1 00:00:01,080 --> 00:00:06,880 Speaker 1: Hilarious posts by the Rocky moutin Oyster regarding yesterday's issue 2 00:00:06,880 --> 00:00:11,840 Speaker 1: at TIA. The post says Denver Airport train system achieves 3 00:00:11,880 --> 00:00:14,200 Speaker 1: carbon neutrality by ceasing to exist. 4 00:00:16,560 --> 00:00:20,680 Speaker 2: This is probably the perfect time to do this naval 5 00:00:20,680 --> 00:00:24,439 Speaker 2: strategy because I'm looking up oil is the CNBC at 6 00:00:24,760 --> 00:00:29,440 Speaker 2: their tyron right now. Oil prices spike after Iran strikes 7 00:00:29,640 --> 00:00:33,879 Speaker 2: Key LNGX sport facility and Cutter, And then I was 8 00:00:33,920 --> 00:00:37,600 Speaker 2: reading some other things before we went on air. Let's see, 9 00:00:37,720 --> 00:00:40,320 Speaker 2: Brent is up at one oh nine. I think West 10 00:00:40,400 --> 00:00:45,320 Speaker 2: Texas is that was it one oh one or something. 11 00:00:45,440 --> 00:00:50,920 Speaker 2: So they've both broken the one hundred dollars barrel price 12 00:00:53,159 --> 00:00:57,600 Speaker 2: over the course of the past two days, not counting today, 13 00:00:57,640 --> 00:01:00,920 Speaker 2: So I'm talking about on Tuesday and Wednesday. I've read 14 00:01:00,920 --> 00:01:07,160 Speaker 2: a series of articles that have brought me to a 15 00:01:07,200 --> 00:01:09,440 Speaker 2: thesis that I want to offer you to think about today. 16 00:01:10,920 --> 00:01:15,240 Speaker 2: What if the United States is not in a hurry 17 00:01:15,959 --> 00:01:19,959 Speaker 2: to reopen the strait or her moves because a closed 18 00:01:20,760 --> 00:01:25,039 Speaker 2: or a controlled strait is worth more to the United 19 00:01:25,120 --> 00:01:29,240 Speaker 2: States than an open straight are mute? Think about that? 20 00:01:30,000 --> 00:01:33,800 Speaker 2: I know it's a counter intuity proposition that most of 21 00:01:33,840 --> 00:01:37,920 Speaker 2: you would reflect reflexively dismiss just as I did. But 22 00:01:38,040 --> 00:01:43,319 Speaker 2: before you dismiss it, let's walk through what these articles 23 00:01:43,360 --> 00:01:47,039 Speaker 2: are saying. Let's first talk about the insurance. K'll switch 24 00:01:47,080 --> 00:01:51,400 Speaker 2: because it's real and it's not theoretical. When the seven 25 00:01:52,160 --> 00:01:55,640 Speaker 2: protect even insurance clubs, those are all the big insurance 26 00:01:55,680 --> 00:01:59,760 Speaker 2: companies that belong to an international group think Lloyd's of London. 27 00:02:00,240 --> 00:02:03,320 Speaker 2: So I'm going to refer to all those insurers and 28 00:02:03,400 --> 00:02:07,320 Speaker 2: reinsurres as the P and I clubs, the protection and 29 00:02:07,480 --> 00:02:15,200 Speaker 2: insurance groups. When those seven clubs issued a seventy two 30 00:02:15,240 --> 00:02:18,760 Speaker 2: hour cancelation notice for war risk coverage in the Persian 31 00:02:18,760 --> 00:02:22,160 Speaker 2: Gulf about two weeks ago. Now I think back on 32 00:02:22,240 --> 00:02:27,240 Speaker 2: March third or fourth, they did not just raise costs. 33 00:02:28,400 --> 00:02:32,560 Speaker 2: They're the ones that made the transit impossible. Now I'm 34 00:02:32,560 --> 00:02:37,799 Speaker 2: not trying to be hyperbolic here. Those insurance clubs ensure 35 00:02:37,960 --> 00:02:42,680 Speaker 2: roughly ninety percent of the world's ocean going tonnage, and 36 00:02:42,800 --> 00:02:47,560 Speaker 2: without that coverage, the ships cannot sail because the port 37 00:02:47,560 --> 00:02:50,400 Speaker 2: authorities will not let them dock, the banks will not 38 00:02:50,520 --> 00:02:54,320 Speaker 2: finance the cargo, and charters will not book the vessel, 39 00:02:55,480 --> 00:02:57,960 Speaker 2: so it has very little of anything to do with 40 00:02:58,680 --> 00:03:04,440 Speaker 2: the Iranians. It has to do with the risk. And 41 00:03:04,480 --> 00:03:08,520 Speaker 2: then I casually mentioned this back when this happened, I 42 00:03:08,600 --> 00:03:12,680 Speaker 2: said that the Trump administration did something that the pressed 43 00:03:12,680 --> 00:03:16,960 Speaker 2: and even to this day, doesn't really cover. He ordered 44 00:03:17,000 --> 00:03:21,919 Speaker 2: the US International Development Finance Corporation to create a twenty 45 00:03:22,120 --> 00:03:26,160 Speaker 2: billion dollar maritime reinsurance facility. Now, facility is just a 46 00:03:26,160 --> 00:03:35,200 Speaker 2: fancy word for a document, a and ability twenty billion dollars. 47 00:03:35,720 --> 00:03:40,960 Speaker 2: He designated Chubb Insurance as the lead underwriter, So that 48 00:03:41,040 --> 00:03:45,080 Speaker 2: now makes the United States Government the insure of last 49 00:03:45,200 --> 00:03:50,040 Speaker 2: resort for shipping through the Gulf. Now think about that. 50 00:03:51,120 --> 00:03:54,960 Speaker 2: The US government is now the backstop insure for the 51 00:03:55,000 --> 00:04:00,760 Speaker 2: world's most critical shipping checkpoint. The Development Finance Corporation facility 52 00:04:00,880 --> 00:04:06,720 Speaker 2: was coordinated with US Central Command and the Treasury Department. 