All-In with Chamath, Jason, Sacks & Friedberg - E72: Impact of sanctions, deglobalization, food shortage risks, macroeconomic outlook and more

I now have a chief of staff. He’s pretty great. He’s worked

for me for a while and he’s doing a great job but it’s

actually really helped. I will say that and then I started a

family office. Wow. Congrats. What does that mean? You have a

place in your home that you call an office? Yeah, you don’t

like to bring by your refrigerator. There’s an

office. Is that’s the family office. Yeah, it’s the family

goes in there to talk about office stuff. Where does Jade

put the stickies that say we’re out of granola bars in the

family office?

Hey, everybody, welcome to another episode of the all in

podcast episode 72 part do with us today again, the prince of

panic attacks, the sultan of science, David Friedberg.

Yes, and also Zephyr of Zoloft and also as you’re hearing

cackling, the Duke of Degeneracy, uh the dictator

himself, Chamath Palihapitiya, and of course, everybody’s

uh favorite, the rain man himself, the drunk history

channel uncle, David Sacks. I mean, David, I I follow you on

Twitter. You’re tweeting 50 times a day. Oh, I was thinking

the same thing. When do you work? What has happened to you?

You won’t meet with startups anymore. I bring you startups.

You said, you know what, I’m no longer gonna be like stuck in

your room tweeting. I don’t do first meetings. That is the end

of your career. Huge mistake. No, it preserves it preserves

my energy. There’s nothing more draining than endlessly

spending your day in first meetings. No, why don’t you

just have a short first meeting like a 15 minute first meeting?

Well, that’s what, you know, we have a team for. I love it.

They don’t because we know exactly what we’re looking for.

SAS investing is very metrics driven and so the first meeting,

that’s yeah, exactly. So, it’s like, you know, the first

meeting, we just find out, do they meet our basic threshold

for love it for growth and yeah, exactly. Yeah. So, we run

the numbers and then II will meet with them if they look

good. I love this. I would like all VCs to take the same

approach and I will let everybody know my DMS are open

Jason at I will take the first meeting. I need

to call you after this. One of our businesses which is not in

SAS has started to sell SAS software and we’ve already

booked $40 million of **** ACV by complete accident from zero.

Wow. You stepped in it and I need some advice. Okay. Yeah,

let’s talk. Alright, everybody. It’s been a bit of a crazy

couple of weeks here and we have to start with the war in

Ukraine and do a bit of an update. It’s been over 20 days.

The death toll continues to climb. We don’t know exact

numbers here. It’s very hard to get information. We’re not

experts. We don’t have boots on the ground but according to the

New York Times, 7000 Russian troops have been killed and

Zelensky said on March 12 1300 Ukrainian troops have been

killed. I think we’ve got three or four angles we need to talk

about here. One, I want to talk about food supply with

Friedberg since you ran and have a lot of

expertise in that and of course, Ukraine and Russia are

the breadbasket of the world. I want to talk about markets of

course, but let’s go to our history channel uncle first

sacks. You have been going down the rabbit hole looking at the

history of this. Let me just ask you just a point in question.

Is Russia losing the war? And if they are losing the war, if

that is a pass, is that even a possibility that they’re losing

the war? Are they losing the war? And then what is the exit

ramp here? And what does it mean on a go forward basis?

Right? I think great question. So here’s where I think we stand

three weeks into the war is that Putin clearly miscalculated. He

thought this would be a cakewalk. Obviously, it’s

turned out not to be the Ukrainians have put up very

fierce resistance. The Russians have taken very serious

casualties and losses. And so the war is very much, you know,

up in the air, it’s the outcome is very much in doubt. So I

think, you know, Putin was overconfident, made a political

economic and obviously humanitarian mistake. But I

think three weeks in here is where I would characterize

things is it feels to me like the West might be making a

similar mistake of sort of excessive overconfidence and

triumphalism, meaning that we think the rest of this war is

going to be a cakewalk. And the reason I say that, let me just

give you some examples and then tell you why it may not be a

cakewalk. So you’ve got Francis Fukuyama had a piece this week,

basically, he’s back with the end of history, he predicts

that, you know, imminent Russian defeat, and that there’s

gonna be a new birth of freedom. For the West, it’s

going to be like the Bush doctrine and 20 years of failed

policy in the Middle East never happened. You got David from,

you know, all that predicting mission accomplished, just like

the Iraq war, he said the springtime is gonna be bad for

anyone who bet on Putin, his words, which, in his view, is

anyone who isn’t a basically a neocon who favors regime change,

you had a piece get a lot of circulation over the last week

in the US China perception monitor by, by I think, a former

Chinese observer named Hu Wei. And he basically predicted that

China would be under so much pressure by what the Russians

have done, you know, in terms of humanitarian losses, that

they would come out, basically denouncing Russia, and support

the West. And then, of course, I think the final example of

what you might call Western triumphalism right now is that

absolutely no one in Washington seems to be pushing for a

ceasefire. They’re, you know, they’re all paying lip service,

at least to this no flows, no fly zone idea, Biden and the

squad seem to be the last holdouts for the idea of not

imposing no fly zone. So I would say right now, the West

seems to be very confident about the way that this war is

going, and not inclined to make any compromises or concessions.

I just want to flag quickly why that you know, why there might

be some clouds on the silver lining. So you had a Washington

Post article, first of all, warning, it was very

interesting that Ukrainian military progress may not be as

great as their quote, stratcom, their strategic communications,

you know, aka propaganda. So in other words, the Ukrainians are

very effective at fighting the information war, but the

Russians are still making progress on the ground. You also

had this Washington Post story about neo Nazis flocking from

all over Europe to Ukraine to fight for the cause. Again, that

story got it’s very troubling, and it got no likes or retweets,

because it just doesn’t fit the great narrative here. You’ve got

the slow motion humanitarian…

Is that true?

Like, yeah, let’s, let’s come back to let me lay out all the

issues and we can come back to it. You’ve got the slow motion

humanitarian disaster of, you know, a billion people across

the world potentially starving. If the spring planting doesn’t

happen, which we should let Friedberg speak to more, you’ve

got the fact that Russia can still escalate this war. I mean,

they could still rubble cities, Belarus could enter the war. And

you know, God forbid they could even use WMD. And then you have

this idea, this dream of toppling Putin, probably look,

it could happen, but probably a fantasy you had 200,000

protesters pro war protesters turn out in Moscow today,

nationalism is still strong in Russia. Yes, there’s anti war

protesters there. But the Russian people, at the moment,

seem to be still behind Putin. And then I think you had today,

the foreign minister of China came out with a statement

really throwing cold water on the idea that they support the

West, they basically denounced the West for NATO expansion.

So this whole idea of the Chinese bowing to Western media

pressure, which they, in other contexts, call the Baizhou

influence. I think that’s a fantasy that is not going to

happen. So look, I think that, you know, you know, we all

support the Ukrainian cause. We all support their desire for

freedom to their freedom from domination from this, this

Russian war of aggression. But what I wonder about is whether

this would be the opportune time for Washington to try and

push for a ceasefire instead of a no fly zone. And we should

talk more about what that might look like.

Can I give you a psychological assessment of I think what’s

happening right now? Yes. Great. Just as somebody who, as you

know, you guys and I were just joking, but six days just being

mostly off the grid with my notifications off. I was really

like, honestly, like you, you kind of like go through this

dopamine fast. And what it actually helps you do is pick

out better signal. And, you know, with all respect, sex, I

think, like a lot of what you said is not really as

meaningful signal as the following, which is the most

important thing that happened was both sides basically said

the surface area of a deal was very much in sight, and that

they were down to three or four points. And I think that that

didn’t get reported nearly as much as it probably should have.

And what I thought was psychologically interesting was

that as soon as that was said, the next few days was when the

rhetoric got ratcheted up extremely aggressively on both

sides. And the way that I interpret that typically is

having done deals, that’s typically when you’re closest

to a deal, and you’re trying to get the last few T’s and C’s.

