Okay. So, um let us review last class. So, last class we discussed the British Empire and how it ultimately triumphed over its main rivals who were the French, the Spanish and the Dutch because of three major uh powers. Okay. The first is the Bank of England.
What made the Bank of England so important is that it could absorb foreign capital, okay, from all around the world. So at first it absorbed capital from the Dutch Republic, but then if you uh were a French aristocrat, if you were the Catholic Church, if you're the Habsburgs, you could all move your capital to England where it would be safe because it' be be protected by the law. Okay, that your property rights. Um and when Britain became an empire, this was important because uh local elites in China, in India, in Southeast Asia would help the British because they were incentivized to do so. They could help the British steal from these places and then move capital, their wealth to England or uh one of the British colonies for safekeeping.
Okay, so that's a source of English power. Second is the idea of soft power right so we are in school learning English because we want to go and study in the west that's soft power right so Shakespeare the BBC um Oxbridge are all components of British soft power which still rules the world today and the third of course is the British navy which controls seal lanes and therefore controls all trade. Okay. So for the longest time for 100 100 years Britain was able to maintain a global empire which really was the first global empire because it spanned the entire world. But there were three problems or three limitations to the British Empire.
Okay. So the first major limitation limitations the first major limitation is that Britain had an ethnicity. It had a race. It was the white people, the Anglo-Saxons. And so even though Britain was ruling over Vasco Empire, it was very much racist.
It saw itself as superior to everyone else and that limited its capacity to work with local elites. Okay. So in other words, eventually India rebelled to establish its independence and eventually Britain lost its over overseas empire. A classic [snorts] example of course is 2016 Brexit when the English people decided that we we no longer wanted to be part of Europe. Okay?
And so even though Britain is an empire, its people are very provincial. Okay? They see themselves as better and they they see themselves as separate from everyone else. I've met English people who've told me like English people cannot learn a foreign language. English speak people speak English very well and that's it.
They can't learn French, they can't learn Spanish, they refuse to learn Chinese. And they told me it's because their brains are different. Okay, their brains are hardwired to speak English really well and that's it. All right, so that's just the British attitude. Um, second problem is the idea of currency um or wealth standard.
The idea here is that okay, yes, you're uh you're stealing wealth from other places, but what is wealth? Okay. And for the longest time, people understood wealth as gold. The problem with this is that there's a limitation or there's a limit the amount of gold in the world and therefore there's a limit to how many people can participate in this game and how much money they can win in the end. Okay?
So, it's really a game only for the elite. That's the second major limitation. Okay. And the third problem for Britain is that it's really a small island with very few people and very limited resources and therefore it was really not sustainable for Britain to control the entire world. there's a limitation to its reach and ultimately other powers in Europe would arise to challenge uh British hegemony including Russia including Germany.
[snorts] Ultimately the power that would overthrow the British Empire to create its own empire is of course America and what America would do that's very important is resolve all three of these limitations to to create a world game in which we all play today. Okay, so Britain um basically birthe this game, but there were limitations to how far this game could spread. America will then take the concept of this game and spread it all around the world until it conquered the entire world. Okay, so how did they do so? All right, so let's go over America.
Well, first of all, America is not a small island. It is a continental fortress. And in fact, it controls the entire western western hemisphere. We know that the western hemisphere is very very wealthy. Okay.
So America h is not just the country of America. It's really the western hemisphere [clears throat] and as such has unlimited population and it's unlimited resources has unlimited land. Okay. So this resolves the issue of um resources. Okay.
Second problem the currency. Well, what America would do [clears throat] that would revolutionize the world is make the US dollar the standard of wealth in the world. And because the US dollar is just a concept, it's just an idea. Everyone can now play this game and wealth can now be infinite. Okay, but that makes sense, right?
Before gold was what everyone was playing for, but there's a limit to gold. But with US dollars, anyone and everyone in the world can now play. Okay. So I'll talk about how the US dollar became uh the center of wealth in the world. Now the ethnicity is another problem.
Okay. And so what America did that was very clever is tell the world we are not an ethnicity. Okay? We're not a land. What we really are is a game.