53 00:04:07,960 --> 00:04:13,200 Speaker 2: It offers hull meaning the ship's hull, machinery, and cargo 54 00:04:13,360 --> 00:04:18,240 Speaker 2: coverage on a rolling basis to eligible vessels. And I 55 00:04:18,279 --> 00:04:23,279 Speaker 2: want to emphasize it was coordinated with US Central Command. Now, 56 00:04:23,680 --> 00:04:27,880 Speaker 2: US Central Command is not a financial instrument. US Central 57 00:04:27,920 --> 00:04:34,039 Speaker 2: Command is a strategic weapon. You cannot pass without Navy permission, 58 00:04:34,720 --> 00:04:36,720 Speaker 2: and the green light so far has not appeared. The 59 00:04:36,800 --> 00:04:38,880 Speaker 2: Navy has not given permission for anybody to come through, 60 00:04:39,960 --> 00:04:42,279 Speaker 2: So this is not a conspiracy theory. I think this 61 00:04:42,320 --> 00:04:48,640 Speaker 2: is more like a balance sheet. The last time US 62 00:04:48,720 --> 00:04:52,560 Speaker 2: Navy escorted tankers through the Straighthorn moves was something called 63 00:04:52,680 --> 00:04:57,200 Speaker 2: Operation Earnest Will during the Iran Iraq Tanker War of 64 00:04:57,279 --> 00:05:01,599 Speaker 2: nineteen eighty seven nineteen eighty eight. Foreign tankers that wanted 65 00:05:01,680 --> 00:05:05,760 Speaker 2: US Navy protection they had to take down whatever they 66 00:05:05,760 --> 00:05:08,760 Speaker 2: were flagged under, and they had to reflag into the 67 00:05:08,839 --> 00:05:13,839 Speaker 2: US registry. So a Kuwaiti supertanker would not fly the 68 00:05:13,880 --> 00:05:17,200 Speaker 2: Kuwaiti flag, they would fly the American flag in order 69 00:05:17,279 --> 00:05:20,000 Speaker 2: to get an American escort through the Strait of Hormons. 70 00:05:20,920 --> 00:05:24,040 Speaker 2: Now Trump has already said the Navy will escort ships 71 00:05:24,080 --> 00:05:29,560 Speaker 2: if necessary. If the same reflagging requirement were to apply, 72 00:05:31,160 --> 00:05:35,440 Speaker 2: every single European and Asian tanker that once the US 73 00:05:35,640 --> 00:05:40,799 Speaker 2: escort would have to fly the American flag. Think about 74 00:05:40,800 --> 00:05:43,599 Speaker 2: what that means for the Ships Act, the Jones Act, 75 00:05:43,600 --> 00:05:47,320 Speaker 2: which I discussed with Ross earlier today. Think about what 76 00:05:47,360 --> 00:05:52,080 Speaker 2: it means for the US flag fleet and for the 77 00:05:52,400 --> 00:05:57,120 Speaker 2: unfulfilled promise within the Pentagon to triple the US flag 78 00:05:57,240 --> 00:06:02,000 Speaker 2: vessels and this is where I I think my argument 79 00:06:02,000 --> 00:06:06,000 Speaker 2: about Trump playing three D chess, I think it's in. 80 00:06:06,240 --> 00:06:11,040 Speaker 2: I think it is intellectually defensible because the straight of 81 00:06:11,120 --> 00:06:16,160 Speaker 2: her moves becomes the forcing function for every single maritime 82 00:06:16,240 --> 00:06:21,880 Speaker 2: policy objective that Trump could not achieve through either legislation 83 00:06:21,960 --> 00:06:27,080 Speaker 2: or diplomacy. And this is not unprecedented. Reagan did it. 84 00:06:28,200 --> 00:06:32,040 Speaker 2: The legal and the diplomatic architecture is already in existence. 85 00:06:33,560 --> 00:06:36,960 Speaker 2: So now let's think about the geopolitical leverage. Here's what 86 00:06:37,000 --> 00:06:40,960 Speaker 2: the leverage is in Europe's the target and i'll explain why. 87 00:06:41,920 --> 00:06:46,120 Speaker 1: You guys, remember in twenty twenty two when Kathy Heckel 88 00:06:46,920 --> 00:06:51,400 Speaker 1: beat Res Delden in the Dubnor's race in New York, 89 00:06:52,160 --> 00:06:55,080 Speaker 1: and she told people that if they didn't like her policies, 90 00:06:55,120 --> 00:06:57,880 Speaker 1: to get out of New York, we don't need you here. 91 00:06:58,520 --> 00:07:02,040 Speaker 1: But now it appears that she's staying the message that 92 00:07:02,120 --> 00:07:05,440 Speaker 1: many people, a lot of rich people love New York. 93 00:07:05,600 --> 00:07:09,960 Speaker 1: Oh that's redace their tax base, redacing up their taxes. 94 00:07:11,840 --> 00:07:14,040 Speaker 2: Let's go back to the geopolitical leverage that I was 95 00:07:14,080 --> 00:07:16,480 Speaker 2: talking about, because I think this is the most compelling 96 00:07:16,840 --> 00:07:21,320 Speaker 2: and probably the most underreported the European shipping community, and 97 00:07:21,440 --> 00:07:27,240 Speaker 2: the European political establishment has spent the entire past year dismissing, undermining, 98 00:07:27,560 --> 00:07:33,520 Speaker 2: mocking Trump's maritime initiatives everywhere, tariffs, the Ships Act, refused 99 00:07:33,520 --> 00:07:37,880 Speaker 2: to take any American maritime policy seriously. Now where are 100 00:07:37,920 --> 00:07:44,200 Speaker 2: they now? Europe's energy supply runs through an insurance facility 101 00:07:44,280 --> 00:07:50,000 Speaker 2: controlled by Washington, and the European navies are absolutely incapable 102 00:07:50,240 --> 00:07:54,440 Speaker 2: of bailing themselves out. European naval forces are too small, 103 00:07:54,520 --> 00:07:58,200 Speaker 2: too slow, too poorly equipped to sustain any sort of 104 00:07:58,280 --> 00:08:03,800 Speaker 2: convoy escort operation through a contested strait, and they don't 105 00:08:03,880 --> 00:08:08,320 Speaker 2: have the fiscal wherewithal to put together an insurance facility 