Transcript
So, normally, I am an optimist, but this might be the most pessimistic podcast we've ever done. Jay, do you think? Like, I kept trying for optimism there and That's no way because every time you're like, we have to end on a positive vibe, positive outcome. I got it as optimistic as I could by the end. So so so anyway, look, a lot of people, myself included, are worried about what's happening with the whole tensions between China and Taiwan, a worldwide situation that affects everyone on the planet. What's going on? The tensions are rising. US and all its allies are there. China is sending missiles, its exercises all over the place. Lots of tensions are happening. So we brought back on one of our favorite guests, general Robert Spalding. He's the author of War Without Rules, China's Playbook for Global Domination. I highly recommend people read it. It's very so who's general Spalding? Well, he was the White House top adviser for many years on China and our relations with China. Now he wrote this book, War Without Rules, China's Playbook for Global Domination. He's already been on the podcast to talk about the book, but I've been so nervous about this situation. I wanted to see what he thought. What's going to happen with Taiwan? Will China invade Taiwan? How will the US respond? What will happen around the world? What's gonna happen to all our pharmaceuticals that's made in China, which is about 99% of our medicine is made in China, plus, you know, of course, a lot of our tech, our food, and and on and on. General Spalding was great enough to come back on and really answer all of our questions. So here's general Spalding, author of War Without Rules, China's Playbook for Global Domination. This isn't your average business podcast, and he's not your average host. This is the James Altucher Show. General, there's a lot of stuff going on that we're scared about, to be honest. And it starts off with, I guess, Nancy Pelosi's visits to Taiwan and China being upset about this and Biden saying he had nothing to do with it. It's all very confusing and missiles are being fired over Japan's economic zone and everybody's posturing, but what's the reality right now? Well, the reality is I love these titles in US media where it says, Pelosi goes to Taiwan, China outraged. The fact part of that is Pelosi goes to Taiwan. The China outraged is manufactured narrative. It is propaganda, but it is completely picked up by our own media as fact. China outraged. Most people in China could care less what Nancy Pelosi is doing. They're worried about their own problems. You know, there's 1,400,000,000 Chinese people. And for the most part, they could care less what the Communist Party thinks. But what our media portrays is what the Communist Party wants them to portray, which is China is outraged. Now, to the extent that Chinese people know about Pelosi going to Taiwan, it's because the Chinese Communist Party told them Pelosi was going to Taiwan, and they use it to manufacture rage. And they do that to create support for their own regime. But but let me ask you, like, aren't we more worried about the Chinese government being outraged than the people? Like, the Chinese government's the one that's sending missiles around. But they're not outraged. This is part of their narrative. So when we think about, you know, what's China gonna do with regard to Taiwan? They've already decided what they're gonna do, and Xi talks about it all the time. We're gonna take Taiwan. What they will do when they decide to do that and when the timing is right, they will use something like, Pelosi went to Taiwan, so we had to take it. That's what they will use. So everything with regard to after Pelosi goes to Taiwan is entirely manufactured by the Chinese Communist Party, consumed by our media, and then disseminated to the world. And what's unfortunate, I think, is that in Washington DC, within the Beltway, the China experts aren't savvy enough to distinguish between what's really going on in China with the Chinese Communist Party and propaganda. In fact, they're all about the propaganda. And if you looked at all the, talking heads within Washington DC, they're like, how could Pelosi do this? How could Biden lose control of the China relationship? And it's all completely ridiculous. Again, the narrative is manufactured by the Chinese Communist Party for their own purposes, then we feed into it and attack ourselves. This is the beauty Mhmm. Of unrestricted warfare. It has become part of our lexicon. It has become part of our way of thinking, entirely manufactured by the Chinese Communist Party for their own interests. Well, and this goes to your broader point from your book that everything China does is essentially part of their war, whether it's military or through communications or through economics or through trade negotiations. It's all part of their larger picture of war. And we don't really when I say we, I'm talking about the US government, but the US in general doesn't really think that way. Not everything we do is thought in the context of war. But in the context of war, when the Chinese government is outraged and they and they send missiles over Japan, and you're saying they're gonna use Pelosi as potentially an excuse, what will happen? Like, what do you think is going to happen? Oh, they're gonna invade Taiwan. There's no doubt they're going to invade Taiwan. The question that remains is, what's our part to play? If we play a part, everything that we have within the Indo Pacific will be taken out within minutes. Within minutes. What what does that mean? They have so many missiles, so many rockets on their side of the Strip. They've been building this for decades. They have so much war material on their side. So you forget about Ukraine, you know, Russia's invasion of Ukraine. That is kid's play. Ukraine was a little fireworks show. We're talking about Lord of the Rings on steroids that China has in terms of weapons to go against, not just Taiwan, but all the allies in the region that might think that they would wish to interfere. And that includes not just fixed assets like bases, like Guam. It also corresponds to ships, whether it be aircraft carriers or frigates or destroyers, doesn't matter. They have far more weapons than they have targets. Now, why would Xi be that interested militarily in Taiwan? Like, why does he care that much? Is it just to kind of bolster his own reputation at home or is there an economic reason he would go for it? Go back to Chinese Communist Party narrative. You know, Taiwan has to come back into the fold. It is one of the things that will indicate that China has arisen. China has returned to their place in the world. They have basically extinguished all the grievances. Now they are dominant, and they cannot claim that until Taiwan is brought back into the fold. Now the legitimacy of the Chinese Communist Party is we can do this. Only we, as a party, can do this for China. And, therefore, we have to be in control. And then, eventually, we will bring back Taiwan, but it will be in addition to all the other things that we've lift 100 of millions of people out of poverty. We've created this massive war machine. We