All right. So the idea is that America became a nation game. All right. So um what so this is pretty easy to understand. Okay.
So I'm going to explain this first and then I'm I'm going to explain how the dollar came to dominate the world. Okay. All right. [snorts] All right. So for the longest time we had problems deciding what a game or a nation ought to be.
Okay. So um traditionally nations have been ruled uh politically through the monarchy. Okay. um an oligarchy, a democracy or a theocracy. Okay, so there are others but these are the four major ones.
A monarchy is very simple. A king is in charge. Everyone just obeys the king. Uh oligarchy is where the nobility are in charge. Another name for oligarchy is the aristocracy.
Okay? And that's basically Rome. A democracy is where the people make all the decisions. And so what happens is that if a decision is to be made, people get together and they give speeches. Whoever gives the best speech gets the most votes and then that decision is implemented.
Okay? And of course the classic example of democracy is Athens. [snorts] Okay? And then you have a theocracy which is to say that the priests are in charge and the priests represent the will of God. Okay.
And of course uh theocracy the last example is a Catholic Europe. This is a medieval Europe when the Catholic Church was in charge. All right. But starting with the enlightenment uh when God was no longer considered that important philosophers debated amongst themselves what a nation ought to be what society ought to be. Okay.
And so let's discuss the major theories of this time period. All right. So the first idea is [snorts and clears throat] if God doesn't really matter. Okay. If it's up to humans to decide how to structure societies, how can you best do so?
And at this time, the most popular idea is social contract theory, social contract theory. And there are two major theorists. Okay. The first is John Lock who of course is English. And for him, government it's very simple.
Okay. Human beings have three fundamental rights that God gave us. Okay. Which are inel inelable which means that no one can take take away from us. The first is life.
Okay. The second is liberty. The right to say whatever we want. The right to do whatever we want. The third is the pursuit of property wealth.
Okay. So they have private property. In other words, [clears throat] government exists in order to pro protect the wealth that we generate for our hard work. And if we steal it, that's okay as well. Okay.
If we kill out people uh in India, China, and France to get it, that's okay, too, because it happened elsewhere. Okay. All right. So, private property. And as you can imagine, um if you have wealth, you like the system a lot.
And not only that, but you are encouraged, you're incentivized to work really hard. And that's what actually allowed uh England to overtake um the French, the Dutch, and the Spanish. Okay. Then you have another theorist named John Rouso. And this theory is different.
Okay. It's also social contract theory, but it's a different idea, which is okay, we're born in a state of nature. We have complete freedom. We can do whatever we want. So why do we choose to give up this freedom and come into society?
Okay, the reason why is when we do so we create a social social contract that creates the general will. Okay? And the general will is a substitute for God. It is the expression of the best of who we are. Okay?
Do you understand? So by ourselves we're fine. Okay? When we come together, we create a new concept that allows us to be truly and fully human. The general will.
So what is general will? Okay. All right. So uh think of Emilion Kant [clears throat] was a German philosopher and he explained that the very basis of humanity what we should all try to achieve is something called the categorical imperative. Okay, the categorical imperative is the highest moral law, right?
It's really God's law. And there are three components to the categorical imperative. Okay, the first is the idea of universality. [clears throat] Universality just means that imagine this. Whatever you do, everyone else around you will automatically do.
Okay? So, if you want to go drink alcohol, everyone's going to drink alcohol. Do you want to live in a study of alcoholics? Okay. If you cheat on a test, everyone immediately is going to cheat as well.
Do you want to live inside of cheaters? Okay. If you read books, everyone else is going to read books. So, imagine that whatever you do will be replicated by everyone else immediately. Okay?
That's the idea of universality. Second is the idea of free will. Okay, I know that eating ice cream is bad. I know that uh eating protein, chicken is good. Okay, but I cannot be forced to eat chicken even though it's better for me.
I have to choose to eat chicken by myself. If I want to eat ice cream, I can do that. Okay. So we cannot coersse people to do what they do not want to do. All right.
