a lot of informal economies. So they don’t shut down and they’re not impacted as much. And governance doesn’t seem to be as broken.
  • Brazil’s in a lot of trouble. Mexico’s in a lot of trouble. Turkey’s in a lot of trouble. You have a lot of financial crises coming through these places, too. But when I look at most of sub-Saharan, I mean, definitely the fact that commodity prices are depressed is going to hurt them a lot, but I mean, some of the poorest countries out there, you know, Ethiopia, over 100 million people, not much impact, frankly, you know, and I think there’s going to be a lot of countries like that in sub-Saharan South. So, you know, there’s a winner.
  • And then also the other groups of comparative winners. And again, when I say winners, keep in mind, you know, everyone’s… no one’s better off for having had this crisis than if it didn’t happen, right? You’re not going to say that. But I’m just saying in the context of it’s happening globally, what are the places that actually come out of this comparatively stronger than they came in at the beginning? Then you look at some of the other places that look comparatively well governed, that have actually handled this early and strong. And you know some of those stories well, South Korea and President Moon, as a consequence, is vastly better in his parliamentary elections, now has a supermajority and, you know, is actually hitting above his weight and being able to not only drive more reforms domestically, but also having more leadership around the world. That’s pretty interesting. Merkel, of course, 80% approval right now. A lot of people saying maybe she’ll stay for another term. People that are very close to Merkel say absolutely not. But the fact that they’re talking about it gives her more ability to help ensure that the next leader of Germany is the person she picks. And you remember, with Annegret Kramp-Karrenbauer just a few months ago, it looked like Merkel was on her last legs and couldn’t even get a successor in place, very different now.
  • You’ve got some smaller countries doing a good job, some of those in Southeast East Asia that really got this right because of SARS and MERS, and so they were ready for the next pandemic. Vietnam, poor country, but they really got the contact tracing right. Lots of human beings that were ready to follow this up and quarantine early because they know how to deal with a pandemic. They treated it seriously. They’re in much better shape as a consequence.
  • And then you’ve got, you know, Singapore, you’ve got Iceland, you’ve got Taiwan, Hong Kong, a few countries like that, not Sweden. Swedish model, not a great model. We could talk about that if you want. So, you know, those are who your winners are out there.
  • Final point that I want to raise, and this again goes back to, are we going to use any of this? Can we actually address the big structural crises that are coming down the pike?
  • Could this be a Goldilocks crisis? Not too hot, not too cold, not for the next three years, but for 10, for 20. Because, you know, the fact is the reason that our institutions don’t work today is not because our leaders are so bad. Actually, our leaders are bad because the institutions increasingly didn’t work.
  • And that is not a pessimistic view, it’s a cyclical view. This happens all the time. A lot of you are economists. Most of you were in the markets, market participants, you know the cyclicality of markets. You know what economic recessions look like. I’m here to tell you that geopolitics has the same thing. There are structural geopolitical recessions, boom and bust cycles, and the reason they happen is very simple. It’s because when you set up an institution, it’s aligned with the geopolitical order of the time. World War II happens. It’s over. The Americans are in charge. We set up institutions that are aligned with what we want, the winners of World War II. So the Security Council and the UN have permanent members of the winners of World War II.