106 00:08:08,400 --> 00:08:13,480 Speaker 2: to cover that. All the European navies combined could not 107 00:08:13,720 --> 00:08:17,600 Speaker 2: send more than three ships at a time to defend 108 00:08:17,680 --> 00:08:22,640 Speaker 2: the Red Sea. There was an entire German task force 109 00:08:23,280 --> 00:08:27,960 Speaker 2: that sailed around Africa to avoid it. So what does 110 00:08:28,080 --> 00:08:34,040 Speaker 2: capitulate look like for Europe? Well, you got the carbon tax, 111 00:08:34,760 --> 00:08:37,960 Speaker 2: you got Greenland, you have tariff concessions, you have the 112 00:08:38,000 --> 00:08:42,920 Speaker 2: Ships Act, you have every single maritime policy priority that 113 00:08:43,120 --> 00:08:46,320 Speaker 2: Europe and China both have been blocking for the past year. 114 00:08:49,280 --> 00:08:53,120 Speaker 2: And then think about the domestic energy fracture. Nobody's talking 115 00:08:53,120 --> 00:08:57,640 Speaker 2: about this either. This is the section, this is the part. 116 00:08:57,720 --> 00:09:00,360 Speaker 2: This is the part of the theory that I think, 117 00:09:00,480 --> 00:09:04,920 Speaker 2: including CNBC, that most cable news analysts are completely missing, 118 00:09:04,960 --> 00:09:06,960 Speaker 2: and I think it is probably the most important piece 119 00:09:07,400 --> 00:09:13,160 Speaker 2: for American domestic politics. The real threat listen closely. The 120 00:09:13,200 --> 00:09:15,120 Speaker 2: real threat to you and me in our way of 121 00:09:15,160 --> 00:09:19,000 Speaker 2: life is not two hundred dollars oil. It is a 122 00:09:19,120 --> 00:09:25,080 Speaker 2: fracture of the system, cheap energy in export nations and 123 00:09:25,240 --> 00:09:29,160 Speaker 2: ruinous energy costs in places far from where those reserves are. 124 00:09:31,200 --> 00:09:35,439 Speaker 2: Brent I said earlier was above one hundred dollars. WTI 125 00:09:35,559 --> 00:09:39,760 Speaker 2: West Texas Intermedia is now above one hundred dollars. Domestically, 126 00:09:40,200 --> 00:09:45,400 Speaker 2: diesel is stabilizing, but natural gas prices are falling. As 127 00:09:45,720 --> 00:09:49,480 Speaker 2: look with natural gas that would normally be exported, it's 128 00:09:49,559 --> 00:09:55,480 Speaker 2: trapped here. And Trump has already moved. As you heard 129 00:09:55,480 --> 00:09:58,760 Speaker 2: on the earlier program, Trump issued a sixty day Jones 130 00:09:58,800 --> 00:10:03,040 Speaker 2: Act waiver opened up Venezuelan oil sales to US companies 131 00:10:03,400 --> 00:10:09,080 Speaker 2: via new Treasury license for the Venezuelan Oil Company. Exactly 132 00:10:09,120 --> 00:10:10,679 Speaker 2: the kind of move that you would make if you're 133 00:10:10,720 --> 00:10:16,160 Speaker 2: trying to drive US prices down. While the global market fractures. Now, 134 00:10:16,200 --> 00:10:23,120 Speaker 2: think about the political calculus. California's closing refineries, California's blocking pipelines. 135 00:10:24,000 --> 00:10:28,240 Speaker 2: They're forcing gasoline imports from South Korea on ships with 136 00:10:28,480 --> 00:10:33,640 Speaker 2: day rates that are starting to skyrocket. New England, where 137 00:10:33,679 --> 00:10:36,800 Speaker 2: we think about New England, where we have one of 138 00:10:36,840 --> 00:10:41,080 Speaker 2: the largest LNG facilities just right there next to Logan 139 00:10:41,200 --> 00:10:46,920 Speaker 2: International Airport in Boston. New England is importing LNG and 140 00:10:46,960 --> 00:10:51,400 Speaker 2: they're importing diesel fuel by ship. Now, if hormone, if 141 00:10:51,400 --> 00:10:56,160 Speaker 2: the straighter her move stays closed, prices will spike. In 142 00:10:56,200 --> 00:11:02,400 Speaker 2: those states, the deep blue states, red energy state, red 143 00:11:02,440 --> 00:11:08,080 Speaker 2: state energy, those costs could fall, Blue state costs rise. 144 00:11:09,360 --> 00:11:14,160 Speaker 2: Capitulates a major policy dispute between now and the midterms. Now, 145 00:11:14,200 --> 00:11:18,640 Speaker 2: all of this, this political part is purely speculative, but 146 00:11:18,800 --> 00:11:22,520 Speaker 2: the directional logic, I think is undeniable, and I think 147 00:11:22,559 --> 00:11:27,360 Speaker 2: it's already showing up. Governor Gavin Newsom, he is furious, 148 00:11:27,800 --> 00:11:30,760 Speaker 2: calling the situation a crisis of the president's own making. 149 00:11:31,360 --> 00:11:32,920 Speaker 2: Of course that's what you hear on the news, right, 150 00:11:33,640 --> 00:11:36,480 Speaker 2: And he's also arguing that the only thing that will 151 00:11:36,520 --> 00:11:40,520 Speaker 2: actually stabilize global oil markets is reopening the strait of 152 00:11:40,559 --> 00:11:44,679 Speaker 2: hor moves. So Newsom is screaming as lungs out. Well, 153 00:11:44,720 --> 00:11:48,600 Speaker 2: that's nothing new when the most likely twenty twenty eight 154 00:11:48,640 --> 00:11:53,560 Speaker 2: Democratic presidential candidate is on record demanding that you fix 155 00:11:53,640 --> 00:11:57,080 Speaker 2: a problem that you have no intention of fixing. You've 156 00:11:57,080 --> 00:12:00,000 Speaker 2: handled the White House a remarkable piece of political ring 157 00:12:00,960 --> 00:12:05,800 Speaker 2: over the most prominent Democrat in America. Right now, and 158 00:12:05,920 --> 00:12:10,720 Speaker 2: think about the sorting mechanism, because Iran has now become 159 00:12:11,559 --> 00:12:13,319 Speaker 2: a useful villain, Michael. 