ah, i'm after it and see and welcome back to going undergrad, progressing all round the world from dubai in the u. e. this week we're asking, is it really all doom and gloom for the global economy? nature nation meet european shock went shocked when opec plus suddenly announced the slashing of oil production in stark contrast to the begging of abiding administration that's only just had to bail out the 2nd was bank failure in u. s. history. joining me today to make sense of it all from the form of financial center, the world london, is professor daniel the collier chief economist at the spanish wealth management fun tresses. and he's been ranked as one of the top 20 most influential economists in the world. thank you so much shy, daniel, for our coming on forget to s v b as a good valley, a bank. what about credit suisse? because need an asian media. commentators seem desperate to say, look, this is nothing like 20 o 8 and then we have pizza shifts here of euro, pacific capital, who i think, you know, saying isn't going to get better. this is going to be worse than 2008,

and we must remember that the numbers of hundreds of thousands of excess deaths that the 20 o 8 crisis cause when it came to poverty, cold, hunger, 40000000 am in the usa. a going hungry to night? hey. well, i think thank you so much for having me. i think it's somewhere in between to be fairly honest to say that it's nothing like 2008 and it's going to be just a small piece of news and transferred to a much larger risk. makes no sense. but i think at the same time that precisely because the problems of the financial sector are global and because of the excess debt that exists all over the world, when everybody's in deep trouble than virtually no one is in deep trouble. so at the end of the day, there is a concerted effort, both from governments and central banks to avoid a 2008 style crisis. however,

the challenges obviously are enormous because we've had a decade of negative negative interest rates that has obliterated the balance sheet of banks and it has created an enormous bubble that goes from sovereign bonds to crypto currencies. and what's happening right now is the destruction of capital of so many of those. ready investments loans that were made with perception of valuation or perception of a risk that certainly it was. ready profoundly optimistic. so i think that and so you would you sympathize with the home us treasury? neural rubini saying, look the u. s. banking sector is on the verge of catastrophe. had unrealized losses on security. the money 620000000. which together with a higher interest rates, point 2, unrealized. $1.00 trillion dollars losses. you

know, the banking system is gone is gone. more episode like silicon valley bank for more worried about the european banking system because the european banking system did not get out of the 2011 crisis with a clean up of nonperforming loans with the clean out of the, of the balance sheet. at least in the united states, you get a shock in the united states, you have mark to market on a monthly basis on a quarterly basis of all of the assets. and therefore, you can immediately see whether there's a big financial hole in a, in a bank or not. in the case of european union, you have now just a challenges that were built up throughout the 2011 crisis and a decade of nominal negative rates. but on top of that,

you have this very challenging situation with the convertible contingent bonds that can create a domino effect on the equity. so i think that usually when these things start, when these crisis banking crisis start, we always hear the same narrative, which is the u. s. a problem of the u. s. banking sector and everybody else was fine. and then as it happened, 2011, and we actually see is that the challenges are global. so i think that it's going to be a massive re basement of the asset base that you just mentioned. and there's going to, there's going to appear in the bond side, and the equity side certainly is going with the central bank while central banks and europe deny all that. and so they learned so much in the fall, out of the 20 weight crises. and the growth is that went after it. do you said it was everywhere?

the situation, arguably where i'm speaking the from everyone's talking about a boom in entrepreneurial capitalism and the sale around these days or so it's not everywhere is it, isn't there gonna decode global economy going on here. that while you're speaking to me from the old world where people are talking about imminent bank elapses with huge unrealized debt. and over here they're opening new banks and trying to got a whole new innovations and businesses back to often by global south of government. you just mentioned a great world i'm talking from the old world now and what year would you're actually living in southeast asia? what you're actually living in the middle east is the. busy is actually banking the way that it should be and that it should be done with real assets with, with, with real prospect of. ready growth and with opportunities and innovation,

etc. absolutely. but the global financial system is fully interconnected. so there's a ripple effect can happen. but you're absolutely right. this time there is a huge difference between the banking system in the united states or the euro area relative to those. ready countries in which there's been no to start with. the 1st thing that those, none of those countries have had to do was create an artificial bubble through negative rates, real rates and nominal, where rates were actually positive. so as they pay the currents, they have to keep up with he's asking them to keep up with the money printing, but at least they keep up with the money in printing, in a sensible way. now we're just to understand that, but the price of risk has to be has to be real and has to be realistic and