And in that same construct as applied to Ukraine and Russia, I

suspect what’s happening is they both put out the trial balloon,

it was well received on both sides, the surface area is now

down to a few points. I’m not saying that those are

justifiable in the end. But I think that if both of these two

folk parties want to come to a ceasefire, which I think it

does, we’re probably much, much closer than anybody thinks. And

right now, all of this rhetoric is meant to basically try to

get the other side to budge a little bit more. And so I

suspect, and you know, I could be completely wrong, is that

we’re much closer to a ceasefire than anybody thinks. And I

suspect that you could see something in the next two to

three weeks. And I think that that’s really hopeful, because

you want this thing to come to an end.

The thing I’m trying to parse here, and I don’t know if anybody

here can even answer this, is how did how did we either

underestimate or overestimate, depending on the time, Russia’s

ability to invade another country?

I think I think the thing is, we have, we can’t even estimate

correctly. So for example, there was something that said there

was 100 out of 100, Russia has 170 battalions, apparently, I

don’t know if that’s true or not, right, of which 100% in,

we don’t know if that’s true or not, of which Ukraine

apparently destroyed 50, of which we don’t know if that’s

true or not. So we’re left to guess. And unfortunately, what

that does is that people psychologically then fit as

David has used in the past your priors, what are your biases?

Right? What narrative fallacy do you want to believe, and then

you’re going to fit. So the pro Russian factions will say

that’s entirely not true. The pro Ukrainian factions will say,

actually, it’s even greater than that huge sustained military

losses. The truth is somewhere in the middle that will only get

accounted for after a ceasefire is in place. So I think we

almost need to again, we can get caught in this fog of war,

and talk about this stuff in ways which we don’t accurately

know. Or we can level up and say the thing that we both know is

there was on the record statements by the Foreign

Minister of Russia and the President of Ukraine, that a

ceasefire and the surface area of that ceasefire is within

sight. And unless something is materially changed, and then in

the last three days, which it hasn’t, it means we are really,

really close to this being done.

So I agree with a lot of what Tomas said, I don’t think

contradicts anything I said before, I agree that there was a

big piece of news this week that caused markets to rally for

three days, which is the announcement of a proposed 15

point peace deal. And the we do know sort of the key features of

that deal. It means that the three big features are you

Ukrainian neutrality, so they don’t become members of NATO,

you had Zelensky saying that NATO membership was off the

table. Ukraine can’t host foreign troops, bases or

weaponry, there’d be limits on Ukraine’s military, but they

would get security guarantees from the allies. So it wouldn’t

be a complete demilitarization. And then the other pieces of it

were Ukraine recognizing Russia’s control of Crimea,

recognizing that’s not coming back. And then some sort of

independence recognized for the disputed territories in the

Donbass. So I think you’re right, Chamath that everybody

now knows the broad contours of what a peace deal would look

like. And the markets are starting to price in them

getting to that peace deal. But I’m worried that if you look at

it from the point of view of what people in Washington say

that there’s no pressure here, coming from Washington, for

Zelensky, who’s basically our client, he’s an American client

to make a deal. You know, if you compare this to say the 1973

Yom Kippur War, where the US was on the side of Israel, but

still acted as a peacemaker and got a ceasefire done. You know,

Kissinger got that deal done, even though we were on the

Israeli side. You don’t really hear anyone in Washington

saying, let’s get a deal done. So I hope you’re right. But

because you’re not, we’re not talking about the elephant in

the room, which is that in the Yom Kippur War, the unitary

resolve and the military dominance of America was

undisputed. And so as a result, its ability to be the mediator

was also undisputed. We’ve already talked about this when

Biden called the UAE and Saudi, they wouldn’t even pick up the

phone. The people that are negotiating this priest to

priest peace treaty right now are Naftali Bennett, and

Emmanuel Macron. So we’re not at the table. So I think a lot of

what we’re hearing as well, is just a lot of the rejection and

the psychological, you know, kind of anger that we have to

not being even part of the process.

The world doesn’t want us to have such an outsized point is

it’s we’ve moved past that whether you wanted us to be

involved in it or not, we’re not involved. And we are not the

principal mediators in this. And we I hope to God that Israel

and France and whoever else is at the table gets this done.

Yeah, I agree with that. But here’s my concern is I think

everyone knows the broad contours of the deal. But if

you’re Russia, or you’re Ukraine, you’re getting daily

reports of what’s happening on the battlefield. And if you

think you’re winning, you have an incentive to stall the peace

process to cement greater gains and get more leverage for those

remaining details and negotiating points. And so if

Zelensky thinks that the Ukrainians are making progress

on the battlefield, he’s going to wait. And so neither one of

them, I think left to their own devices can be fully trusted to

make a deal. I think you need the US applying some pressure or

acting in a pot in a constructive way towards the

process. And I think it’s a huge problem that the US is not

viewed as a peacemaker. We’re basically viewed as so partisan

and on the side of Ukraine.

David, we’ve talked on this pod about us not being the global

police officer of the world, and that other people need to stand

up. So maybe the lesson here is, you know, maybe strategically,

it’s and it’s not like we were called on and we didn’t stand

up. We weren’t called on. Well, okay, that’s what we assume

that. I mean, we don’t have perfect information either. But

let’s let’s get to Friedberg here. I think the other wrinkle

in all of this, and I think it’s quite positive is sanctions are

seeming to have a profound impact here and people are

looking at them as potentially, maybe cyber warfare and just,

you know, actual tactical warfare on battlefields is less

important than economic warfare. And Russia has been

essentially cancelled from the global economy from visa to

McDonald’s to exports. And these sanctions are not just

government sanctions. These are people opting into them,

whether it’s corporations, and other entities saying we’re just

not going to do commerce with Russia. Unfortunately, and this

is something you have great expertise on. And so we’re lucky

to have you here to talk about it. People may or may not know

this. I’m happy to be here. This is the breadbasket of the

world. They export more wheat than anybody. And they also

export fertilizer, soybeans and some other inputs, which we’ve

talked about previously, that provide meat for the world. So

what can you tell us about the downstream effects of there not

being potentially, or half as much crops coming out next year,

and what would happen in places that are the beneficiaries or

dependent on wheat and fertilizer from Russia.

So there’s a number of first order and then second order

effects that are not just about sanctions, but also about export

controls by Russia that are creating swings in food markets

like we’ve never seen, and will almost certainly lead to

widespread famine by the end of this year at this point. So the

first important point to note is about 15% of the world’s

calories come from wheat, about a third of that wheat comes from

Russia, Ukraine, Russia has banned export of wheat. And the

wheat spring planting season is like now this week. And there’s

not a lot of planting going on, you know, a lot of commodity

folks are in the field trying to figure out who’s actually going

to go to field and plant, but no one’s making, you know, the

concerted effort that they normally would under normal

circumstances. So not only is the current wheat supply in

Russia, Ukraine blocked up and cannot make its way to countries

like Africa, or countries in Africa and elsewhere, but the

future planting season is now significantly at risk. And again,

that’s 15% of global calories. And I just to take a step back,

the whole planet Earth operates on a 90 day food supply. So once

we stop making food, humans run out of food in 90 days. So

another way to think about that is our food supply excess our

capacity in excess of about 25% of our global production. So if

our global production goes down by 12%, we’ve lost half of our

global food supply. And that’s not just linearly across all

nations, what happens is the most vulnerable nations lose

their food supply first, and the richer nations buy that food

supply to secure their population calories. And so you

very quickly see a bifurcation happen when you have a shortage

in a food supply like this of just a few points, where

suddenly famine is a real risk. And we already have about 800

million people on earth that are subsisting on below 1200

calories a day. So this very quickly tips the bucket in a

significant way in a number of countries that’s going to be

really awful. And that’s just on the wheat supply and wheat

planting problem. The bigger problem is the energy price

problem and the phosphorus and potassium problem. All

fertilizer is made up of nitrogen, phosphorus or

potassium. Those are the three major types of fertilizer that

farmers around the world have to use every year in order to

grow that crop without fertilizer plants don’t grow.

