Putin’s Out of Time, Not Troops

Jacob Smu: 00:00:04

Hello and welcome to another episode of Geopolitical Cousins.

Jacob Smu: 00:00:07

It is your producer other Jacob.

Jacob Smu: 00:00:10

Um, today Marco and Jacob Shapiro take a dive into the Ukraine war, which we

Jacob Smu: 00:00:16

haven't touched on in a while, and, and then really spend the rest of the episode

Jacob Smu: 00:00:21

taking a deep dive into the tariffs and what they mean for the US' relationship

Jacob Smu: 00:00:25

with everybody else now and in the future.

Jacob Smu: 00:00:28

That's all I got.

Jacob Smu: 00:00:29

Enjoy the episode.

Jacob Smu: 00:00:31

Go spend time with your loved ones and touch some grass.

Jacob Smu: 00:00:34

See you guys out there.

Jacob Shapiro: 00:00:41

Uh, we should rename the podcast, poolside podcast 'cause

Jacob Shapiro: 00:00:44

I'm by the poolside in Monroe, Georgia.

Jacob Shapiro: 00:00:46

In the middle of nowhere.

Jacob Shapiro: 00:00:46

I magically have wifi.

Jacob Shapiro: 00:00:47

This is the first time I've ever been here that the wifi actually worked.

Jacob Shapiro: 00:00:50

So, uh, we're both, we're both off the reservation.

Jacob Shapiro: 00:00:52

Marco.

Marko Papic: 00:00:54

Yes.

Marko Papic: 00:00:54

And I'm, uh, still recording this from interior British Columbia.

Marko Papic: 00:00:57

So.

Jacob Shapiro: 00:00:58

There we go.

Jacob Shapiro: 00:00:59

Alright, so we decided to get together here for a quick one, which for us

Jacob Shapiro: 00:01:02

is probably gonna be like an hour.

Jacob Shapiro: 00:01:03

Um, because our last two podcasts were our absolutely incredible

Jacob Shapiro: 00:01:07

trade value leadership column.

Jacob Shapiro: 00:01:10

Basically, if you haven't listened to those episodes,

Jacob Shapiro: 00:01:11

you need to go listen to it.

Jacob Shapiro: 00:01:12

If you haven't sent us all the reasons you think we're idiots, we want your

Jacob Shapiro: 00:01:15

email, please send it to us, the email address at the end of the episode.

Jacob Shapiro: 00:01:18

Um, but Marco, the last time we actually like spent time on what was going on

Jacob Shapiro: 00:01:22

in the news, it was Iran, Israel, shit.

Jacob Shapiro: 00:01:24

So we have lots of things to catch up on.

Jacob Shapiro: 00:01:25

It was actually an interesting.

Jacob Shapiro: 00:01:27

Yeah, go, go ahead.

Jacob Shapiro: 00:01:28

We

Marko Papic: 00:01:28

haven't talked about any of this, uh, like what's going on in the

Marko Papic: 00:01:31

world almost in like a month, if not more.

Jacob Shapiro: 00:01:33

Which is an interesting exercise to go back and be like,

Jacob Shapiro: 00:01:35

well, has anything actually important happened since the Israel Iran war?

Jacob Shapiro: 00:01:38

Was the Israel Iran war actually important?

Jacob Shapiro: 00:01:41

Like, I actually struggled a little bit to find things, but um, and, and

Jacob Shapiro: 00:01:44

like tellingly enough, like when you called me right beforehand to, to set

Jacob Shapiro: 00:01:48

our list of topics for the agenda, you said the Russia, Ukraine War.

Jacob Shapiro: 00:01:51

I totally forgot that the Russian Ukraine war was something we should talk about.

Jacob Shapiro: 00:01:54

So it just goes to show you, but let's start there.

Jacob Shapiro: 00:01:56

Um, it's been a pretty seismic shift from the White House.

Jacob Shapiro: 00:02:00

I mean, a couple weeks ago.

Jacob Shapiro: 00:02:02

It, it seems like Pete Hegseth was gonna try and limit weapons to

Jacob Shapiro: 00:02:06

Ukraine, and he didn't tell anybody or he surprised the White House.

Jacob Shapiro: 00:02:09

Um, Donald Trump turned around and said he's actually gonna dramatically increase

Jacob Shapiro: 00:02:13

weapons supplies to European allies.

Jacob Shapiro: 00:02:15

So they're gonna be selling roughly 10 billion, $10 billion worth of

Jacob Shapiro: 00:02:20

weapons, including air defense, artillery missiles, things like that

Jacob Shapiro: 00:02:23

to NATO allies and, uh, weapons that are eventually gonna go to Ukraine.

Jacob Shapiro: 00:02:27

He's also given.

Jacob Shapiro: 00:02:28

Russia, a 50 day ultimatum, uh, that if there isn't peace in 50 days,

Jacob Shapiro: 00:02:33

they're gonna start talking about secondary tariffs, which, you know,

Jacob Shapiro: 00:02:37

we're, we're parsing Trumpian language here, Trump chronology, but we think

Jacob Shapiro: 00:02:41

that means secondary sanctions on purchases of Russian oil from China

Jacob Shapiro: 00:02:45

and India and other countries.

Jacob Shapiro: 00:02:46

That's probably what that means.

Jacob Shapiro: 00:02:47

But who knows?

Jacob Shapiro: 00:02:48

Um, I'll quote President Trump, uh, from Monday.

Jacob Shapiro: 00:02:51

Uh, he said this about when he speaks to Putin, I always hang up and say,

Jacob Shapiro: 00:02:55

well, that was a nice phone call.

Jacob Shapiro: 00:02:56

And then missiles are launched into Kyiv or some other city.

Jacob Shapiro: 00:02:59

And after that happens three or four times, you say,

Jacob Shapiro: 00:03:00

talk doesn't mean anything.

Jacob Shapiro: 00:03:02

End quote, Donna, we're glad you got here.

Jacob Shapiro: 00:03:04

After however many months of dealing with Vladimir Putin that this,

Jacob Shapiro: 00:03:07

you finally realized the pattern.

Jacob Shapiro: 00:03:08

That's cool.

Jacob Shapiro: 00:03:09

Um, where do you wanna take this, uh, at the offset?

Jacob Shapiro: 00:03:12

Uh, 'cause you know, we'll probably get to the end of 50 days.

Jacob Shapiro: 00:03:14

I don't think Putin's gonna stop.

Jacob Shapiro: 00:03:15

Or maybe you see something different, but where, what are you seeing, Marco?

Marko Papic: 00:03:19

I think we have to stop.

Marko Papic: 00:03:20

Uh.

Marko Papic: 00:03:21

From the point that Jeffrey Epstein is a Russian spy.

Jacob Shapiro: 00:03:24

Hmm.

Jacob Shapiro: 00:03:25

Of course.

Jacob Shapiro: 00:03:26

How could I forget that?

Marko Papic: 00:03:27

No, I just, I just figured if we're gonna get more clicks, Jacob, the

Marko Papic: 00:03:30

one thing that we didn't talk about at any point in our podcast is Jeffrey Epstein.

Jacob Shapiro: 00:03:34

Well, I'm, I'm gonna steal this from, from X.

Jacob Shapiro: 00:03:36

Isn't it incredible that the only impeached president in US history

Jacob Shapiro: 00:03:40

who wasn't hanging out on Jeffrey Epstein's boat was Andrew Johnson?

Jacob Shapiro: 00:03:43

Not an incredible just fact of reality.

Marko Papic: 00:03:47

Yeah.

Marko Papic: 00:03:47

So, uh, let's talk Russia, Ukraine.

Marko Papic: 00:03:49

That was a joke by the way.

Marko Papic: 00:03:50

I have nothing really smart to say about the Epstein thing.

Marko Papic: 00:03:52

Uh, but maybe I will at some point.

Marko Papic: 00:03:54

I dunno.

Marko Papic: 00:03:55

Hmm.

Marko Papic: 00:03:55

Yeah, we'll figure it out.

Marko Papic: 00:03:56

Uh, I think, uh, I think the Russia, Ukraine thing is interesting because

Marko Papic: 00:04:00

first of all, it reveals how I think stupid, the notion that Trump is

Marko Papic: 00:04:06

pro-Russian really is, you know, I've gotten inundated Jacob with questions.

Marko Papic: 00:04:11

From friends, family, clients, from everybody about, Hey, what's

Marko Papic: 00:04:16

this 180 degree turn to Russia?

Marko Papic: 00:04:18

And I'm like, what's turn to Russia?

Marko Papic: 00:04:20

The man is pro-Trump.

Marko Papic: 00:04:21

He's not pro Russia.

Marko Papic: 00:04:22

Mm-hmm.

Marko Papic: 00:04:23

He's not pro-China.

Marko Papic: 00:04:24

He's not pro-Israel, by the way.

Marko Papic: 00:04:26

He's not pro anything.

Marko Papic: 00:04:28

He's just pro-Trump.

Marko Papic: 00:04:29

And so he shows up and he says, I want peace in Ukraine.

Marko Papic: 00:04:33

This war is unsustainable.

Marko Papic: 00:04:35

And objectively speaking.

Marko Papic: 00:04:37

Donald Trump is correct in this, this, this conflict is unsustainable.

Marko Papic: 00:04:40

And this notion that the West should continually support Ukrainian efforts

Marko Papic: 00:04:44

to reclaim their territories is going to end Ukraine as we know it.

Marko Papic: 00:04:48

Like we, like the west, will bleed Ukraine dry.

Marko Papic: 00:04:51

This is an unsustainable conflict.

Marko Papic: 00:04:54

It it has to end.

Marko Papic: 00:04:57

Uh, so Trump says, okay, well I'm gonna end it and I'm gonna look cool doing it.

Marko Papic: 00:05:01

Um, and so he slaps zelensky around in the White House.

Marko Papic: 00:05:04

Uh, which wasn't completely incorrect because part of the

Marko Papic: 00:05:07

problem is that Zelensky has been given a blank check by previous

Marko Papic: 00:05:10

administration and many Europeans.

Marko Papic: 00:05:12

And so he needs to be put in line with this notion that yes, you do

Marko Papic: 00:05:16

need to negotiate with the Russians.

Marko Papic: 00:05:17

And he's like, but they're murderers.

Marko Papic: 00:05:18

Yeah.

Marko Papic: 00:05:19

Well that's kind of like what war is, you know, like, welcome.

Marko Papic: 00:05:22

Hello.

Marko Papic: 00:05:23

Yeah, thank you.

Marko Papic: 00:05:24

So thanks for being with us.

Marko Papic: 00:05:25

And so the media latches on to that.

Marko Papic: 00:05:27

And of course previous Russia hoaxed the stuff and it's just like, oh my God.

Marko Papic: 00:05:32

Donald Trump has gone fully mature and candidate here.

Marko Papic: 00:05:35

Um, meanwhile, Donald Trump expects Putin to react to all of this, including to the

Marko Papic: 00:05:42

fact that American officials are starting to take Russian interest seriously.