valuations have to be relatively relatively comfortable. so that the bank simply don't see a domino effect like silicon valley bank source which, which was not a collapse because they invested in technology or. ready collapses, they had a message somewhere and bond book that had to generate those unrealized losses that you mentioned, how be it that there was investment from this region and se age. i me, i just, you were talking about it being in the connected, the fact that opec plus or reduced oil output, if things are really, is interconnected, as you suggest, they wouldn't one, are we going to economic war defacto with the other side, the old world would be i think really that interconnected anymore you, there are differences. absolutely. the reason i think that everybody was shocked by, in the, in the old world as you say,

about the decision to cut production from us. and certainly that raises a few questions, but it is also true that the open plus position comes from mentally from a weakening, global demand picture. so, and, and the weakening global demand picture comes from the technician of the us and the european economy. jack, huge importance of oil and gas. so i think division is basically a reflection of everything that we're talking about now is that they see that on the one hand demand growth is not as expected. second, that they, that make taken a measure to defend oil price and of the same time the see very little in terms of negative ramifications on the producing countries. so we are seeing that that's

that, you know, on the one hand everything is interconnected. brown, the other hand there are a regional exposures that allow. busy are produces in this case to take positions that are probably most driven. ready towards making the situation internally better. ready rather than just. ready as it used to be in terms of open policy. ready x policy used to be more about what the united states do. that is not the case anymore at all. yeah, when i'll give the opec was a proxy, but just explained to me one thing because obviously that was a decision. russia saudi arabia, you a, not sure whether it'll affect china very well because it needs energy and also the fact, oh, big plus did this is truly a benefit to the united states because the united states is the biggest oil export . oh, it is never understand that the media coverage with explain why actually the united

states benefits from the saudi production and the russian production cut. absolutely. the reason why the united states benefits from the production cost is because the united states has become the marginal provider. ready away for the rest of the world when there's a reduction in production for many of the of the over producers in united states has gone to produce almost. ready $11000000.00 barrels a day which is more than what. ready so the are a via, or russia produced but, and the fact that the united states has become almost energy independent is an important factor that, for example, has saved the european union in its energy prices by bringing liquefied natural gas from the united states. when the intentions with russia became more evident, so all of that is benefits in the united states. on the one hand, it's exposed, you believe the north stream with joy by the,

by ministration. because certainly you've just told me the motive. yeah, no, i don't. i don't know, but do you know that the biggest beneficiary of the no stream collapsed in was the norwegian oil company state norwegian or company that was if you look at the earnings, that's when the united states didn't benefit from it. that you were just telling me about the n, n g though, and the opening of l n g terminal. it already had all of it sold in advance. so why would they would be implementing such or such? and such an action based makes no sense to me. it was already sold bombs in long term contracts. wait. so the u. s. l n g that could go to europe couldn't replace the l n g that would have gone through no stream. no, it wouldn't be the united states ability to export is i'm goal,

but not unlimited. so, so we would not have more energy to no european union unless it couldn't danger supply of the united states itself. and that's not going to happen if you think about it, if they enter into a situation in which the arbitrage between the price and the european union price in the united states is, is ample enough in order to make it more profitable to send to the european union, the best way to do it is to enter to long term contracts. nobody in the oil industry as you know, very well. one sport for volatility. everybody wants as many long term contracts as possible and the united states when the ukraine invasion happened. they entered into the long term contracts that they could more would have

been virtually impossible. so if at any beneficiary on the north stream collapsed, it's the state owned or region company. and obviously just re no c, producers. well, the norwegian government obviously denies any involvement in the eco atrocity. of course i'm not even close and i know you know you haven't been, you have me giving a motor. people can see our interview with you on a rumble channel professor daniel, like i, i'll stop you that more from the chief economist of the wealth management fund dress itself to this break. ah ah with

oh, when i was showing wrong, when all 3, just a sheep out disdain becomes the african and engagement equals the trail. when so many find themselves world support, we choose to look for common ground. ah, welcome back to going undergrad. i'm still here with professor daniel, like i had chief economist at the wealth management fund tresses. would, has been the impact of sanctions on russia from your viewpoint because, i mean why, why was the rubel the strongest performing currency of 2022. given that the bi