160 00:12:13,480 --> 00:12:17,000 Speaker 1: Last year, the Colorado State troopers pulled over twenty five 161 00:12:17,080 --> 00:12:20,480 Speaker 1: hundred drivers traveling slower than the flow of traffic. The 162 00:12:20,559 --> 00:12:23,280 Speaker 1: left lane is for passing, the right lane is for traveling. 163 00:12:23,640 --> 00:12:26,640 Speaker 1: Know you're lane, Thank you, Colorado State Patrol. 164 00:12:28,120 --> 00:12:31,240 Speaker 2: So let's go back and think about Iran as being 165 00:12:31,280 --> 00:12:37,080 Speaker 2: a useful villain here because Iran is selectively letting ships 166 00:12:37,320 --> 00:12:44,760 Speaker 2: through which ones Turkish, Indian, Chinese, and a couple of 167 00:12:44,760 --> 00:12:48,960 Speaker 2: Saudi tankers they've all been permitted to transit via Iranian 168 00:12:49,080 --> 00:12:54,480 Speaker 2: territorial waters. About eighteen tankers, mostly Chinese, they've all done so, 169 00:12:54,559 --> 00:12:58,800 Speaker 2: that's according to Lloyd's in London. Now Western Allied ships 170 00:12:59,360 --> 00:13:02,720 Speaker 2: they're all being blocked. So the closure in the strait 171 00:13:02,720 --> 00:13:07,760 Speaker 2: of her moves is really a sorting mechanism. Iran is 172 00:13:07,800 --> 00:13:12,000 Speaker 2: deciding who trades and who does not, unless, of course, 173 00:13:12,040 --> 00:13:15,760 Speaker 2: the United States Navy reopens it for everyone. But they 174 00:13:15,920 --> 00:13:18,800 Speaker 2: If the United States Navy opens it for everyone, that 175 00:13:18,960 --> 00:13:22,959 Speaker 2: will be on our terms. So think about that structure. 176 00:13:24,600 --> 00:13:27,920 Speaker 2: Iran is doing the dirty work of demonstrating every single 177 00:13:28,000 --> 00:13:35,120 Speaker 2: day what a world without American maritime dominance is going 178 00:13:35,200 --> 00:13:41,800 Speaker 2: to look like. Without our dominance, China will get oil, 179 00:13:42,760 --> 00:13:47,400 Speaker 2: but Europe won't. And the price of changing that arrangement 180 00:13:48,280 --> 00:13:52,200 Speaker 2: that now runs through Washington, d C. And the White House, 181 00:13:52,440 --> 00:13:58,000 Speaker 2: it does not run through the Mullas and Tehran. That 182 00:13:58,320 --> 00:14:03,400 Speaker 2: is three D chess at its best. Now, everything that 183 00:14:03,440 --> 00:14:10,040 Speaker 2: I've told you so far is clearly a hypothesis, and 184 00:14:10,120 --> 00:14:15,640 Speaker 2: so it has some vulnerabilities. Think about attribution of intent 185 00:14:16,120 --> 00:14:21,320 Speaker 2: versus the exploitation of the circumstances. I'm not arguing that 186 00:14:21,320 --> 00:14:24,840 Speaker 2: Trump planned this from the beginning, because the P and I, 187 00:14:24,960 --> 00:14:29,960 Speaker 2: the insurance Club's withdrawal, that was a cascading, systematic failure 188 00:14:30,440 --> 00:14:32,840 Speaker 2: that I don't think any central planner could have predicted 189 00:14:32,960 --> 00:14:37,760 Speaker 2: or even orchestrated. But Trump is arguing that the administration 190 00:14:37,920 --> 00:14:40,960 Speaker 2: has and this is my argument too, whether it's by 191 00:14:41,040 --> 00:14:45,120 Speaker 2: design or adaptation, they have assembled the tools to exploit 192 00:14:45,240 --> 00:14:49,360 Speaker 2: this moment. And I think that's an important hedge. This 193 00:14:49,480 --> 00:14:54,200 Speaker 2: is smart opportunism, it's a master strategy. Those are two 194 00:14:54,240 --> 00:14:59,160 Speaker 2: different things, even if the outcome looks the same. And 195 00:14:59,400 --> 00:15:02,720 Speaker 2: let's be off here too, the domestic oil price risk 196 00:15:02,920 --> 00:15:06,840 Speaker 2: is real now. If this whole worldwide fracture goes too deep, 197 00:15:07,240 --> 00:15:09,720 Speaker 2: too fast, yes, you and are going to feel that 198 00:15:09,760 --> 00:15:14,240 Speaker 2: at the pump West Texas Intermediate crued under one hundred 199 00:15:14,280 --> 00:15:17,920 Speaker 2: dollars a barrel. That's one thing. But a supply shock 200 00:15:18,960 --> 00:15:21,840 Speaker 2: that pushes domestic gas prices north of five dollars a 201 00:15:21,880 --> 00:15:26,880 Speaker 2: gallon before the midterms, that becomes a different political calculation 202 00:15:27,200 --> 00:15:31,440 Speaker 2: entirely now. The waiver of the Jones Act for sixty 203 00:15:31,520 --> 00:15:37,360 Speaker 2: days and giving access to Venezuelan crude that buys time, 204 00:15:38,480 --> 00:15:43,240 Speaker 2: but it's not unlimited time. And there's a third and 205 00:15:43,280 --> 00:15:49,720 Speaker 2: a fourth factor, there's the escalation risk. Everything I read 206 00:15:49,760 --> 00:15:56,800 Speaker 2: focuses on maritime and economic leverage, but Iran retaliating against 207 00:15:56,880 --> 00:16:00,840 Speaker 2: the fifth fleet base in Bahrain, that's a reminder of 208 00:16:00,840 --> 00:16:04,200 Speaker 2: the kinectic risks. Don't pause while you're playing insurance arbitrage. 