Marko Papic: 00:05:45

Whether it's, you know, not having Ukrainian nato, whether it's like,

Marko Papic: 00:05:49

Hey, we wanna keep these territories.

Marko Papic: 00:05:50

Oh, interesting.

Marko Papic: 00:05:51

Okay, fine.

Marko Papic: 00:05:52

Let's talk about it this entire time, Trump expects Putin to be.

Marko Papic: 00:05:56

Fair and objective.

Marko Papic: 00:05:58

Yeah.

Marko Papic: 00:05:59

And say, okay, cool.

Marko Papic: 00:05:59

Thanks.

Marko Papic: 00:06:00

Like, let's, let me reciprocate.

Marko Papic: 00:06:02

But what I don't think that they understand in the White House or really

Marko Papic: 00:06:05

anywhere, media, journalist, analyst, nobody is that Putin has a real problem.

Marko Papic: 00:06:10

He promised Don Bus, which is Donkin, Luhansk, together, two,

Marko Papic: 00:06:16

all OBLs of Ukraine make donbas.

Marko Papic: 00:06:19

The problem is that a third, a third of donk, a third of

Marko Papic: 00:06:23

this territory, like 30% of it.

Marko Papic: 00:06:27

Russians have not been able to conquer for 11 years.

Marko Papic: 00:06:30

I mean, not like three years since 2022, but since 20 14, 20 15 conflict,

Marko Papic: 00:06:36

there's this part of Dons that the Ukrainians are just defending valiantly

Marko Papic: 00:06:40

and impressively, and so Putin has a problem I genuinely believe.

Marko Papic: 00:06:46

Putin feels like he got 90% of what he wanted from Ukraine, so I actually

Marko Papic: 00:06:50

don't fall into the camp that he's just gonna keep stringing it along

Marko Papic: 00:06:53

until the Russian tricolor, you know, is waving across Elise in Paris.

Marko Papic: 00:06:59

Like that shit's not gonna happen.

Marko Papic: 00:07:01

He's got 90% of what he wants.

Marko Papic: 00:07:03

He can't conquer Donk for 11 years for God's sakes.

Marko Papic: 00:07:06

People, he's not gonna invade Estonia or Poland.

Marko Papic: 00:07:08

If he invades Poland.

Marko Papic: 00:07:09

Quite frankly, Poland will reinve and conquer Moscow.

Marko Papic: 00:07:11

Yeah.

Marko Papic: 00:07:11

Good luck.

Marko Papic: 00:07:12

That's my hot take.

Marko Papic: 00:07:13

Yeah, so my point of all of this is, you know, Putin has a problem,

Marko Papic: 00:07:17

which is that Donald Trump got elected too early, quite frankly.

Marko Papic: 00:07:22

He got elected too early.

Marko Papic: 00:07:23

He got elected about 12, 18 months too early.

Marko Papic: 00:07:25

And what I mean by that is that Putin, that last 10%.

Marko Papic: 00:07:30

Objectives that Putin needs is kind of important domestically in Russia,

Marko Papic: 00:07:34

which is that how do you go back to all your nationalist military

Marko Papic: 00:07:37

bloggers who are basically trying to say that they're out Putin, Putin.

Marko Papic: 00:07:42

How are you gonna go back to them and say, oh, hey guys.

Marko Papic: 00:07:44

By the way, Donald Trump is president.

Marko Papic: 00:07:47

Cool.

Marko Papic: 00:07:48

We got all sorts of goodies out of, uh, America.

Marko Papic: 00:07:51

They're recognizing our sphere of influence.

Marko Papic: 00:07:52

They're letting us keep these territories, they're making sure the

Marko Papic: 00:07:55

Kiev doesn't get into nato, so we won.

Marko Papic: 00:07:57

Right?

Marko Papic: 00:07:58

And they're gonna say, but you promised this Naya Ross, you promised this dumbass.

Marko Papic: 00:08:02

Like, what's up with this?

Marko Papic: 00:08:03

Like third of Dons we haven't conquered.

Marko Papic: 00:08:05

And so that I think is the fulcrum.

Marko Papic: 00:08:07

You know, sometimes these geopolitical events, they have like a fulcrum.

Marko Papic: 00:08:11

The thing that needs to be resolved and what needs to be resolved is

Marko Papic: 00:08:14

that when you look at the map.

Marko Papic: 00:08:15

The Russians haven't conquered part of Ukraine.

Marko Papic: 00:08:18

They promised their people.

Marko Papic: 00:08:20

Um, it's not about Kiev, it's not about West Ukraine.

Marko Papic: 00:08:22

It's not about the rest of Europe.

Marko Papic: 00:08:24

It's just that sliver.

Marko Papic: 00:08:26

I mean, if you look at a map, it doesn't look that big.

Marko Papic: 00:08:28

It's a third of vignettes.

Marko Papic: 00:08:29

Nobody cares about it.

Marko Papic: 00:08:30

It's just empty space.

Marko Papic: 00:08:32

But Putin does.

Marko Papic: 00:08:33

And that's, that's the problem.

Marko Papic: 00:08:35

That's the challenge here.

Marko Papic: 00:08:37

And of course, everybody in the us, most of the mainstream

Marko Papic: 00:08:40

media is like now shocked that, uh, Trump is turned on Putin.

Marko Papic: 00:08:44

I'm not.

Marko Papic: 00:08:46

I never assumed that he was pro Putin to begin with.

Marko Papic: 00:08:48

In other words, Donald Trump is very disappointed and he feels he's

Marko Papic: 00:08:51

being strung along, as he said.

Marko Papic: 00:08:53

I think that's his direct quote.

Marko Papic: 00:08:55

Um, and I can just imagine Donald Trump's eyes glazing over Jacob if I

Marko Papic: 00:09:00

was in the White House explaining to him, well, you know, Mr. President,

Marko Papic: 00:09:03

like the Putin wants to conquer Dons, which is part of a dump us, you know?

Marko Papic: 00:09:07

And I can just see him being like, I don't give a fuck.

Marko Papic: 00:09:11

You know?

Marko Papic: 00:09:11

Like this is like, this is petty.

Marko Papic: 00:09:12

What are you talking about?

Marko Papic: 00:09:14

W and that's where sometimes these domestic political issues get in the way

Marko Papic: 00:09:20

of rational geopolitical negotiations.

Jacob Shapiro: 00:09:24

Uh, it's so hard to talk about you.

Jacob Shapiro: 00:09:26

I'm literally like looking into a pasture right now where my wife and my daughter

Jacob Shapiro: 00:09:29

and my niece are like driving through the fields with a, with an electric car

Jacob Shapiro: 00:09:32

who says that the world sucks in 2025.

Jacob Shapiro: 00:09:34

Um, there's a couple things that I, I would say to that.

Jacob Shapiro: 00:09:36

The first is, I, I think you're right.

Jacob Shapiro: 00:09:37

And it's, it's not even that he's, that Trump is pro-Trump, and I

Jacob Shapiro: 00:09:40

think Russia makes this mistake too.

Jacob Shapiro: 00:09:42

I've said this before, yes, but I think it bears repeating because I, I don't

Jacob Shapiro: 00:09:44

think it's getting through to people.

Jacob Shapiro: 00:09:46

I don't think Trump is strategic.

Jacob Shapiro: 00:09:48

He doesn't think long term.

Jacob Shapiro: 00:09:49

He is an instinctual being he's a child.

Jacob Shapiro: 00:09:52

He wants what he wants, when he wants it, and when he doesn't get

Jacob Shapiro: 00:09:54

it, he throws a tantrum and now he, in his mind, is the leader.

Jacob Shapiro: 00:09:58

Of the free world and the most powerful country in the world.

Jacob Shapiro: 00:10:00

So you better do exactly what I say when he says it.

Jacob Shapiro: 00:10:04

So I'm sure that there were people maybe up to Putin himself that were like, aha,

Jacob Shapiro: 00:10:07

we've got the guy in the White House.

Jacob Shapiro: 00:10:08

We've got the dude who was gonna like, you know, we've cultivated this

Jacob Shapiro: 00:10:11

guy for decades, uh, via Jeffrey.

Jacob Shapiro: 00:10:13

And everything else.

Jacob Shapiro: 00:10:14

No.

Jacob Shapiro: 00:10:15

Like he's literally wants what he wants when he wants it.

Jacob Shapiro: 00:10:17

And this is why I think Zelensky, like, I think if you go back to

Jacob Shapiro: 00:10:19

that episode in the White House, I think Zelensky did the right thing.

Jacob Shapiro: 00:10:22

I think that he actually, by pushing back against Trump and throwing his hissy

Jacob Shapiro: 00:10:26

fit like he was responding, he was able to give himself space to actually come

Jacob Shapiro: 00:10:30

closer to Trump and for Trump to feel like he had moved him along in some way.

Jacob Shapiro: 00:10:33

I, I think when you look back, like I know you've been anti zelensky on that,

Jacob Shapiro: 00:10:36

on that tirade, and maybe he meant to do it, maybe he didn't do it, but that,

Jacob Shapiro: 00:10:39

that's one thing about Trump, he's not strategic, so he will change his mind.

Jacob Shapiro: 00:10:43

Like on a dime, and that's something for the Russians to learn too.

Jacob Shapiro: 00:10:46

The second thing I just wanna say is that I think you're right that Putin has

Jacob Shapiro: 00:10:49

downgraded his desires to to Dansk, but he wanted the Russian tricolor in Kyiv.

Jacob Shapiro: 00:10:54

And his promise and all of his essays and talks about Ukraine.

Jacob Shapiro: 00:10:57

Like he, he wants to sort of get there and that's where I think it's

Jacob Shapiro: 00:11:00

not gonna stop and where it's gonna get to what you've talked about, like

Jacob Shapiro: 00:11:02

Ukraine as a, as a garrison state.

Jacob Shapiro: 00:11:04

And then the last thing is just, this is also an example of

Jacob Shapiro: 00:11:07

Donald Trump's charisma because.

Jacob Shapiro: 00:11:10

Iran, Israel didn't affect him.

Jacob Shapiro: 00:11:12

Jeffrey Epstein doesn't seem to be affecting him.

Jacob Shapiro: 00:11:14

As you know, there's those people on social media burning,

Jacob Shapiro: 00:11:16

make America great again.

Jacob Shapiro: 00:11:17

Hats okay, like, it's like LeBron, I've, I've made this metaphor before, like

Jacob Shapiro: 00:11:20

as soon as LeBron comes back, they're gonna like buy the jerseys again.

Jacob Shapiro: 00:11:23

So he is just gonna get the money twice.

Jacob Shapiro: 00:11:25

Um, but now he's talking about sending tens of billions of dollars

Jacob Shapiro: 00:11:28

worth of weapons to Ukraine.

Jacob Shapiro: 00:11:29

Now he's selling them, so you can at least make that argument.

