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Chambov joined us absolutely definitive at Blackrock here Global had a research for Blackrock Investment Institute and with the Canadian feel as well. Jean, I see the moment here. I was reading very carefully way Lee the other day synthesize the Blackrock view of the software shock of four or five, six days ago.
Yeah, I think it's interesting maybe to start by comparing this to last fall. Right, So, last fall we had market selling off and that was all on the back
of doubts about whether AI with the real thing. And now we got this kind of as you say, shock over the last few a couple of weeks, which is also a sell off, also a sell off story, but it's it's because of AI is a real thing this time, and now market extrapolating to the disruption is going to really cause So I guess one takeaway is that you know, we see that as increasing the conviction of this AI mega force being real, it's happening, it's disrupting now, uh,
and now markets are starting to think through what that means for winners and losers.
I think it's early though on that question.
So we're going to see markets start to run to conclusion and make big, you know, sweeping software type labels and stuff and run with this. But I think it's going to be a story that's gonna, you know, be a much more nuance. And yeah, I think we're gonna likely to see overreaction along the way as we've seen.
John, I'm wondering if this market can perform if technology is not leading it. We've become so accustomed to technology and then most recently the magazis magnificent seven leading this market. Do you sort of have confidence that that's the case.
Yeah, Well, I mean the we we in our outlook we call that micro is macro, right, So the idea that like it's it's a it's a mega for story's AI is at the center not only of this market but of the economy, to be honest. So the growth we've been having and we're going to continue that is heavily dependent on AI continuing to grow. But I would say that what we've seen in the last couple of weeks is now visibility into that breaking out of you know,
out of the pure kind of builders. So yes, we are focused on the potential losers, but that means that they're losers because there's going.
To be windfalls.
They're going to be very significant for the others where it's going to get monetized.
So you know, you know, I think we get Yeah, everything dependent on the AI story.
I think the build out, the need to build this out is that THESUS is intact, even maybe reinforced, and that's an I perfrescat.
Our story is killing me.
Ticos micro's macro. You know, I got a shift to a FED discussion Jean Beauvan with us, with all of his great work and academics at Princeton. Does Kevin worsh have any understanding Jean Beauvan of the micro dynamics of Monetary policy study or is it all big concept stuff? I mean, I I don't know.
I don't know that I have visibility into that specific question, I think, But you know, I know I've known given for for some years and I've followed like his comments and so on. I guess one thing you could say is that this is only somebody that has like a macro view of my policy that is incurred in like crisis experience, and I would say that as like a good understanding of the global ramification of that.
So I guess that's uh, that's an important point.
And has also been very focused on the AI piece, which I guess is uh is more of a micro lench something. So so that suggests that like both are at play here with Kevin And what's.
Really interesting here we had another guest in earlier is talking about the productivity boom is not only AI, but is efficiency learned off the pandemic. Describe how you see America's burgeoning productivity.
Well, I would say that the productivity we've seen in the data so far, to my mind, our mind, has not much to do with AI yet, So I think that would be would be more sympathetic to uh, you know what we've learned from the pandemic and uh and that feeling true.
And also I think a big part of this is just cyclical.
Uh, you know, where when when growth is accelerating, we tend to be more productive before we hire more people and there's also this kind of no fire, no higher dynamic with the uncertainty that I think manifest itself in increased measure productivity.
So first point is, I don't think we've seen the II productivity yet.
I do think that this is the potential is real, right, I mean, and I think it's going to take some time to see it.
But like we for the we think for the first time it's.
Conceivable that AI could be powerful enough to finally break us out of a two percent road world, which we haven't broke in.
The US for one hundred and fifty years.
All the ingenuity of humans over the last one hundred and fifty years has just been enough to keep us on a two percent road pad. I think it's conceivable that AI for the first time could change that.
And the key thing.
Will be if it actually leads us to accelerate the rate of innovation.
That's the key thing to track for us. But that I don't think we've seen that yet.
Jehan, twenty twenty five was a year where emerging markets really asserted itself as a performer. Here is that can extend in twenty six.