demonstration himself said the rubel will be rubble. well, the ruble is a very complicated currency. on the one hand, it has capital controls. so most russian citizens simply cannot exchange rules for us dollars or euro's so the exchange rate is relatively massaged or managed by the, by the central bank. and i think that basically, on the other hand, there's another reason is that the global oil and gas market is, is global and fully interconnected. so sanctions against russia has basically meant that russia would export a lot more to china. and india, which haven't been, as you mentioned prior, the main beneficiaries of,

of are receiving all oil and gas at a discount from, from russia. so basically what has happened is that the reduction economy has gotten into a massive trade surplus. that certainly helps and utilize vision is true that you can, i say sion of the rubel as a currency is virtually and exist and globally however, it is true that the interconnection with china and with india has stand the gold reserve from from and the gold reserve a gold reserves matter to a certain extent go reserves are important. and there is certainly the governor of the russian central bank or his award. she's a woman, i don't remember how to, certainly, but she implemented a policy of defending the reserve based on the central bank in

a very non keen shan way, not printing money massively. so not printing money massively certainly has helped stabilize the rule in the situation that could have been, as you said before, very, very negative, obviously come back to the point capital controls. ready are a, are a very negative thing for the russian population that want to exchange those for euro. so for dollars and the other hand, it has strengthened the ties with china, undoubtedly there and with india. and those 2 have basically offset all over all of the negative impact on exports to, to the european union, and probably by a very, very large difference. well, the central bank governor in moscow, lena came under attack,

leaving loads of money in the united states. as russia went in to, as they saw it, defend the people of don bass, which shows the problems are decoupling doesn't have from the american economy. everyone in the global south, all talking about decoupling as you know from the u. s. currency. how difficult is it for china to d? couple, i understand the latest figures here. the 6, the straight mother decline in us. treasury is lois. it's $29859000000.00, joiner owns of of frontline us debt. how careful do they be? have to be and how easy this is straight years of decline in u. s. debt buying by the chinese government. they can just pull the rug and they now we have to remember, we have to remember that china, there are huge us dollar reserves, which are fundamentally in us that are one of the principles

of, of the strength of the central bank. it provides stability to the, to the un. no. and how easy is it to come from the us? it's very difficult. and the reason why it's very difficult is that when countries like china, russia, india, so many other countries think of the company. the problem is that none of them think, oh, what makes the us dollar reserve currency and that a liquid. so the problem that one finds when you see the alternatives to the us data, they may be non state owned, but stayed fee of currencies. that could be an alternative to the us dollar is that was the perverse incentive of central banks and governments of implementing covered and controls immediately make it impossible for that currency to be

a world reserve currency ok. but then we should define what decoupling is, and history is seeming to move much quicker every other week. you can still have a kind of peg to the dollar while being the coupled, or he probably not a buyer of us treasury bills and debt got you. i mean, you on is kind of pegged to the dollar, isn't it? yeah, yeah. in a way the u. n. is fully back to the us. and if you think about it, the way that the p, b o. c, the central bank of china managers fixing on the un is fully aligned. ready ready what you just mentioned, which is the variability of the reserves until the dollar starts declining massively. whereupon the communist party would surely say, no, we're not buying anymore us treasury. exactly which, which could happen. but the reason why it doesn't happen, or it's not happening, is because the other, at the end of the day in be it in bonds spit in currencies. you always have to

think of the, the us dollar versus something, or the us treasury versus cents. and the problem is right now, the alternative, the alternatives are not feasible to offset the kingdom of the us dollar. to start with, the euro is the only word reserve currency that has reagan omen nation risk. so, you know, we never know, but one day a country can decide to leave the euro on. the entire house cards can collapse, not. the un is a currency that has many positive things you mentioned before, the gold reserves you mentioned that the strengths of the chinese economy. absolutely, but it has capital controls and it's not good for investment houses like yours in for financial institution. but as a reserve currency, it could be something with a future, obviously offering less ability to gamble and speculate on probably why,