we are the industrial base of the world. And we basically settled all of these territorial disputes. Now, Xinjiang, which is basically Chinese for East Turkestan, which was taken 9 days after the Chinese Communist Party took over the mainland, was never a part of China. But they claim all these territorial grievances to include the 9 dash line in the South China Sea. So all of those will be rectified when China fully, arises from its century of humiliation. So this is part of the narrative. They built it as part of their legitimacy. Now why so the that's not the question, though. The question that you wanna know is why will Xi do this and potentially upset the apple cart with regard to their economy? That's a question you wanna know. And the answer is because it is a totalitarian regime. Why did Hitler open up 2 fronts? Why did the Japanese attack Pearl Harbor? Why did Putin invade Ukraine? They can't help themselves. It's this sense of entitlement and hubris that forces them to act. And so, you know, people were asking me before Putin invaded Ukraine, is he gonna invade Ukraine? And I said, yes. And the question is why? And, well, because he's Putin. Why is Xi going to invade Taiwan? Because he's Xi. If he was a Democratic elected leader of the United States, he wouldn't do it, but he's a leader of a totalitarian system. Who's gonna stop him? Who's gonna tell him, don't do this? You know, he's going to do what he wants to do. That's what happens. And therein, I believe, hopefully, I pray, lies our salvation that we begin to see, okay, I understand now what this regime is. I think I understood Russia before, but China oh, I didn't know that China was, you know, this rogue state that was, you know, led by a totalitarian leader. Hopefully, when they invade Taiwan, we'll figure that out. Now, I mean, this leads to so many different questions, but, I mean, the most basic is, do you think we will respond in any way militarily if I mean, we're kind of implying that we would stop China from invading Taiwan. Like, we're doing military exercises there. All of our allies are as well, which kind of implies, hey, Taiwan, don't worry. We're here. But clearly, if we do anything, to your point, we're gonna lose immediately and World War 3 could potentially start. Well, so people asked me, have asked me, we want to stop an invasion of Taiwan. How do we do that? Very easy. Simple. Give the Taiwanese nuclear weapons. Just give them to them and just let them then defend themselves by threatening the leadership of the Chinese Communist Party with nuclear weapons. So how do we stop a war between China and Taiwan? We give the Taiwanese nuclear weapons. Now are we gonna do that? No. We don't do that. In fact, they had their own nuclear program, and we suppressed it. We said don't do that. And, by the way, that's the same thing that happened in Ukraine. We told them to get rid of their nuclear weapons, and guess what? They didn't have anything to to deter a Russian attack. So now everybody's gonna say, well, we can't give the Taiwanese nuclear weapon. Okay. Well, then the Chinese aren't gonna be deterred from attacking. What we could do is what we did with Europe and and the Soviet Union. We said, look. If you move, every one of our nuclear weapons, we're gonna use them. The reason we did that, there's a there's a nice, little, monograph written by a gentleman named Lieutenant General Glenn Kent. At the time he did the study, mathematician, he was a one star in the military. He was tasked with figuring out, 1964, how much would it cost to protect America from a Soviet ICBM attack. So he calculated it would cost $28,000,000,000 in 1964 to protect 70% of the society. So we could protect 70% of America. To protect 90% would cost 6 times that. Okay? But here's the kicker. For every dollar the Soviets spent on ICBMs, it would take us $6 to defend against that. And so what they calculated was we could not defend the country against an offensive threat, using nuclear weapons, and, therefore, we adopted this approach called mutually assured destruction. We told the Soviets, if you invade Western Europe, we will unleash everything that we have against you. And that kept the peace. Now, we've completely forgotten deterrence theory and how we use nuclear weapons to prevent the 3rd World War from ever happening with the Soviet Union, But we don't think like that anymore. There's actually people in the Pentagon today that think that we can fight China and potentially win and not have a war with China eventually become nuclear. Our salvation in terms of fighting China is convincing them that if we fight, it will go to nuclear war, which means it will threaten the leadership and survival of the Chinese Communist Party. That's the only way. And we're not we're unwilling to do that. So, therefore, what I think in terms of your answer is, if we do get involved in Taiwan, it will be to either resupply or evacuate the island. Very much so, you have you have to begin to think this was happening very early on in the Cold War with the Berlin Airlift. Right? We supply resupplied, Western Berlin because the Soviets cut it off. Now, why did we not invade Germany, take back East Germany, take back East Berlin because the Soviets had nuclear weapons? So we said, we're not gonna do that, we're not gonna go to war, we're gonna wait and we're gonna, we're gonna let this long term competition play out. And so, I think if we are if we do get involved in a China Taiwan thing, it'll be with regard to resupply, with regard to evacuation, and that then, hopefully, we will be engaged in a cold war at that time. The Chinese are already in a cold war. We're not. The other issue that you have to consider, though, is China brought in all the bankers in April around the world, brought them to China and said, okay. These are the sanctions that are going against the the Russians because they invaded Ukraine. How do we get out from under them? Right? So they're preparing the battlefield for any financial sanctions that that they might, have to ensure that they're not affected by them. So our sanctions will not be effective over China. Why? Because they have currency exchange with the Saudis to buy oil. They use renminbi instead of dollars. But the other thing that you have to consider is that if we decide we're gonna sanction China for invading Taiwan, we're gonna punish them. We're gonna use the might of our treasury department, of the Fed. We're gonna make sure that nobody does any financial transaction with China. Okay. What's gonna happen? They're gonna turn around and say, guess what? You are not getting a single shipment of antibiotics anymore. And guess where antibiotics come from? They come from China. Microelectronics. I mean, everything that we need almost has some either the product itself or the the materials for the product is manufactured in China. A lot of chemicals, for example. Well, and and we're gonna get more to this in a second. I know Robin has some some questions about this, but, you know, they make our antibiotics. They make a lot of our computers, like our, our, our phones, they make our clothes, they package our food. And for some reason we've