We are we are positive for an emerging market for twenty twenty ses. I think the backdrop macro backdrop continues to be you know positive for EM in general. Do we have you know, a weaker dollar environment that I think we were not like subscribing to the idea that there's an ongoing kind of trend downward than a dollar in twenty twenty six, But I don't think it's trend any either, So I think that's going to be conducive
constructive for EM. We have you know, a Paulsey landscape in EM that has been you know, surprisingly strong the last couple of years. I think that continues and for us then it's about tracing those mega force and now they play out in EM. So those that are exposed to AI, I think are set to do well. You know, Korea is obviously like the super story of twenty twenty five, but I think that hass the room to continue.
What is the study at Black Rock? Joan Bovan of China? Are they finally recovering? We're seeing it in retail a little bit caring Gucci out today with a better tone, but this Black see China doing better.
I think I think that the marginal the evolution is towards a more positive you know, investment landscape. I think the and there's a couple of things. I think the AI story again, I mean, there's this more in AI in life. But that's the key that's certainly the key thing right now, and it's also true in in China.
That's a key thing.
I think we we have not paid enough attention in twenty twenty five has been a big story and it has really been pretty powerful. I think the other the other key drivers or yes, there's a bit of a of a brunnening of growth that could be part of it. But I think also the authorities shifting their stands on copper China and allowing maybe a bit more breeding room I think and learning those lessons from the last few
years could also be constructive. So on a technical basis, we see more opportunity in China than we would have had seen a year ago.
Jean, thank you for the time, particularly those comments on the federal reserve nomination process. You champavent at Blackrock. Stay with us. More from Bloomberg Surveillance coming up after this.
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True that we here with all the government shut down, short shutdown, nice restart, but the economics forward through the week is exhausting. To help us out, Francis Donald it joins us right now, thrilled to have her with us year this morning with RBC. I look, Francis at where we are, and I got to get to Friday. Do you have any guestimate or bestimate of where you'll be Friday? It's a quarter of nine, quarter of nine.
Well, we will be still reviewing the CPI data, but probably taking the entirety of the week together, which is we've got retail sales, we've got a jobs number coming through, we've got inflation, and yet behind the scenes, the problem is a lot of our data is still distorted coming off of the shutdown. We've got seasonality issues, which we always do in the first quarter, and then we have a lot of known unknowns like where is tariff policy
going to settle? We still don't know the answer to that, and we're wrestling out with all of these data points. What is a cyclical trend versus what is a structural that's never been more important in.
Microre smart people in Atlanta have the Atlanta GDP now, which is now it's coming down. Is that a vector in place that are we going to get real GDP under three percent?
We're probably going to get something for the fourth quarter around three percent, maybe a little bit of upside about that. But again, what is the composition of that growth. We're seeing growth that is great for markets, but not great great for the people. We're seeing growth that is really biased towards capex Ai data centers. Now, that's not necessarily bad. Different type of growth. It's not a tide that lifts all ships, and it's not one that's going to create
a significant amount of job growth associated with it. It's not growth that's going to save the affordability issues facing consumers. In fact, it's not growth that's going to solve the k shaped elements of this economy. So it's growth, and that's good, and I'll never knock a great GDP number, But what's happening under the surface is going to be far more important for companies operating in the United States and ultimately for markets too.
I like notes you say we're about to hit the five year anniversary of inflation running above two percent. I didn't think about it in that terms. The a IFED can't be happy about that, But b who cares about two percent? I mean, where did that number come from? And should we really care? It feels like inflation. It's higher than maybe we'd like it, But it's isn't it just kind of where we are in this economy.
Well, I guess that's a great way to put it. That's kind of where we are. Where does it come from central bank research? Predominantly, I think originating out of New Zealand. The two percent was a great place to be. And I remember even a few years ago, folks would say things like, oh, well, what if we end up with three percent being the new two percent? This was
a really scary type of development. But when I think about three percent, I think that while people got worried about inflation surging like it did during the post pandemic period, you know nine ten percent as being the real big problem, But here we are actually sort of embedding higher inflation expectations going forward, and the issue is based on our outlook, we're going to stay in the high twos and around
three percent through the end of this year. So it wouldn't surprise me if you have me back a year from now that we're celebrating the six year anniversary of inflation above the two percent target.
All right, let's go to the other side of the FEDS mandate, the labor market. We'll get some labor data this week as well, and the unemployment rate. I think the forecast is for four point four percent. Again, that feels kind of full employment ish, although you tell that to a recent college grad and they probably wouldn't feel that way. So how do you feel about the labor market?