209 00:16:05,360 --> 00:16:10,560 Speaker 2: A serious escalation, say a base hit, a carrier actually 210 00:16:10,640 --> 00:16:15,480 Speaker 2: threatened or damaged, a tanker sunk with US personnel abroad, 211 00:16:17,160 --> 00:16:20,120 Speaker 2: that can force the White House's hand in ways that 212 00:16:20,240 --> 00:16:24,160 Speaker 2: collapses the leverage hypothesis entirely. And this goes out the window, 213 00:16:24,400 --> 00:16:29,400 Speaker 2: and it is it's just full on war. And the 214 00:16:29,480 --> 00:16:35,320 Speaker 2: Navy has their own bureaucratic and institutional interest. The Navy 215 00:16:35,360 --> 00:16:41,480 Speaker 2: is playing along right now, but think about why. Because 216 00:16:42,000 --> 00:16:47,200 Speaker 2: they're trying to get support for their battleship program. They've 217 00:16:47,280 --> 00:16:52,800 Speaker 2: got to somehow shake, rattle and roll the defense contractors, 218 00:16:52,920 --> 00:16:57,920 Speaker 2: the shipbuilders, everybody that's feet dragging, foot dragging right now 219 00:16:58,080 --> 00:17:03,440 Speaker 2: with the battleship program. So I think their institutional interest 220 00:17:03,520 --> 00:17:07,320 Speaker 2: is playing a role here. Naval institutions have their own 221 00:17:07,359 --> 00:17:11,360 Speaker 2: bureaucratic momentum, and they've got their own chain of command considerations. 222 00:17:12,480 --> 00:17:17,920 Speaker 2: Deliberately slow walking at this scale requires extraordinary message discipline 223 00:17:17,920 --> 00:17:23,120 Speaker 2: from the top. And if I've learned anything about I 224 00:17:23,160 --> 00:17:29,160 Speaker 2: forget HEGSA. But the person you need to focus on 225 00:17:29,800 --> 00:17:33,920 Speaker 2: is the Chairman of the Joint Chiefs, because he is 226 00:17:34,280 --> 00:17:43,320 Speaker 2: forcing message discipline among all the different Secretaries, Navy, Air Force, marines, 227 00:17:43,480 --> 00:17:47,920 Speaker 2: all of them. So here's how I would frame this 228 00:17:48,280 --> 00:17:55,280 Speaker 2: an entire thesis for you. The conventional analysis of the 229 00:17:55,320 --> 00:17:57,719 Speaker 2: Straighthorn moves ask a simple question, when's the Navy going 230 00:17:57,720 --> 00:18:02,080 Speaker 2: to reopen it? I think the better question is what 231 00:18:02,200 --> 00:18:06,399 Speaker 2: is the price of reopening the Strait? And who's going 232 00:18:06,480 --> 00:18:10,800 Speaker 2: to set that price. Now, the answer of my hypothesis 233 00:18:10,840 --> 00:18:13,960 Speaker 2: holds based on all these different articles, is that dc 234 00:18:14,800 --> 00:18:21,280 Speaker 2: Ie the President now controls a financial checkpoint inside the 235 00:18:21,280 --> 00:18:27,320 Speaker 2: physical checkpoint. The reinsurance facility that Trump put together with 236 00:18:27,440 --> 00:18:32,639 Speaker 2: Chubb is the real leverage, and the Navy's deliberate pace 237 00:18:33,160 --> 00:18:37,240 Speaker 2: is the clock running on that leverage. Every day the 238 00:18:37,280 --> 00:18:42,479 Speaker 2: Strait stays effectively closed is another day that Europe's energy 239 00:18:42,680 --> 00:18:48,000 Speaker 2: dependence deepens. It's another day the case for concessions on tariffs, 240 00:18:48,520 --> 00:18:52,720 Speaker 2: the Carbon framework, or Greenland or the Ships Act. It 241 00:18:52,800 --> 00:18:57,760 Speaker 2: becomes harder and harder to refuse. You know, if I 242 00:18:57,800 --> 00:19:01,560 Speaker 2: put my notes together, I noticed last night the Poles, 243 00:19:02,520 --> 00:19:06,120 Speaker 2: Poland they stepped up to the plate. I think they 244 00:19:06,240 --> 00:19:11,880 Speaker 2: understand this because they're just new enough in terms of 245 00:19:12,280 --> 00:19:16,399 Speaker 2: having shed communism, unlike France and Germany, who have all 246 00:19:16,440 --> 00:19:20,720 Speaker 2: forgotten about the Nazis and World War Two. They know 247 00:19:20,840 --> 00:19:22,960 Speaker 2: I think the Poles know what games being played here, 248 00:19:24,119 --> 00:19:27,640 Speaker 2: and so they've stepped up because they know that when 249 00:19:28,119 --> 00:19:32,160 Speaker 2: the trip wire is hit on my hypothesis, they want 250 00:19:32,200 --> 00:19:39,920 Speaker 2: to be on the side of Trump. You don't anytime 251 00:19:39,960 --> 00:19:44,880 Speaker 2: you're doing negotiations and you have leverage, you don't announce 252 00:19:45,000 --> 00:19:49,760 Speaker 2: the leverage. You just apply it. Now, whether this is 253 00:19:49,800 --> 00:19:54,760 Speaker 2: three D chess or it's very sophisticated improvisation on a 254 00:19:55,240 --> 00:19:59,520 Speaker 2: lucky break, I think almost doesn't matter. The tools have 255 00:19:59,520 --> 00:20:04,199 Speaker 2: been a simi. The incentive structure is in place, and 256 00:20:04,280 --> 00:20:08,480 Speaker 2: the historical precedent Operation ernest Will shows that it has 257 00:20:08,560 --> 00:20:13,520 Speaker 2: been done before. Now, think about the opposition, both foreign 258 00:20:13,520 --> 00:20:19,879 Speaker 2: and domestic, is completely focused on the wrong question, that 259 00:20:20,040 --> 00:20:24,000 Speaker 2: is what strategic advantage looks like. And the people think 260 00:20:24,040 --> 00:20:30,680 Speaker 2: about who's screaming aloudest right now, European diplomats, Gavin Newsom, 261 00:20:31,760 --> 00:20:35,240 Speaker 2: whatever's left of whatever the regime leadership is in Tehran. 