welcome back to going underground, broadcasting 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 mead? european shock went shocked when opec plus suddenly announced the slashing of oil production in stark contrast to the begging of abiding administration that is only just had to bail out the 2nd world 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. 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 that doesn't transfer 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 star 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 and 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 us banking sectors. on the verge of catastrophe, said unrealized losses on security. the money 620000000. which together with the higher interest rates, point 2, unrealized. $1.00 trillion dollars losses. the banking system is gone,

is gone. i wouldn't say that the u. s. banking system in its entirety, but certainly there's going to be more episodes, 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 and 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 a 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. ready very challenging

situation with 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, central banks and europe, denial that. and so they learned so much in the fall have to fear 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 a sale around se, asia, so it's not everywhere is it, isn't there, go at diekama global economy going on here. that while you're speaking to me from the old world where people are talking about imminent bank collapses, with their huge a unrealized debt. and over here they're opening new banks. and they're trying to start out all new innovations and businesses back to often by global self serve governments. you just mentioned a great word. i'm talking from the old world now. and what you're, what you're actually living in se asia where you're actually living in the middle east. busy is actually banking the way that it shouldn't be out and that it should be done with real assets with, with, with real prospects. ready growth and with opportunities and innovation and set up

for absolutely. but the global financial system is fully interconnected. so there's, there's ripple effects can happen. but you're absolutely right in 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 brains, real rates, and no matter what raged were actually positive. so they, because they pay the current is they have to keep up with the money. exactly. we have to keep up with the money printing, but at least they keep up with the money in printing, in a sensible way now, which is to understand that. but the price of risk has to be has to be real and

to be realistic and valuations have to be. ready 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. but our collab sleek is they had a massive southern bond book that had to generate those unrealized losses that you mentioned that there was a message from this region and southeast asia. i me, i just you talking about it being in the connected, the fact that back plus or reduced oil le output if things are really as interconnectedness as you suggest, they wouldn't one. are we going to economic war de facto with the other side, the old world would? they are things really that interconnected any more to 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

a production from the past. 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. so, and the weakening global demand comes from the tech nation 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 the, 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 produce and 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 produces, in this case to take decisions 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 expulsion 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 factor of a person to did this is truly a benefit to the united states because the united states is the biggest oil export it. oh, it is never understand that the media coverage this 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 opec production cut is because the united states has become the marginal provider of. ready busy ready for the rest of the world, when there is a reduction in production for many of the of the opec produce, as the united states has gone to produce almost. ready $11000000.00 barrels a day, which is more than what saudi arabia. ready in russia, produced bar and the fact that the united states has become almost energy independent. ready 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 benefiting the united states. on the one hand, it all you believe in north stream with right by the,

by an administration. because suddenly you just tell me the motive. yeah. no, i don't. i don't know. but you know, who is the biggest beneficiary of the no string or collapsed? it was the norwegian, oil company, state, norwegian or company that was if you look at the earnings, that's what the united states didn't benefit from it. and we were just telling me about the n and g though and the opening of energy terminal. is it how it already had all of it sold in advance? so why would they would be implemented such a such a such an action base makes no sense to me. it was. ready already sold, bonds are in long term contracts. wait, so the u. s. l n g that could go to europe couldn't replace the energy that would have gone through extreme no, it wouldn't be the united states ability to export is i'm goal,

but not unlimited. so the, so we would not have sent a more and g to. busy european union, unless it put in danger supply of the united states itself. and that's not going to happen if 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 ample enough in order. ready to make it more profitable to send to the european union, the best way to do it is to enter into 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, the long term contracts that they could,

more would have been virtually impossible. so if at any beneficiary of the north stream collapsed, it's the state owned or region company, and obviously it knows the producers. well, the norwegian government obviously denies any involvement in the eco atrocity. of course, i'm not even sure. i know, you know, you haven't been that you have me giving a motor. people can see our interview with he will have to rumble channel residents like i, i'll stop you that more from the chief economist of the wealth management fund dress. it's after this break. ah ah no wrong oh, just a move to see how the thing becomes the advocate

and engage with when so many find themselves well, the part we choose to look for common ground with it was the ruble, the strongest performing currency of 2022 by the center in russia, having basically meant that russia would export a lot more to china and india, which haven't been, as you mentioned prior,