  • Then in 1947, two years later, after we set it up, right? What happens? There’s a Berlin blockade. We’re fighting with the Soviets. It’s the beginning of a new Cold War. Our leaders are going to be looking and saying, why the hell did we give the Soviets a permanent veto? And the answer was, well, because they won the war.
  • But the geopolitics change. The institutions don’t. Because when you set up an institution, you want it to last, so you don’t let it change because they’re your rules. You don’t want anyone else to come in and change your rules and think about what that means today.
  • The Germans and the Japanese are the two large economies in the world most capable of upholding rule of law, most interested in multilateral institutions in their strength and viability and resilience. And they want to be permanent members of the Security Council, but they can’t get in. You know why? Because they lost World War II. Well, that’s a stupid reason, but it’s also the right reason. It is the honest reason, I should say.
  • I mean, NATO. NATO used to be an organization that made a lot of sense because we were fighting the Russians and were fighting them militarily. The nuclear balance, mutually assured destruction, you know, and armies that were facing each other down across the East and West blocs. Now, today, we, the United States, consider China to be our most important adversary by far. No one else is close. That’s not going to change, Biden or Trump.
  • But they’re not primarily a military threat. They’re only a regional military power. They’re primarily an economic and a technological threat. So here we’ve got the most important security alliance in the world, NATO. It’s focused on military, conventional, and nuclear weapons, and it’s oriented at the East Bloc, which doesn’t exist anymore, and many NATO members actually want to be actively closer with the Russians. They don’t agree, many of them, with the United States on China and their ability to deal with cyber, certainly not economic and tech, in NATO is zero. So, I mean, I’m not saying NATO’s going to go away. I’m just saying it’s functionally becoming irrelevant.
  • And so we have all of these institutions that have been around for a long time that no longer reflect the geopolitical balance of the world today, not even close. So the only way you fix that is if you have a crisis that is big enough to actually address it, a crisis that’s so big that you recognize if you don’t create new institutions or really reform the ones you have, that big things are going to break.
  • And that’s not only true globally, it’s also true domestically. When you talk about the social contract, you talk about what capitalism is and how you regulate it. You talk about what you do for an economy where you can’t actually create full employment because a lot of what technology can accomplish for you subsumes what lots of reasonably well-educated human beings are capable of doing, when all of those things don’t imply that we’re bad. They don’t imply that humanity doesn’t work anymore and that our governance is no good. It just implies that the existing institutions have outlived their utility and need to be reformed, scrapped, or created anew.
  • And the only way that happens is with a big crisis. Good news. We’ve got a big crisis, but it’s not so big that it destroys us. This isn’t going to kill everybody. In fact, it’s going to, it’s comparatively low in terms of lethality. And the people that actually die are mostly people that aren’t in the workforce. So, I mean, it’s horrible to go through. It’s going to be painful emotionally. It’s gonna take a long time and a lot of people are going to suffer, but it is the scale of crisis that makes you think that Goldilocks could be, you know, just the silver lining we were looking for. Maybe this is the crisis we really needed.
  • So anyway, that’s a few musings from me. Macro. A lot of stuff to think about, talk about. My best to my friend, John Mauldin. I’m glad that he’s pulling this together. And I hope all of you are enjoying it. And I’m looking forward to a good discussion right now. So wherever you guys want to go, I am all yours.