Well, employment ish, I'd say that's downright full employment right there. There's only two periods in history when we've had unemployment rates that were this low. We actually have a four to three in our forecast this week, but for three four four we're sort of splitting hairs here. So what's happening, Well, we are going to have far less job creation. You're not going to see new jobs being posted, so non
farm payrolls those it going to continue to decline. We have about sixty sixty five thousand this week coming through could be lower, and it will trend lower through twenty twenty six, but that unemployment rate is not going to rise meaningfully. Why because there are not enough people who need new jobs coming forward. We only need to create about forty thousand jobs per month or less in order to keep those who want jobs with jobs coming through
this year. That's going to take a lot of re education for markets to really understand.
With the Royal Bank of Canada, Francis Donald with us to get us start. It's joining Terry Reisman on deck in the next hour, Ander Slimming from Morgan Stanley, Ian Bremer in the nine o'clock with Jellebovan Blackrock. Just a fabulous set of conversations today to launch into February and Marsh, I'm going to digress here now for thirty seconds. I
think it's very important. One of the great moments for your Canada was to see the back Nordiq's on the ice with the Montreal Canadians eer of course at Colorado Avalanche play. Really emotional, Actually, folks, to see these two teams Pictures and Catchers right now? Do we need to see Montreal expos next year at Pictures and Catchers.
Sure, let's go for it.
I have to tell you just over this weekend My husband and I were having a conversation that everyone wanted gold, everyone wants critical minerals. Everyone was running after silver, whereas up in Quebec we're always running after nordiq a swage. We just want Nordique cots butters, and if we could monetize that, we could actually beat this market.
When you were a kid, did you see the expos? Do you have any memor morse?
We saw the expos. We saw UPI who is the mascot? It's still embedded in my montreal life.
It's like up there, it's like it's.
Like hockey exposs in, skiing on the mountaint being cold.
Yeah, that kind of track care with the economics, finance investment with Francis Donald. I look at the makeup here and the number one thing I get from our listeners and viewers, you guys are idiots. The unemployment rate isn't four percent. We had somebody a couple of days ago say the unemployment rate calculated around hiring a dearth of hiring is eight percent ish. What does our unemployment rate feel like right now?
Well, it depends who you are. I mean, Paul, you highlighted young folks. Right now, we've seen a huge surge of what we call youth unemployment, those under the age of twenty five. That's not just an American phenomenon, by the way, that's happening globally. Maybe some AI issues in there, maybe some hesitancy around how much will tariffs actually burn us?
Should we be bringing on new labor here. But we have another theory as well, which is we talk a lot about this no hire, no fire environment, which is so atypical, but there is a shadow hiring market that's happening in the background, which is that if you retire, and we know there's mass retirements about two million folks in America are retiring every single year right now. That's sixty thousand folks more per month than before two years ago at delta sixty thousand.
And you bring in a young person to replace that rule.
Will not count as new job creation, It will not come up in non farm payrolls, will actually just be a replacement higher.
So we know that there's hiring happening.
That's a little bit more in the shadows and where we see and Tom, I'll tell you again, like if you are in trade or manufacturing right now, your unemployment rate is higher if you're in healthcare, the job market is extraordinarily tight. So my friend and colleague Amy Wi Silverman, I think here yesterday, friend of your show, she has this metaphor of a duck that is calm on the water.
With the feet paddly.
This today, I'm going to reduce it because it's a brilliant way that she describes it. It's also how the economy is operating with that unemployment rate stable on the surface, but extraordinary churn and transition happening underneath the surface. So it makes sense that Americans feel like they're not well represented in the number.
A because the number is not telling us the whole story. But also because there's this huge fragmentation.
Underneath retail sales.
We're going to get a thirty this morning. How's the consumer doing it there?
Do you think the consumer is muddling through? They've got real wage growth around one percent. That's enough they have going forward, so you'll be okay on retail sales. But again, incredible fragmentation underneath the surface. High income consumers holding up a lot of the rest, but not entirely. And I think this is the challenge, is that we're looking for a lot of cyclicality in that consumer that's going to be reduced because if you want a job in America,
you probably have one on average. Again, we talked about some other areas. So for a very long time, economists would say the best way to measure the growth of the US economy is to say, if a consumer is employed, then all is right with the world.