Jacob Shapiro: 00:11:32

But I assume that the MAGA folks and the America first folks, like, what does it

Jacob Shapiro: 00:11:37

take for you to light your hair on fire?

Jacob Shapiro: 00:11:38

Because nothing, this is not, this is not Donald Trump.

Jacob Shapiro: 00:11:41

Like, oh, I'm making I America great again.

Jacob Shapiro: 00:11:42

He's like, I'm, I'm arming Ukraine and I'm bombing around and I'm doing all this.

Jacob Shapiro: 00:11:46

Stuff like this is not like the isolationist president at all.

Jacob Shapiro: 00:11:48

People were expecting so,

Marko Papic: 00:11:50

well, I think, I think probably nothing.

Marko Papic: 00:11:51

But let, let me, let me go back to the point you said about Russians.

Marko Papic: 00:11:54

Mm-hmm.

Marko Papic: 00:11:55

Uh, Russians have a very long history of com being completely and utterly.

Marko Papic: 00:12:00

Like naive when it comes to American politics.

Marko Papic: 00:12:02

Mm-hmm.

Marko Papic: 00:12:03

They just cannot assess American politics correctly.

Marko Papic: 00:12:06

This goes back to, you know, Kennedy.

Marko Papic: 00:12:08

Kennedy comes in, everyone's like, oh, he's a young womanizer.

Marko Papic: 00:12:11

We can just like sneak stuff by him.

Marko Papic: 00:12:13

And then we almost go to World War III and Kennedy's like, you

Marko Papic: 00:12:17

know, test me, test me, come at me.

Marko Papic: 00:12:20

And of course that that ends up being, you know, a Soviet back down from Cuba.

Marko Papic: 00:12:24

So, um.

Marko Papic: 00:12:27

This, this Russian mentality of thinking everything is a conspiracy theory,

Marko Papic: 00:12:31

this Russian mentality of thinking that there's a, there's a sort of a paranoid

Marko Papic: 00:12:34

delusional conspiracy behind everything is, is really making them very poor

Marko Papic: 00:12:40

analysts of American domestic politics.

Marko Papic: 00:12:41

And I think that, you know, they, they actually bought the liberal

Marko Papic: 00:12:45

mainstream propaganda in the US that Trump is pro-Russian, uh,

Marko Papic: 00:12:50

that he's enamored with Putin and that he can just string him along.

Marko Papic: 00:12:53

The problem is that.

Marko Papic: 00:12:54

Donald Trump has made a promise, you know, and that promise is we will

Marko Papic: 00:12:59

have a ceasefire, not necessarily a piece, but a ceasefire in, in Ukraine.

Marko Papic: 00:13:03

And Putin is now embarrassing him domestically.

Marko Papic: 00:13:06

That's, that's the fundamental and that's the worst place

Marko Papic: 00:13:08

to be in to embarrass Trump.

Marko Papic: 00:13:11

And I think that's a problem.

Marko Papic: 00:13:12

The other thing is that the deal that's now coming out, which is

Marko Papic: 00:13:15

actually quite smart, I mean.

Marko Papic: 00:13:17

A couple of months ago, I made fun of that rare earth mineral deal is the

Marko Papic: 00:13:20

dumbest thing I've ever seen in my life.

Marko Papic: 00:13:22

I mean, it's completely vacuous, but this drone deal that actually

Marko Papic: 00:13:25

is going to happen is interesting.

Marko Papic: 00:13:26

I mean, Ukraine and Russia are probably the world's.

Marko Papic: 00:13:29

Greatest innovators on drone warfare right now.

Marko Papic: 00:13:31

'cause they have to be it's life or death situation.

Marko Papic: 00:13:34

The Ukrainians have developed some absolutely insane drone technology,

Marko Papic: 00:13:38

both, uh, aerial and naval.

Marko Papic: 00:13:40

And so the US is now, you know, getting all this IP out of Ukraine,

Marko Papic: 00:13:44

that's actually a really good deal for the us It's really smart deal.

Marko Papic: 00:13:48

And, uh, yeah, I mean like Trump is not like really sinking

Marko Papic: 00:13:53

strategic teeth into Ukraine in a way that should worry Russians.

Marko Papic: 00:13:58

Because I think that they're gonna have to make a deal.

Marko Papic: 00:14:01

And these, this 50 day deadline is no joke.

Marko Papic: 00:14:03

I actually think it's serious.

Marko Papic: 00:14:04

Mm-hmm.

Marko Papic: 00:14:05

I do think they will impose secondary sanctions on Turkish, India and

Marko Papic: 00:14:08

Chinese, who, whoever's companies.

Marko Papic: 00:14:10

And so what Russia has to really ask itself is, what are our

Marko Papic: 00:14:14

strategic objectives in Ukraine?

Marko Papic: 00:14:15

You know, what are they?

Marko Papic: 00:14:17

If it's to delineate the sphere of influence to the

Marko Papic: 00:14:20

maximum potential that we can.

Marko Papic: 00:14:22

Get the most we can in terms of delineation then, like

Marko Papic: 00:14:25

this, this seems to be it guys.

Marko Papic: 00:14:28

And the second is to ensure that Ukraine remains sort of a, um, you know, uh, a

Marko Papic: 00:14:33

non-aligned, it's, it, I mean, it will clearly stay aligned with the West, but

Marko Papic: 00:14:37

at least it's not gonna be part of nato.

Marko Papic: 00:14:39

But you've accomplished those two things.

Marko Papic: 00:14:41

And if I think they're, they're gonna have to realize over the next month and a half,

Marko Papic: 00:14:46

two months that Trump is not kidding.

Marko Papic: 00:14:49

He's extremely angry that they're embarrassing him domestically and

Marko Papic: 00:14:54

that that sliver of donates can be conquered five, 10 years from now.

Marko Papic: 00:14:58

Maybe in some sort of a future exchange, because clearly this is

Marko Papic: 00:15:01

gonna be a frozen conflict, but they cannot conquer it right now.

Marko Papic: 00:15:04

They're gonna have to give that up.

Marko Papic: 00:15:05

So that's my low conviction view.

Marko Papic: 00:15:07

I think this actually ends with, uh, Trump victory two, three months from now,

Marko Papic: 00:15:11

where he basically does manage to bring everyone to the table and there's at

Marko Papic: 00:15:14

least a ceasefire because it's just simply unsustainable for Russia at this point.

Marko Papic: 00:15:19

And it's gonna cost him a lot.

Marko Papic: 00:15:20

Like yes, they have more troops.

Marko Papic: 00:15:21

Yes, they have.

Marko Papic: 00:15:22

They can bleed Ukraine, uh, that way.

Marko Papic: 00:15:25

Those secondary sanctions.

Marko Papic: 00:15:27

Man, those are really serious sanctions.

Marko Papic: 00:15:29

And if you remember, 20 11, 20 12, that's how Iran was brought to heal.

Marko Papic: 00:15:33

The US actually imposed those.

Marko Papic: 00:15:35

China played along and Iran ended up negotiating J-C-P-O-A.

Marko Papic: 00:15:39

So I do think that Russia's going to have to abandon its gold like

Marko Papic: 00:15:43

conquering this third of dk.

Marko Papic: 00:15:45

Then nobody can even find on a map.

Jacob Shapiro: 00:15:47

Let's say for the sake of argument that this, that Putin doesn't

Jacob Shapiro: 00:15:50

listen and the secondary sanctions go on.

Jacob Shapiro: 00:15:52

Doesn't that, don't you think that means higher oil prices?

Marko Papic: 00:15:55

I mean, uh, marginally speaking, obviously, you know, set their,

Marko Papic: 00:15:59

all other things being equal world.

Marko Papic: 00:16:00

Yeah.

Marko Papic: 00:16:00

Uh, there's demand and supply and slowing economy.

Marko Papic: 00:16:03

You know, there's a lot of other forces, but absolutely it's about 3

Marko Papic: 00:16:07

million barrels that could be impacted.

Marko Papic: 00:16:10

Uh, right now it seems that the sanctions would be a hundred percent of the

Marko Papic: 00:16:13

price, which suggests given there's already a discount to Russian crude,

Marko Papic: 00:16:17

that some buyers may still buy it,

Marko Papic: 00:16:21

you know?

Marko Papic: 00:16:21

Yeah.

Marko Papic: 00:16:22

So like, uh, and just pay the fee.

Marko Papic: 00:16:25

Uh, but I do think that on the margin it would mean slightly higher.

Marko Papic: 00:16:29

Uh, oil prices.

Marko Papic: 00:16:30

Yeah.

Jacob Shapiro: 00:16:31

Yeah.

Jacob Shapiro: 00:16:32

Um, which, which might be the only thing that Russia could count on that.

Jacob Shapiro: 00:16:34

Okay.

Jacob Shapiro: 00:16:35

He doesn't want the higher oil prices, so maybe he won't follow through on it.

Jacob Shapiro: 00:16:37

But see, that's

Marko Papic: 00:16:38

again, I know that's again dangerous, that they're making,

Marko Papic: 00:16:41

you know, like, you know, I, you know, I mean, turn the TikTok camera on.

Marko Papic: 00:16:45

Okay.

Marko Papic: 00:16:46

Turn it on.

Marko Papic: 00:16:46

Turn it on.

Marko Papic: 00:16:47

Turn it

Jacob Shapiro: 00:16:47

on.

Jacob Shapiro: 00:16:47

Where's, where's Kyle?

Jacob Shapiro: 00:16:48

We don't have a Kyle for that.

Jacob Shapiro: 00:16:49

We're

Marko Papic: 00:16:49

Kyle.

Marko Papic: 00:16:49

Yeah.

Marko Papic: 00:16:50

We don't have a Kyle.

Marko Papic: 00:16:50

Fortunately, we're, we're a small operation, but like,

Marko Papic: 00:16:53

here's what I would say.

Marko Papic: 00:16:54

Uh, I wanna speak, I wanna speak directly to whoever is at the Kremlin.

Marko Papic: 00:16:59

Engaged in analyzing American politics.

Marko Papic: 00:17:02

Um, you're fired

Marko Papic: 00:17:06

and that's it.

Marko Papic: 00:17:07

That you're fired.

Marko Papic: 00:17:08

Bye.

Marko Papic: 00:17:08

I

Jacob Shapiro: 00:17:08

I love that.

Jacob Shapiro: 00:17:09

It's, it's the apprentice, but, but Mark Marcos taken over while, while

Jacob Shapiro: 00:17:12

President Trump is busy doing anything.

Jacob Shapiro: 00:17:14

I mean,

Marko Papic: 00:17:14

I just think Russians have no idea what's going on in the

Marko Papic: 00:17:17

US and, and if they think that Donald Trump gives a shit about all credit

Marko Papic: 00:17:21

prices going from 65 to 75, like, you know, somehow America will survive.

Marko Papic: 00:17:26

By the way.

Marko Papic: 00:17:27

By the way, look at the chart of gasoline as percent of the consumer basket.

Marko Papic: 00:17:32

It's absolutely collapsed since the nineties.