never diversified away from this. And to your point, the last time you were on the podcast, it would take years to basically change this supply chain away from China. Like it's, it's gonna literally take years. And so is it all just false posturing when we say, hey, we're gonna help Taiwan. Like we literally can't. Like they could do more damage to us. Now the one thing we can do to them is we can cancel our debt to them. Like, we owe them $2,000,000,000,000. We could say, hey. We're not gonna pay you back. But they probably don't care. The government probably doesn't care about that. So what is going on? It feels like we're just kind of fighting in the dark, making stuff up as we go, and they've got a real strategy. Well, I mean, I think it's not, that book that I just mentioned that talked about Lieutenant General Glenn Kent, it was something he wrote after he retired. He wanted to talk about, you know, what he had learned and what he had worked on in his time in the Department of Defense. And if you read that and you begin to consider, guys that and gals that were working on these problems, how do you prevent nuclear war from happening? What do you need to do? All of that expertise and knowledge about how that we got through the Cold War is gone. They had programs in universities that were teaching deterrence theory. They were teaching about, you know, national security in a Cold War context. Now, that grew up at about the same time that we went from these very crude nuclear weapons to, you know, fusion weapons. Today, all that expertise is gone. And so when you go to the Pentagon, you say, hey. I wanna talk about deterrence theory. They're like, go sit in a corner, you nerd. We wanna talk about war fighting like in Iraq and Afghanistan. Deterrence theory, what a joke. But it's the most important thing that we could be thinking about right now because it is a thing that got us through the Cold War without having a war. It's a it's called a Cold War because it didn't become a hot war and kill 100 of millions of people. But the the thought the thinking that went into that strategically is gone. It's it's absent. And even in the and and people like President Biden, he was never an expert on deterrence theory. So, he might have grown up and lived through that era. But, if you think about people like me, you did not come of age and gain rank in the military by thinking about nuclear deterrence, by thinking about how to prevent war. You came of age and got promoted by going to war in Iraq and Afghanistan, non nuclear powers that we could steamroll like nobody's business. So there's no academic programs anymore. The think tanks don't really, support this. There's a few people, again, I'll call them nerds. They're like, go stand in a corner and think about nukes. Nobody wants to hear it. But that is the type of way that we need to think with regard to China because, otherwise, I could see us stumbling into a war by thinking, oh, we can just have we can keep this war conventional, and it'll never go nuclear. You can't. Once the genie, the war genie, is out of the bottle, try and determine which way this goes, forget about it. You have no you have no control over it. NAS passions are inflamed. And as people die, the tendency to escalate goes up. And so there's all this discussion about, you know, how do we how do we prevent this from escalating nuclear war? It's all pie in the sky. You know, once that war starts, making sure that you don't have a nuclear war is your biggest problem and probably one that's not possible. So we need to be thinking now, how do we prevent a war? And the people that actually study that intently are all all gone. Given that, my guess is China is gonna back channel and say, Look, if you touch us in Taiwan, we're gonna drop nukes on you. Because they know that the US is not prepared to hear that. And the US doesn't want obviously, Biden doesn't want a risk nobody wants to risk a nuclear war, but they're gonna be they're gonna act more out of fear than aggression. And my guess is we'll back off in somehow in a way we did with Ukraine and say, okay. We're gonna start with sanctions. We don't really have diplomatic relations with Taiwan anyway. Blah, blah. They're gonna sort of back off what they've been saying. Do you think that's what will happen or what what what do you think? What's your gut tell you will happen? Because I don't think we'll get into a nuclear war over this, even though we're kind of posturing for it. No. I I think what'll happen is that will begin in earnest for the West because it's already happened in China, and and in Russia. That will begin in earnest for the West, the 2nd Cold War, and we will begin to decouple economically, politically, academically, financially from, China and its satellites, which include the Belt and Road Initiative countries, and Russia, and North Korea, and Iran, and and other authoritarian regimes. And then, we're gonna start to have to rebuild the mechanisms that got us through the 1st Cold War. But we're but now we're doing so at a disadvantage. You know, where during the 1st Cold War, we owned the industrial base. Now China owns. So we can't produce, all the goods where before, America could produce all the goods. So, you know, it is not a definite thing that democracies survive the 2nd Cold War because what you're seeing around the world is this increasing affinity for the system that China has created. It's a political economic system that says, don't challenge the government. Don't get involved in politics. Let the party take care of that, and we'll give you a job. We'll make sure that you have employment. But the challenge of that model is, and this is the part that the Chinese have hit so well, is it relies on the talent, technology, and capital of the West. So 75% of the country is state owned enterprise led, the of the economy, And technology talent capital from the West comes in and deals with the fact that those companies are less efficient in terms of productivity. Nobody knows that in terms of all of these belt and road initiative countries. Or if they do, they're more interested in what China will give them in terms of, like, loans for the port of Hambantota in Sri Lanka. So this is what's happening is you have this the world saying, democracy is dead. That model doesn't work. You know, you got infighting in America. You got infighting in the UK and Europe. It doesn't actually produce outcomes for the citizens. China's model does. And so what happens over time, they own the supply chain. They own the narrative. Then you have to start to worry about, will our system because we're not gonna fight. We've made that determination. It's a it's a bad idea, nuclear weapons and all. But we don't have the industrial base or the kind of credibility now internationally to say democracy is a better system. We say democracy is a better system, and Chinese says, yeah, but you have riots in the streets because you're you're racist. You have homeless people. You don't take care of your people. By the way, we have all kinds of jobs. Why? Because we own all the manufacturing, so we make sure our people have jobs. So you guys are better? It's a joke. So