The consumer is two thirds.
But that is no longer going to be the way that we measure the strength of the American economy, or the way we measure the strength of the consumer. It's going to be what type of job do they have, is it enough to offset the cost of living? Again, five year anniversary of inflation above two percent? And what sectors are actually seeing some of that strength moving forward? So I'm looking for more information on that today.
From the Canadian perspective, where are we on tariffs here? Because I don't think we've heard a lot about them recently. I mean we had down on the Greenland thing a while ago. But from your perspective, the Canadian perspective, what is the tariff situation?
Well, it depends what country you're speaking from. And actually trade policy is still very much in flux, right. We have the IEPAS Supreme Court decision that may come through. We have USMCA, Mexico, Canada and the United States are up for review of this very important trade document. And of course every day we see new information about trade
deals that the US is embarking on. So our view is that actually American companies are not sure where tariffs will land, will they get reduced, and that's really implicating or slowing some decision making.
You've been brilliant on this and the answer is we are a two to three percent blended tariffs. We did a jaw boned moonshot out of the rose Garden up to some ginormous William McKinley gilded age number, and there's a beautiful chart in the FT. I think Toby Nangoli had it coming back down and we're at tennish right now. For you, what would be the number to come back to where you'd say we'll survive. Do we need to get back to two to three percent?
Well, I think the issue with tariffs is we always think about them in absolute as if it's the only shock happening to the US economy, and so I hear all the time, well, look, tariffs didn't impact the US inflation is you know, high twos, about three percent. The unemployment rate is fairly well contained. Where was the big you know hoop law that economists.
Warm towards well Number one. I still think it's early.
So companies, we believe, held onto market share over the holidays, and you're going to actually see tariffs rise into CPI data into the second quarter of this year. So it's too early to say we didn't see it. But secondly, we have seen this impact. We've seen it in rise and goods. We've seen it in layoffs in manufacturing and
trade exposed sectors. And I think the better way to think about this is if we hadn't had tariffs come through, you would probably see higher growth, you would see lower unemployment, and you would see less inflation. So you have to compare it to what would the world look like without tariffs? Not why didn't the economy break as a result.
So given all that background, what's are fed going to do over the next two three four five months?
You think two three four five months, well, we think that they're going to stay on hold just because they won't have enough data to justify cuts.
I mean of the year, we do have.
A whole call through the end of twenty twenty six. Now here's the challenge. It's going to depend on some of the biases within the committee and how reactionary they're going to be. Because the unemployment rate is going to take up a couple beeps here, we could go from four to three to four five. Do they feel the need to react to that while inflation is still high?
But the window to do this is probably not going to appear until later in this year, because again you are going to see inflation stay really high and goods inflation rise into the second quarter. But I've been around a few feds now, Tom, you and I together have seen through a few of them, and there is enough variation in the data, there are enough subcomponents, there are enough core cpis taking out XYZ that if this FED wants to cut and bring rates closer to their estimate
of neutral, they could find a number for it. But our call right now is they won't have enough sufficient data.
I'm not read in on this, and I assume you are because your Francis Donald, who knows all there is a bridge to Michigan. There is named after the Fabrican Foundation of Detroit. Gordion how I never saw him play. I saw Kim Neely, who I was told was the closest approximation. The gordianau Bridge has become a political pawn.
It has what would you know?
This is a terrible position for you. But how should Canada and how should mister Carnie react to what President Trump says about that bridge and that magical name.
Well, I don't think they need any advice for me. They've been managing the trade relationship for over a year. But the challenges that Canadians and many trading partners across the world wake up to new true socials all of the time. And what we're seeing here is probably a prelude to the USMCA mandatory review. Now, this review of USMCA would have been in place no matter who was President put in. It's supposed to expire in twenty thirty six, and this is a conversation about whether or not to
extend it. But if you look through to the Americans right now, what they're asking for from Canada is not largely deal breakers. Things around darry for example, perhaps digital services taxes. None of that's happening here is probably going to railroad. The Canadian economy. But it's going to take up an enormous amount of headlines, and if you're a Canadian or American company doing business with each other, it's probably going to weigh on your ability to make decisions.
I saw a photo of the Canadian hockey team in front of the DUMO in Milan. Are you kidding me? With the total aggregate payroll there is the GDP of California. I mean, I mean Canada US.