Marko Papic: 00:17:34

Americas just don't spend that much on gasoline as percent of

Marko Papic: 00:17:37

their total household expenditure.

Marko Papic: 00:17:40

So, and it's a transitory, uh, blip in inflation, and it's like 3 million

Marko Papic: 00:17:44

barrels, you know, you know, I can just see Trump making a deal with Iran.

Marko Papic: 00:17:49

Honestly to compensate for a bit.

Marko Papic: 00:17:51

So Saudis, well and the Saudis are already pumping.

Marko Papic: 00:17:53

The

Jacob Shapiro: 00:17:54

Saudis have been pumping for months, probably.

Jacob Shapiro: 00:17:55

He's been working through them already.

Jacob Shapiro: 00:17:57

Like go back to pre COVID, like the news of the decade would've been

Jacob Shapiro: 00:18:00

the Saudi Russian oil price war that got put on hold 'cause of COVID.

Jacob Shapiro: 00:18:03

So the Saudis are happy to kick him in the teeth while they're there.

Marko Papic: 00:18:06

And by the way, I know you want to talk about the

Marko Papic: 00:18:08

CPI, which we can get to right now 'cause I think it's a great topic.

Marko Papic: 00:18:11

What better way to justify why inflation is going up than to blame Vladimir Putin?

Marko Papic: 00:18:17

You know, so like the Russians, if they think that an increase in

Marko Papic: 00:18:20

oil price is gonna hurt President Trump, I don't think so at all.

Marko Papic: 00:18:23

He's gonna blame it on them.

Marko Papic: 00:18:25

He's going to uh, you know, like say like, look, we're gonna punish them.

Marko Papic: 00:18:30

Oil prices will be up for six to 12 months.

Marko Papic: 00:18:32

We can take it as an economy and we'll move on.

Marko Papic: 00:18:34

And again, it's not gonna be a hundred bucks.

Marko Papic: 00:18:36

This isn't like Iran closing the Strait of MOUs.

Marko Papic: 00:18:39

This is going to be more like going from $65 to like 75, 80.

Marko Papic: 00:18:43

The world's not gonna end because of that, but Russian purse is

Marko Papic: 00:18:47

going to drain because of that.

Marko Papic: 00:18:48

And so I do think that Putin has a really, really interesting open window

Marko Papic: 00:18:55

of opportunity here to make a deal.

Marko Papic: 00:18:58

Set in stone that sphere of influence.

Marko Papic: 00:19:00

And if he loses it, then he doesn't know, uh, American politics.

Marko Papic: 00:19:05

Yeah.

Marko Papic: 00:19:05

And I don't think he does.

Marko Papic: 00:19:06

I think that he's misunderstanding it un unless

Jacob Shapiro: 00:19:08

he has a rabbit in his hat that takes it to a hundred a barrel.

Jacob Shapiro: 00:19:11

I think you're exactly right.

Jacob Shapiro: 00:19:11

I don't, I don't think he can get it to a hundred a barrel.

Jacob Shapiro: 00:19:13

If he can get oil to sustain it a hundred plus a barrel, I think he might

Jacob Shapiro: 00:19:17

actually like, have a leg to stand on.

Jacob Shapiro: 00:19:18

I think you're firing the Russian, uh, American political

Jacob Shapiro: 00:19:21

analyst for the wrong reason.

Jacob Shapiro: 00:19:22

Huh?

Jacob Shapiro: 00:19:22

My experience of them when I was, the last time I was in Moscow.

Jacob Shapiro: 00:19:26

Um.

Jacob Shapiro: 00:19:27

Was, was it 2018?

Jacob Shapiro: 00:19:28

2019? It was before the pandemic.

Jacob Shapiro: 00:19:30

And I remember this Russian American analyst came up to me and he was

Jacob Shapiro: 00:19:33

quizzing me about some congressional race in Alabama that I'd never heard of.

Jacob Shapiro: 00:19:36

And he knew everything about it.

Jacob Shapiro: 00:19:37

And he wanted to know what I thought about the race and how it was gonna affect the

Jacob Shapiro: 00:19:40

balance of US politics and the house.

Jacob Shapiro: 00:19:42

And I was like, my guy like this.

Jacob Shapiro: 00:19:44

We we're not thinking about like, no self-respecting analyst gives a

Jacob Shapiro: 00:19:47

shit about this in the United States.

Jacob Shapiro: 00:19:48

It's very impressive that you're in back.

Jacob Shapiro: 00:19:49

Woods, Alabama politics, but like, this does not matter.

Jacob Shapiro: 00:19:52

So you're, you need to fire them 'cause they know too much.

Jacob Shapiro: 00:19:54

They are so far down in the weeds.

Jacob Shapiro: 00:19:56

Yeah.

Jacob Shapiro: 00:19:56

Like, with all these very, very specific things that they're missing.

Jacob Shapiro: 00:19:59

Um, the forest for the trees.

Jacob Shapiro: 00:20:01

Yeah.

Jacob Shapiro: 00:20:01

I also, before we Oh yeah, go ahead.

Jacob Shapiro: 00:20:02

Good.

Jacob Shapiro: 00:20:02

Yeah,

Marko Papic: 00:20:03

yeah.

Marko Papic: 00:20:03

No, the forest is like, Donald Trump is the president.

Marko Papic: 00:20:06

Don't piss him off.

Marko Papic: 00:20:07

Like, yeah, that's like, that's, it's simple.

Marko Papic: 00:20:10

It's simple.

Marko Papic: 00:20:11

Why would you do that?

Marko Papic: 00:20:12

And no, his MAGA supporters are not gonna turn on him.

Marko Papic: 00:20:15

For this, it's, it's like the noise in Ukraine is so much less than even on Iran.

Marko Papic: 00:20:22

And definitely this Jeffrey Epstein thing is just like a blob that's

Marko Papic: 00:20:25

taking over the Maga Civil War, which is, which I find kind of hilarious.

Marko Papic: 00:20:29

Mm-hmm.

Marko Papic: 00:20:29

But whatever, let them, you know, like, let them obsess about that.

Marko Papic: 00:20:32

Who cares?

Marko Papic: 00:20:33

The point is, you know, like there is just, Americans are

Marko Papic: 00:20:37

not pro-Russian, you know?

Marko Papic: 00:20:39

I mean, like, let, let, let's just start there like, yes.

Marko Papic: 00:20:42

Yes.

Marko Papic: 00:20:43

Ameri, uh, many Americans who voted for Trump.

Marko Papic: 00:20:45

We're not happy with the blank check.

Marko Papic: 00:20:47

Give it to Ukraine.

Marko Papic: 00:20:49

Yes, agreed.

Marko Papic: 00:20:50

But don't extrapolate that to some sort of like a nostalgia

Marko Papic: 00:20:54

for like Slava file, like Doky.

Marko Papic: 00:20:59

Love.

Marko Papic: 00:21:00

No guys.

Marko Papic: 00:21:01

Like,

Jacob Shapiro: 00:21:01

to your point, this is America.

Jacob Shapiro: 00:21:03

I'm, I'm in MAGA country right now, and I remember when the war broke

Jacob Shapiro: 00:21:06

out, like in, in rural Georgia out here, everybody had Ukrainian flags.

Jacob Shapiro: 00:21:09

They're not out anymore.

Jacob Shapiro: 00:21:11

Uh, but I'm sure they're still in the garage.

Jacob Shapiro: 00:21:13

Like I'm so all these people could take 'em out.

Marko Papic: 00:21:15

Yeah, they can take 'em out.

Marko Papic: 00:21:16

Like, and that's why, that's why I think they're just, I think a lot

Marko Papic: 00:21:19

of these guys are either like nerds that you ran into or they just are

Marko Papic: 00:21:22

like so far down the far right.

Marko Papic: 00:21:26

Twitter rabbit hole, that they actually believe Americans like love Russia.

Marko Papic: 00:21:30

You know, they, they all watch that Tucker Carlson episode where

Marko Papic: 00:21:33

he's in Moscow on repeat, and they actually think that that matters.

Marko Papic: 00:21:37

It doesn't, and it's a very dangerous moment for Russia because I, I do.

Marko Papic: 00:21:41

So you are right.

Marko Papic: 00:21:42

Like my base, like is my baseline here, is that Putin is not an idiot and he realizes

Marko Papic: 00:21:47

he needs to, to, uh, to act on this widow of opportunity with Putin, uh, with Trump.

Jacob Shapiro: 00:21:54

He, he's, he's high on his own supply.

Jacob Shapiro: 00:21:56

Like, going back, back to like the trade value column.

Jacob Shapiro: 00:21:58

Like if we were going let, let's like bring in a wire reference to really

Jacob Shapiro: 00:22:01

bring this like full Bill Simmons.

Jacob Shapiro: 00:22:02

Like, it's like as if Stringer Bell started shooting up his own product.

Jacob Shapiro: 00:22:06

Like that's where Putin is.

Jacob Shapiro: 00:22:07

And since 2020 he's been high on his own supply thinking.

Jacob Shapiro: 00:22:10

He was, you know, everything from the pandemic to the long table to the

Jacob Shapiro: 00:22:13

invasion of uh, Kyiv and a Blitz Greek.

Jacob Shapiro: 00:22:16

That didn't work.

Jacob Shapiro: 00:22:16

'cause he didn't even tell his generals like he's high on his own supply.

Jacob Shapiro: 00:22:18

It's not gonna work.

Marko Papic: 00:22:20

So how do we, so how do we conclude this?

Marko Papic: 00:22:21

Uh, the rational, let, let's conclude it this way.

Marko Papic: 00:22:23

So if you're watching the news and you don't know what the hell

Marko Papic: 00:22:25

is going on, it's that simple.

Marko Papic: 00:22:27

Putin just wants to conquer one last bit of territory that he really needs

Marko Papic: 00:22:31

before he can maybe put this war on pause for five to 10 years, whatever.

Marko Papic: 00:22:36

Yeah.

Marko Papic: 00:22:37

The rational, the rational thing to do is just to give up and say, okay, fine.

Marko Papic: 00:22:41

You know what, let's just take it while we can take a deal from the us.

Marko Papic: 00:22:44

But as you said.

Marko Papic: 00:22:46

Putin has made a lot of bad, uh, decisions over the past,

Marko Papic: 00:22:49

uh, over the past five years.

Marko Papic: 00:22:52

Yeah.

Marko Papic: 00:22:52

And so this is a risk, it's a risk of direct US Russia confrontation,

Marko Papic: 00:22:57

not military, I'm not talking nuclear war, but actual return even under

Marko Papic: 00:23:02

Trump of a very aggressive us.

Marko Papic: 00:23:06

Counts Russia.

Marko Papic: 00:23:06

So I do think that's a risk over the next six months that we need to watch.

Marko Papic: 00:23:09

Yeah.