JARED: Hey, Ian, Jared Dillian here. We got some questions from the audience if you’re ready. There was a continued reference to getting a vaccine to get a recovery. That is a long-shot bet. What is your view for society if we don’t get a vaccine?

IAN: Well, I think that if no vaccine comes, then eventually we’re getting closer and closer to herd immunity, which we generally think is something like 55 to 70% of a population gets the disease and has antibodies. Those antibodies will not be as effective as a good functioning vaccine, but it will allow more and more people to go to work.

  • We don’t yet know what level of antibody you need to go back to work, whether you know, the fact—if you got the disease but you were asymptomatic, is that enough? That’s a big question about whether or not Sweden is getting close in Stockholm to herd immunity or not. Is it a matter of months or years? We don’t know that, but there’s still too much about the disease we don’t know. But if that were the pattern, thenyou’d definitely see societies moving towards immunity passports with a QR code that is, you know, randomly generated, almost impossible to hack, and that would allow increasingly large numbers of society incrementally to start functioning normally in the economy again.
  • Now, having said all of that, I am someone who does believe that a vaccine is coming. I mean, the epidemiologists I’ve talked to and I’ve talked to some of the world’s best in the last few weeks, all agree that they are very optimistic that of the 110 vaccines that are presently being trialed, that some of them at some point next year will work. Now, work does not mean 90, 95% effective. It might be only 60% effective. That’s some of the lower numbers I’ve heard. And that’s not going to make us feel like the first vaccine is, you know, the silver bullet that everyone’s looking for. And then, of course, you need to produce it at scale and you need to get it around the world. And I mean, the first six months, 12 months when we have a vaccine that kind of works, but not everyone has it, I mean, if you think we’ve got geopolitical competition right now, you wait until the first months of the vaccine, especially if we’re in a cold war with the Chinese at that point. That’s ugly.
  • That’s dangerous, because that’s going to create a very different sense of winners and losers around the world.
  • But I think those are the things that we’re heading towards. And all of that does imply that the next couple of years are going to have very dangerous levels of inequality because certain people will be able to get back into full functionality in the economy and others will not. And then there’ll be the question of people that want to… that are really desperate, that want to infect themselves so they have exposure, that don’t yet, so that they can get immunity, and what a horrible thing to think about. But in the developed world, if you don’t believe that the government is going to be able to go through two years, three years of fully functional continued relief at that scale, then clearly behaviors like that are going to occur.
  • I have also asked… I’ve asked my friends involved in this on the tech side, do you think immunity passports will be counterfeit-able and how much will it cost me to get one? And generally, they say no, they think that it will not be something that happens. And it’ll be, it’s one of the reasons why… in fact, it’s solving a problem that we… a big problem that we have right now, which is if you use a credit card, you know the limit on your credit card, to go someplace and do a transaction that’s fairly low because the theft, it’s so easy to steal. And once you have this with an immunity passport, it’s also going to change how Americans do a lot of banking. It moves us into the digital economy a lot faster.
  • Keep in mind right now, the Chinese digital economy is 50X that of the US. And that’s because no one uses credit cards in China. Everything, all those transactions through your phone, through a couple of very integrated apps. The Americans are hugely behind on this. It’s a problem for us. This virus will get us up to speed with the Chinese real fast on that one. That’s the upside. The downside is the danger of a surveillance state and the danger of a bunch of very powerful technology monopolies that will be seen as patriotic by our government.

JARED: Cool. Next question. What is the possibility of getting universal basic income out of this?

IAN: Spain is talking about implementing it, though we’ll see when they realize how much it costs if the Europeans let them, and that could obviously lead to a big fight between the two. Nancy Pelosi, two weeks ago, came out publicly and said she thinks, at least in this environment, it’s something she has to consider.

  • I will tell you, I’m not a fan of universal basic income because I think that when you simply give a part of the population cash, frequently that makes you feel like you’re no longer obliged to do anything for them. And the danger is it creates a more permanent two-tier system, so I’d rather see something flexible. I’d rather see us move towards a gig economy, understanding that a lot more people are going to be functionally underemployed, than unemployed. We should be okay with that. That’s the nature of the new economy, and we should make a much stronger safety net where benefits stick with people, no matter what level of employment they have, where there’s much more robust maternity care and paternity care, where there’s universal education and training and retraining. I mean, I’d like to see a lot of investment in those sorts of things, though I fully recognize that to get us through the next three years of crisis, something that feels UBI- like is probably required for a double-digit percentage of the populations of democracies around the world.

JARED: We didn’t talk much about Canada and Mexico. The question is, in an era of growing American isolation, where does this leave its regional partners, Canada and Mexico? Any chance of creating a North American fortress?

IAN: I mean, there already is one. You don’t need to create it. I mean, they don’t… it’s not like they’re going anywhere. When we tell the Canadians, we want you to grab the daughter of the founder of Huawei and put her under house arrest for a year while we go through this case, even though the Canadians understand that it’s one of the worst things they can possibly do for one of their most important trade partners, they do it. And when we tell the Mexicans, if you guys don’t tighten up your southern border and stop illegals from coming through, we are going to tariff you so bad your head spins, they do it. And 30 days later, you got 50 percent fewer people coming through that border even though they had nowhere near the money in security to get it done.