You gotta go with Canada, right, Well, of course I'll always go with Canada. Are you speaking to the heated rivalry version of the Canadian economy a Canadian hockey team or the real life one.
I don't know. I'm looking at Sidney Crosby and Bradmere Shawan and you know in Milan, and I'm like, this is going to be a hell of a game.
It's going to be a hell of a game.
Yeah, Fransis Downald, Thank you so much. Really nice brief there, folks. Stay with us. More from Bloomberg Surveillance coming up after this.
You're listening to the Bloomberg Surveillance podcast. Catch us Live weekday afternoons from seven to ten am Eastern. Listen on Apple karplay and Android otto with the Bloomberg Business app or watch us live on YouTube.
I was channeling Terry Weisman as he walked into the studio because I was looking at the Japan forty year Where are you going to be in November? Where are you going to be in December? Looking back to February, and saying I should have, would have could For Terry Weisman at Macquarie, his expertise on global foreign exchange, it is Japan, okay, currency's there. I guess you say we're going to see us stronger yain, but I see it
in yields. The wonderful Stanley Fisher taught me look at the percent change of the yield the forty year generic. The yield is in twelve percent from the gloom of just weeks ago. Higher prices, lower yield. What does it signal?
Well, you know, interestingly enough.
When Sinai Takeichi's took over as head of the LDP in Japan back in October, you couldn't say that she had a popular mandate, and there was a lot of uncertainty about whether or not she was going to drive growth higher in Japan. Because she lacked that popular mandate. She was right to call this snap election because now not only is she the leader of the party, she also has a popular mandate, and I think that's incredibly important with regard to her ability to push through the
reforms that could improve growth. Now you might think that improving growth should be associated with higher yields. I think the market is realizing the higher growth in Japan may be exactly what Japan needs to bring down yields, because higher growth is what's needed ultimately to bring down that debt to GDP ratio that everyone has been concerned about in Japan for several years now. So it can also be disinflation as well, and we know that higher bond
yields are associated with expectations of high inflation. She's able to drive growth, bring real GDP higher, and bring inflation down potentially or stabilize it in Japan, which is very different than the policy approach under the new capitalism of Primarysiacax Sheeta before her. You should expect eels to come down. I think the market is finally realizing that, Look, the stock market there is up as well. Dollar yen fell
upon the announcement of the LP's victories. I think Japan is heading in the right direction.
How will Japan do it? How can Japan fuel growth? It's been forty years since we've talked.
About growth in Japan.
How do they change that narrative?
What's the policy?
Do you think Japan has been stuck in a demographic nightmare? So one of the things that has to happen, at the very least is to stop spend And I hate to say this because it might sound cruel, but to really try to stop spending so much money on the aging population and start to focus on the youth and the young people in Japan who are the engine of productivity and innovation. Doing that would be a would start.
I don't think would start would be stopping this budgetary morass of continuing to subsidize a lot of these zombie companies in Japan, both directly and indirectly through the subseason in the budget.
I think that will spur innovation.
I think Japan we think of it as an advanced manufacturing economy, but to a large extent, we all know that it has lagged with regard to technology adoption innovation other countries in the West, including its neighbor China and the US.
I think that's the key. It's interesting business school buddy.
In mind, the CEO of a Japanese company just sold the KKR. I don't think i'd ever seen that, and I can't remember how long. I mean, a private equity company coming in to Japan an investing capital and on the other side, a selling a Japanese company to a US private equity company. Maybe that's something like you're talking about. Yeah, well maybe, but look, I think Japan has. If what you're trying to suggest is that Japan has a lot of hidden it or discovered gems in its economy, I
would agree with that. It's just that innovation and technology adoption have been somewhat suppressed.
But think about it. It's a manufacturing economy. It's an industrial economy. It's exactly what's needed in this day where defense is becoming increasingly important in that region. It's also an economy that has an integrated supply chain. By the way, it doesn't really at least for the respect to manufacturing. It doesn't really have to worry about getting parts and sourcing parts from the rest of the world. It has the capacity for that, and it has great infrastructure in
support of the industrial manufacturing complex. As well, so all those things are exactly what you need if you're going to restart the economy.
What they just don't have is the incentive.