Nitrogen is made from natural gas, 98% of the world’s ammonia

is made from natural gas, natural gas prices, as you guys

know, have doubled and the and the futures market looks like

in some places natural gas prices going up like 4x. As a

result, the price of ammonia fertilizer, nitrogen based

fertilizer has gone from $200 a ton to $1,000 a ton. So it’s

five times as expensive to buy basic ammonia fertilizer

today than it was a few weeks ago, or a few months ago. And so

this is now leading a lot of farmers and then the other big

problem is phosphorus. So phosphorus, you know, by some

estimates, I mean, you know, there’s a little variation

around here, but about 10% of the world’s phosphate comes out

of Russia. And about, you know, call it 25% of the world’s

potassium comes out of Russia, potash, both of those markets

are blocked up, they are they are sanctioned, and they have

banned exports Russia has through the rest of 2022. So

around the world, the cost to make nitrogen fertilizer has

skyrocketed because of natural gas prices, because of the

Russia problem. And Russia is not exporting potassium and

phosphorus. And as a result, the price of nitrogen has gone

from 200 1000, the price of potassium has gone from 200 to

  1. And the price of phosphorus has gone from 250 to 700. So now

it’s so expensive to grow a crop that a lot of farmers around

the world are pulling acres out of production. And they’re

actually going to grow less this year than they would have

otherwise, because it is so expensive, and they cannot

access fertilizer locally to plant crops. So not only do we

have the wheat problem, we now also have the fertilizer

problem, and the acres coming out of production problem. And

so food supplies are going to go down even further. And this is

going to become even more catastrophic. And so there’s a

scrambling going on right now, you know, food prices around the

world, as a result, everyone starts buying up all the

commodities, they buy up all the corn, they buy up the

soybeans, they buy up the wheat, and the price for corn has

nearly doubled. Whereas, you know, from where it was in July

of 2020, the price of soybeans, the price of wheat are all

skyrocketing. And in a lot of countries, they cannot afford to

acquire and individuals cannot afford to buy food with the

skyrocketing commodity prices.

Can I ask you a question? I think it’s estimated that the US

food supply, if you could X out the waste would actually feed

most of the developing world, because I think 30 to 40% of all

of our food is wasted. Can you do something with that?

Yeah, that is actually true. A lot of that happens at the point

of consumption. So it’s in people’s homes. So it’s a

reverse supply chain problem, where, you know, we throw away a

lot of like stale bread and cereal that goes bad or

whatever. There’s some in the fresh vegetables market, but

generally, the core calorie producing commodities are rice,

wheat, potatoes, and corn. Those commodities don’t go bad in the

supply chain, they end up getting tossed out at the end of

the supply chain, which is at the point of consumption at home.

So, you know, I’m not sure there’s a real solution there

right now. The bigger issue is like, how do you get bulk

commodities to the places that are going to need them over the

next 12 months. So look, we’re right now we’re reducing food

supplies, stocks around the world, there’s strategic

reserves that are getting opened up and being released.

As that starts to get the planet’s diminished, and as the

production kind of numbers start to come out, it looks like less

acres are in production. You know, and God willing, we have a

good weather year everywhere this year, because you know, a

bad weather year in some markets could completely decimate the

remaining supply that’s coming out this year. Regardless, it is

going to be a humanitarian disaster within a year. And we

will see hundreds of millions of people go starving. And there

will be potentially, I think you said hundreds of millions of

people, hundreds of millions of people will never happened in

the history of million people already live on below 1200

calories a year right now.

You’re predicting that 100 over 100 million people will die

because of this. I don’t know about death, famine, like famine

is this like, you know, short of calories, you know, within that

within a market, it’s not like, hey, there’s no food, like, you

know, there will be strategic reserves release, there will be

stuff, but it won’t be enough. We just don’t have enough in the

way supply chains are set up. There just isn’t enough. And so

we found another supply chain weakness, like we did in COVID

over and over again, and boys will be released. But then

hoarding is starting. So David, you take it after this. But the

one question I had was maybe talk to me about this concept of

hoarding, because there seems to be a cascading effect. And you

kind of

well, yeah, it’s not just talking about a little bit is as

with any market guys, as you know, when there’s scarcity,

people come in and buy at a faster pace, you know, everyone

and so this is a market dynamic. It’s not like people are

physically hoarding loaves of bread, but commodity traders,

countries, strategic reserves, they start buying up what they

can get to prepare for the famine that’s coming, then

prices go even higher. And then it kicks other people out of the

market that couldn’t afford to buy it. And the whole thing

gets really ugly, really,

there’s no off ramp here. There’s no way to solve this.

Well, what freeberg Yeah, the thing I want to ask you is if we

had a peace deal right now a ceasefire, would we avoid this

outcome? I mean, like, how long? How long do we have to

Russia to reopen fertilizer export markets? Now? We need

natural gas prices to come down now. And we need them to plant

the spring wheat. Those are three things that need to happen

to solve this problem. If those three things don’t happen, we’re

going into spring right now. So around the world in the northern

hemisphere, farmers are making plans, they’re planting, they’re

deciding how much fertilizer to use. And so as this market

starts to kind of work itself out over the next few months, a

lot of the commodity traders and the the ag departments, they

publish these planting reports, and they talk about how many

acres of what were planted, and then everyone forecast how much

the supply will be. And we’re going to start to see these

uglier numbers come out over the next few weeks and months.

Meanwhile, we’re seeing supplies dwindle, and Russia’s holding

all this stuff. So you know, they’re holding hostage

phosphorus, potassium, and the natural gas pricing is just what

it is. Remember, there are ammonia plants everywhere. There

are ammonia plants and I and all ammonia plants use natural gas

to create, you know, to create this nitrogen based ammonia.

Let me make a statement and I’d love your reaction.

We’re finding out all of these externalities that was made with

underlying poor scientific rack reasoning that has caused these

issues to be exacerbated. So we know, for example, that our

overreliance on Russian hydrocarbons could have been

mitigated with nuclear, but we fell for shoddy science and we

fell for a bunch of uninformed people who ran this banner of

like, environmental protection, right? So they screwed us. Okay.

And those people now have meaningfully less credibility.

Let me give you another cohort. freeberg and you tell me all the

people that pushed back on GMO and said GMO was unacceptable.

It could never happen. It has to be x, y and z way. And there

are ways where we could have been working on plants that had

different mechanisms of action in order to actually absorb and

retain nutrients from the soil in different ways that would have

made us less reliant in exactly the way in which fertilizer

works. True or false? Yeah, GMO technology as a former Monsanto

executives, you can call me a Monsanto shill here. But yeah,

GMO technology has been hindered globally by a challenge

to adopt it. And there are techniques and technologies that

have not been aggressively developed, because of the

concern on approvals, just to get a single GMO trade approved

in the United States today and get it to market can take seven

to 13 years. And even then you have to still go get China to

approve it because they’re the biggest importer. And you have

to, you know, get all these other market participants to

approve it. And there are multiple agencies to get to

approve it. Europe is finally the EU is finally coming back

to the GMO problem and saying, you know what precision gene

editing can actually be beneficial to growing better

more stuff. Now, would it have solved this particular crisis?

Can I just say what’s so ridiculous about this? The fact

that we have a modern agrarian economy is because we actually

did figure out a way to do GMO except we use the Punnett

square and we use successive iterations. But the minute that

you try to scientifically scale it in a lab, all of a sudden,

that same process is not does not make any sense to me. That’s

it’s just intellectually so inconsistent.