we've lost that, that ability to say America's a better system. China now has it. And now we get into this Cold War where we start to rally the democracies, and the democracy is like, who do you who are you to talk to us, to lead us? I mean, you don't really you're not doing it from a position of strength like you were doing the during the 1st Cold War. And so what happens? Well, the Chinese start to pick us off state by state. You know, slowly, they start to convince, you know, the the the political system that, hey. Let's go over on the Chinese side. You know, the Americans are running out of ideas and money and everything else, but the Chinese are giving it away. Okay. So if we just leave this system and go to that system, they'll take care of us. And so what I'm telling you is that we winning a cold war on the second time around is not necessarily a given. And so you have to ask yourself, what happens then? Our system comes under attack from within. We begin to attack our system. In fact, that process has already started. What about the rumors and maybe more than rumors that the Chinese economy is starting to fall apart? They're having a situation similar to our 2008 financial crisis and maybe not the wherewithal to fix things. So is that happening, like, what there there are con maybe the one reason why Xi might act in Taiwan is to distract the Chinese population and the world from what's really happening in their economy. Well, I mean, we've known about their debt problems and their real estate problems. And what happens? Western capital continues to flow in. The problem is that Chinese and if you read unrestricted war warfare, you know, don't read that. Read War Without Rules is an easier read. They recognize that they were, vulnerable to the global financial system. And they talk about George Soros, and they talk about the Asian financial crisis, and they recognize that the that the Asian countries were decimated by the Asian financial crisis. And so they said, we need to prepare for that. So what did they do? They created a closed financial system. They have a nonconvertible currency and strict capital controls. So now when Citibank, for example, who's got, I don't know how much money invested on loans in China for real estate or any of the other big banks, they try to, like, bring that back. Like, hey, I wanna I wanna pull my capital out. Things aren't looking so good there. How do they do that? Well, they have to actually, you know, exchange and and and pull that capital out. But they've got non convertible currency and strict capital controls. So now when you had during the Asian financial crisis, as soon as you get a hint of trouble, currency flows out. That's not happening in China. And so I don't believe that you're gonna have a financial collapse in China because the Chinese Communist Party totally controls the financial system and it is decoupled. Their financial system is decoupled from the global financial system. So you're not gonna have a run on Chinese banks in terms of capital flowing out. And Right. And they have Hong Kong. So Hong Kong continues to draw in capital. That capital then makes its way into China, exchange, you know, currency for yuan, then it's stuck and they own it. So, I mean, they should have never been allowed to join the global financial system ever by creating that kind of financial system, but they were really smart and we, we now they're a part of the IMF currency basket. They're a part of the World Bank. Money flows in and doesn't flow out. And so when we step back and say, oh, their system's gonna fall apart. No. It's not. They've designed a system that can't fall apart. You know why? Because when you come knocking for your for your deposits, they're like, sorry, not gonna happen. Wouldn't that make them less capable of growing their economy though? Because if money money's not gonna flow in, like, the the thing about America is everybody lends us money because it's a great innovative system. But nobody's gonna lend China money, and an economy is grows on its ability to to take on some leverage, some debt. So, what did that ultimately limit China? Yes. If they hadn't built the Belt and Road Initiative. The Belt and Road Initiative is their lifeline. And so, the currency swaps, even the digital currency, so the digital Silk Road, the the maritime, and the landward version of the Silk Road, all of that combines into a closed ecosystem, so they don't need dollars. And in fact, they're negotiating currency swap, buying petrol from, oil from Saudi with, and now, of course, they've got the Russian who are selling them all the oil they want. What do they need that they can't buy with renminbi? And since they can print renminbi, and since you can take renminbi and buy all the goods in the world because they're all produced in China, what do they need that they don't currently have? So, yes, Will it slow down their economy because Western Capital won't be going in, allowing them to have dollars to buy other stuff? Yes. But they built a system to make up for that. So they own the industrial base. They now they just, proved that they could build 7 nanometer, chips. I don't think there's anything else that they need. And and therein lies why, you know, Xi, I think, is gonna feel comfortable about taking Taiwan. He doesn't need anything else from the West. He has all the technology. He has all the, factories. He has everything that he needs. He has the ability to get resources because he negotiated this belt and road agreement, which allows him to get all the raw materials he needs, all the energy he needs, and he owns the supply chain. So, I mean, I guess, yeah, I have to turn it back on you. Like, what do they need that they don't actually have right now and that that they can't procure with the Belt and Road Initiative? It's a good question because and then, you know, Robin, if you wanna jump in here, like, why are they buying so much land and mining rights and so on in the US right now? They are coming in through Canada, you know, Canadian companies going into Nevada, which is one of the largest, you know, lithium mines, I think, that they have found, in the world. But now they're coming in that way and mining and and shipping it over to mainland China. I mean, why are we letting them do that? Well, so remember what happened to the Russians? They they couldn't spend their dollars. Right? We said, no. Your dollars are frozen. You can't spend dollars. You can't pay off your debt. You can't you cannot so that's one thing that that the United States has, control over the use of dollars, if we have a crisis. Well, so they're just taking dollars as fast as they can and converting them to hard assets, real estate, you know, any kind of mine or any kind of natural resource. They are just buying it up by the bucketloads because, then they own it. Michelle Stott Right. But I mean, why are we allowing I mean, that should be something that our government shouldn't allow them to have, our resources. I mean, and it's the purest lithium too. It doesn't need a lot of refinement. I mean, it's pretty pure. So why are we letting them come in? They're coming in through Canadian companies