Jacob Shapiro: 00:23:10

Before we pivot to CT CPI, I wanna say something that is separate

Jacob Shapiro: 00:23:13

but sort of related to this, which is, I dunno if you saw the Pentagon's new

Jacob Shapiro: 00:23:16

changes to, um, is it doctrine policy?

Jacob Shapiro: 00:23:19

I don't know the correct word about the use of small drones in the field.

Jacob Shapiro: 00:23:23

Um, so rather than treating them as, um.

Jacob Shapiro: 00:23:27

Basically as aircraft, they're treating them as consumables, so something like a

Jacob Shapiro: 00:23:31

hand grenade or other types of ammunition.

Jacob Shapiro: 00:23:33

Mm-hmm.

Jacob Shapiro: 00:23:33

And they're talking about training people and training, like authorizing

Jacob Shapiro: 00:23:37

people on the battlefield to be able to call these in, to use them

Jacob Shapiro: 00:23:40

themselves in any kind of conflict.

Jacob Shapiro: 00:23:42

So I think you're right about Russia.

Jacob Shapiro: 00:23:44

Ukraine, like being this laboratory for drone usage.

Jacob Shapiro: 00:23:46

We've seen this with the Houthis, we've seen this with us and Iran, and

Jacob Shapiro: 00:23:50

now you've got the US military like finally taking notice and saying, okay,

Jacob Shapiro: 00:23:53

we're gonna be a drone superpower too.

Jacob Shapiro: 00:23:55

There's also tons of money going at Antione defense.

Jacob Shapiro: 00:23:58

Like I think this is a whole area that's like changing very, very quickly.

Jacob Shapiro: 00:24:01

And it starts with this, with this Rush Ukraine war.

Jacob Shapiro: 00:24:03

I don't know where it ends, but like it definitely starts well,

Marko Papic: 00:24:05

and I think it starts, look, uh, I referenced, uh, some.

Marko Papic: 00:24:09

YouTube videos that our viewers can watch on Ukrainian and Russian drone

Marko Papic: 00:24:12

technology and how it's advanced.

Marko Papic: 00:24:14

And I think it also starts with the US recognizing that there's a lot

Marko Papic: 00:24:17

of IP floating in Ukraine right now.

Marko Papic: 00:24:20

A lot of ip, this is the, this is the battleground where drones

Marko Papic: 00:24:24

are being deployed, uh, in an incredibly fast evolution.

Marko Papic: 00:24:28

Uh, so it was a very, I think that's a very smart move by the Trump

Marko Papic: 00:24:32

administration to say, okay, cool.

Marko Papic: 00:24:33

How can you pay us for these weapons?

Marko Papic: 00:24:35

Well.

Marko Papic: 00:24:36

We don't need Ukraine to like sell off.

Marko Papic: 00:24:38

Its like Grandma Silver to pay for the weapons.

Marko Papic: 00:24:41

But you know what you can't do Give those drone, uh, the drone IP and

Marko Papic: 00:24:45

that, that was a good move, like astute move by somebody at the Pentagon

Jacob Shapiro: 00:24:48

coming to you all soon.

Jacob Shapiro: 00:24:50

Uh, tickers on the stock exchange that, uh, referenced Lord of the

Jacob Shapiro: 00:24:53

Rings that are drones or drone defense companies all sourced from

Jacob Shapiro: 00:24:57

the battlefield, uh, in Ukraine.

Jacob Shapiro: 00:24:58

A hundred percent.

Marko Papic: 00:25:00

A hundred percent.

Jacob Shapiro: 00:25:00

Although they've taken most of the good ones.

Jacob Shapiro: 00:25:01

We're gonna have to really start digging in the bag of Lord

Jacob Shapiro: 00:25:03

of the Rings if we're gonna.

Jacob Shapiro: 00:25:05

Uh, start finding other names for these things.

Marko Papic: 00:25:07

Paul Baba Bombadil is out there.

Marko Papic: 00:25:08

Guys.

Jacob Shapiro: 00:25:10

Tom Bombadil.

Jacob Shapiro: 00:25:11

Oh, there we go.

Jacob Shapiro: 00:25:12

I, I I need to, I need to trademark that one.

Jacob Shapiro: 00:25:14

Um, okay, let's talk CPI for a bit.

Jacob Shapiro: 00:25:17

This will probably be a shorter conversation, but, um, core

Jacob Shapiro: 00:25:20

CPI was roughly in line 2.9%, uh, two point year on year.

Jacob Shapiro: 00:25:26

Headline.

Jacob Shapiro: 00:25:26

CPI was 2.6%, but there was a big jump in core goods.

Jacob Shapiro: 00:25:30

Um, core services was hot, medical care services was hot.

Jacob Shapiro: 00:25:35

I would describe it as a moderately warm CPI print.

Jacob Shapiro: 00:25:38

And I know you're probably gonna take the other side of this, but I just wanna say

Jacob Shapiro: 00:25:41

that I think people thought that after Liberation Day there was gonna be an.

Jacob Shapiro: 00:25:45

Immediate increase in prices due to tariffs, and that was never the way it

Jacob Shapiro: 00:25:48

was gonna work because there was stuff getting shipped via other countries

Jacob Shapiro: 00:25:51

that wasn't China like look at the imports from places like Vietnam or

Jacob Shapiro: 00:25:55

Indonesia or Thailand from China and trans shipments and things like that.

Jacob Shapiro: 00:25:58

Like those things weren't closed off.

Jacob Shapiro: 00:26:00

Lots of companies had inventory on hand that they were gonna burn through, and

Jacob Shapiro: 00:26:04

they had been stocking up in preparation for something like Liberation Day.

Jacob Shapiro: 00:26:07

Um, it, it just takes time.

Jacob Shapiro: 00:26:09

It's sort of like a snake eating something too big for itself and

Jacob Shapiro: 00:26:11

it takes time for it to digest.

Jacob Shapiro: 00:26:13

But I have been thinking since liberation Day that if Trump stuck to the guns and

Jacob Shapiro: 00:26:17

he looks like he's trying to stick to the guns, we'll get to tariffs and trade.

Jacob Shapiro: 00:26:20

Maybe as part of this, 'cause I think we need to talk about, um, Trump and the

Jacob Shapiro: 00:26:24

50% tariffs on Brazil and the ongoing free trade agreements with India.

Jacob Shapiro: 00:26:28

Does he or does he not have a deal with Vietnam?

Jacob Shapiro: 00:26:31

What's going on with China?

Jacob Shapiro: 00:26:32

We're gonna send them, you know, ships from Nvidia, but we're also gonna

Jacob Shapiro: 00:26:35

like crack down on the other things.

Jacob Shapiro: 00:26:36

Like I think all that is part of the conversation.

Jacob Shapiro: 00:26:39

Um.

Jacob Shapiro: 00:26:40

But I was never one of these people that was expecting inflation to go to the moon.

Jacob Shapiro: 00:26:43

But I do maybe think that what we could say is like, when is the, like

Jacob Shapiro: 00:26:46

maybe we're at the lowest point of inflation for the last 12 months.

Jacob Shapiro: 00:26:49

Like I think we're really heading towards like also this conflict

Jacob Shapiro: 00:26:52

with Jerome Powell and the Fed, and are you gonna raise rates or not?

Jacob Shapiro: 00:26:55

If inflation is starting to slowly tick up from here because the tariffs are

Jacob Shapiro: 00:26:58

starting to have some sort of impact.

Jacob Shapiro: 00:27:00

So I mean, it's not the be all, end all.

Jacob Shapiro: 00:27:02

Maybe we get a couple more CPIs and they're not working that way.

Jacob Shapiro: 00:27:05

But this is the first CPI where I was like, okay.

Jacob Shapiro: 00:27:08

Like a little tiny signs that maybe we're gonna start seeing

Jacob Shapiro: 00:27:12

like the long-term impact of these things and prices moving up.

Jacob Shapiro: 00:27:14

And I think that will be, that'll be challenging for President Trump if it

Jacob Shapiro: 00:27:18

keeps up, because you can do the slide of hand with Iran and Israel and Russia

Jacob Shapiro: 00:27:22

and it all works for those things.

Jacob Shapiro: 00:27:24

But when people's, when the price of eggs like starts going up, when the price of

Jacob Shapiro: 00:27:27

all these other things starts going up, like we've seen, uh, what people do.

Jacob Shapiro: 00:27:31

So tell me why I'm wrong.

Jacob Shapiro: 00:27:32

Tell me why you think that's not the right thing.

Marko Papic: 00:27:34

No, I think politically you are right, right.

Marko Papic: 00:27:36

I think from a political perspective, uh, inflation is clearly the number

Marko Papic: 00:27:41

one concern of Americans, and the intensity of that concern has actually

Marko Papic: 00:27:45

increased over the past six months.

Marko Papic: 00:27:48

Even though CPI has come down from almost double digit levels, and

Marko Papic: 00:27:52

that's because, you know, prices are.

Marko Papic: 00:27:54

CPIs slowing down, but prices are still rising,

Jacob Smu: 00:27:57

right?

Marko Papic: 00:27:57

Uh, so there's no disinflation.

Marko Papic: 00:27:59

And that's just where we're gonna be for the next 10 years, that like the price

Marko Papic: 00:28:03

increase we got is where we're gonna stay.

Marko Papic: 00:28:05

So people are gonna stay mad for a very long time.

Marko Papic: 00:28:08

Um, so from a political perspective, you're a hundred percent right And

Marko Papic: 00:28:12

everything I'm about to say doesn't matter from a political human perspective.

Marko Papic: 00:28:15

And a lot of people who listen to this, listen to our

Marko Papic: 00:28:18

podcast for that perspective.

Marko Papic: 00:28:19

Like, what?

Marko Papic: 00:28:20

So you're correct.

Marko Papic: 00:28:22

From a market perspective, however, um, I do think it's gonna be

Marko Papic: 00:28:26

difficult for CPI to rise a lot because shelter is 40% of core CP.

Marko Papic: 00:28:32

Mm-hmm.

Marko Papic: 00:28:32

And it's tanking.

Marko Papic: 00:28:34

It's tanking.

Marko Papic: 00:28:35

And, and the second issue I would say is that widgets, you

Marko Papic: 00:28:39

know, things like goods, right?

Marko Papic: 00:28:42

This is the stuff that we get from China and abroad.

Marko Papic: 00:28:45

They're gonna go up in prices.

Marko Papic: 00:28:48

For all of you who are listening to this, there's a very important concept, which

Marko Papic: 00:28:52

is that when a price of a item goes up, it's actually in a way disinflationary,

Marko Papic: 00:28:58

unless it's supported by wage growth or some sort of demand stimulus.

Marko Papic: 00:29:04

So, and that's where I would say that it's absolutely criminally

Marko Papic: 00:29:09

insane that Jay Powell thought inflation was transitory in 2021.

Marko Papic: 00:29:16

This is something that he should be fired for.

Marko Papic: 00:29:18

Like this is, it's insanity.

Marko Papic: 00:29:20

The Central Bank of Mexico is raising rates, bro.