And number three is uh human um is the end onto itself. Okay. And the idea here is that you cannot use humans a human being to achieve a higher purpose because humans are the ultimate purpose. So I can't be like a king that says you know what I'm going to war to make a lot of money for everyone and I'll sacrifice 50% of my people but the other 50% who live will be happy. They'll live in paradise.
You can't do that. Okay. Because you cannot sacrifice anyone's life in order to achieve a higher end because the ultimate end is the human life. Okay. So that's the idea of the categorical imperative.
And this becomes the theoretical basis for the general will. Okay. Now in practical terms, how do you implement this in society? Well, the general will gives rise to government and then the government gives rise to laws. Okay?
So the legitimacy of the government comes from the consensus of the people which is the general will. The general will is not democracy, right? The general will is an abstract idea which represents the best of who we can be. All right. So just because everyone's like, "Okay, we should all vote to kill that person because we don't like him." No, that's not the general will.
The general will is everyone is important. Do unto others as you would want others to do unto you. Okay? So you can't kill anyone. Okay?
And if you if people vote for this, then government is illegitimate because it goes against the general will. All right? And this is important for us because this becomes the basis of the French Revolution. And the French Revolution, the entire European [clears throat] continent, okay, including Britain, Prussia, Austria, Russia, everyone got together and attacked France. France was poor.
France had no monarchy. But France defeated everyone. Why? Because people were energized to fight for their nation. They believe that I am now part of a greater good of equity in this game.
Therefore, I will defend this nation with my life. And France for the longest time was unbeatable on the battlefield. Okay. All right. So that is the French conception of a nation.
A nation is a social contract which guarantees rights to its citizens and in return its citizens must be willing to sacrifice its life for the nation and that's why um the French revolution was so successful which ultimately led to the French empire under Napoleon. Okay, does that make sense? Now there's another conception of the nation state which is this. Okay, and these are the Prussians or the Germans. Okay.
And it's idea of um iron and blood. So a nation is not something that you choose to get into. Okay? It's not something that you sign in contact with. A nation is in your blood.
A nation is language, heritage, land. Okay? and you prove that you are worthy by sacrifice your sacrificing yourself in battle. Okay, this is this comes to us from the German in 1870. Okay, in the FrancoRussian war between Prussia and France, these two concepts of the nation state came into battle.
Okay, the French was a social contract. You fight for us because you agree to be a citizen of this nation which guarantees you certain rights. Prussia is like no you fight because it is your duty to fight because it is in your blood it is in your language it is in your culture it's in your family and then when these two cultures clash it was the Prussians who won and um that created of course Germany okay so in 1870 the current the modern nation of Germany was founded by the Persians when it defeated France in the Franco Pussian war right so Now we go to America. Okay. And America has a different conception of the nation state.
Okay. So at this time in history first of all um America it's a very small place 13 colonies and the continent is controlled by these indigenous people. The French are there the Spanish are there. Okay. And but the Americans are very very ambitious and they are expanding really really fast and Britain the home country actually becomes um afraid of America because at this time about the 1700s America has more people.
It's wealthier. It's welcoming people from all around Europe. And so Britain tries to limit the expansion of America. Okay? It tries to say you can't cross the certain line, the Appalachian Mountains.
America says screw you. We're going to revolt. Okay, this creates the American Revolution. And in 1789, um, America creates the Constitution, which becomes the highest law in the land. And so at this point in history, America, the American founding fathers, they look around the world, they know about the British system, they know about the French system.
Um, they're trying to grow the country as fast as possible. They're they have to fight the Spanish, the French, the British, and the indigenous people in their land. They're trying to welcome as many people as possible. Okay? So they decide that the nation will become a game.
Okay? a game where the citizen is a player and the citizen is trying to maximize his wealth. Okay? And through this process of maximizing his wealth, trying to get as much wealth as possible, he will be energetic. He will work hard and this energy will contribute to the overall wealth of the nation which will allow America to grow very very fast.
Okay, that's a plan. All right, so for this to work, they have to control the game that has three major characteristics. All right, the first is that it has to be open, meaning anyone can come and play. Okay, but that just means also limiting the history and the ethnicity of the uh place. Okay.