if you, you know, with the I wanted to invest in some pure play lithium American companies. I couldn't find any. All of them led to China. And it's like now they're buying the farmland, they want the water rights in Nevada. I mean, which is crazy to me, but I was like, why is our government allowing them to do this? Like, if I know it, I'm just a housewife. I'm not I know that they're coming into Canada. And Canada is just a shell company for them to come in so that they don't go on joe. They're not going to allow them to do it, but a Canadian company with a normal name, they come in and buy. But you would think that they would do some research on these companies that are trying to come in and buy. Well, I mean, I I think the the problem really is is that we've convinced ourselves that there is no going back. Yes, it's bad, but if we went back, it would be even worse. And for the most part, people don't understand what the Chinese Communist Party ultimate objective is, and they don't understand how over time, you know, selling all your resources, selling your, manufacturing capacity, basically selling everything that makes you independent and sovereign means that at the end of the day, it doesn't matter, you know, here in the United States, we spent, you know, almost $900,000,000,000 on defense was the last, budget. Not gonna make a hill of beans different because you don't own anything. Right. And and so we when when I said all those people that passed away or gone out of government that that actually thought about the Cold War, We don't have any strategic thinkers anymore that understand kind of what we had in the beginning and and as the country was founded through our formative years that that stayed with us all the way through the Cold War is just this cadre of people that understood, geopolitics, understood strategy, understood how important the economy was in our relationships, economic relationships and financial relationships around the world to protecting our independence and sovereignty. And, you know, when the Cold War ended, there was this kind of collective sigh and this realization that, hey, we don't have to do this anymore. All you guys, all you gals, all you cold warriors, go away, Not need it anymore. Everybody, basically, believes America is supreme, and that means everybody's gonna play by the rules. And these 2 Chinese lieutenant colonels sat down and said, Okay. Well, they're just taking all their toys and going home. They're taking all their pieces off the risk board and they're saying, we don't care about it anymore. We care, meaning them. I care, meaning the guys that were writing that document. Like, this is how we take advantage of it, guys. They're just walking away from it. It's all open to us and, you know, when when you're a CEO of a corporation, when you're a, congressman, when you're a senator, you know, you're not thinking about geopolitics. You're not thinking about it in the terms that China does in terms of long term competition, long term survival. How do we protect our, long term political independence and sovereignty, they are. And they are not just in their corporations, but in their, in their government, in their military, across their society, their educational institutions. Everything has been prepared for this war, war with the West, that they intend to win. And since we're not gonna even play the game, we're not even going to, recognize what they're doing, you know, it's like, let's run up the score. Let's let's beat them a 110 to nothing. So and and not to kind of make a bad situation even worse, but the, one side question here is they do make all of our antibiotics plus process a lot of our our food, but let's think about the drugs in particular. We're letting them make, you know, all our pharmaceuticals. How easy would be for them to kind of change the formula a little bit and start to, you know, as we discussed last time with with their their involvement in in fentanyl in the US, how come they, you know, how easy would be for them to manipulate our pharmaceuticals in ways that would be almost undetected and Kill us. Yeah. Start damaging us that way. Well, I mean, they are, in a sense, doing that with Fentanyl. Fentanyl precursors and Fentanyl comes from China. That's where it's being manufactured. And, you know, I I I remember when I was in the White House and I I I, met with the assistant or the acting director of the O and DCP, and I said, What are we doing about fentanyl? And he's like, The Chinese are cooperating with us. I said, No, they're not. I mean, fentanyl deaths are Tens of thousands of Americans a year. What are we doing? And he says, It's not a problem. There's nothing they can do. I'm like, What are you talking about? This totalitarian society that can control, you know, everything that you do, using social credit? You don't think they can stop Fentanyl? No. We don't think of it like that. And so, to answer your question, they're already doing it. They're doing it. And a lot of these places that produce the fentanyl and the precursors are themselves manufacturing pharmaceuticals. So they do fentanyl at night and they do pharmaceuticals during the day. So I would venture to say, to the extent they can get away with it, there are impurities that you find in Chinese, medicine. Now, could they deliberately add, stuff to of course, they could. They do that in China. They do. Yeah. They infant formula. They basically put melamine in the And melamine in the mouth. All kinds of babies. They do this to their own people. Right. So, yes, they could do it to us. I lived there when they did that and I just couldn't believe it. So, I, you know, if they can do that to their own people right, what are they doing to our antibiotics? I mean, are we preparing for that? Do we have any facilities here? Are we changing this? I mean I asked those questions, those very questions to people that are responsible and the answer is, well, we're doing that for the military. We're, stocking up on supplies for the military. Like, what about the rest of us? Like, that's not their job. Right? The the the free market takes care of everybody else. You know, this in my my company, know, we're we're thinking about not just how do we protect the military communications, but, you know, our neighborhood communications. The government doesn't think about that, though. That's that's that's the the private sector. AT and T, you go out and think about protecting America. But AT and T is not incentivized to build infrastructure that will survive, say, an EMP attack or whatever. That is the way that our system is. There's this complete separation between the government and the people, and the people are kind of have to fend for themselves in this, in this environment. So when so I tell people, like, you better get some antibiotics and put them in your closet because if this happens, you're gonna go down the shelves. Just like coronavirus, there's no toilet paper. Toilet paper's one thing. Antibiotics, that's a big problem. So you go to the doctor, and you're like, sorry, there's no medicine for you. What would have been an easily cured infection, tough luck. I just hope that, you know, I