Marko Papic: 00:29:23

And you are sitting there and you're saying like it's, it's transitory.

Marko Papic: 00:29:26

Yeah.

Marko Papic: 00:29:26

Because the argument is like, well, these supply chain issues

Marko Papic: 00:29:29

are gonna resolve themselves.

Marko Papic: 00:29:30

No, no, no.

Marko Papic: 00:29:31

It doesn't matter because there was so much fiscal stimulus in 21 and 22

Marko Papic: 00:29:35

that supported the increase in prices.

Marko Papic: 00:29:39

So the price increase ended up being sustainable.

Marko Papic: 00:29:43

Just kept feeding on itself.

Marko Papic: 00:29:45

The difference this time, Jacob, is that we don't have fiscal stimulus.

Marko Papic: 00:29:48

The one big beautiful bill is not stimulative.

Marko Papic: 00:29:51

Uh, it's very, very small increase in, uh, fiscal thrust for 2026,

Marko Papic: 00:29:55

and that actually becomes negative.

Marko Papic: 00:29:57

So there, and I mean this, this is not a disputable point that

Marko Papic: 00:30:01

we're so far away from the fiscal stimulus of the 2020s or 2021.

Marko Papic: 00:30:06

We don't have cash handouts to people where they can afford

Marko Papic: 00:30:09

to buy ever increased goods.

Marko Papic: 00:30:11

So because of that from a market perspective, the CPI increase

Marko Papic: 00:30:15

that we're getting right now is actually quite transitory.

Marko Papic: 00:30:18

And it's quite funny that Jay Powell this time around is not saying, not using

Marko Papic: 00:30:23

the word transitory, but he should be.

Marko Papic: 00:30:25

Everything that's gonna come from the tariffs will be

Marko Papic: 00:30:28

transitory because it's not being supported by any fiscal stimulus.

Marko Papic: 00:30:33

And because of that, I actually don't think that this increase

Marko Papic: 00:30:36

will have market implications.

Marko Papic: 00:30:39

I hear you on the politics though.

Marko Papic: 00:30:41

On the politics.

Marko Papic: 00:30:42

Absolutely.

Marko Papic: 00:30:42

And I would say the two actually feed on each other in that it's

Marko Papic: 00:30:46

very, very painful and difficult for him to impose extreme tariffs.

Marko Papic: 00:30:51

And that's why I think you will get deals.

Marko Papic: 00:30:53

So I think we're gonna end up with a 10 to 15% increase in

Marko Papic: 00:30:56

goods prices across the board.

Marko Papic: 00:30:58

That's like the level we should be expecting, and that's a one-off hit.

Marko Papic: 00:31:02

A lot of that corporates who manufacture the retailers will have

Marko Papic: 00:31:06

to take on in their profit margins.

Marko Papic: 00:31:09

Some of it will be passed on to the consumer.

Marko Papic: 00:31:11

Uh, and I think it will be transitory this time around.

Marko Papic: 00:31:14

So this time around this increase is transitory.

Marko Papic: 00:31:16

'cause there's just no fiscal backstop.

Jacob Shapiro: 00:31:19

Yeah.

Jacob Shapiro: 00:31:19

Um, you know.

Jacob Shapiro: 00:31:21

We've come so far that adding three to 4 trillion to the deficit is not

Jacob Shapiro: 00:31:25

considered stimulative or that you can make that argument and that it's not.

Jacob Shapiro: 00:31:28

And this is, you know, one place where you and I differ, like to

Jacob Shapiro: 00:31:30

me, the one big beautiful bill.

Jacob Shapiro: 00:31:31

Yes, it's not direct cash handouts, but it's still adding 4 trillion,

Jacob Shapiro: 00:31:35

uh, to the deficit and the cuts don't really kick in until 2028.

Jacob Shapiro: 00:31:38

I also, I think this is a good time also to bring up, um, the MP

Jacob Shapiro: 00:31:41

material deals, which is something I think is super interesting.

Jacob Shapiro: 00:31:44

So the Pentagon has basically become, um, the largest shareholder in MP materials.

Jacob Shapiro: 00:31:49

They refine.

Jacob Shapiro: 00:31:50

Rare Earths and other things like that.

Jacob Shapiro: 00:31:52

Um, the, the Pentagon is also basically agreeing to purchase

Jacob Shapiro: 00:31:55

commitments and a floor price.

Jacob Shapiro: 00:31:57

Um, a 10 year agreement establishing a price floor commitment of, for

Jacob Shapiro: 00:32:01

instance, $110 per kilogram of one of the things that MP material sells.

Jacob Shapiro: 00:32:06

This is sort of.

Jacob Shapiro: 00:32:08

Similar to what the United States did with the semiconductor industry

Jacob Shapiro: 00:32:10

in the 1950s and sixties when they were going up against the Soviets and

Jacob Shapiro: 00:32:13

they wanted to put chips on missiles to create precision guided munitions

Jacob Shapiro: 00:32:17

like the semiconductor companies exist because the US Comp, the US government

Jacob Shapiro: 00:32:20

came in and said, we will buy all of these chips and we will buy them at

Jacob Shapiro: 00:32:23

a certain price and you will survive.

Jacob Shapiro: 00:32:25

And then we get chips on our phones and our laptops and the thing

Jacob Shapiro: 00:32:27

that we're recording on right now.

Jacob Shapiro: 00:32:29

But if that's true, like if this is what the Pentagon is

Jacob Shapiro: 00:32:32

doing and they're, you know, uh.

Jacob Shapiro: 00:32:34

Gearing up this capacity, you're gonna pay more for these things if,

Jacob Shapiro: 00:32:37

if you're one of these other companies in general that's been importing

Jacob Shapiro: 00:32:39

this stuff cheaply from China.

Jacob Shapiro: 00:32:41

And this is one of the asymmetric levers that China has been threatening,

Jacob Shapiro: 00:32:44

that if you go after us on all these different things when it comes to

Jacob Shapiro: 00:32:47

trade, like yes, you're gonna win.

Jacob Shapiro: 00:32:49

You're bigger than us, but we will make it painful for you.

Jacob Shapiro: 00:32:51

And we can make it especially painful for us companies that

Jacob Shapiro: 00:32:54

need to source these things.

Jacob Shapiro: 00:32:55

So I think it's actually the US government signaling, hey, like this

Jacob Shapiro: 00:32:58

stuff is gonna cost more because it's gonna be made and refined.

Jacob Shapiro: 00:33:01

In the United States.

Jacob Shapiro: 00:33:02

And so, and, and I think there's also like an interesting thing happening

Jacob Shapiro: 00:33:05

here where you can hear the ambivalence in my voice and in my take because

Jacob Shapiro: 00:33:08

you have this sort of thing on the one hand and then on the other it's, oh,

Jacob Shapiro: 00:33:12

Nvidia, you can send the chips to China.

Jacob Shapiro: 00:33:14

Yeah.

Jacob Shapiro: 00:33:14

Yeah.

Jacob Shapiro: 00:33:14

Which that's awesome.

Jacob Shapiro: 00:33:15

Like these, these things don't make sense.

Jacob Shapiro: 00:33:17

Like, are you Trump the globalist who just wants to make a deal with China and trade

Jacob Shapiro: 00:33:20

more, or are you Trump that we are gonna get all of our rare earth sourced from

Jacob Shapiro: 00:33:23

the United States and pay more for it, but we're gonna be secure as a result of it?

Jacob Shapiro: 00:33:26

Like these are not, this is the right hand and the left hand not

Jacob Shapiro: 00:33:29

knowing what they're doing to me.

Jacob Shapiro: 00:33:30

But no, no.

Jacob Shapiro: 00:33:31

Take it though.

Jacob Shapiro: 00:33:32

Maybe you think it can make sense.

Marko Papic: 00:33:33

I can defend it.

Marko Papic: 00:33:34

I can defend it.

Marko Papic: 00:33:35

I can defend it.

Marko Papic: 00:33:36

Because look, there are certain technologies, there are certain

Marko Papic: 00:33:40

technologies that like, so first of all.

Marko Papic: 00:33:44

What is the foundation of geopolitical power and it's material wealth?

Jacob Shapiro: 00:33:50

Material wealth.

Jacob Shapiro: 00:33:50

I thought it was rivers.

Jacob Shapiro: 00:33:53

Hashtag peters eye.

Marko Papic: 00:33:54

Absolutely, absolutely not.

Marko Papic: 00:33:56

Okay.

Marko Papic: 00:33:58

So, uh, it's the source, like the foundation of wealth is material power,

Marko Papic: 00:34:05

you know, and all obviously, you know, access to technology, but you're not gonna

Marko Papic: 00:34:09

access technology unless you have money.

Marko Papic: 00:34:12

So money is very important.

Marko Papic: 00:34:14

Now, I, I love the scene in the house of cards that you have before quoted

Marko Papic: 00:34:18

myself, I mean, it's in my book.

Marko Papic: 00:34:20

You may have all the money, Raymond, but I have all the men with guns,

Marko Papic: 00:34:23

you know, which Kevin Spacey delivers in his extremely like great act

Marko Papic: 00:34:27

like I'd agree with that Jacob.

Marko Papic: 00:34:29

But men with with guns is expensive.

Marko Papic: 00:34:33

And so the reason I say this is because I do think it's a simplistic view.

Marko Papic: 00:34:38

That one can just stop trading with China.

Marko Papic: 00:34:42

No, you just have to be smart about it.

Marko Papic: 00:34:43

So, uh, is Nvidia going to give China the most cutting edge chips that it has?

Marko Papic: 00:34:48

It's in Arsenal.

Marko Papic: 00:34:49

I actually don't know, but I'm assuming the deal with the US

Marko Papic: 00:34:52

government is that No, we'll give them some generation older chip.

Marko Papic: 00:34:57

Same with, uh, Airbus or Boeing.

Marko Papic: 00:35:00

Should Boeing stop selling aircraft to China?

Marko Papic: 00:35:03

That's the most idiotic thing I've ever heard.

Marko Papic: 00:35:05

First of all, Boeing airplanes suck.

Marko Papic: 00:35:07

So like, there you go, China, like gorge yourself on planes

Marko Papic: 00:35:10

that are gonna fall outta the sky.

Marko Papic: 00:35:12

But, but the more, the more serious, the more serious point is that this

Marko Papic: 00:35:16

is 1980s and 1990s technology that you're selling to China, the buy

Marko Papic: 00:35:20

airplane that allows Boeing to the end r and d on latest technology.

Marko Papic: 00:35:26

Like that's, that's the whole point of the video.

Marko Papic: 00:35:28

You cannot cut off the video.

Marko Papic: 00:35:30

And you cannot cut off.

Marko Papic: 00:35:31

This isn't pro globalist.

Marko Papic: 00:35:33

This isn't like, oh, Marco works for finance bros. He

Marko Papic: 00:35:36

just wants Nvidia start, go up.

Marko Papic: 00:35:38

No, this is like legitimately obvious point.