the main beneficiaries are receiving a oil and gas at a discount from, from russia. so basically what has happened is that the russian economy has gotten into a. ready massive trade surplus, that certainly helps, and the utilization is true that the utilization of the rural currency is virtually in existence globally. however, it is true that the interconnection with china and was india, has san the gold reserve frank from and the gold research, a gold reserves matter, to a certain extent go reserves are important. and there is certainly the governor of russian central bank or is a, well, 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. busy breach,

non keen on 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 very negative thing for the russian population that want to exchange those for euro's on for dollars. and the other hand, it has strengthened ties with china, undoubtedly there and with india. and those 2 have basically offset all of 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. are you ready for leaving loads of money in the united states as russia went in to, as they saw it, defend the people of don't bass, which shows the problems of 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 china rounds of of frontline us debt. how careful do they be? have to be and how easy this is straight years of decline in us debt buying by the chinese government. they can just pull the rug. can they no, no, we have to remember, we have to remember that for china, they're huge, new s dollar reserves, which are fundamentally in us that are one of the principles

of the strength of the central bank. it provides stability to the un now and how easy is it to recover from the euro dollar? 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 of. busy what makes the u. s. t r? we're reserve currency, and that is that there is in a fire, or it is the house largest number of windows and doors. it's liquidity. so the problem that one finds, when do you see alternatives to the u. s. data, they may be non state owned, but stayed fee of currencies that could be an alternative to us dollar. is that the,

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 perhaps 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 couple that he probably not a buyer of us treasury bills and debt got you. i mean, the, you on is kind of pegged to the dollar, isn't it? yeah, yeah, in a way, absolutely, honest. the u. n. is fully packed to the u. s. dot net, if you think about it, the, the way that the p, b o c, the central bank of china managers fixing on the un is fully aligned. ready what. ready 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 is not happening is

because the out there at the end of the day in b, it in bon speed in currencies. you always have to think on the us dollar versus something or the us treasury versus cents. and the problem is right now, the alternate id, the alternatives are not feasible to, to offset the kingdom on 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. 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 that is not good for investment houses

like yours and 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'm going 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 had already liked risk of economic collapse and european economic let's what can asian economies, latin american, african, you know, china, what can they do to mitigate the risks, the world bank, the saying a decade of loss growth and saying we're all doom and gloom what, what can the rest of the world most of the will do to mitigate the losses in my opinion a so 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 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 to states where you are only you could just default on you could default on the difference. the good news. yeah, exactly, but that doesn't, that doesn't work. that doesn't work. was the. busy default is the witnessed when a sovereign state before it is the proof to the world that it's unfold. but it's still 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 businesses, that you would say you're in trouble on you because you'll end up in a revolution a political revolution, as you said, well, the public sessions. yeah. you just mentioned argentina, argentina is a 100 percent ration. so yeah, it's very, it seems, it seems like a great idea to enter into messages and then it not pay it. it's 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 asset for another country that is buying it, obviously now, but you mentioned argentina there in there because the account was 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 f, a g is doing a bit better now that it was back in those days in the initial years,

up to the default. similarly, isn't this all about break? shang i cooperation organization. decoupling and a default is just to be on the way to it. i mean, i know china is contributed to the i m f, i should say, but isn't it a merely a staging post? so think about this year, 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, but it's not going to do it on china, makes no sense in the default process in itself. the destruction of the conference in government might have by the markets too. no, just 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 then know what they're doing with their money. they're not going to lend to that country. certainly in ins, 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 mentioned that that was in the united nation. just one final question. 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 to 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 and ukraine and poland doesn't. is it the international monetary fund in the britain's woods 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 a good question, what a challenge and wants to respond? it's going to be 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 after the 2nd world war with europe or. busy similar but it's very difficult to learn, 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 won't say that the i d m s 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 ever the chair will be back next saturday with well renowned energy markets expert analogy. but until then, you can keep a judge my role as social media, if it's not sense and in your country and had to our channel going on, the ground tv on rumbled dot com to watch new and old episodes of going on the ground. she is out there. ah ah ah

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ah with ah, if there is another search of these hidden sanctions that were experienced last spring, it could lead to a family. and an r t exclusive, the chairman of the russian union of green exporters reveals the all the official hurdles the west is using to block trade in the, on the sanction grain of fertilizers, market prayers in russian. no longer allowed in the latest proc donna, the revered, picturesque lover complex, the ukrainian authority, the orthodox church. another blow this for a week following estimate the tax on monks and believers update masika walsh with other bbc appeals to twitter. it to remove the government funded.