Yeah, the thing that really scares people about GMO, like,

I mean, I’ve spent a lot of time on GMOs. And the reason people

are upset, I have a broader philosophical point.

Believe in that do you believe in that inconsistency, that

intellectual inconsistency? Like, how do you think somebody

from, you know, pre BC to today, I think that

agriculture iterated on our

Yes, no, I think agriculture itself is technology. Think

about it. Humans, humans used to go out and just eat whatever

was lying around what nature gave us. Then we started making

rows in the ground and putting seeds in the ground and putting

water on the ground. We engineered the earth to make

that we started to bring

and then we did plant breeding and traditional plant breeding

through Norman Norman Norman save the world that

genetically modifying things it is and then what we did with

GMOs, which is the distinction just to be really clear about

the definitional distinction between GMO and traditional

plant breeding. GMO is when you take DNA from another organism,

and you put it in the plant’s DNA to get that plant to do

something very specific. And Jason, you came with me to

Monsanto. I mean, you should be cautious, we should be cautious

about anytime we’re doing stuff like that. Right. But

and then there’s generally like a very visceral reaction when I

make that statement. And people are like, wait, you’re taking

the DNA from bacteria and putting it in plants. And how

do I know that’s going to work? And so there’s these layers of

concern, which, you know, are deeply psychological layers, but

we can, you know, scientifically resolve this over time. But

look, at the end of the day, humans today, you guys remember

last year, how much I was talking about that starch

synthesis paper, and how important it was, we don’t need

to grow plants to make the stuff we need to consume. If every

city around the world had a starch synthesizer, and it took

co2 from the atmosphere and water from the ocean, and had

this technique developed out, it could synthesize its own

calories in a physical device without needing to rely on the

ammonia supply chain and the phosphate supply chain, and all

of the systems that we rely on that are super outdated, that

are all a scaled up industrialized version of old

school agrarian techniques. Humans today, I think have the

ability to synthesize and print food. And over the next couple

of decades, particularly catalyzed by what’s going on in

Russia, Ukraine today, we’re going to see these technologies

accelerate. It’s obviously where I spent a lot of my time, but

I’m super excited about it. Yeah,

I think we suffer from a very insidious kind of plague in the

world, which is the plague of overeducated dumb people. And

it’s, it’s almost as if, you know, because of their degree

and the school, you give them inordinate power to make value

judgments that really put the world in a very difficult

position. And so when you have something like a war in Ukraine,

it just lays everything bare. And you find, you find all these

things like, you know, simple another, another version of this

example, how did an entire continent and specifically, I

mean, Europe, abdicate their entire energy security to the

group of it to a group of environmentalists and to, you

know, to a 16 year old girl, without even thinking about what

the right answer was for themselves from first

principles. That’s really crazy that that happened. And you need

a war, you know, where 10s of 1000s of people have to die to

realize that that was a really bad set of decisions that have

been compounding for decades. Here’s another example where

food security is yet another one where, you know, we weren’t

able to think cleanly from first principles. And so depending on

who had more money, or who was able to create more psychological

guilt, or fear, was able to get an outcome that fundamentally

puts the world at 100 million person plus famine. So somehow

we need to rethink how our institutions work, because we

are giving folks who haven’t proved that they can handle

power, the ability to influence outcomes, for the wrong sets of


What’s even worse tomorrow, these people you’re talking about

who are smart, dumb people, they’re so privileged that

they’re living in some bubble making decisions for people who

have food insecurity, or energy insecurity. And it’s only when

COVID showed, hey, oh, semiconductors, I can’t get my

car that I want, because it doesn’t have the chip in it. Or

I can’t get drugs, or I can’t get PPE, then all of a sudden,

they see the value and redundancy and supply chain. But

when they were living high on the hog, and had nothing to

worry about, and 20 different flavors of Captain Crunch, that

you know, they can’t even think about people in Africa.

Jacob, I think it’s really important to speak to the

capitalist incentive and how you get there. So okay, we’ve

globalized supply chains, because as a business, it

doesn’t make sense for me to do every step of the thing that I

want to do, because you can get better utilization out of capex

if a system is running all the time to make stuff. So if one

step of the system doesn’t need the other system running 24 seven,

it’s going to outsource that. And that’s kind of think about

like semiconductors, think about food manufacturing, right doesn’t

make sense for a farmer today to make his own ammonia. So

there’s an ammonia plant that centrally makes that stuff 24

seven distributes it out to a bunch of farmers that brings the

cost down per unit of production. And so these

systems have existed because we’ve had less capital with a

higher ROI on capital invested at every point in the system by

you know, distributing and having a kind of, you know,

centralized supply chain system like this. Now, what we’re

looking at today is what happens when one part of that system

fails. And now I think the big trend for the next decade or two,

everyone’s going to have like a institutional memory of this. And

you’re going to see companies that are going to start to

vertically integrate supply chains, they’re going to

vertically integrate their, their manufacturing, we’re going

to see a lot of businesses make what traditionally would have

been really, quote unquote, bad capex decisions and bad

investment decisions. And they’re gonna say, you know what

we need to have redundancy because we cannot face the

cataclysmic kind of circumstance that we faced in the past.

I also think those are, by the way, the easy decisions. I also

think that there are some more complicated ones of morality

that we may have also misappropriated. I’ll give you

one example. So if you think about energy independence of

America, I think there’s there’s not going to be there’s not

going to be many who think that it’s not critically important.

Well, then you go and say we have a short term bridge with

hydrocarbons and the long term solution is renewables. But

underneath renewables is the idea that you have to store

these things, right, you have to store the energy you make,

whether it’s from wind or solar, even if it’s from nuclear,

okay. And all of that results in us needing batteries, while

batteries need lithium, there’s enormous lithium deposits in the

United States that today can never get access because we’ve

decided that the you know, the upper land grouse of a state is

more important than America’s energy independence, right? So

when push comes to shove, a small rat like creature is

prioritized more importantly than America’s energy

independence. The downstream implications of that are now

obvious, rising costs, inflation, unemployment,

potential recession, war, death, famine, is the upper land

grouse that fundamentally more important than all of these

systemic risks to humankind. And the thing is, for a long

time, we would never even think about the trade offs to

actually think about why that decision should be made that

way. And now we actually have the ability to remake these

decisions. So it’s going to be really interesting to see

whether we upend all of these existing frameworks, you know,

and there’s enormous environmental lobbies that have

been created that have raised hundreds of millions, billions

of dollars to fight these battles systematically wherever

they come up. And in some ways, now what people will say, well,

you’ve really prevented progress, and you’ve actually

done more damage. That’s going to be a really interesting point

in our good intent evolution, good intent, save the

environment. And then there are downstream impacts. Let’s go to

sacks about the sanctions, we saw a level of sanctions we

didn’t expect. They were ferocious, they were unilateral,

they they they’re, you know, undeniably having an impact. Do

you think Putin would be at the table? Do you think the

sanctions are really having a dramatic impact? And do you

think that there’ll be a tool that we should use in the

future? Or do you think maybe we need to be more thoughtful

about them? In other words, cancel culture comes up as a

an analogy here, people are saying, oh, it’s like cancel

culture for a country. I think it’s pretty great that a country

that is murdering their neighbors doesn’t get to

participate. But obviously, you can have some serious concerns

if fertilizer and supply chain issues, as we just discussed,

are going to cause famine. So what’s the balance here?