So the concept that America creates is the idea of melting pot. We welcome anyone who comes to America regardless of your race, regardless of your history, regardless of your wealth, as long as you're willing to assimilate into America into the melting pot. Okay, that's the first idea. Second idea is fairness. And the third is clarity.
So, in other words, people are willing to play a game and work really hard to win this game if first of all they can play this game. They're allowed to play this game. They're not discriminated against. Um, also if the rules are really clear, okay, you understand what the rules are. In America, the rules are very simple.
You go to America, you follow the law, you work really hard, you get rich, okay, really simple. It's called the American dream, right? Um and the third thing of course is that the game is fair. Meaning the only criterion to generate wealth is how hard you work, how much talent you have, how much merit you have, right? The idea of merit.
Okay? And look, this is true. When you go to America, you will discover this. If you work really hard, if you're really talented, if you're really smart, they will respect that. Okay?
I've been to a lot of countries and I can tell you that America in America this is true but it's not true in Canada. I grew up in Canada and they don't really care if you're ambitious don't care if you're smart don't care if you work hard. They don't care. They expect you to follow the rules and conform. Okay, that's Canada.
You go China. Okay, we all know what China is. Okay, no one cares if you work hard. No one cares if you're smart. No one cares.
Okay, it's all about your guanchi about where your family. Okay. But it's true for actually this is true for most of the world. And I would say that the idea of merit is only true for two places. America is the most obvious example.
Okay. I've been to meetings where at first Americans are like this guy is Chinese. He probably doesn't speak any English. He's not that smart. Okay.
So there's discrim discrimination going on. But the moment I speak, the moment I try to make my case, they are win over won over by my logic. Okay. by my arguments, by my creativity, and they welcome me into the club. That's just the American attitude of being open-minded, of being generous, of appreciating your talent above everyone else.
Okay. The British are the English are also very similar in that way in that, yeah, maybe they're racist, but if you can make a good argument in front of them, they will accept your argument. Okay? But guess what, guys? Nowhere else is this true.
Okay? In China, China, you have the best argument in the world. No one cares, right? Okay. So, we there are lots of issues with America, but in all honesty, America is a place that really does appreciate merit and which really does reward merit.
That's why everyone wants to go go to America. All right. All right. So, the question then is how did America create the system? Okay.
Well, it did so through the constitution. The idea of the constitution is to create a game and make this game above power. Okay? And how they did that is creating a system of government that checks and balances each other. So you have the president, you have the congress, okay?
And you have the Supreme Court. Okay. The Supreme Court it's very simple. It's to interpret the constitution which the highest law in the land. Okay.
And then the powers of the government are divided equally amongst these different branches. So the Congress can create laws and control spending. Okay. what's called the purse. The president has war powers basically or the sword.
Okay. But if the president were to declare war, he needs congress to approve because congress has to give the money to start the war. Okay. And um the idea that the constitution is the highest law in the land means that it's really rule of law. Okay.
So even though you have this government system in place, you also have another parallel system called the judiciary, the court system which protects property rights in the same way that they do in um Britain. Okay, does that make sense? So so the very idea is that this is a game. The government is a system to maintain the openness, clarity and fairness of the game. And because of this, America was very quickly able to dominate the world.
Okay. The thing about this game, okay, that's very important for us to understand is it is expansionist. Okay. [snorts] So what happened is that in its history, America faced certain challenges to this game and this game won out every single time. Okay.
So the first major challenge to this game is called the American Civil War. All right. So let me explain what happened. From 1861 to 1864, the Civil War was fought between the North and the South. This was a clash of e economic systems.
Okay? So the north played the game. Okay? And so it believed in free labor. The South was its own independent economic system that focused on agriculture.
And so it used slave labor. For many Americans in the north, slave labor was offensive because it corrupted the game. Okay? Because remember, America started on the idea of openness, fairness, and clarity. But if you're a slave, that's not fair, okay?
Because you were born a slave and you can never participate in this game. And so they fought a civil war to decide which who will trumpet in the end. And of course the north won because the north focused on free labor. So that meant that there were more people in the north. That meant that the north was wealthier because of manufacturing and that meant that the north were more energetic.