Marko Papic: 00:35:42

China's second largest economy in the world.

Marko Papic: 00:35:45

Huge consumer market, you are going to hurt NVIDIA's efforts to

Marko Papic: 00:35:50

use its revenue to funnel into r and d to develop new chips unless

Marko Papic: 00:35:54

you let them trade with China.

Marko Papic: 00:35:55

So that's the first point, I would say.

Marko Papic: 00:35:57

The second point is then, okay, then you can identify certain things in your

Marko Papic: 00:36:00

supply chain that are critical to you and you just invest a lot into those

Marko Papic: 00:36:06

to make sure that you can, that you can actually have that domestically.

Marko Papic: 00:36:09

So I think you can both be a globalist and put 50% tariffs in steel.

Marko Papic: 00:36:15

I think you can do both things.

Marko Papic: 00:36:17

If you, if you decide steel is really important at the 21st century, if you de

Marko Papic: 00:36:21

decide, decide that you need rare earth mineral refining in your country, fine.

Marko Papic: 00:36:26

Like whatever it is that you decide, you can have like a backstop

Marko Papic: 00:36:30

domestically while still trading with essentially your rival, and here's

Marko Papic: 00:36:34

where you have to trade with China.

Marko Papic: 00:36:36

The reason you have to trade with China, the reason that you

Marko Papic: 00:36:39

have to let Nvidia trade with China is because I guarantee you.

Marko Papic: 00:36:44

Tokyo Electron and Samsung, and you know, all these other allies of the US

Marko Papic: 00:36:50

are gonna continue to trade with China.

Marko Papic: 00:36:52

And so you're gonna fall behind, you're gonna seed marketplace to somebody else.

Marko Papic: 00:36:57

And then 10, 15 years from now, you're wondering why the, I don't know, the

Marko Papic: 00:37:01

Dutch or the South Korea under the Japanese, or at the forefront of.

Marko Papic: 00:37:05

Because you decided not to make the money off of the Chinese

Marko Papic: 00:37:09

with second or third generation goods that you were selling them.

Marko Papic: 00:37:12

So I think it, it requires nuance.

Jacob Shapiro: 00:37:15

It does.

Jacob Shapiro: 00:37:15

And I, and I, I take your point, but it can be done over a period of years.

Jacob Shapiro: 00:37:21

If the federal government is gonna support the strategic sectors that you're talking

Jacob Shapiro: 00:37:25

about, and that's not what's happening.

Jacob Shapiro: 00:37:26

Like if you wanna do what you are talking about, then you need, sorry, MAGA folks.

Jacob Shapiro: 00:37:31

You need Biden's Industrial Policy Blueprint.

Jacob Shapiro: 00:37:33

You need to go in and actually support and train and set a floor, not just

Jacob Shapiro: 00:37:39

for these materials, but for all the things that are strategic, what

Jacob Shapiro: 00:37:41

is not happening, they're giving.

Jacob Shapiro: 00:37:43

The, the size of Italy's military budget to ice and they're cutting Medicaid

Jacob Shapiro: 00:37:47

and they're doing things like that.

Jacob Shapiro: 00:37:48

They're not there.

Jacob Shapiro: 00:37:49

They're not, they're not out there saying, in five years we wanna be making

Jacob Shapiro: 00:37:51

X, y, and Z things in the United States, and here's how we're gonna retrain the

Jacob Shapiro: 00:37:54

workforce and here's how we're gonna bring the factories back and here's the

Jacob Shapiro: 00:37:57

countries that we're gonna near shore, some of the other components that we need.

Jacob Shapiro: 00:38:00

Like, that's not what they're doing.

Jacob Shapiro: 00:38:01

They're doing some of these one-offs.

Jacob Shapiro: 00:38:02

So I think they're gonna reach a point where.

Jacob Shapiro: 00:38:04

You're gonna get all these inputs where the price is gonna go up significantly

Jacob Shapiro: 00:38:07

because the things that you're talking about haven't kicked in yet, and China's

Jacob Shapiro: 00:38:10

just gonna take advantage of those things.

Jacob Shapiro: 00:38:12

And I think the other thing that's in what you said is that, uh, the eu, Japan,

Jacob Shapiro: 00:38:17

South Korea, uh, they were being more reticent with China until the last.

Jacob Shapiro: 00:38:22

Three or four months.

Jacob Shapiro: 00:38:23

Now Japan is going like, screw y'all.

Jacob Shapiro: 00:38:26

We're going all in on China now.

Jacob Shapiro: 00:38:28

Now South Korea is saying, fuck this.

Jacob Shapiro: 00:38:30

Like, you wanna treat us like this?

Jacob Shapiro: 00:38:31

We will punch back a little bit.

Jacob Shapiro: 00:38:33

We are not Canada, my friend.

Jacob Shapiro: 00:38:34

Like, you wanna see what this looks like?

Jacob Shapiro: 00:38:36

No.

Jacob Shapiro: 00:38:36

Go cook.

Marko Papic: 00:38:37

So, so, no, no.

Marko Papic: 00:38:37

So, so, so let me, let me put what you're saying and I think like, kind of rapid,

Marko Papic: 00:38:42

you know, I think that you're correct.

Marko Papic: 00:38:45

And that's where the, that's where the strategy for like

Marko Papic: 00:38:49

creating critical infrastructure.

Marko Papic: 00:38:51

Should be not just American.

Marko Papic: 00:38:54

And that's where I think the Trump administration's treatment

Marko Papic: 00:38:57

of allies really will hurt the US over the 10 20 year horizon.

Marko Papic: 00:39:01

Like why not set up some of this rare earth refining, you know, it's

Marko Papic: 00:39:07

very difficult to build a refiner for rare earth because the, uh,

Marko Papic: 00:39:12

basically what's left after your.

Marko Papic: 00:39:16

Refine.

Marko Papic: 00:39:16

Rare earth is toxic, extremely toxic material, and toxic waste.

Marko Papic: 00:39:20

So how are you gonna set this up in the United States of America?

Marko Papic: 00:39:22

Like it may make sense to move it out of China to an ally.

Marko Papic: 00:39:26

And your point is like, well, you've kind of, uh, you're not

Marko Papic: 00:39:30

really thinking about that.

Marko Papic: 00:39:31

Seriously.

Marko Papic: 00:39:32

You want to put everything into the us You want us to produce steel

Marko Papic: 00:39:35

and you treat Canadian steel as somehow a national security threat.

Marko Papic: 00:39:40

That will significantly increase cost domestically, whereas just spreading

Marko Papic: 00:39:44

it around, quote unquote the West writ large would've been a cheaper strategy.

Marko Papic: 00:39:49

And I think a strategy that would've ensured that those allies, you know,

Marko Papic: 00:39:55

see America as a reliable partner.

Marko Papic: 00:39:57

So I think, I think your criticism of the Trump administration is very valid,

Marko Papic: 00:40:00

you know, and uh, and I think that they are going to have to explain themselves.

Marko Papic: 00:40:05

For that attitude that they had both in the first term and this term, which is

Marko Papic: 00:40:09

what it's, uh, you know, this thing that Jerry Kushner said in the first term,

Marko Papic: 00:40:15

it's, what have you done for me lately?

Marko Papic: 00:40:18

World Use that term.

Marko Papic: 00:40:21

Similarly, you know, it's this whole idea that the rest of the

Marko Papic: 00:40:24

world owes something to the US and so the US is gonna cash in on it.

Marko Papic: 00:40:28

I think that that was, that was a mistake.

Marko Papic: 00:40:30

And you identified why?

Marko Papic: 00:40:31

Because if you have to onshore all of this stuff domestically,

Marko Papic: 00:40:35

it is gonna increase prices.

Marko Papic: 00:40:36

It also ensures that those allies are no longer reliable partners.

Marko Papic: 00:40:40

So no counter for me on that one.

Jacob Shapiro: 00:40:42

And you know, Jared's not around anymore.

Jacob Shapiro: 00:40:44

We can't even go to Jared now because Jared's busy making

Jacob Shapiro: 00:40:47

money off the first term.

Jacob Shapiro: 00:40:48

'cause he realizes that the second term is kind of crazy.

Jacob Shapiro: 00:40:50

But this, I think it's, it's a perfect bookend of what we were talking about

Jacob Shapiro: 00:40:52

earlier because I think that Trump.

Jacob Shapiro: 00:40:54

Instinctual nature.

Jacob Shapiro: 00:40:55

His non-strategic point of view helps him with Russia, Ukraine, because he

Jacob Shapiro: 00:41:00

has a real instinct for where is power, where is weakness for getting what

Jacob Shapiro: 00:41:03

I want for pushing my finger on the place that is gonna get me what I want.

Jacob Shapiro: 00:41:06

Heran in Israel

Marko Papic: 00:41:06

too.

Marko Papic: 00:41:07

Sorry to interrupt you, Jacob.

Marko Papic: 00:41:08

Yeah.

Marko Papic: 00:41:08

But like, why are we not talking about Iran and Israel?

Marko Papic: 00:41:11

Because it was actually handled extremely well by Donald Trump.

Marko Papic: 00:41:15

And here we are, like a month later, nobody cares.

Marko Papic: 00:41:17

Where's the instability in the Middle East?

Marko Papic: 00:41:19

Where is it like, you know, I'm looking at,

Jacob Shapiro: 00:41:21

well, well, it's, it, it's, it's in southern Syria because

Jacob Shapiro: 00:41:23

Israel is now bombing southern Syria.

Jacob Shapiro: 00:41:25

'cause the Jews are in the Syrian sectarian issues.

Jacob Shapiro: 00:41:27

And that's all we're gonna talk about because it's not that important.

Jacob Shapiro: 00:41:29

But like, it's there.

Jacob Shapiro: 00:41:30

It's not like.

Jacob Shapiro: 00:41:30

Israel is acting like a great power.

Jacob Shapiro: 00:41:32

Now, by the way, in the Middle East, I said this on Twitter, Kurds, if you're

Jacob Shapiro: 00:41:35

listening, watch what's happening with the Drews in southern Syria.

Jacob Shapiro: 00:41:38

Like if you have any hope for an independent state in

Jacob Shapiro: 00:41:40

your lifetime, like what?

Jacob Shapiro: 00:41:41

Like you should be taking notes.

Jacob Shapiro: 00:41:43

Um, but that's the only thing I'm gonna say about the Middle East.

Jacob Shapiro: 00:41:45

But I was, I, you know, I said something nice about President Trump.

Jacob Shapiro: 00:41:47

Now I'm gonna say something not so nice about President Trump because the way,

Jacob Shapiro: 00:41:51

all the things that made him good at Russia, Ukraine, and make him good at

Jacob Shapiro: 00:41:53

this Iran Israel thing are making him yes.

Jacob Shapiro: 00:41:55

Yeah.

Jacob Shapiro: 00:41:56

Extremely incompetent when it comes to trade.