Yeah, I think it’s a great another great example of, you

know, we’re not thinking through the second and third order

consequences of what we’re doing, we’re just reacting. And

so to Friedberg’s point, so, you know, first of all, we have to

realize this was more than just sanctions, this was a complete

severing of economic ties. I mean, basically, every Western

country pulled up stakes out of Russia. They and they did it on

their own, too. I mean, they did it because for the reasons you

said, because they wanted to make a statement that what

Putin did was wrong. So every Russian who was working for one

of these companies basically got fired and all the stores

closed, and so on. So I think I think it is, the repercussions

of it are going to be severe. However, these things, the

economics of it take time to play out. And so do I think it

creates pressure on Putin to make a deal? Yes. But, you know,

if the if this is going to be determined on the battlefield

one way or another in the next month, do I think it has time to

operate in that timeframe? Probably not. And I think what’s

likely to happen here is that in the same way that the real

repercussions of this war are going to be felt in grain

production in six months, you know, there is an economic

tsunami headed for our own economy as a result of the

blowback from basically severing, you know, 144 million

Russians from the global economy. There’s also going to

be geopolitical blowback. I mean, you know, I think it’s

very likely that the way this is going to play out

geopolitically is that Russia will become a Chinese client.

And, you know, all of those natural resources that China

produces, the gas, you know, all the the mineral wealth, that

those resources are going to flow on a conveyor belt on a

belt and road conveyor belt from Moscow to Beijing, and they’re

going to fuel the Chinese economy.

Yeah, yes and no, because the reality is, the thing we have

to remember is China is still a fundamentally export driven

economy, of which 35% just alone goes to the United States,

when you add in Europe and other OECD countries, it’s

almost 60%. So I think the idea that all of a sudden you,

Russia will be able to backdoor all of these things through

China into the rest of the world, I think is not really

realistic. And this is actually why I think the rhetoric is so

high. Because those two countries specifically are put

in a very difficult situation. Like what do you think the

China calculus on Taiwan is looking what’s happening to

Russia? Has it completely? It’s completely off the table,

completely off the table, they would never consider invading

Taiwan, Taiwan, knowing that it would put Apple in a position

or other companies that are entwined in the Chinese economy.

I think they would have to, again, I’ve said this before,

everybody has was always, you know, sort of like lambasting

economic sanctions, you know, even on this pod, people, it’s

never going to work, it doesn’t do anything. And it turns out

it’s just not true.

To be clear, I think sanctions are an appropriate way to create

economic pressure so that we can get a ceasefire and a peace

deal made. Okay. So I do believe in the same way that I believe

we should arm the Ukrainians so they can defend themselves

while I’m against a no fly zone. The issue is just are we

actually using the leverage that we’re creating to drive this

process to a success? I’m talking to the ceasefire process

to a successful resolution. Because if we just make this the

new normal, which is, you know, a, basically an insurrection

in Ukraine that drags on forever, and that China and

Russia cut off from the global economy and becomes a client of

China. I think there’s a parade of horribles that flow from

that. And Freebird just outlined one of them, which is

hundreds of millions of people across the world potentially

starving. So my point about sanctions is not that we

shouldn’t have done them, but there are going to be big

repercussions for our economy if we don’t resolve the

situation in Ukraine. Let’s do best case worst case with these

new this new economic order here and economic sanction

ability that the West has now demonstrated, you know, quite

effectively. For me, the best case scenario here is, if you

want to participate in the global economy and globalism to

global globalization 2.0 means you’re going to have to be hit

some base behavior level of being a good actor in the world

if you want to participate in the wider economy. Therefore,

as Chamath just pointed out, I think quite correctly, Taiwan’s

off the table. I mean, China does already is having massive

economic downturn and headwinds. The idea that they would face

what Russia is facing right now in terms of sanctions globally

would be cataclysmic for them. So do we think what’s the what’s

the best case in your mind, Friedberg, the worst case of

this new economic sanctions that we’ve just outlined best case

worst case, much of this is driven by Russian decision

making, not just our decision making. And so you know, there’s

a lot of question marks around what they’re gonna they’ve said,

definitively, we are banning all fertilizer exports through

  1. Okay, so like, does changing a sanction model at

this point, get enough resolve for them to kind of come back to

the table? Do we need to kind of weave that into some discussion

peace discussion that they’re having with Ukraine, I think

there’s going to need to be this multilateral, like global,

either support or partnership model, that’s going to have to

kind of emerge for this to all get resolved positively. I don’t

think that it’s just about Russia and Ukraine agreeing to a

bunch of terms, we’re all going to be affected by what’s going

on and what Russia has chosen to do back to us. And we all

think we’re in the power and we’ve blocked them and destroyed

the ruble and, you know, knock them back to the Stone Age,

yada, yada, but like, we’re hurting ourselves far more than

we realize. And we have to go get something back from Russia in

order to resolve this. So nuanced, I’m not sure I totally

agree with that. I actually think that, you know, necessity,

what is it? Necessity is the mother of invention. I think

that this has the ability just circling back to what we said

before, for us to rewrite all of these other decisions that

were frankly, not necessarily rooted in either first

principles or long strategic thought, in a way that can

actually improve the state of play for everybody, not just

including us for the next 50 or 100 years. So I’m not

completely convinced that it’s as catastrophically bad as you

think. Well, what about this, Friedberg, if we were thinking

about food stability, you mentioned your slurry, and, you

know, being able to make these calories without actually

planting any food. If we go anywhere, if you call it a

slurry, but yeah, okay, let’s call it a protein bar. You know,

like, like, ultimately, Jason, we can actually create pasta,

bread, rice. I mean, that’s where this all goes. Perfect. By

the way, just so you guys know, I want to frame this up. It’s

super important. 60% of the world’s calories come from

carbohydrates, which are basically two molecules, amylose

and amylopectin. Okay, that’s what makes up starch. So if we

can synthesize amylose and amylopectin, we can make it

would it take how long would it take? What would it cost to

build your pasta making machine and rice making machine, you

know, to have more decades long scale up problems, right? This

is not like this is like, hey, we got a solar similar to

nuclear or solar and batteries. Yeah, yeah. Okay. But there are

solutions to this. I look I mean, this is why I keep coming

back to saying like, we’re evolving the global economy and

planet Earth away from this model of centralized industrial

manufacturing into a production system that looks more

distributed, more decentralized with better technology. And

that that’s really a big trend for the century for for our

global economy. And that’s why right now I think the near term

trend is in de globalization, people making less capital

efficient decisions that create redundancy and supply chains.

And there’s a lot of ways as investors to play that, by the

way. Saks, what are your thoughts on maybe the the high

order a bit for the West being a race to resiliency or a race

to redundancy in energy in semiconductors, this race to

resiliency in food supply? Yeah, I mean, look, trade creates

economic wealth, but it also creates dependency. And we’re

realizing the downsides of having that dependency if we’re

dependent on or Europe is dependent on Russian cast, or

you know, you saw during COVID, we’ve become dependent on

Chinese pharmaceuticals, all the pharma companies have moved

their manufacturing over there. And then you know, that got

when China was rattling the saber, because we were blaming

them for COVID. This was back in 2020. They all of a sudden

started implying we might not get access to pharmaceuticals.

So look, we are gonna have to rethink all those trade

relationships. You can’t have trade without trust. Because,

again, if you if you you are empowering the producer to cut

you off when you make yourself dependent on that. Yeah. So So

look, I think we’re gonna have to rethink all of that. But can

I go back to your best case worst case question? Yes, I was

trying to get somebody in there. I think it’s a good

question. And, you know, here, let me lay out the best case

and then the worst. So the best case, look, the best case is

this sort of the Fukuyama argument, the sort of the from

argument is this Western triumphalism, which is like

sanctions are going to drive the Russians into submission,

they’re going to topple Putin, the people are going to rise up,

they’re going to lose this war, we are going to strike a great

blow against autocracy, and liberal democracy is going to

win. Okay, I understand that argument. Okay, now, what’s the

the worst case scenario? Worst case scenario is Freiburg’s

right, we end up with hundreds of millions of people starving,

the war drags on because Russians are going to give up.