  • So, you know, these two economies, let’s face it, Trudeau was not exactly ideologically aligned with Trump and Lopez Obrador before he became president. The only countries he had traveled to were Cuba and Venezuela. So no one would’ve thought this guy was going to be a Trumpista, and yet the relationship between Lopez Obrador and Trump has been extremely constructive because it’s completely asymmetric. The Americans call all the shots, all of the remittances, the integration of their trade, the tourism, everything comes from the United States. They have no choice.
  • So, I mean, it’s not like you’re President Moon and you’re thinking, wow, the Americans are demanding that I double, triple the amount of money I spend on these troops. Eh, China is my most important trade partner, maybe I change my view. President Duterte in the Philippines who actually rips up his defense agreement with the Americans a few months ago. It’s not like that. You’re Mexico, you’re Canada—the fortress already exists. If you made it, you’d just be… if you announced it, you’d just be embarrassing them, you know? I mean, if you’re the 80-year-old billionaire with a 25-year-old super-hot supermodel that really is embarrassed to be with you, you don’t need to call it out. The relationship is already there, right? I mean, don’t make it worse just because they’re already stuck. I think that’s where we should be.

JARED: [Laughter] There’s a question here about third parties. This is of interest to me. Justin Amash is running as a libertarian. It actually looks like he might not get the nomination within the Libertarian Party, which would be amazing. The question is, do you think we will ever get a true centrist third party in the United States?

IAN: I mean, not in the foreseeable future. I don’t think… if Amash does get it, he’s in it for a few months. I don’t think he’ll actually be on the final ballot because when it becomes obvious to him that he’s not going anywhere, he’s not going to want to tilt the election to Trump, and that’s what he would do. I mean, you know, you certainly look at where his support base comes from, which in some cases you see even 4 or 5%. In some polls, it’s overwhelmingly helping Trump.

  • So, you know, I think Amash is all about… I mean, this is going to be very effective for him. He’ll probably build out a few hundred thousand, maybe even a million more followers. He can get a book deal. He can get some virtual speaking gigs. I mean, you know, this is where he wants to go. He has seen that that is a way a lot of people… why did you have, you know, 20 people running for the Democratic nomination, most of whom, I mean, were completely useless? Marianne Williamson, like, what the hell was she doing? She was building a career. Why do I even know who she is now? I was stuck with it. There was no choice.
  • So I think that’s what, I think Amash is very sensible, and unfortunately, we have a political system that really incentivizes behavior like that. So, of course you’re going to see it.

JARED: Any thoughts on how the US and China can be as economically dependent on one another as they are while politically and militarily at odds?

IAN: Well, they’re going to be… they’re not that militarily at odds. Again, the Chinese are not building bases all over the world. They are not interfering with the United States in the Middle East militarily the way the Russians are, or in Eastern Europe. We are at economic and technological odds with them. They’re building a 17+1 that is part of… it’s kind of like Belt and Road but in eastern, southern Europe. It’s orienting those countries towards China. They are using technology and digital currency and data to orient countries towards them. I mean, yes, there are military issues, obviously, in Taiwan, in the South China Sea, and the East China Sea in particular. But it’s largely not a military issue for the United States. I would take a bit of issue with that.

  • But on the economic side. Yeah, I mean, I fear the biggest problem is that we are going to be considerably less interdependent on the Chinese in the next three years. And that is going to make it more likely that we end up in confrontation with them because there’ll be less stopping it. And from an investment perspective, I see a world that will be less coupled economically, which also means that asset prices will diverge more. Not everything will go up and down at the same time in regard to different crises that you have, and I think that’ll be interesting.