Structure tervicemen with this requiry of Australia, and of course they're huge reach into the Western Atlantic and over the continent as well as we really consider here the Pacific Rim. I think a damien sassa and all that it comes down to a boom Now is something as simple as luxury like carrying out today with Gucci, say in China as a pulse? Is the arch Macquarie call out of Sydney and Melbourne that this is a time for the
Pacific Rim. I've got the Japanese stock market in dollars since the pandemic, up eleven point two percent per year. I don't think most Americans know that.
Yeah, look Tom, no one thinks that China's going to collapse this year or next. I think we're on the look looking at a steady five percent growth rate in China. I don't know if I say, Panda, I'm in China.
That's fine. I think I think that's expected.
If they reach that target, no one's gonna get excited, But no one's going to panic either. But I think the real story in East Asia right now is Taiwan and Japan. Taiwan because it's the beneficiary of all of the hardware spending that's coming out of the US, out of the Max seven's and the hyperscalers and the data center build out. Japan because they're potentially on the verge
of a supply side revolution. If you're going to focus on East Asia and where the stories are and where the innovation is and where the inflection points are, those are the two places I would not focus too much on China these days.
All right, Given all that background, what do we do with the end here?
I'm looking at the end from weakening from April ish, you know, one forty one to here we are at one fifty five. I mean, what do you do with the Japanese yen here?
I think you buy it, okay, I think you take a view that dollar yen has probably peaked, the dollars gotten as strong as it possibly can. Against the end, that we're going to see a resumption of growth, that the boj will not succumb to demands to keep interest rates slow, but we'll you know, gradually raise interest rates that as soon as growth picks up in Japan, people will become more enamored of Japanese companies. You'll see an
inbound flow of capital into Japan. What you mentioned about your friend's company being sold to Kekar could be endemic of a wave that's going to happen over the next few years that's going to be strong for the end I believe, and I want to state this with all all firmness, is that a currency will do well when the growth of the country does well, or the relative growth of the as well, or way in this inflecting upward in terms of growth. I see that happening in Japan right now.
Taiwan stuck index, Paul, I've never looked at this Bloomberg folks. And not only do you see these obscure indexes, but you translated into whatever currency you want, the Vietnamese don or the US dollar in dollars Taiwanese. Since pandemic twenty point eight percent per year, is it too late to climb on board the Pacific brand?
I don't think so.
I think that to the extent that that foreign investors have wanted to grab a piece of the text story, they've grabbed it in the US. But they've overlooked is that all of these US companies are dependent on fab fabrication of chips in Asia, on companies that test chips, for example, right there's plenty of those in Taiwan, and there's plenty of those in Japan as well.
So I don't think it's too late.
If anything, there's been an overhang over Taiwan for the last few years on the premise that the Chinese might invade at some point, and you don't want to, certainly be invested in a country in which that's facing a Chinese invasion. But if you abstract from that and you believe, as I do, that that China's not going to do anything quote unquote stupid here, Taiwan's a great story to be investing.
In right now.
This is way too much optimism pictures and catchers here. Yeah, you know, I can't, I got it. I'm worried about you know.
Most optimistic day of the year, pictures, pictures opening day, that kind of thing.
Doctor Weisman comes in and kills the Pacific Room. Terry Weisman, thank you so much, my pleasure stay with us. More from Bloomberg Surveillance coming up after.
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So if I was to do a panel, let's say some fancy place like Davos. Yeah, right now. They would say, mister Keene, who would you like to have in your panel? And I would say Ezra Pisade of Cornell cell and Ian Bremer of Tulane, and Stanford Gremmer and Persad would be lights out. The Doom Loop is Ezra Prasad's new book with really interesting discussions of stability, and Ian Bremer owns the high ground on this with every nation for itself, the j curve, and of course US versus them. Doctor
Bremmer joins us from Eurasia Group. I look at the Doom Loop from prisad Ian and the heart of the matter is we are in some form of stability moving to instability. Is that how you see it? There's instability out there.
Yeah. I like his book a lot. He's more of an economist.
I'm a political scientist, so I'm focusing on the geopolitics specifically, and I think it's cyclical, So I see this as a bust cycle because the balance of power is no longer aligned with the institutions, the architecture, or the policies or the values.
And that's particularly playing out with the.