feel like even if they are giving us the antibiotics, I mean, I feel like they would put things in there to slowly kill us. Or they would use that as leverage to just say, Go sit in your corner. In fact, you know, they have told our leaders this. You don't get involved, everything will be fine. You get involved, you know, you're gonna pay the price. And and this is the type of price that because we we've never been in this situation before, so I don't think the American people understand how like, even Europe before, we could then if something happened, we could give Europe stuff. We could give Canada stuff. We could give we can give our friends stuff. We can't even give ourselves stuff. So now now we're in a situation where, you know, it's really bad. And, I think the reason that we have such a fear of China in Washington DC is because we recognize that we've put ourselves, and our families, our citizens in a completely vulnerable situation, and we have what can we do? What can we do now? So it sounds like what we will do most likely, and on this might be a best case scenario, is they're going 1, sooner or later, and we could discuss timing in a second, but sooner or later, they're going to invade Taiwan and just claim it as theirs. And we're gonna talk big, but ultimately do nothing and eventually seek to repair relations just because we can't do without China for a lot of these reasons. You know, again, we'll probably for years, attempt to move our supply chain and maybe be successful with part of it, maybe not. And our business as usual will become this sort of coldish kind of war that essentially is the new normal. It sounds like that's the best case scenario. Yeah. I I I think but but my I guess my point is, whereas in the first cold war, when you looked at the shelves in in American supermarkets, they were full. When you looked in Russia and the Soviet Union, they were empty. You're gonna see full shelves in China and its satellites and empty shelves in America and its satellites and partner. That's gonna be the difference. How long do you think it would take to to move our supply chain off of China, realistically? Realistically, I would say, in the realm of 3 to 5 years, it's it's what we stated to do that. I would assume. Well, you know, there there's things that happen like the Chips Act, for example. We said we're gonna build, you know, chip fabs in in the United States. But even that bill, as it was going through the process, you know, the chip companies told congress, well, we want ability to and you're so you're gonna invest your money in in building infrastructure here. We would like the ability to spend our money in China. Mhmm. Right? So, I mean, this is the kind of half measures that we have going on in that, you know, we allow so the our corporations are incentivized by China to continue to flow capital and talent and, and technology into China, even when that chip act was designed to say, hey. We need to have our own chip manufacturing capability here in the West. But the corporations are watering it down. So, ultimately, more private capital drives innovation and productivity than government capital. Government capital is kinda primes the pump, but private capital is really needed. But in this case, and what used to be the case before, is the private capital followed the government capital into places like Silicon Valley. Today, there's no money being, raised, you know, in really in a venture sense in Silicon Valley, but Sequoia China just raised 9,000,000,000, you know? So everyone put pencils down and Sequoia China raised $9,000,000,000 And so our capital is flowing in opposite direction for what it needs to do to actually support these initiatives that the government wants to do to basically get our industrial base back. We need some optimism here. Like, can you weave your way through to any positive scenario for us? Like, or, or maybe a negative outcome for for China or maybe a change of regime or something that that happens? Like, what's some other possibilities that that are more positive? Well, so the positive, is really this, and that is free societies are more productive. Period. End of story. And so, if we can get the China out of the DNA of Western societies, democracies, and allow them to just work together. It's gonna be tough. It's gonna be hard. But, ultimately, it's gonna be better because that technology, talent, and capital will not be flying into China. It will be staying at home. And when it stays at home, free people tend to be more productive. And so this model that China has basically shown to the world is kinda like the building that cousin Vinny shows to the guys that are on trial in my cousin Vinny. He's like, Look, they're gonna show you the bricks and the really solid bricks, and then you turn them on, and it's just a card trick. Yeah. That's China. That's what they do. China. That's China. But right now, it looks like a big solid building. Once you start to pull the democracies out and decouple and you have the technology talent capital from free societies being reinvested, it's gonna be difficult. But over time, we'll start to grow and they'll start to decline because they will no longer have that. This is gonna be a long term competition. So when I say, what is the best case scenario for me? Let's just get the Taiwan thing over. Let's have it happen because that's the only thing that's gonna wake us up and actually have us economically, financially, politically, academically decouple from China and begin to as democracies work together. And I think in the end, you know, we can be victorious. The worst scenario is if we never wake up, if we never realize what China is, slowly, we will become China because that's what we're doing today. Well, and maybe even a a a more worst case scenario is if we have very short term thinking or or pressure from media or whatever it is. Whereas when they invade Taiwan, we feel like we need to respond militarily. That seems like a worst case scenario. But I just despite all our posturing, I just don't see it happening. But how do we back off from that when it when the event happens? How do we save face? Yeah. I mean, you you make a good point. My, concern is just the lack of strategic thinking in Washington DC. And I think, you know, my hope, my hope, my fervent hope is that cooler heads prevail. Nuclear weapons change the game, and and we have to basically begin to respect those, think about them, and understand that, you know, we can't just willy nilly go off to war with a nuclear power. We have to think very carefully about that. You know, we have a deliberative process in Washington DC, and we have a democracy, so hopefully, you know, cooler heads will prevail, that we won't slide into war. That being said, we've found ourselves in wars that we didn't wanna be in. So I don't know. I mean, that's if you wanna talk about the worst case scenario, not just for America but for the world, it's that we just let a war happen, that we probably shouldn't have gotten into. I mean, why did Nancy Pelosi correctly or incorrectly, why did she visit and why is president Biden denying he had any involvement in that decision? Well, I think