[SB here: I’d be curious as to Ian’s view with this news just out July 9, 2020 – China Inks Military Deal with Iran Under Secretive 25-Year Plan. Link https://oilprice.com/Energy/Energy-General/China-Inks-Military-Deal-With-Iran-Under-Secretive-25-Year-Plan.html). I’ll see if I can get an update from Ian.]

JARED: Another question on China. I’ve been reading a bunch of stuff about this, too. There are some analysts out there predicting the end of the Chinese Communist Party at some point. What’s your belief on the lifetime of the CCP?

IAN: Yeah, there have been analysts talking about the coming collapse of China for a very long time. They’ve been wrong for a very long time.

  • I do not have a view on 10, 20 years out, but I will tell you that my strong view is, however robust you think China is, the fact that they have come out of this pandemic first and strongest economically because their surveillance state, with the ability to implement and enforce policy on the ground, means that their supply chain can get back up and run, that gives them more time.
  • Their ability to have a technologically empowered surveillance state that can incent certain types of patriotic behavior and punish others, that gives them more time. And, of course, the fact that right now travel has stopped, so it’s hard for Chinese to get capital out, which in the teeth of this crisis is also useful for their economy. So, you know, you put those things together.
  • If you thought that China might have five years, it’s probably 10. If you thought they had 10 it’s probably 20, if you thought they had 20, it’s functionally a long, long time, but the tech side definitely helps them. It gives them a bigger piece of resilience that five, 10 years ago they did not have.
  • So, I think there are a lot of people that hope the Chinese Communist Party falls apart. There are a number of people that make that argument because it’s useful to their supporters ideologically. But I don’t think it comports with analytic reality.

JARED: We haven’t talked about India yet. How does India fit into all this?

IAN: You know, the Indians have security problems with China. The Chinese are dominant in the Pakistani economy. The Americans are no longer aligned with Pakistan the way we were.

  • Modi is a Hindu nationalist who is playing that and did play that heavily to win his recent elections last year and win them effectively, even though he was doing not so well three, six months before.
  • So I think that India and China are likely to be more at each other’s throats over the coming years. And India and Pakistan as well. But the Indian government absolutely sees that the Chinese model has been effective, and I see them moving towards an immunity passport scheme that will require people coming into India to give up all of their information, and ditto with the Indian population. I mean, privacy is going away in India, and that’s a good trade for a lot of poor Indians that think this is a way that we could actually ensure that we get benefits from the state that before were stolen by levels and levels of bureaucratic kleptocracy.
  • You know, in the near term, Indians aren’t testing at all and they have had a much steeper case incline over the past couple weeks than they were showing before. But again, in the context of a lot of people with pre- existing conditions that won’t be characterized as coronavirus, a lot of people that die that we won’t know about as having coronavirus, I think they’re going to work. They’ve got this, you know, red, yellow, green or red, orange, green system to get regions back up and running. They’ll come up running faster than others.
  • Also, the Indian stimulus that’s been announced, the topline number, 10% of GDP, most of that’s money they were already spending. They’re just repackaging it. If they’re lucky, they’ll get to two or three. It’s robust for India, but it’s not enough. The economic hit for them this year of those we’ve talked about, certainly not one of the better ones.

JARED: Who does China want to be President, Biden or Trump?

IAN: They know that under either it’s going to be problematic for them. You know, Biden will focus more on the Uighurs, human rights, Hong Kong. Trump will focus more on national security, Taiwan, South China Sea. Trump is much harder to predict. But both leaders, they think, are going to be structurally more challenging towards China.

  • Six months ago, I would say they didn’t have a preference. The last couple months I’ve been starting to hear that they actually prefer Trump. And the reason they prefer Trump is because at least if Trump wins, Trump’s relations with other American allies is suitably damaged and his unilateralism is suitably great that it allows and affords the Chinese more flexibility in other parts of the world geopolitically. It makes it easier for them to not get beaten up by a bunch of other countries, where they fear that with Biden, he would actually do a better job of recreating American multilateralism. You know, he would re-engage, obviously, in things like the Paris Climate Accord, but more broadly than that, he’d have much more functional bilateral relations with a bunch of allies that right now the Chinese think they have a better shot of running with, so I have a hard time imagining that the Chinese would actually interfere with our elections in the way the Russians have and will again. The Russians are more interested in just delegitimizing US institutions than they are in trying to insure an outcome. But I don’t think the Chinese are likely to do that.