Americans, the most powerful country, stepping back from their own historic leadership. So I mean, the good news is that that's very unlikely to get you the so called Throughcinity's trap, a World War III. Historically, usually when you have a move to instability in geopolitics, it's because the major power is in decline and trying to hold on to its old system. The rising power wants to create a new one. That's not what's happening here. The United States is still
the most powerful country. It's it's just unilaterally saying it doesn't want to be in charge of collective security or free trade or promotion of democracy of rule of law. So it's causing a lot of instability, but it's not causing global conflict.
Ian in your notes, you suggest that these countries historically allies and maybe ifposed of the United States, they are not decoupling from the US, but they're de risking.
How are they doing.
That, they're primarily doing it economically.
And the reason it's mostly economic is because the global economy today is increasingly multipolar, while the global security environment is still dominated by the United States.
So the reality is that even if you don't trust.
Or rely on the United States as a security ally, you don't have many good options and it will take you a very long time.
Even for the Europeans who see this as an existential need.
Yes they're spending a lot of money on Ukraine, but they're buying American weapons. Yes they're stepping up their own security, but they know, as Mark Ruta, the Secretary General of NATO said in the last few days, how essential the Americans still are for the foreseeable future. Where when you
think of the global economy, there are options. I mean, even Canada, which is so incredibly dependent on the United States, has the ability to diversify more effectively with the Europeans, with the Chinese, with others.
And that's particularly true India, for example.
The United States pushes India hard despite the relationship that Trump and Mody have, and Modi takes his time in doing a deal with the Americans and instead steps up as relations with the EU and with the Australians and stabilizes with China and the rest.
So that.
Effort that we are seeing to hedge is mostly happening in diversifying away from US trade, from US capital, and you know, those things, once they happen, they.
Do have much more long term implications.
Does this America First agenda of this second Trump administration to what degree do you think it will empower China empower Russia.
I don't think it's empowering Russia at all. I do think it is empowered in China. Russia's dug its own grave. In fact, they've dug hundreds of thousands of them over.
The last four years of the war in Ukraine. They are weaker as a consequence.
Their economy is weaker, their security environment is weaker, their diplomacy is weaker. They're basically becoming a second rate state that has to follow the lead of China. And that's not where Putin wants to be. Clearly where China is actually in so many ways taking advantage of the United States being seen as unreliable.
In part that is directly reaching.
Out to countries to improve their bilateral relations, and in part it's stepping up China's role in these old institutions that the Americans don't value much anymore. So you will have noticed the Americans pulled out of the World Health Organization.
They convinced Argentina to join them. Nobody else did.
China immediately stepped up how much money they were giving to the WHO to five hundred million dollars.
Why would they do that because if America is out, they get to be number one in influence. When Trump announced the Board of Peace, not just in terms of Gaza coordination, but as potentially a replacement to many of the of the operating principles that the United Nations has.
The Chinese immediately said, we don't want to join that.
In the same thing in the time we got left Ian, I think the question I'm getting us all the time, and I'm not informed like you as simple as I can. What do you perceive post Trump? Do we return to what Paul and I knew years ago? Do we go to some form of the mended new What do you perceive in say twenty twenty eight, two thousand and thirty.
Well, if Trump is followed by a much more predictable and reliable leader in the eyes of allies, that I.
Think you will be able to normalize those relations from a very different base. In other words, permanent damage will have been done, diversification efforts will be in place.
The Americans won't be leading the world the way they used.
To, but you won't see the continued trajectory towards chaos. If, on the other hand, Trump is replaced by a leader that is seen as not only more unilateralists, but also just as unpredictable and just as willing to use American power against allies and adversaries alike, then of course that trajectory will continue to deteriorate.
We don't care and the only reason you're on today is pictures and catchers with Red Sox down at Fort Myers Jet Blue Park. You were behind home played. I saw for the playoffs last year. What an improvement on the Red Sox, doctor Bremer. Can they do it again and improve further?
Well, they can't do worse than the paid Sure it's did this Sunday one of the worst games I've ever seen. And but I you know, you gotta be hopeful for my Red Sox. I've got to be one of the only Red Sox out there that's also capable of rooting for the Yankees when I see them in New York.
It's a weird it's a weird position to be in.
It's a weird's there's a mental health issue there, probably, Adam Bremer, thank you so much. Regards to Moose as well.
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