So the sanctions, you know, while be while hurting the

Russians don’t end the war, and in fact, drive them into the

arms of the Chinese, you know, the rush has been called a big

gas station with nukes, that gas station will now fill up the

Chinese economy, henceforth, worsening the balance of power

in Cold War Two. And then there’s a big, you know, tsunami

or boomerang headed for the US economy. And we we have a

recession later this year, as gas prices go to $7 and $10 a

gallon. And so it ends up hurting us. And so I don’t, I

certainly see the case for sanctions. But, but I wonder if

people are really thinking through the downside scenarios.

And what I what I do think is that if that that the removal of

sanctions should be certainly something we’re affirmatively

putting on the table in these ceasefire negotiations, and that

sounds obvious, but I saw a tweet from Ian Bremmer, who’s

sort of part of the foreign policy establishment guy, think

tank guy, who has been pretty good on like, smart, he’s smart.

And he’s been good on no fly zone. He’s been saying the same

things I’ve been saying, like, guys, this is tantamount to a

declaration of war, we’re not going there. Also, basically

saying that, listen, no matter what the Russians do, we’re not

going to get into war three here. He’s been cool headed

about that. But he also tweeted that, listen, as long as Putin’s

in control of Russia, we can’t ever do business with them

again, sanctions are sticking around basically forever. And I

just wonder if that is an overreaction, if we’re going to

make that policy, I’d rather see us as America be willing to put

economic relations back on the table, as you know, in this

peace process, as opposed to saying, the Russians are cut off

forever. Because otherwise, they’re just going to become a

Chinese client state. I don’t see how that benefits us long

term. Well, again, I did. But again, David, what do you think

they do with China, China? What are they going to do, take 60%

of their goods and still export them to us, even though it just

contains Russian materials that are now considered contraband?

So they can’t absorb it economically, as my point,

there’s not enough demand outside these OECD countries to

absorb all of that. Well, here’s what I think. It’s just

mathematically not possible. I think so like, I think you make

a point. But I think if you’re going to look at this from like

a 50,000 foot level, I think there’s like two grand

narratives about what is happening in the world. One

narrative, sort of the neocon, sort of liberal hegemony

narrative is that we’re in a great battle between democracy

and autocracy. The other narrative is that we’re in Cold

War Two is that it’s more of a great power rivalry between the

US and China. I tend to think that the latter is where we’re

really at in the world. And the reason why I say that is, you

look at there’s a lot of autocracies who frankly, we

support because we want them on our side. For example, you know,

Turkey is run by an autocrat. You know, Erdogan is becoming

more autocratic. In Egypt, we had sort of democracy there for

a brief moment. When Mubarak got overthrown, guess what, they

elected the Muslim Brotherhood. And we didn’t like that too

much. And now we got General al-Sisi in charge. We like that

a lot better. You know, we are still allies with the Saudis,

and they’re a more autocratic government. And so I tend to

think that, you know, the better way to describe what’s

happening in the world is a balance of power rivalry between

the US and China, which is only going to pick up momentum in

the current in the coming decades. And we have to think

about who’s on our side of the ledger, and who’s on their side

of the ledger. And, you know, I think, at this point, it’s,

we’ve pretty much driven Russia completely onto the Chinese

side of the ledger. And I think it’s gonna have like very bad

consequences for us.

All right, let’s segue from here into the economy,

inflation, and markets. In a previous episode, Chamath, you

talked about the psychological cycle of, you know, ignoring

good news, then accepting it being outraged by it, and then

maybe not taking the good news. In the bad news column,

obviously, inflation continues last six months of CPI numbers

year over year, obviously, September 5.4, I’ll fast forward

to November 6.8, January 7.5, February 7.9, excluding food and

energy, core inflation still rose 6.4%. That being said, we

have 11 point x million jobs available for Americans, five or

6 million people unemployed who are looking for work, obviously,

there will be some mismatch in terms of geography and skills

there. And then corporate earnings great, but a recession

possibly looming. Where are you on this? And obviously, the

markets bottomed out. So where are you at with the economy,

hope, fear, and otherwise?

Well, I think that we’re in the midst of what I would call a

melt up. So, you know, probably the next month, month and a

half, there really isn’t much, quote, unquote, bad news that

hasn’t been priced in. The thing that I’ve learned over the last

few years is that markets don’t actually care what the news is.

They, they can process good news and bad news equally well, what

they despise is the uncertainty of what the news could be. And

so this week was really important because we had two

huge buckets of uncertainty taken out of the market. So the

one we’ve already talked about, which is when, when the market

saw that there was a surface area of a deal between Ukraine

and Russia, that was really constructive. Because neither

side would have signaled something if both parties were

very far apart. So that that meant to the markets were a few

weeks out from something getting done. And then the second thing

was Jerome Powell and the Federal Reserve. They finally

had their meeting, they raised rates 25 basis points. But even

more importantly, they gave you a very prescriptive forecast of

what the next year will look like at a minimum, and possibly

even two years. And once you could have that, you were able

to then go and redo all of your expectations. And what people

realized was, okay, you know, inflation may actually start to

get tamed in the back half of the year, the economy is still

quite strong. And we could actually support two, two and a

half percent interest rates, and still actually grow really well.

And so what you’ve seen in the last three or four days is a

reaction to the loss of uncertainty. And so there really

isn’t now the only thing to find the ointment could be if the war

all of a sudden escalates, not that it gets dragged on, because

at that point, that’s also I think, been priced in. But if

something very meaningfully different, and some and Russia,

in this case, ratchets up the intensity by going, you know,

nuclear or something else, although I think that’s a very

long tail chemical weapons seems a possibility, or

corporate bombing, I think these are all very, very low

probability events. But in the absence of these things, you

basically have really constructive dynamics right now

for at least the next month and a half, maybe even two months.

How much of this has to do with retail investors who were YOLO

hodlers, speculators, stimmy checks, getting super active for

two years, and then maybe getting super spooked right now

and maybe needing the money to deploy in their lives.

Look, the thing to remember, and I hate to be this blunt, but

it’s true. Retail is not a very good signal of anything. In

fact, if you actually look at retail flows, typically, you

will make money by doing the exact opposite of what retail

does. And I posted this in the group chat to you guys, you

know, every single day of since the beginning of this year,

retail was a net buyer. In all of those days, the market got

punched in the face. Finally, at the beginning of March, retail

capitulated. Right. And I posted that same day. And I said,

guys, this is the moment to buy. And it lo and behold, what

happened, the markets rallied meaningfully from that point.

And the reason is because they were going into the end of q1,

you have a huge tax bill due in April 15. People were starting

to just finally give up, they were buying every single day,

and they finally gave up. But that capitulation was the

moment that you buy. So if anything, retail is is is the

you know, you know, I’ve said before, you fade your faith

list, you know, retail flows are something you typically will

make money by fading by doing the exact opposite of whatever

retail is doing. And you just need to have access to that

information. If you have access to it, you can kind of, you

know, profit from it. So where are we going from here probably

up, David, you’ve been pessimistic. We’re seeing a lot

of changes in the private market, funding rounds taking

longer, a lot of funds getting closed, you know, venture funds,

that is, but seems like a lot more diligence is being done.

The time meantime to closing a deal has definitely extended

massively. What’s your betting strategy now as a venture


I think that there’s going to be a trickle down effect of what’s

happened in the market to privates and the valuations are

going to go back to their pre COVID levels. I mean, they are

multiples pre COVID. We’re like 20, not 100. So we’re seeing a

massive repricing of deals. And that’s going to continue. And I

don’t think it’s going to be this like transient effect,

everything’s going to bounce back in a few weeks. On the

public markets, the defining characteristic of these markets

is volatility. I mean, the VIX, which is the measure of

volatility is at one of its all time highs. And so it’s true

that over the past week, we saw a nice sort of melt up or rally.