Okay? So they defeated the south. And so that was the first major challenge. Now the game is spreading. Okay, it spreads across America and now it stops because America can't expand anymore.
Okay, it basically conquers the west and be and now the game is an issue because of the nature of money. The problem with money is that ultimately the the longer you play this game at the end of the game one person controls all the money. Okay, does that make sense? That's a problem of capitalism. That's a problem with this game.
So now now that the frontier has been settled, now that the borders have been controlled, a few people are now controlling all the money which leads to the great depression. Okay. So now the solution is America has to go and conquer the world which it does. Okay. In World War II, America conquers the world.
And so now what America needs to do is spread this game throughout the world. And it does that by creating the US dollar. Okay. So 1945 America wins the war. A year before in July July 1944 for one month what happens is that America organizes something called a bread and woods conference.
in New Hampshire. Okay. And the idea of the bread and woods conference is to establish the world game. Okay. Before America's game was limited to America, but now America wants to scale its game to the entire world.
Okay. So, how does it do that? Well, first thing it does is it makes the US dollar the reserve currency of the world. All right. What does that mean?
It means that every other currency has to be derived from the US dollar. Every other currency will find value from the US dollar. Okay? which means that if you have Canadian dollars, you can now um change it for US dollars, which is what's valuable. The Canadian dollars is just not valuable.
Okay? All right. They also agree on um exchange rate. Okay? It doesn't make sense.
Okay? And this this is a system that we have today. Okay? All right. The global reserve currency is the US dollar.
That's what's valuable. The ring B deres value from its relationship with the US dollar. The room is not valued by by itself. Okay. All right.
That's number one. Um, okay. So now you're like, wait a minute here. If this is true, the US dollar can the Americans can just put as much money as they want. And so to solve this problem, uh, the Americans said the US dollar will be pegged to gold.
Okay. doesn't make sense. Okay? Meaning like you can always take your dollar and change exchange it for gold. And because there's a limit [clears throat] to gold, there has to be a limit to the US dollars which keeps the system stable.
Okay? All right. That's number one. Number two is America needs to expand this game. Okay?
Because it is in competition with the Soviet Union which is against this game. Okay? So it creates two new organizations to spread the game throughout the world. And these two game and these two organizations are called the World Bank and the International Monetary Fund, the IMF, IMF. Okay?
So um I'm so for the sake of simplicity. Okay, understand this. The World Bank, their job is to give you loans. Okay? So let's say you are China and you are poor, right?
And you need to build dams. Well, the World Bank gives you money. And when he gives you money, what it does is it allows you to start playing this game. Okay? It allows you to participate in this game.
Now, what always happens is um eventually the countries pour so much money they have to go into debt and they can't pay off the money, right? So then what happens is the IMF comes in and changes your government and it policies to make it conform more to the game. Okay? Does that make sense? And its main mechanism is called privatization.
All right? So, what the IMF says is, okay, well, you're inefficient. You can't pay off the debt because you're inefficient. You're inefficient because the public should not be control of infrastructure. The public should not be control of water.
Okay? Private companies should be in charge of the water and electricity and the land. Okay? So, uh the the goal of the World Bank MF is to spread the game throughout the world. All right.
Okay. Then in um 1947 they create create something called the GAT. Okay. The GAT is a general agreement on tariff and trade. So this is the WTO basically.
Okay. That changes into the WTO in 1995. All right. So [clears throat] it's basically agreement on free trade. Right?
Does that make sense? 1973 um Swift is an agreement um amongst different banks in the world on how to transfer money. Okay. So for example, if you want to transfer money from China B into America to go to university, right? Guess what guys?
It has let's go for Swift. Okay. So now it allow allows for more cooperation among banks in the world to use US dollars. All right. Um now the last thing is okay how do these countries get together and decide on how to cooperate economically?
And the answer is the bank of international settlements. Okay. Okay. And this is the idea is that the central banks of different countries get together and they agree on certain policies. All right.
And this is all done privately in secret. No one knows about them. Okay. All right. So this is the game that America uh creates.