262 00:20:36,200 --> 00:20:40,920 Speaker 2: They're screaming, I think precisely because they understand what's actually happening. 263 00:20:42,280 --> 00:20:46,800 Speaker 2: They understand that everything is being put together, is that 264 00:20:47,480 --> 00:20:52,040 Speaker 2: we're not in any hurry here. We're gonna guilt Trump 265 00:20:52,320 --> 00:20:57,280 Speaker 2: canceled the trip to China. Yes, they're letting a few 266 00:20:57,480 --> 00:21:02,320 Speaker 2: Chinese ships get through Europe. You're not getting squat right now. 267 00:21:03,280 --> 00:21:07,439 Speaker 2: The polls recognize that and are stepped up. So it 268 00:21:07,640 --> 00:21:11,320 Speaker 2: really is that why be in a hurry to reopen 269 00:21:11,400 --> 00:21:16,640 Speaker 2: this because either a closed straight or a controlled strait 270 00:21:17,680 --> 00:21:24,120 Speaker 2: is worth more to Trump's overall global strategy of realigning 271 00:21:24,160 --> 00:21:28,199 Speaker 2: America first, making sure that we are the most dominant, 272 00:21:29,440 --> 00:21:32,679 Speaker 2: that we are the most powerful, and that we have 273 00:21:32,920 --> 00:21:37,119 Speaker 2: the largest economy on the face of the earth. And 274 00:21:37,240 --> 00:21:42,160 Speaker 2: all those competitors we have think China, think India, think 275 00:21:42,200 --> 00:21:48,320 Speaker 2: the European Union. We control the one thing that they 276 00:21:48,440 --> 00:21:54,560 Speaker 2: need most to become dominant, oil going through the Strait 277 00:21:54,560 --> 00:21:59,280 Speaker 2: of Hormons. And you you want you want to buy China, 278 00:21:59,320 --> 00:22:03,480 Speaker 2: you need some oil. Once we finished the kinetic operation 279 00:22:03,640 --> 00:22:07,880 Speaker 2: going on in Iran right now, and we effectively get 280 00:22:07,920 --> 00:22:11,960 Speaker 2: a first carg island. I don't know whether once the 281 00:22:12,000 --> 00:22:15,399 Speaker 2: exhibitionary force gets there, whether they'll actually put boots on 282 00:22:15,440 --> 00:22:17,440 Speaker 2: the ground and take control of that might. Guess is 283 00:22:17,520 --> 00:22:20,960 Speaker 2: they will, because by the time they get there, the 284 00:22:21,040 --> 00:22:25,080 Speaker 2: ability of the Iranians to lob missiles on the Island. Yeah, 285 00:22:25,119 --> 00:22:28,320 Speaker 2: probably not gonna happen. But that's also suicidal on the 286 00:22:28,320 --> 00:22:32,800 Speaker 2: part of the Uranians because Cark Island is their sole 287 00:22:32,960 --> 00:22:35,080 Speaker 2: source of revenue. Well, I shouldn't say the sole source. 288 00:22:35,240 --> 00:22:39,240 Speaker 2: It's the distribution point for all of their revenue, all 289 00:22:39,320 --> 00:22:41,560 Speaker 2: the oil that they collect in the oil fields. Why 290 00:22:41,600 --> 00:22:44,520 Speaker 2: have we not bombed the infrastructure, Why have we not 291 00:22:44,640 --> 00:22:46,920 Speaker 2: bombed the oil fields? Why have we not set on 292 00:22:46,960 --> 00:22:49,840 Speaker 2: the flame like Saddam Hussein did during the First Gulf War? 293 00:22:50,920 --> 00:22:54,119 Speaker 2: Because we want that in place, we want that to 294 00:22:54,160 --> 00:22:59,200 Speaker 2: stay there. So we're going to take carg Island, which 295 00:22:59,280 --> 00:23:02,240 Speaker 2: wants all of those oil fields are now operating again. 296 00:23:02,480 --> 00:23:08,480 Speaker 2: We'll control that, and we'll control the straight and will decide. China, 297 00:23:08,560 --> 00:23:11,840 Speaker 2: Oh you want you want oil? No, sorry, Venezuela Le's 298 00:23:11,880 --> 00:23:13,800 Speaker 2: you're not getting it there anymore. You want it through 299 00:23:13,840 --> 00:23:16,560 Speaker 2: the straight over moves. You want Iranian oil, here's the price. 300 00:23:19,119 --> 00:23:23,320 Speaker 2: I think that puts us in the so called driver's seat. 301 00:23:24,400 --> 00:23:30,080 Speaker 2: And I think it's counterintuitive because most strategists don't want 302 00:23:30,119 --> 00:23:35,240 Speaker 2: to think beyond the immediate political argument that's going on everywhere. 303 00:23:36,560 --> 00:23:39,919 Speaker 2: You got the stupid, dumbass democrats in Congress bitching and 304 00:23:39,960 --> 00:23:41,680 Speaker 2: moaning about how long is this going to take? What 305 00:23:42,640 --> 00:23:45,119 Speaker 2: have you been doing this now? Three four weeks or something, 306 00:23:46,200 --> 00:23:49,520 Speaker 2: and they're already bitching and complaining and actually I think 307 00:23:49,560 --> 00:23:55,359 Speaker 2: dissing the troops that are in harm's way. They're so 308 00:23:55,720 --> 00:24:00,680 Speaker 2: blinded by their hatred of Trump. And don't get me wrong, 309 00:24:00,960 --> 00:24:03,600 Speaker 2: I understand why they don't like how he actually do 310 00:24:03,760 --> 00:24:05,760 Speaker 2: like how he behaves. They don't like the fact that 311 00:24:05,800 --> 00:24:10,000 Speaker 2: he may you know, some of them may actually understand 312 00:24:10,040 --> 00:24:14,840 Speaker 2: what he's doing here, and they can't stand it because 313 00:24:14,840 --> 00:24:18,240 