Because there was speculation about this peace deal, the

Financial Times had that article in the 15 point plan. Chamath is

right that if that peace deal gets signed, I think the market

rally strongly because, you know, it went up considerably

just on hopes that it might be signed. But on the other hand,

if this peace process falls apart, I think the market will

give back all those gains and then some I think we are nowhere

near out of the woods on all the risky scenarios that could

develop from this war. I think that if there is no peace deal,

I think you can almost expect Russia to escalate in the war.

They have said this is an existential issue for them. I

think that would mean at a minimum, you know, heavy

bombing of Ukrainian cities, and then they’ll step up the

pressure even more on Biden and Washington to get militarily

involved. This situation could still spin out of control. So,

you know, I think in the absence of peace deal, and then

finally, we have all the risks of recession, we definitely are

seeing a slowdown in the economy right now. And I think if this

war continues, and we don’t get the spring planning and things

keep, you know, deteriorating, I think we’re headed for a very

serious recession in this country, I think we’ll go from

slowdown to recession. So if I were advising Biden, of course,

no one’s listening to me. But if I were advising Biden, I would

be telling Biden, listen, Mr. President, we are going to have

a horrible midterms in November. And you know, we are

going to have a really hard time in 2024. If this war continues,

and, you know, we head down into recession, or any of the

other catastrophes that could happen, we need to push for a

peace deal right now. And the US should be playing a

constructive role. And we should be applying pressure

wherever we can to make a deal because the broad contours of

this deal to my point, have been set. I don’t think any of the

details now that we know, look, it’s about Crimea, it’s about

Donbass about neutrality. None of the details that we’re still

fighting over are more important than getting a piece right now.

And if I were in the White House, I’d be singly pushing for

that. Yeah, it’s, it’s complicated. There, the, the

counter to that, obviously, is, this could be, you know, the

beginning of the end for Putin. And, you know, even if that’s a

10% chance or 20% chance, the possibility that in our

lifetime, you know, Russia could have a leadership change

could be tremendous, obviously, it’s a coin toss, which way it

goes. But change could be

so look, that’s certainly in the cards. And, and look, if

somehow magically Putin got toppled and replaced with a

democrat, that would be a wonderful thing. However,

it’s happened before. It’s rare, but it happens. Yeah.

Well, tell me when it when does it happen?

East Germany, right? We tore down the wall.

Yeah, I mean, that was a reunification. Here’s the basic

problem is, we understand the Russians in the Russian system,

you’ve got all these oligarchs are basically like bosses or

mob bosses. And then Putin’s like the boss of bosses, right?

So what are the odds if you take out the boss of bosses, that

he’s replaced with someone who’s a democrat versus the next

biggest, baddest boss? I think, you know, look, that that’s

certainly a possibility. But my concern is that when you play

from maximalist upside like that, you’re also taking

maximalist downside. And a lot of people have made this point

that look, if Putin’s life is on the line, he’s gonna be more

willing to do anything. And I think the the better approach

and you’ve you’ve heard people mentioned this idea of the

golden bridge from Sun Tzu, which is give your enemy a

golden bridge to retreat mentioned it so that he’s not

fighting for his life.

That was a really clever framework, Jacob, I think. I

mean, if you guys went and created a tally, and I’m not

trying to be Debbie down here. But, you know, since the advent

of the CIA, the number of times that we have tried to incite

regime change, and then the number of times it’s been

successful, what is that percentage? I mean, we don’t

know, because we don’t know how many times we’ve tried. Well,

we know we know many attempts. And I mean, we’ve changed a lot

of two outers. We’ve

every time we try it, we either get the same or worse. So for

example, Syria, we tried to get rid of Assad, he’s still there.

And now it’s worse. Afghanistan, we tried it, the

Taliban are back in power. Well, no, but

take it to the calculation is what if it does change?

Hold on Iraq, we got rid of Saddam. And now we’ve handed

that country to Iran on a silver platter, the ayatollahs control

it. Qaddafi in Libya, we got rid of him because he was so

horrible. And now that country is in chaos. You’ve got

open air slave markets. We tried in. In Ukraine, we tried

in Ukraine in 2014. So our track record is not super good.

Yeah, no, I mean, I think regime change is like chasing someone

out or something, you know, for a company at some point, we

would have been pipped for our ability to do regime change.

I don’t think it’s a great strategy. I’m not necessarily

advocating for it. But what I’m not saying that I’m saying

whether or not it’s a good strategy. I think that we are

particularly not good at it. Yeah, we need a performance

improvement plan on that front. We should just I think we should

just stop trying that we shouldn’t be going for regime

change. We should be this is a good question. You and I had

this thing where I said you and I are in sync that we both want

to contain dictators, and maybe isolation and you’re like, I’m

not into isolation. So I think a definition of like, what is the

strategy for containment, going forward post a peace deal with

Russia. And isolationism, you know, I guess is a bit of a

trigger word is loaded. But well, yeah, I’m not an

isolationist. Next person, I would describe my strategy as

selective engagement, meaning that we still engage

internationally on behalf of vital American interests in our

core interests, but we don’t stick our fingers in the pie of

the internal affairs of all these countries all over the

world to try and foment regime change. So for example, like

what’s an example of a vital American interest, I would say,

standing up to China in the sense that we do not want them

dominating Asia and becoming a peer competitor to the United

States that can then challenge us all over the world. So some

more pragmatist on it. And we can be isolationist with North

Korea, because there’s literally nothing they can do for us.

And look, I would not be throwing countries like Turkey

and Egypt and Saudi Arabia out of our coalition in Cold War two

because we don’t like the the nature of their governments. And

I’m not saying I support autocracy. I don’t know. But the

reality is dialogue is reasonable, because if you

don’t, then the other side will, the foreign policy playbook is

going to get fundamentally rewritten. After this Russia,

Ukraine war, in large part because of the effectiveness of

government sanctions, plus corporate social responsibility,

whatever you want to call that CSR public sentiment, woke is

whatever you want to call it. Yes, I agree. But the

combination of these two things has proved to be incredibly

effective at setting the stage for some sort of compromise or

regime change, the spectrum of outcomes is there. But the point

is, that’s an incredibly unique set of circumstances where

before we never would have thought an economy that large or

a country that important on the world stage, whatever have

compromised in the absence of military intervention. And I

think that that’s important to think about as we think about

what our forward going China policy looks like, I think

really, like the the importance of like the OECD, right, the

importance of all these organized nations that consume

from China, becoming more organized now probably makes

more sense. I said this before in a tweet, but the importance

of the US dollar has become completely primary, which has

been an incredible benefit, you know, benefit of what has

happened because of this war, you know, very small silver

linings in the grand scheme of all this humanitarian crisis,

but those are going to be really important things that the

United States can seize on. So, you know, we may in some ways

have have had some diminished power in order to facilitate

peace in this, in this conflict. But the downstream capital that

we could accumulate by organizing these countries more

effectively, I think could be really important. And then

separately, we have to have a moral conversation in the

United States about all these things, like environmental laws,

like our approach to agriculture that may have been

under absolutely, yes, with faulty logic, a little more

pragmatism would go a long way.

Yes, it would. I’m a little more pessimistic about our

foreign policy establishment. And part of the reason I say

this is because I’m very disappointed in the Republicans,

the Republicans used to be the party, a vital national

interest, meaning America did not get involved all over the

world, unless we had a vital national interest. You just

never hear them making that case anymore. It’s all the way

back to sort of Bush doctrine. And, you know, as an example,

they’re all pushing for the no fly zone, they’re all pushing

for the delivery of the MIGs, despite they want war.

Just say the words.

They’re weird. I mean, those right wingers are crazy. Why

are they so war? I’ve been very critical. I mean, I’ve been

war on this. I don’t understand there. Well, I think there’s

two possibilities.