It's very simple. Okay. Um and there are other components but but we'll focus on this now throughout the semester we will focus more we will focus on how this game is played specifically but first I just introduce it to you. All right. Okay.
So now let's talk about how the dollar conquers the world. All right. So for the longest time um this system works well. Okay. The United States is in competition with the Soviet Union.
But over time, the Americans start to abuse this system. So they pay for things they can't really pay for. For example, the war in Vietnam, for example, a space race, for example, something called the Great Society. Okay? They're just spending too much money.
And other countries start to freak out. So France basically withdraws all all its gold from the United States. So, in 1971, what Nixon does is say, "You know what? Um, here's the secret, guys. We actually don't have have enough gold to pay off everyone." Okay?
So, screw this. We're not going to peg the gold uh the dollar to gold anymore. Okay? Do you understand? You can now you can no longer redeem your US dollars for gold.
It's done. Okay? So now what happens is the US dollar becomes a Ponzi scheme. All right. What is a Ponzi scheme?
A Ponzi scheme is basically the US dollar is valuable because people want to use it. Do you understand? It has no value in itself. It's only valuable because people want to use it. So now Nixon has to go and create demand for the US dollar.
Right? So the first thing he does is he goes to Saudi Arabia [clears throat] and he creates something called a petro dollar. [applause] Right? The idea of the petro dollar is very simple. Saudi Arabia which is the largest oil exporter in the world will only accept payment in US dollars.
Therefore if you want oil you have to have US dollars. Okay? That's the first thing that Nixon does. The second thing that Dixon does is actually even more important. What does he do?
You guys know he visits China. Okay. Not only does he visit China, but he's established a framework in which America will give China everything. Okay. In 1980s, what happens?
America gives China its market access. Right now, US consumers can buy goods from China. That's a huge deal, guys. Okay, that's number one. Number two is America gives China FDI technology education.
All right, imagine what happens. America gives foreign investment to China, gives all this capital to China, gives all this technology to China, right? All these military secrets that America has, it gives to China for free. And not only that, but America educates the Chinese elite. Okay.
1980s, all these Chinese students, Chinese students for grad school, go to America to learn America technology. Okay. And the third thing, and this is the most important, is military protection. All these conflicts that China has with Southeast Asia, with Japan, Vietnam, America will now protect China. When Chinese ships export goods to Europe, Africa, and United States, the US Navy will now protect these ch Chinese ships.
Okay, you understand? You're like, "Oh my god, America gave China everything. America made China rich. Why would America do that?" And there's one answer and only one answer. It's to make you China use US dollars.
Okay, it's that simple. Okay, so now when China trades with the world, it gets US dollars in return. You understand? Okay, and the entire idea is to make the world addicted to US dollars. And now that the world is addicted to US dollars, now that the world depends on US dollars, America can now control the global economy.
Okay. So in 1999, [clears throat] sorry, 1991, the Soviet Union collapses. Okay? And now America is the only game in town. There's no one who can challenge the supremacy of the Americans.
And so now what happens is America creates something called the new world order. The new world order is based on global trade. But because United States controls the US dollar, it can now control something called pricing. Pricing just means that the Americans can decide the value of everything. Okay?
So what America does is create a price hierarchy. So at the very bottom are resources. Above that is manufacturing. Then there's knowledge and then finance. Okay.
This is the price hierarchy for the world. All right. And it divides the world into a division of labor. Okay. So what is resources?
Well guys, it's Russia. Okay, that doesn't make sense. Russia, Africa, South America. What's made factory? China.
What's knowledge? Europe. And what is finance? America. Okay, does that make sense?
So, what's going to happen is that America is going to take its manufacturing and transfer to China. Okay? Because it's cheaper for China to do it than for America to do it. And all America is going to do is finance. Okay?
What is finance? Finance is just the creation of money for the purpose of creating more money, right? Okay. So, this is the system in place and at first it sounds great because everyone's making money. Okay.
But there are inherent instability in this system. Okay? And we will discuss all this instability throughout the semester. But for the sake of simplicity, uh let's talk about America. What happens when you focus on finance is that you become a speculative economy.