people believe that, they can deter China by reinforcing American support for Taiwan, and I don't think that's possible. And so, you know, Pelosi's visit was to, you know, essentially send a message to both China and Taiwan that we're supporting them. Unfortunately, in the way that we get it in Europe is we actually put new nuclear weapons in Europe. And so, and so that was one of the ways that we reinforced this message that if you attack, you know, there not only will Americans be killed, but there will be nuclear weapons there that, you know, our allies can respond with. There's not enough recognition that, you know, just because Pelosi goes to Taiwan doesn't mean the Chinese are gonna be deterred from attack. They actually have to feel some kind of threat, and, they don't feel a threat. They don't feel afraid. You have to feel afraid for you to think twice about doing something. If you're if there's nothing, you know when you think about it just at a very basic level, how does Pelosi going to Taiwan actually make China feel afraid? It doesn't. But we have convinced ourselves in Washington, DC that we can create the, I don't know, perception of deterrence by, demonstrating our resolve to protect Taiwan. I think, you know, the Chinese Communist Party sees right through that, and because we haven't because exactly what you're saying, I think what's gonna happen is we're gonna recognize that, oh my gosh, we're talking about trading, Taiwan for LA and Washington DC and New York, and that's not that's not okay. We're gonna back off. And and, and I think the Chinese Communist Party knows it. I think deep down inside, we know it, but that's why she went was, you know, it's it was a deterrence measure. And, you know, in many ways, the, the the administration itself was deterred because, you know, of course, you know, it doesn't have any control over the legislative branch, but it doesn't want and it thinks that somehow, if it manages the relationship with China, they can prevent, you know, a war from happening. They can't. They have no control over it. It's entirely in the hands of the Chinese Communist Party. And so we, you know, unfortunately, because we don't recognize that, number 1, even if the Chinese say they're getting mad, it doesn't matter. They're either gonna invade or they're not. Either way, there's nothing you can do about it, and so we just need to do what we think is right. And I think so in that respect, I do think that, you know, possibly, you could say that, you know, by going to Taiwan, you are emboldening the Taiwanese people, that we will we will come to their aid. I think, you know, if I was just thinking about the problem, you know, in terms of, you know, what would be the right, approach, I think the right approach is to prepare Taiwan, and the Taiwanese people for the eventual reunification using force. How many of you want to stay? How many of you want to leave? What can we do? What can America do to, ease this transition to prevent loss of life? You know, what can we negotiate with the Chinese? In that case, we could say, hey, we are willing to fight you if you don't allow us to, evacuate those that wanna leave. We could say that and back it up. And I think the Chinese would basically say, okay. You wanna evacuate those people and you're serious and, willing to lay down your lives for that? Then I think, you know, for them, they're gonna get to Taiwan, then they would probably, you know, negotiate. So you have to think through the problem, recognize they're gonna do it either way. You can't stop it, short of giving Taiwan nuclear weapons. Okay. What's our role? Our role is to prevent human suffering. How do we do that in the most efficient and effective way possible? And do you think that's enough for us to save face worldwide after all the posturing we've done? Oh, it doesn't matter. I mean, if the alternative is a nuclear war, I think it doesn't really Saving face, I mean, that's, we're past a point now where American credibility is on the line. I mean, you're talking about human lives. Right? What what do we have to do to protect human lives? It's not about American credibility anymore. It's about, the safety and welfare of people, and and and there's 23,000,000 people on Taiwan. Yeah. That should mean something more so than American, you know, credibility in terms of, losing face. Now, Chinese leadership, they don't care about human lives. They're willing to take those at the drop of a hat. But for us, where, you know, human life is very important, you know, that has to be the overwhelming, imperative for for America. And what do you think is the timing on if you were to guess, you know, tensions are rising nonstop. Like, they never go down. They just go up. I I would be surprised if they don't invade before, Biden's, 10 years out. I would be very surprised. Adriana Linares: And what makes us think that they'll stop there? I mean, well, if they go to Sri Lanka or they go to these places that they want? I mean, Japan, Korea, you know? Yeah. Well, I think I think they already are, but I think they're going in a way that's not kind of recognized as what they're doing. I mean, you look along the Belt and Road Initiative countries, tens of thousands of Chinese have immigrated to those areas and created their own kind of city states. So I think you you are seeing a kind of, migration of people. One of the things that happened with regard to China is this, one child policy, created this overwhelming, imbalance in males, young males versus females. What what do they do with those millions of, males that don't have, women to, to marry? They're they're they're sending them off to the Belt and Road Initiative countries to intermarry with the, population there. So I I think, you know, when and if you study Chinese history, the you know, China has, has been invaded many times over the last 5000 years, and each time has succeeded in basically, subsuming the invaders, creating you know, making them into Chinese. This happened, you know, over and over again. So I think they're very good at at basically, you know, using just the the might of the people itself to, be able to spread, in a missionary way, their model. And, you know, these people that that migrate to these countries are very loyal to Mhmm. To China, to to to mother China. And so I think they're doing it in a way that's not as, it's you they're using money. They're using money in the promise of, productivity and economic growth to sue the transition. So it's very much a, neocolonial way of doing things without without, you know, the the gunboats of the of the British empire. And and another thing that I'm I'm wondering, you know, they're they're meeting with the Saudis and and working out deals with that, but why aren't they doing it with Iran? It's interesting that they're that they're, you know, talking with with with the Saudis, and I know the difference with the Saudis and Iran. They're buying oil from Iran. They've been buying oil from Iran. They've been sending products to Iran. I mean, that's how Iran and North Korea and, you know, Russia have prospered even when they're cut off, like, you know, Russia is today after invading