and he 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 share 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 we have busy shifts 0 of euro pacific capital, who i think you know saying isn't going to get better. there's 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 are going hungry tonight. 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 it 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 challenge is 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. ready are profoundly optimistic now. 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. the banking system is gone, is gone. i wouldn't say that the u. s. banking system and insurance id. but certainly that 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. ready there is 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 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 legal banking sector and everybody else was fine. and then as it happened, 2011, we actually see is that the challenges are global. so i think that there'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, out of the 20 weight crises and the crises 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 they're saying around se, asia, 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,

are with their huge unrealized debt. and over here, they're opening new banks and they're trying to start out all new innovations in their businesses back to often buy global self serve governments. you just mentioned a great world of 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, that it should be done with real assets with, with, with real prospects. ready growth and with opportunities and innovation and sen, absolutely. but the global financial system is fully interconnected. so 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 rates were actually positive. so they, because they pay the current is have to keep up with the money exactly. keep up with the money printing, but at least keep 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. ready and to be realistic and the valuation have to be relatively a 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 we 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 opec plus or reduced oil, her 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 be i things really that interconnected any more a difference is 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, and certainly that raises a few questions, but it is also true that the big plus position comes fundamentally from

a weakening global demand. so, and the weakening global demand picture comes from the stagnation of the u. s. and the european economy are huge importance. uh, oil and gas. so i think a decision is basically a reflection of everything that we're talking about now that they see that on the one hand demand growth is not as expected. second, that the, that, that make taking a measure to defend the oil price. and at the same time, they see very little in terms of negative ramifications on the produce and countries. so we are seeing that that, that, you know, on the one hand, everything is interconnected. on the other hand, there are all kinds of regional exposures that allow our producers in this case to take positions that are probably more driven towards. ready making

the situation internally better. ready rather than just as it used to be in terms of open policy. ready policy used to be more about what would the united states do that is not the case anymore at all. yeah, when i 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 will affect china very well because it needs energy and also the fact of a class id. this is really a benefit to the united states because the united states is the biggest oil export . oh, it is never understand that the media coverage this explain why it actually the united states benefits from the saudi production and the russian production cut. absolutely. the reason why the united states benefits from the old production card is because the united states has become the marginal provider of. ready ready oil for the rest of the world when there's

a reduction in production for many of the of the over producers. 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 or you believe the north stream with right by the, by ministration. because suddenly you've just told 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 implementing such a such a such an action makes, makes no sense to me. it was. ready already sold bonds are in long term contracts. wait, so the u. s. energy 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 angle, but not unlimited. so the, so it would not have sent a more energy to the european union unless it endanger 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. ready 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 and 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. ready so any beneficiary of the north stream collapsed, it's the state owned 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 close and i know you know, you haven't been that you have me give me a motive. 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. it's after this break. ah, ah, i never. i mean, steve, american, all sons ah, neatly coop in a fishy babble. been okay, so mine is too bad speaking when else with we will man in the european union, the kremlin media machine, the state on russia for date and c r t spoke neck, given our video agency,

roughly all band to on you to send me to school with me ah ah ah

ah welcome back to going undergrad. i'm still here with professor daniel like i a chief economist at the wealth management fun tresses. wood 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 themselves said the rubel will be rubble. well, the ruble. busy 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 massage 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, which hadn't been, as you mentioned prior, the main beneficiaries of us are receiving audio and gas at a discount from, from russia. so basically what has happened is that the reaction economy has gotten into a massive trade surplus. that certainly helps, and the utilization is true that the you can, i say sion of the ruble as a currency is virtually and exist and globally, however, it is true that the interconnection with china and with india has and the gold reserve rang 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 war. she's a woman, i don't remember her name, 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 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, 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 trying to runs of a frontline us debt. how careful do they be?

have to be and how easy this is straight years of decline in us that buying by the chinese government. they can just pull the rug, can they our we have to remember, we haven't to remember that for china, they're 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 pick up 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 coupling. the problem is that none of them think, oh, what makes the u. s. dollar reserve currency, and that is that there is in

a fire. it is the house with the largest number of windows and doors. it's liquidity. so the problem that one finds when you see curtis to the us data, they may be non state own, but stayed fee of currencies. that could be an alternative to 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 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 couple that 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, absolutely. with you and it's fully back to the thought. and if you think about it,

the way that the p, b, o. c, this intro bank of china managers fixing on the you one is fully aligned with. ready ready you just mentioned, we're just the variability of the reserve 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 other, at the end of the day in b as in bonds 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 re denomination 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 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 that'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 walk, walk in the rest of the world. most of the will do to mitigate the loss of my b. and it says very straightforward and simple. and so, but it's a very complicated one to implement. we're chase, avoid tween 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, couldn't you? yeah, exactly. but that doesn't,

that doesn't work. that doesn't work. whatever. busy default is the witnessed what a sovereign state before it is the proof to the world that it's unfolded. but it's 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 cut public spending just because you're obsessed by the deficit, like the government, the national economy, with some grocery shop businesses. 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 sessions? yeah. you just mentioned argentina, argentina is a country with 100 percent the asian. so yeah, it's very, it seems, it seems like a great idea to enter into messages and then not it, not pay it. it's great. now it looks like a good idea until you know what that means when it basically means or 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 than 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 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 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's, 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 market to not just of the market, 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 income 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 imagined if the debt 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 weston 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 into a problem that economy let alone the weapons. what are a good question, what a challenge you want to respond? it's going to be a, is going to be a very long process of reconstruction. that is going to require an incredible amount of money from different different countries and, and ultimately it's going to be a question of whether that process happens. like,

i don't know. and i do like it after the 2nd world war with europe or similar. but it's, it's a very difficult one to answer. 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 outcomes that we read in the press seem to be for 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 b i d i m f is going to own it, but certainly without the i m. s. i don't see it happening. residential. ok. thank you. thank you so much. and that's it for this year. we'll be back next saturday with well renowned energy market expert analogy, but until then, you can keep in touch wireless social media if it's not sense that 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's out there

for ah, i'm rick sanchez and i'm here to plead with you whatever you do. you don't watch my show stay mainstream because i'm probably going to make you uncomfortable. my show is called direct impact, but again, you probably don't want to watch it because it might just changing the ways both with

but she did it on a one you're sure easy. other way if i did a by bit by bit oh.