you know, people like you probably don't, don't like it very much. i've got to ask for, you know, we know, we like we like capital controls. i know you don't like capital controls. clearly, if we could just ask you your advice as to giving, given the higher oil prices, energy prices, and the risk of, you know, it, risk of economic collapse and european economic. that's what can asian economies, latin american, african you know, china, what can they do to mitigate the risks, the world bank, to saying a decade of loss growth and saying we're all doom and gloom, walk, walk in the rest of the world. most of the will do to mitigate the losses. in my opinion it's, it's a very straightforward and simple answer, but it's a very complicated one. domains were chase, avoid twin deficits at all costs. and what is the problem? the problem is that everybody complains now about the risk of contagion,

etc. but if you are from a government perspective or country from a government perspective, decides to constantly and go to massive deficits, be it on the fiscal or on the commercial front or both. then inevitably you're becoming more dependent on the you are stellar, i come back to the point. it's where you are only you could just default on you could default on the deficit. good news. yeah, exactly. but that doesn't, that doesn't work. that doesn't work whatsoever. default is the witnessed when a sovereign state before it is the proof to the world that it's insolvent, but it is to the old world, isn't it? it's to the old world argentina, did that. if you do what you are saying, and massively public spending, just because you're obsessed by the deficit, like the government, the national economy with some grocery shop. is that to say you're in trouble? are you because you'll end up in a revolution a political revolution, as you said,

well, the public stations. yeah. you just mentioned argentina, argentina is a country with a 100 percent situation. so yeah, it's very, it seems, it seems like a great idea to enter into messages and then it not pay. it is great. now it looks like a good idea until you know what that means when it basically means ultimately, what is that for one country is an assay for another country that is buying it, obviously now, but you mentioned argentina, they're in there because they are countless countries in africa, isn't it? merely that default a procedure, a stage in the development of a decoupled country from that us system. and we haven't mentioned the i'm of a g is doing a bit better now that it was back in those days. in the initial years after the default, similarly, isn't this all about break, shang i cooperation organization. decoupling and the default is just to be on the

way to it. i mean, i know china is a contributed to the i m f, i should say, but isn't it a merely a staging post? so think about this you. busy busy even if it's china, china is a very intelligent and very long term country. the idea that a country is going to default on the united states or on the euro area. and that it's, but it's not going to do it on china. makes no sense. if the default process is in itself, the destruction of the conference in government might have by the market to not just of the markets, but by anyone that wants to lend to the country. so if so if i'm the chinese government and i see a government that has defaulted 8 times, i guarantee you that the chinese who are very, very pride,

very intelligent and know what they're doing with their money. they're not going to lend to that country. certainly in conditions are going to be better than the ones that they were receiving calls. and this is a political default, arguably. and politics does have a mention of the debt was in the united nation just one final. it just one final question, who is going to own ukraine, given russia, saying it doesn't want to have when this war, horrible war and is the i m f is the debt. i mean, i don't know whether the tech, who we defaulted on. clearly, ukraine is not the ukrainian people's, at the end of this war, regardless of russia, saying it doesn't want to take over west in ukraine and poland doesn't. is it the international monetary fund in the britons would institution, who is it that owns ukraine? these are humble, evil, sums of money going in to prop up that economy and then learn the weapons. what are,

what are a good question? what a challenge one to respond. it's going to be it's going to be a very long process or reconstruction. that is going to require an incredible amount of money from different different countries. and ultimately it's going to be a question of whether that process happens, like i don't know the id after the 2nd with europe or similar, but it's a very difficult one to i'm so i don't, i don't know. i certainly right now for me, i don't see that. i don't see that any of the, of the, of the outcomes that we read in the press seem to be the ones that will probably end up happening now. but it's certainly going to be the reconstruction, the entire reconstruction of the country. and that i would say that the i,

the i m f is going to own it. certainly without the i m. s. i don't see it happening, professor danny, like i thank you. thank you so much and that's it for this year. we'll be back next saturday with world renowned energy market expert and us ology. but until then, you can judge my role as social media of it's not sense and in your country and had to our channel going on the grantee on rumble dot com to watch new and old episodes of going underground. she is out there. ah ah ah

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ah, the pentagon struggles to keep its secrets leaking classified documents revealed the usaa beans, spying not only on its adversaries, but also on the strategic allies. we go through that this hour also. if there is another surge of these hidden sections that were experienced last spring, they could lead to famine. in an rti exclusive, the chairman of the russian union of brain exporters reveals the all know facial hurdles, the west, these using to block frayed in the on the sanctions, rain and fertilizers, market and purge in russian.