JARED: One, maybe two more questions. You know, Bernie Sanders has a lot of passionate supporters. We saw that in the primary and it kind of seems like the political center of gravity just keeps moving pretty far left in the US. I mean, what do you think about socialism in the US?

IAN: Well, most Americans have no idea what socialism is because, I mean, when you say Denmark and to some Americans, even Canada, they think that’s socialist, and it’s not. It’s just that the United States has one of the least regulated free market economies in the world, certainly at scale, and there have been advantages to that. There are also a lot of disadvantages to that. I think the problem is not that Americans are becoming socialist. It’s that a lot of Americans understandably no longer believe that their own country is a representative democracy in the sense that it doesn’t represent them, and that is not unique to the United States.

  • I mean, that’s why we got Brexit. By the way, it’s also not only why we got… your question was asked about Bernie Sanders, but it’s also why we got Trump, because a lot of people felt like the establishment is full of it, and the establishment lies to people, so they should vote for someone who’s gonna break things. And one of the reasons why Trump could easily win again in November is because they so can’t stand the establishment and Biden represents the establishment and the mainstream media keeps going after Trump every day. And these people think the mainstream media are just lying to us because they’ve never… because they’ve been complicit for decades in a system that has allowed us to suffer. American dream, where is this American dream that you speak of while you allow immigrants to come in, but don’t take care of me, while you do free trade deals, but don’t care if I have a job anymore, while you don’t invest in my infrastructure. Why, why should I support that?
  • So, I mean, with Trump maybe he’s not really draining the swamp, but at least he’s antagonizing the establishment and driving the media crazy, and that kind of makes me happy. And that’s kind of the way a lot of Brits felt about Brexit.
  • So, I think that structure… and that was happening even when the economy was doing comparatively well. So now we have a situation where the economy is going to do much worse, and the people that will suffer the most overwhelmingly will be the people that can’t be a part of the knowledge economy and can’t work from home easily, and they’re the essential workers, but who we treat as anything but essential.
  • This is going to grow. And I don’t think that’s just Bernie Sanders. I think it’s both sides of the spectrum. Doesn’t mean to me that Biden wins. Again, I think it’s close to a coin flip right now whether Biden wins or Trump wins, close to a coin flip. I mean, the horrible economy is good for Biden. A low turnout and social distancing is good for Trump. Trump shoots himself in the foot all the time. It’s good for Biden.
  • Biden’s incoherent, and I don’t know how the hell he’s going to survive a couple of debate rounds. Good for Trump. I just don’t know. I really don’t know. But I will tell you that a lot of Americans I think are just going get more and more sick of the system given what they think the system is doing for them. And I think that’s a serious problem.

JARED: Just really quick, you mentioned Sweden in passing, and you were a little bit dismissive of their corporate response. Can you elaborate on that a little bit?

IAN: Well, one, their economy has not improved on the back of it. The expectation is the same as the other Nordics right now, a little bit worse. Two, they’ve only got 23% in Stockholm that have antibodies, outside of Stockholm, much less than that. Three is their ability to understand what kind of… what you need for antibodies, and their death rates have been vastly higher than other countries in the region, so they haven’t taken care of their old people in old age homes.