Speaker 2: they're not America. First. They don't care whether we're the 314 00:24:18,280 --> 00:24:22,600 Speaker 2: world's soul superpower or not. They want to, in the 315 00:24:22,600 --> 00:24:26,960 Speaker 2: words of that former Yahoo president Barack Obama, they want 316 00:24:27,000 --> 00:24:31,439 Speaker 2: to fundamentally transform this nation. And there's a roadblock. And 317 00:24:31,520 --> 00:24:35,639 Speaker 2: that roadblock right now is Donald Trump, and he is 318 00:24:35,680 --> 00:24:39,960 Speaker 2: shown in We'll just look at South America, look at Mexico, 319 00:24:40,920 --> 00:24:45,439 Speaker 2: look at Venezuela, look at Cuba, and they look at 320 00:24:45,440 --> 00:24:50,280 Speaker 2: Strada her moves. I really think this theory is more 321 00:24:50,359 --> 00:24:53,920 Speaker 2: credible than it sounds. We're not in a hurry to 322 00:24:53,960 --> 00:24:57,679 Speaker 2: reopen because closure controlled is more. It's worth more to 323 00:24:57,840 --> 00:25:02,040 Speaker 2: Washington than an open street. Go back to the kill switch. 324 00:25:03,240 --> 00:25:07,520 Speaker 2: Once he took the US International Development Finance Court created 325 00:25:07,560 --> 00:25:11,600 Speaker 2: that twenty billion dollar maritime reinsurance facility, Chubb as the 326 00:25:11,680 --> 00:25:16,040 Speaker 2: lead underwriter. That made us the insure of last resort 327 00:25:16,640 --> 00:25:21,359 Speaker 2: for Gulf shipping. So we're now the backstop insure for 328 00:25:21,400 --> 00:25:25,840 Speaker 2: the world's most critical shipping choke point. Now, if the 329 00:25:25,960 --> 00:25:30,040 Speaker 2: Uranians led a Chinese ship through, we're not going to 330 00:25:30,200 --> 00:25:34,440 Speaker 2: go blow that ship up because that puts US into 331 00:25:34,440 --> 00:25:39,639 Speaker 2: a direct conflict with the People's Liberation Army. Why do 332 00:25:39,680 --> 00:25:42,680 Speaker 2: you think China's sending ships that direction? 333 00:25:43,080 --> 00:25:43,240 Speaker 1: Now? 334 00:25:43,280 --> 00:25:46,159 Speaker 2: They may not go into the Strait, but they're simply 335 00:25:46,200 --> 00:25:51,440 Speaker 2: trying to do something, show something, and they don't forget 336 00:25:51,440 --> 00:25:53,800 Speaker 2: about Trump deciding that he's no longer going to go 337 00:25:53,880 --> 00:25:57,919 Speaker 2: to the meeting with Chijing Ping and Beijing. I think 338 00:25:57,960 --> 00:26:00,600 Speaker 2: it's supposed to be like first and the next week sometime. 339 00:26:01,960 --> 00:26:05,560 Speaker 2: That's God to have pissed off Sheijing Ping, because he 340 00:26:05,720 --> 00:26:09,240 Speaker 2: surely understands what game's being played here. Now, when you 341 00:26:09,280 --> 00:26:11,160 Speaker 2: have meetings with the Chinese, I can tell you from 342 00:26:11,200 --> 00:26:15,040 Speaker 2: experience that what those meetings are, they're mostly pomp and circumstance, 343 00:26:16,040 --> 00:26:18,320 Speaker 2: and they will drag you out they'll take you to 344 00:26:18,520 --> 00:26:21,159 Speaker 2: places that you know, if you're the Secretary of the 345 00:26:21,200 --> 00:26:23,480 Speaker 2: Treasury or you're the president of the United States for 346 00:26:23,520 --> 00:26:26,720 Speaker 2: that matter, they'll take you places and show you things 347 00:26:26,760 --> 00:26:29,560 Speaker 2: that most people would never see because the Chinese Communist 348 00:26:29,600 --> 00:26:34,680 Speaker 2: Party controls all of those sites, all of those different places. 349 00:26:35,400 --> 00:26:37,720 Speaker 2: So they'll drag it out, they'll, you know, they'll make 350 00:26:37,760 --> 00:26:40,359 Speaker 2: a big deal of it, and they will use that 351 00:26:40,480 --> 00:26:45,280 Speaker 2: to their own propaganda benefit to show their strength. And 352 00:26:45,400 --> 00:26:48,680 Speaker 2: it shows a sign of weakness by the President going 353 00:26:48,720 --> 00:26:51,560 Speaker 2: to China at a time that we're involved in this conflict. 354 00:26:52,080 --> 00:26:55,800 Speaker 2: Trump has basically said ning yanya to Xijing Ping, and 355 00:26:55,840 --> 00:26:59,480 Speaker 2: he's going to stay right in DC. He has snubbed 356 00:27:00,080 --> 00:27:04,040 Speaker 2: the Chinese Communist Party. He has snubbed the one guy 357 00:27:05,040 --> 00:27:08,719 Speaker 2: that ultimately wants to be the dictator of the world. Now, 358 00:27:08,800 --> 00:27:12,879 Speaker 2: let's think about Vladimir Putin for a second. Yes, temporarily 359 00:27:12,920 --> 00:27:17,639 Speaker 2: they have lifted sanctions because you don't want Europe to collapse. 