I think I think there’s two possibilities. I think the

anxiety. Yeah. And this is why I predicted war at the end of

last year. But, you know, that turned out to be a great

prediction, right? Look, I’ve been I’ve been very

disappointed in the Republicans. And I think I think here’s

what I think is going on. I think if any of those

Republicans, like, say, Mitt Romney or something, I look, I

think Lindsey Graham is just a crazy sort of warmonger. But,

but you take someone like Mitt Romney, who’s basically saying

all of these sort of more bellicose and escalatory things.

If he was actually in Biden’s shoes, I bet he’d be making the

same decisions as Biden, because he would not want to risk war

three, but it’s such a cheap, easy, partisan political attack

to say that Biden is being weak, and he’s not doing everything

he can be weak at all. I think history will look back and think

two things about, about this whole thing with with the

American lens. The first thing was, for whatever set of

reasons, we lost it, then we diminish some stature in the

world, as a perceived arbitrator and mediator in

these kinds of conflicts. But separately, I do think Biden has

done a very good job in seeing the forest from the trees, he

held the line on military intervention, and he has really

ratcheted up the ability for others to impose economic

sanctions beside and behind the United States. And I think that

will turn out to be a masterstroke. I give him credit.

And I think that that he deserves to be acknowledged.

Because I think the Biden has done an amazing job of just

saying outright, we’re not going to war, we are not

starting that takes a lot of courage, stop, that takes a lot

of courage. He has not even, I mean, in fact, you’ve lauded

them. I think that shows some intellectual honesty on your

part. And to your point, you’re not. There’s a reason why we

lost our credibility. These misadventures, as Sachs calls

them in the Middle East have been disastrous. We made huge

mistakes. And we need to take a different approach. I’ll give

Trump a compliment. He didn’t start any wars. And if you look

at every president who came before him in our lifetime,

every time they start two or three conflicts, and he was

like, we’re gonna have a no war policy. And now you got Biden

say, we’re not going to go to war either. This could be a

tipping point. And our focus, I think the ultimate checkmate

should be Biden coming out and the EU coming on saying, we are

going to start a race to resiliency. And here’s how it’s

going to look, Jason, it’s an incredible point that you just

made. I just want to reiterate it since Reagan, I can I can

explicitly point out incremental conflicts that the

President of the United States has approved and greenlit to

get us into since Reagan.

We’ve been in seven wars since the end of the Cold War. It’s

amazing. The American people Trump was the only one that did

not start a new war for Biden. You want to know why? Because

he was a populist. And the people of the United States of

America don’t want these crazy wars. They are sick of all these

wars. It is the foreign policy establishment that is pushing

for all of these wars. And listen, why and Obama the same

way Obama, let’s go back. Obama beat Hillary Clinton for the

Democratic nomination, because he was against the Iraq War. And

she was for it. Yeah, Obama had the right instincts on Ukraine,

he did not want to escalate the situation. Remember, in 2014,

when they took Crimea, he said, America does not have a vital

national interest that justifies us going to war. He was right,

the president that tried to incite regime change. It’s right.

You want to know why? Because, because the State Department

lifers, you know, who instituted you incited that our

Undersecretary of State for Russian Affairs was Victoria

Newland, who was a foreign policy advisor for Dick Cheney.

And these people boll weevil their way into the foreign

policy establishment. They’re in the think tanks during the

State Department. What did you just use boll weevil?

They are the permanent the hold on a second, they are the

permanent establishment of Washington, the president’s

come and go, they stay forever. Yeah, she was there. She was

caught on a phone call, basically picking the new leader

of Ukraine after a coup in 2014. She is she the one that had

that famous quote that said, Putin, fuck Putin was that he

said he said, Yeah, she said, Yes, is our guy basically

picking yachts and yoke to be the new leader. And she said,

fuck the EU, when the EU wanted to take a more temperate

approach. Okay, okay, look at William F. Buckley. Here you

go. And sacks. I think the mistake Biden made. Listen, I

think Biden has good instincts on this. I think he had good

instincts last year in June, when he called for basically an

emergency summit with Putin to dial down the tensions. And I

think that summit was successful. So what happened?

Okay, the intercept just had a great article talking about how

tensions ratcheted down after that June summit, but they

picked back up in October, November, what happened between

June and October, I’ll tell you what, on September 1, Zelensky

met with Biden in the White House, and the State Department

issued a joint statement, basically reaffirming that

Ukraine be part of NATO, it would reaffirm military ties,

economic ties. And then on November 10, they published a

giant charter agreement between the United States and Ukraine

that was signed by Blinken. Now look, did Biden know about

this? Yes, but this is the State Department agenda. And it

was on the heels of this charter agreement that the Russians

basically said they had reached the boiling point. They

basically delivered the ultimatum to the US in December

and precipitated the crisis that preceded this war. So my

point is just listen, we have a State Department with its own

agenda. It loves regime change. It loves having clients all over

the world and inserting its fingers in the pie. And unless

Biden Hold on, if unless Biden stands up to his own State

Department, we will not get a ceasefire and we will not get a

peace deal. And that will be disastrous for his presidency.

What I will say is, I think Biden has done a very good job.

And I know Tony really well. And I think Tony’s trying to do

the best job he can. I think he’s done a pretty good job, all

things considered as well. That’s pretty

very any final final thoughts here on, you know, a very

difficult time period we’re living through the global order

is being restructured. It’s predictable. I think again, if

you read Ray Dalio’s book, which I recommended heavily last

year, it’s surprising how much of that simple rubric is playing

out today, exactly as that rubric kind of estimated it

would. And you know that look, I mean, by the way, one way to

think about the China, Russia, US dynamic, you know, you got a

one, two and three player game theories, number one wants two

and three to be at it, because then they’ll, you know, end up

diminishing value. Number two wants one and three to be at it.

Number three wants one and two to be at it. And so we’re seeing

that that multi party game theory play out right now. And

you know, again, based on that rubric, you could probably

predict where this is all gonna end up

brilliant point. Listen, if you were to look at this from the

Chinese standpoint, they must be loving what’s going on loving

it. Old saying, I think Napoleon said it never interrupt

your enemy when he’s making a mistake. Why is China so quiet

right now? Well, yeah, because they love their dream. Their

dream is the US and Russia attacking each other.

Yeah, we have to implement energy independence writ large.

And we have to make sure that it is very clear we have influence

amongst all these OECD countries. Because if China takes

one foot over the line, we have to have the ability to do to

them what we’ve done to Russia economically. It’s the only way

in which we can ratchet down all this tension and find peace.

Yes, the new war is the war on our dependency on dictators, we

much must must have a race to resiliency. We’re going to talk

about this and more at the all in May 15 16 17. No more. May

15 16 and 17. All in some at Miami. 500 of the 700 tickets

are gone. If you want to apply for a scholarship, you can apply

tell us how much you love the show at the website, just do a

Google search for all and summit. Really excited to

announce Keith Raboia will be joining us. One of sax’s besties

a very iconoclastic person. We’re going for iconoclast. Next

up Brian Peterson, friend of the pod from Flexport talking about

all these supply chain issues. The number of speakers we’re

going to have is going to be extraordinary. Brad Gerstner,

friend of the pod is going to come talking about markets

education. Joe Lonsdale is halfway in again, another

iconoclastic controversial person. And that’s what we’re

going for the day and out. Yeah. And we’ll keep announcing

more. We’ll keep announcing more every week. Apply for a

scholarship if you like. And we’ll see you all there for

love you guys. Sultan of science, the rain man and the

dictator. I’m Jake out. Love you. Bye. Bye. Bye. Bye. Best

love you, sacks. Love you, sacks. Love you, Friedberg.

Back at you. Those are good feelings for you to have.

We’ll let your winners ride. Rain Man David Sacks.

And instead, we open source it to the fans and they’ve just

gone crazy with it. Love you, Eskies. Queen of Kinhwa.

Besties are gone. That’s my dog taking a notice in your

driveway. We should all just get a room and just have one

big huge orgy because they’re all just useless. It’s like

this like sexual tension that they just need to release


What we need to get Merchies are

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