  • But the most important thing is not about Sweden. It’s the people that think you can apply the Swedish model to the United States. Have you looked at Americans recently? We are not Swedes. Swedes are tall, good looking, blond people. Okay? We are massively overweight. We have hypertension. We have type 2 diabetes. We have massive comorbidity problems.
  • Our health care system sucks. We don’t listen to government. We do whatever we want. The weather’s beautiful. We’re not wearing masks. We’re going outside. We don’t even know how to put on a mask. We can’t take one off. We’re going to infect ourselves just taking one off, right?
  • So the idea that we could be Sweden is, on its face, ludicrous. I mean, there are other countries out there that we could try to emulate. Sweden is not one of them.

ED: As always, a master class in geopolitics. Ian Bremmer, thank you so much for joining us. Really appreciate it.

IAN: Great to be with you guys. Take it easy everyone.

ED: You can see a lot more of Ian Bremmer at GZEROMedia.com.

IMPORTANT DISCLOSURE INFORMATION

Investing involves risk.  Past performance does not guarantee or indicate future results.  Different types of investments involve varying degrees of risk.  Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by CMG Capital Management Group, Inc. or any of its related entities (collectively “CMG”) will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  No portion of the content should be construed as an offer or solicitation for the purchase or sale of any security.  References to specific securities, investment programs or funds are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell such securities.

Certain portions of the content may contain a discussion of, and/or provide access to, opinions and/or recommendations of CMG (and those of other investment and non-investment professionals) as of a specific prior date.  Due to various factors, including changing market conditions, such discussion may no longer be reflective of current recommendations or opinions.  Derivatives and options strategies are not suitable for every investor, may involve a high degree of risk, and may be appropriate investments only for sophisticated investors who are capable of understanding and assuming the risks involved.  Moreover, you should not assume that any discussion or information contained herein serves as the receipt of, or as a substitute for, personalized investment advice from CMG or the professional advisors of your choosing.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisors of his/her choosing.  CMG is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice.

This presentation does not discuss, directly or indirectly, the amount of the profits or losses, realized or unrealized, by any CMG client from any specific funds or securities.  Please note: In the event that CMG references performance results for an actual CMG portfolio, the results are reported net of advisory fees and inclusive of dividends.  The performance referenced is that as determined and/or provided directly by the referenced funds and/or publishers, have not been independently verified, and do not reflect the performance of any specific CMG client.  CMG clients may have experienced materially different performance based upon various factors during the corresponding time periods.  See in links provided citing limitations of hypothetical back-tested information.  Past performance cannot predict or guarantee future performance.  Not a recommendation to buy or sell.  Please talk to your advisor.

Information herein has been obtained from sources believed to be reliable, but we do not warrant its accuracy. This document is a general communication and is provided for informational and/or educational purposes only. None of the content should be viewed as a suggestion that you take or refrain from taking any action nor as a recommendation for any specific investment product, strategy, or other such purpose.

In a rising interest rate environment, the value of fixed income securities generally declines and conversely, in a falling interest rate environment, the value of fixed income securities generally increases. High-yield securities may be subject to heightened market, interest rate or credit risk and should not be purchased solely because of the stated yield. Ratings are measured on a scale that ranges from AAA or Aaa (highest) to D or C (lowest). Investment-grade investments are those rated from highest down to BBB- or Baa3.

NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE.

Certain information contained herein has been obtained from third-party sources believed to be reliable, but we cannot guarantee its accuracy or completeness.

In the event that there has been a change in an individual’s investment objective or financial situation, he/she is encouraged to consult with his/her investment professional.

Written Disclosure Statement.  CMG is an SEC-registered investment adviser located in Malvern, Pennsylvania.  Stephen B. Blumenthal is CMG’s founder and CEO.  Please note:  The above views are those of CMG and its CEO, Stephen Blumenthal, and do not reflect those of any sub-advisor that CMG may engage to manage any CMG strategy, or exclusively determines any internal strategy employed by CMG. A copy of CMG’s current written disclosure statement discussing advisory services and fees is available upon request or via CMG’s internet web site at www.cmgwealth.com/disclosures.  CMG is committed to protecting your personal information.  Click here to review CMG’s privacy policies.