Ukraine. It's because of their relationship to China. So, I just don't see how the Saudis are, you know, are happy with that because I know that that's a big problem with them, you know, with the Saudis and the Iranians. They're wanting them to, you know, stay. Right. Yeah. That's a whole another story. You you notice that she goes to Iran when he goes to Iran, he goes to Saudi. So, they're they're they're trying to, you know, I think they're trying to play both sides of it. And, you're right. Unfortunately, though, you know, what's Saudi going to do? I mean, you know, America is kind of, you know, now, you know, was had was trying to create a stronger relationship with the Gulf countries. Now it's kind of letting Iran off the hook. What's Saudi going to do? I mean, it's kinda stuck stuck between, you know, the fact that the United States no longer supports it, China's supporting Iran. It's a big mess. Gotta go and kinda make friends with China and, and hope that they will, you know, reign Iran in. I think the other thing is they're gonna try to figure out a way to get nuclear weapons. And then none of the families, all the families, you know, the royal families in the Gulf, you know, they're all the Sunni families. So, I mean, they'll be completely destroyed if Iran comes out. And, it's just gonna be a big mess. And China is gonna be the one maybe managing, or they think they're gonna manage it all, but it's, like, it's really sticky, a very sticky situation. Yeah. I mean, the the, geopolitics and strategy when it comes to the political independence and sovereignty of the nation cannot always be run by the US media, which is what we tend to want to do. We wanna say, okay. We wanna vilify, the leaders of Saudi Arabia. We wanna vilify the leaders of Russia. We want to make it difficult for us to, you know, create wedges between, you know, say Russia and China or China and Saudi Arabia. You know, that's why, Nixon, for example, went to China. Mhmm. He he was trying to create a wedge between, China and and the Soviet Union for the purposes of basically, you know, winning the Cold War. Unfortunately, we took it too far, but, you know, when we when you look at the media and you kind of look at how people react and you look at how people act, there's much less recognition that people like Nixon are needed to, you know, essentially recognize that the world is an ugly place. It is an ugly place. We have to accept it for what it is. It's a little bit brighter because countries like America exist. But in order for us to ensure that countries like America exist, we're gonna have to sometimes have relations with countries that aren't necessarily, you know, our favorite. But the alternative is, you know, allowing a power like the Soviet Union, or in this case, China, to rise and dominate the international space because, we can't be seen as intermingling or having a relationship with a nation that does something that we find untoward. And so in all cases, when it comes to the survival of our republic, we have to basically make decisions that, that are rational, that support our political independence and sovereignty. And sometimes, we have to do what we need to do in order to preserve the republic Mhmm. Even if that's not what we really want to do. Right. You know, it is like you do something where, you know, the alternative is you save 1 person, but you lose 40 people or you lose that one person you save for do do you wanna lose anybody? No. You don't wanna lose anybody. But sometimes you got in in in the world and in life, you have to make very hard decisions. That's why, leaders of countries, they have to be steadfast, and they have to actually be very, solemn in their duty to protect the country. I mean, the reason we have, the government that we have is primarily because of national security reasons. If you read the Federalist Papers, Alexander Hamilton and others really talked about the need to protect the political independence and sovereignty of the nation. And, when you're considering things like this, there's a lot of stuff that you make decisions on as a national leader. Probably one of the most important is, you know, the the geopolitical and strategic and national security decisions that you make that ensure the survival of your people and your nation. And, and that's one where, I think that we are, since the end of the Cold War, we haven't perceived a threat to that, and that's the problem. We we are really threatened. We're more threatened than we've ever been, and yet we, we're not making this hard decision that we need to make to protect ourselves. We don't have Nixons anymore. We don't have Winston Churchill's. We don't have Ronald Reagan's. We don't have, you know, John F Kennedy's. They're gone. Yeah. And we've had 30 years of peace and it's really, really hurt our strategic leadership. I mean, hopefully, when the reality of this situation sets in, whether it's Taiwan or the threat to our supply chain or, you know, the threat to our allegiances with other countries, the the US is forced to take a course like you suggest and think long term and strategically, and and it becomes more like a chess game than a fist fight. We can only hope. And my guess is that's what will happen, but with great pain to us as you've been describing. And that really does seem like our best case scenario, and hopefully that happens rather than, you know, war. I also heard that the Chinese government, they're trying to poach scientists in other countries to come aboard such as Israel and some other countries. And, of course, I think they've been turned down, but that's very scary as well. I mean, they're out looking for talent, you know? Jennifer Stuber Well, and because they're coupled to us academically, they can pay a Harvard professor, you know, that's an expert in, in, in nano to come over and work with their technology. And, you know, that person can be working on government, you know, DOD contracts and working for the Chinese People's Liberation Army. I mean, we've seen that already. Right. So, decoupling academically and saying, no. Absolutely. You cannot have any contact whatsoever, with China, I think is very, very important because, of course, they're gonna continue to do that as long as they can. Alright. Well, General Spalding, it hasn't always been positive in this conversation, but it's reality and it's what's happening. And and I'm so thankful that you came on our podcast to talk about this. This is very much on our minds and in in the news, of course, and a lot of tensions are happening. And, you know, once again, you're the author of War Without Rules, China's Playbook for Global Domination. You've worked in the White House advising about China. You've been all all over this topic from the beginning, and I really appreciate you giving us your insights into this. Thank you so much for coming on the podcast once again. Thank you. Thank you. Really enjoyed the conversation. Yeah. Appreciate it. I'm here. Thank you. Thank you very much for listening. I really appreciate it. If you like this episode, subscribe, subscribe, subscribe. It makes my life so much better when the listeners and when you subscribe.
Comments