360 00:27:18,680 --> 00:27:23,080 Speaker 2: You just want Europe to know who's in charge. And 361 00:27:23,280 --> 00:27:29,000 Speaker 2: while yes, that may help Putin in his war against Ukraine, 362 00:27:29,119 --> 00:27:34,600 Speaker 2: it also points something else out Ukraine. And actually, you know, 363 00:27:35,440 --> 00:27:43,360 Speaker 2: again counterintuitively, this strengthens Ukraine because we've been using Ukraine's 364 00:27:43,640 --> 00:27:48,760 Speaker 2: drone technology. We've been using their advisors to teach us 365 00:27:49,080 --> 00:27:52,600 Speaker 2: how to fight against the Iranian drones. But at the 366 00:27:52,600 --> 00:27:56,640 Speaker 2: same time that that's going on, it is exposed Europe 367 00:27:56,760 --> 00:28:00,480 Speaker 2: for the weak sister that they are. Remember how austream 368 00:28:00,560 --> 00:28:03,600 Speaker 2: they were about shame on us for not giving you know, 369 00:28:03,680 --> 00:28:08,120 Speaker 2: the Ukrainians everything they needed to defeat Putin, And our 370 00:28:08,160 --> 00:28:11,240 Speaker 2: response was basically, well, why don't you step up? They're 371 00:28:11,240 --> 00:28:15,119 Speaker 2: in your backyard. Why don't you do it? And what 372 00:28:15,160 --> 00:28:21,560 Speaker 2: did they do? Nothing? We have exposed Europe for all 373 00:28:21,640 --> 00:28:27,600 Speaker 2: of the folly and the absolute insanity that their social 374 00:28:27,640 --> 00:28:32,600 Speaker 2: welfare programs, their green energy programs, everything that they've done, 375 00:28:32,640 --> 00:28:36,720 Speaker 2: all of their appeasement, for all these dictators, allowing all 376 00:28:36,800 --> 00:28:40,520 Speaker 2: these people to invade their countries. We have shown them 377 00:28:41,720 --> 00:28:45,880 Speaker 2: you can't. You have no nation anymore, you have no 378 00:28:46,000 --> 00:28:50,640 Speaker 2: ability to influence anything in the world anymore. All influence 379 00:28:51,240 --> 00:28:55,360 Speaker 2: right now is being exerted from sixteen hundred Pennsylvania Avenue. 380 00:28:56,680 --> 00:29:00,720 Speaker 2: Xijing Ping knows it, Vladimir Putin knows it, and the 381 00:29:00,880 --> 00:29:07,400 Speaker 2: Molas whoever are left, they know it too. So this 382 00:29:07,760 --> 00:29:11,560 Speaker 2: whole theory about not opening the strait or her moves 383 00:29:12,120 --> 00:29:16,760 Speaker 2: I actually think has some fairly good legitimacy to it. 384 00:29:17,680 --> 00:29:20,680 Speaker 2: Here's what I want you to do over the next 385 00:29:20,720 --> 00:29:26,920 Speaker 2: several days as we watch the kinetic operation continue. Every 386 00:29:26,920 --> 00:29:29,760 Speaker 2: time you hear that a Chinese ship has gotten through 387 00:29:30,200 --> 00:29:34,920 Speaker 2: or an Indian ship has gotten through, ask yourself how 388 00:29:34,960 --> 00:29:40,520 Speaker 2: many European ships went through? How much oil? Has China 389 00:29:40,560 --> 00:29:43,520 Speaker 2: come to us and said we'd like to buy some 390 00:29:43,560 --> 00:29:46,680 Speaker 2: oil from you? And we say, okay, well you can 391 00:29:46,680 --> 00:29:50,880 Speaker 2: buy it from Venezuela. But rather than getting at twenty 392 00:29:50,880 --> 00:29:53,600 Speaker 2: five dollars a barrel, or actually they weren't even paying 393 00:29:53,640 --> 00:29:56,320 Speaker 2: for it. They were getting in exchange for all sorts 394 00:29:56,360 --> 00:30:00,280 Speaker 2: of security operations, just like Cuba was. You know, Cuba 395 00:30:00,280 --> 00:30:03,280 Speaker 2: didn't actually pay for that Venezuelan oil. What Cuba did 396 00:30:03,400 --> 00:30:06,800 Speaker 2: was they sent troops, they sent security apparatus, they sent 397 00:30:06,880 --> 00:30:10,320 Speaker 2: security services to protect Maduro. Now it's no longer needed, 398 00:30:11,160 --> 00:30:13,600 Speaker 2: no longer needed the US embas. He's opened back up 399 00:30:13,600 --> 00:30:19,360 Speaker 2: in Caracas. He's put the United States in the driver's seat. 400 00:30:20,640 --> 00:30:20,920 Speaker 1: Now. 401 00:30:21,160 --> 00:30:29,160 Speaker 2: You can dislike, hate, despise everything about Donald Trump, but 402 00:30:29,200 --> 00:30:33,480 Speaker 2: what you have to admit is that if this works, 403 00:30:34,120 --> 00:30:39,880 Speaker 2: it's all utterly brilliant move because it puts us at 404 00:30:39,920 --> 00:30:48,840 Speaker 2: the apex of everything going on. Yesterday, the Israelis bombed 405 00:30:49,560 --> 00:30:51,280 Speaker 2: a gas or an oil field, I don't know which 406 00:30:51,280 --> 00:30:54,760 Speaker 2: it was, and Trump came out and basically told the 407 00:30:54,840 --> 00:30:59,600 Speaker 2: Israelis don't don't do it again, and I'm not going 408 00:30:59,640 --> 00:31:02,200 Speaker 2: to allow you to do it again. But he also 409 00:31:02,240 --> 00:31:06,120 Speaker 2: said at the same time to the Iranians, now, if 410 00:31:06,200 --> 00:31:09,920 Speaker 2: you decide you're gonna bomb or blow up something in 411 00:31:10,200 --> 00:31:13,960 Speaker 2: Cutter or Saudi Arabia or Kuwait or any of their 412 00:31:14,000 --> 00:31:16,920 Speaker 2: pipelines or any of theirs, then We're gonna come even 413 00:31:17,040 --> 00:31:21,960 Speaker 2: stronger against you. Who's controlling who's exercising the leverage right now. 414 00:31:22,840 --> 00:31:26,080 Speaker 2: It's not Congress, it's not Gavin Newsom, it's not the Chinese, 415 00:31:26,200 --> 00:31:30,520 Speaker 2: it's not Vladimir Putin. There's one guy this exercising leverage, 416 00:31:31,360 --> 00:31:35,000 Speaker 2: Donald J. Trump, regardless of what you think about him personally, 417 00:31:35,240 --> 00:31:38,520 Speaker 2: set that aside for a moment, just a moment, and 418 00:31:38,600 --> 00:31:40,840 Speaker 2: think about what's really going on in the Middle East 419 00:31:40,920 --> 00:31:42,920 Speaker 2: right now, particularly the Strait of her Moons.