You focus on gambling. Okay, basically gambling. And this leads to something called the 2008 great financial crisis when the American economy collapsed. Okay. And at this time the entire world economy should have collapsed.
And so what happened was all these central banks from around the world came together at in Basil Switzerland the bank of international settlements. Okay. Right. The secretive body in which all economic policies are made and they decide the only way to save the world is if China spends money. You understand?
Why do we have all these skyscrapers? Why are the there all these airports? Why are all these highspeed railways? Because America because China to save the global economy decided to invest in infrastructure. Okay.
And belit initiative and that saved the global economy. Now after China did this, [clears throat] China developed a lot of debt. Okay? And China basically said to the world, listen, um, we saved the global economy, so we deserve a seat at the table, right? We deserve to be equals to America.
And so, we're going to sell our products, our Huawei phones around the world. Uh, we're going to compete with America for global dominance. And America said, "Screw you." Okay? And that led, of course, to Donald Trump. 2016, Donald Trump.
And [snorts] the first thing Donald Trump did, of course, was initiate the USChina trade war, right? China wants to be an equal to America. America says, "Nope, screw you. We're going to destroy you." Okay? So, America tried to sanction China.
Uh, America tried to blockade China. Okay? So, we'll discuss this again later on throughout the semester. Okay? Then what happened of course is 2022 Russia invades Ukraine.
Okay? So what Russia is saying is you know this price hierarchy screw this. Okay? Because guess what happens guys? If you don't have any resources this system doesn't work.
Okay? Try manufacturing manufacturing without any resources. Try having knowledge about resources. Try having finance about resources. Okay?
So when Russia invades Ukraine, it's trying to control the resources of Ukraine. Russia and Ukraine together controls onethird of the world's carbohydrates. Africa, the Middle East starves to death without Russian and Ukrainian grain. Okay? Does that make sense?
So now this entire system is in jeopardy. Okay? And so what's happening today is America is fighting to save its game. It's trying to fight to save the system. It's trying to fight to save the US dollar.
It's trying to fight to save its hedge money. Okay? And Russia and China are trying to exert themselves. [snorts] So we are in a time of game reset. All right?
Game reset. and that this is the world that we live in today. Okay. All right. So, we will discuss this throughout the semester.
Any questions? Are you guys clear? So, I I know this was a lot to take in, but we'll go into just the specifics throughout the semester. Okay. We'll go we'll go and we'll we'll apply to current events to explain why this is happening.
Any questions? Okay. So the only purpose of America like they produce a service for China is to let them use US dollars, right? So American can use this game to everyone. But think China does not do the same thing as America.
Like they created this this game. Why? Okay. [clears throat and cough] All right. So, um we'll discuss this throughout the semester.
Okay. The relationship between China and uh the United States. So remember that the United States wants China to play this game, but they can't really say to the world, "Oh, we're doing this because we're greedy and we want China to be subservient to us." Okay? So they said that we we want China to play the game because this game will allow the middle class to rise. It will make China much more democratic.
Okay? But that's that was just BS. That was just a fraud, a lie, hypocrisy. All right. So now that China is in this game all right what it's trying to do is restructure the game so that is more more independent okay because the problem for China is okay um to play this game what you're doing is you're taking resources right you're um creating manufacturing exports okay and so that's the role China in this game.
There's certain problems with this game. The first problem is um America controls the entire game, right? So America can say, you know, we don't like you, so you can't trade anymore. So basically they stop uh they limit the resources and they limit the market access. Okay?
So what China needs to do to survive is idea of diversify. [snorts] Create markets outside of the United States. Create um like find resources that are not dependent on the US. Okay. So that's a game that China is playing and that's the idea of bricks.
Okay. We'll discuss bricks later on. All right. But the bricks is a very different concept where before America was trying to impose its game on everyone. Now China is just trying to create a system that is not so dominated by the Americans.
Okay. That's a Chinese mentality, right? Does that make sense? Okay. All right.
Any more questions, guys? Okay. Great. So, I will we'll continue this on Thursday. Okay.