Jacob Shapiro: 00:41:59

This idea that they're, you're gonna throw 50% tariffs on Brazil because

Jacob Shapiro: 00:42:03

you're mad that that's the best Boro's getting it kicked in the teeth.

Jacob Shapiro: 00:42:06

That's the best one.

Jacob Shapiro: 00:42:07

Like, it's asinine.

Jacob Shapiro: 00:42:09

Let's, lets cook that.

Jacob Shapiro: 00:42:09

Let's cook with that.

Jacob Shapiro: 00:42:09

You've just, you've turned Brazil against you.

Jacob Shapiro: 00:42:11

Like go look at oh h social media.

Jacob Shapiro: 00:42:13

They're furious.

Jacob Shapiro: 00:42:14

Like it's a center right leaning country.

Jacob Shapiro: 00:42:16

And you're like giving Lula support.

Jacob Shapiro: 00:42:18

Like what do you do?

Jacob Shapiro: 00:42:19

Sorry, go ahead.

Marko Papic: 00:42:19

Listen.

Marko Papic: 00:42:20

No, no, no.

Marko Papic: 00:42:20

Don't, don't apologize.

Marko Papic: 00:42:21

I just, I just, I just wanna build on this.

Marko Papic: 00:42:23

This is, uh, uh, uh, Brazil has a trade deficit with the United States of America.

Marko Papic: 00:42:30

Let me, lemme break this down.

Marko Papic: 00:42:32

Really simple for people in the administration who don't

Marko Papic: 00:42:34

know a math Peter Novarro.

Marko Papic: 00:42:38

So basically you have a country that imports a lot of stuff from America

Marko Papic: 00:42:44

and doesn't send anything back.

Marko Papic: 00:42:46

That's Brazil.

Marko Papic: 00:42:47

It's one of the few.

Marko Papic: 00:42:49

It's one of the few countries on the planet that actually finds

Marko Papic: 00:42:53

Americans goods, American goods useful

Marko Papic: 00:42:58

and it doesn't send anything back to America.

Marko Papic: 00:43:00

Americans don't buy anything from Brazil.

Marko Papic: 00:43:02

It's like there's nothing to buy.

Marko Papic: 00:43:04

It's perfectly fine.

Marko Papic: 00:43:06

It's the one country that actually.

Marko Papic: 00:43:09

Has a negative trade balance for the United States of America where the

Marko Papic: 00:43:12

US is winning according to President Trump's like heuristics, which

Marko Papic: 00:43:15

obviously I don't, don't matter with matter because trade balance is not

Marko Papic: 00:43:19

a be all, end all, uh, in the world.

Marko Papic: 00:43:21

My point is like, this is fascinating.

Marko Papic: 00:43:24

Like Brazil, you cannot tariff Brazil at 50%.

Marko Papic: 00:43:29

You cannot, because first of all, whatever Brazil buys from America,

Marko Papic: 00:43:32

you can buy from someone else.

Marko Papic: 00:43:33

Let's just be very clear.

Marko Papic: 00:43:35

There's absolutely nothing critical.

Marko Papic: 00:43:37

United States of America send to Brazil.

Marko Papic: 00:43:39

Nothing.

Marko Papic: 00:43:39

It can all be replaced by other countries, Europe, China, whatever.

Marko Papic: 00:43:42

And on top of that, it's a big country on a continent where

Marko Papic: 00:43:46

US power is kind of relevant.

Marko Papic: 00:43:49

It's the Western hemisphere, and as you say, Jacob, you're pushing

Marko Papic: 00:43:52

it into the arms of China for no real good strategic reason.

Marko Papic: 00:43:56

And I agree with you, Todd.

Marko Papic: 00:43:58

Uh, president Trump's.

Marko Papic: 00:43:59

President Trump is like a hedge fund manager.

Marko Papic: 00:44:01

You know, in in finance we've got hedge fund managers.

Marko Papic: 00:44:03

You have sovereign wealth funds and pension funds on the other side, in

Marko Papic: 00:44:06

terms of time horizons, hedge fund has a total of time horizon from

Marko Papic: 00:44:10

zero to like three months maybe.

Marko Papic: 00:44:13

You know, an institutional investors is gonna have time

Marko Papic: 00:44:15

horizon of five to 10 years.

Marko Papic: 00:44:17

President Trump is treating his job as if he's a hedge fund manager and,

Marko Papic: 00:44:21

and in many ways that's a good thing.

Marko Papic: 00:44:23

As you pointed out when it comes to Israel, Iran, he

Marko Papic: 00:44:25

handled it I think very well.

Marko Papic: 00:44:27

He understands game theory and negotiations really, really well.

Marko Papic: 00:44:30

What he doesn't, I think, care about is how the consequences of those

Marko Papic: 00:44:34

negotiations and those mini game theoretical moments where he crushes

Marko Papic: 00:44:38

everybody really, really well because he negotiates better than everyone

Marko Papic: 00:44:41

because his counterparts have never freaking bought a car at a used car lot.

Marko Papic: 00:44:45

You know where he is, he.

Marko Papic: 00:44:46

He's been dealing with contractors all his life actually lived in the real world.

Marko Papic: 00:44:50

Nine out of 10 American policy makers have basically gone from an Ivy League

Marko Papic: 00:44:54

college to a job in the State Department.

Marko Papic: 00:44:57

So they, they have no idea how the real world works and it's fine.

Marko Papic: 00:44:59

Like that's his specialty.

Marko Papic: 00:45:01

The problem is that those negotiating moments, yeah, they ignore the long

Marko Papic: 00:45:05

term and Brazil is a great example, but you can really make many others.

Marko Papic: 00:45:08

Canada is also a good example.

Jacob Shapiro: 00:45:10

Yeah.

Jacob Shapiro: 00:45:10

Well, I, I wanna make a few others.

Jacob Shapiro: 00:45:12

So, I mean, let's talk about a few.

Jacob Shapiro: 00:45:13

Like, I mean, Mexico is the one that is the top of my mind.

Jacob Shapiro: 00:45:16

We're talking about tariffs again on Mexico and some

Jacob Shapiro: 00:45:19

demerits maybe for Shane Baum.

Jacob Shapiro: 00:45:20

If both thing, if those things get through, Mexico's your era in the hole.

Jacob Shapiro: 00:45:24

And what you really need to do with Mexico, and I think Mexico would be

Jacob Shapiro: 00:45:26

open to this based on what I've read and learned over the past, you know,

Jacob Shapiro: 00:45:29

eight to 10 months is they've got a cartel problem and a security problem.

Jacob Shapiro: 00:45:32

So.

Jacob Shapiro: 00:45:33

Light 'em up, like go in there and make Mexico secure and like make

Jacob Shapiro: 00:45:38

Mexico a manufacturing center that is completely dependent on the United

Jacob Shapiro: 00:45:41

States and make that like a cheap labor workforce that's going for that.

Jacob Shapiro: 00:45:43

That's what you want and there's something that you can do hand in hand there, and

Jacob Shapiro: 00:45:46

it will affect all these other things.

Jacob Shapiro: 00:45:47

There's, um, India, they just wrapped up their fifth round of talks.

Jacob Shapiro: 00:45:51

They're trying to get some kind of interim deal or some deal in before August.

Jacob Shapiro: 00:45:55

You know what the sticking point is?

Jacob Shapiro: 00:45:56

The United States is insisting that we sell milk or dairy products into India.

Jacob Shapiro: 00:46:01

Than other farm goods.

Jacob Shapiro: 00:46:02

And it's like everybody who, all the farmers who listen to this, who have

Jacob Shapiro: 00:46:05

seen me at events, especially those at dairy events, you know, I love y'all

Jacob Shapiro: 00:46:08

and you know, I'm rooting for y'all.

Jacob Shapiro: 00:46:09

Like I, but like this idea that we're gonna use India so that we can sell

Jacob Shapiro: 00:46:13

dairy products into the Indian market.

Jacob Shapiro: 00:46:15

India is what gave the British Empire a second lease on life.

Jacob Shapiro: 00:46:18

If you can get a real free trade agreement with India and all these

Jacob Shapiro: 00:46:22

other different concessions from them on trade, you're gonna hold it up because

Jacob Shapiro: 00:46:24

you want to sell them dairy products.

Jacob Shapiro: 00:46:26

Like that's not gonna help you.

Jacob Shapiro: 00:46:27

Like India's gonna surge dairy production and in 10 years they're not gonna buy

Jacob Shapiro: 00:46:30

from the United States anymore and the deal's gonna be done and you're just

Jacob Shapiro: 00:46:32

gonna piss the Indians off just like you did with the India Pakistan stuff.

Jacob Shapiro: 00:46:35

One place in which his game theory stuff was not so wrong.

Jacob Shapiro: 00:46:38

Think about Vietnam, thought they had a deal.

Jacob Shapiro: 00:46:40

It's a different deal than they negotiated.

Jacob Shapiro: 00:46:42

And now they're like, well, we can't even trust this guy 'cause we thought we had

Jacob Shapiro: 00:46:44

a deal, so maybe we should look to China.

Jacob Shapiro: 00:46:46

Maybe we should look to some of these others.

Jacob Shapiro: 00:46:48

And that's before we get into Japan and South Korea and others.

Jacob Shapiro: 00:46:51

So it's just.

Jacob Shapiro: 00:46:52

It's this really short term thinking, and he's pushing away

Jacob Shapiro: 00:46:55

all these allies otherwise would want to be part of this system.

Jacob Shapiro: 00:46:58

And I think in 3, 5, 7 years, like I, the, the, the metaphor

Jacob Shapiro: 00:47:01

I've used is radiation sickness.

Jacob Shapiro: 00:47:03

Like, I think you'll get a time horizon where things look

Jacob Shapiro: 00:47:06

like the patient has improved.

Jacob Shapiro: 00:47:07

That's what happens when you're exposed to a lethal dose of radiation.

Jacob Shapiro: 00:47:10

But the cellular structure has been so damaged that you can't like,

Jacob Shapiro: 00:47:14

replicate yourself again, and then you die a terrible, horrible death.

Jacob Shapiro: 00:47:17

I don't think we're gonna die a terrible oral death.

Jacob Shapiro: 00:47:18

But like you're setting up the same pattern here where, okay,

Jacob Shapiro: 00:47:21

you did the shock, now things are gonna look okay for a minute.

Jacob Shapiro: 00:47:24

And then, but inside the cellular structure, the patient is damaged

Jacob Shapiro: 00:47:28

in Japan and South Korea on even Canada who just sent their first

Jacob Shapiro: 00:47:31

LNG shipment to South Korea.

Jacob Shapiro: 00:47:33

Mazeltov to the Canadians.

Jacob Shapiro: 00:47:34

Like, they're all like turning on you while saying nice things to your face

Jacob Shapiro: 00:47:38

and you're just running around declaring victory and going to Jared rant over.

Marko Papic: 00:47:44

No, I think I, I, I really like that analogy because, uh,

Marko Papic: 00:47:46

you know, one counter to your rant.

Marko Papic: 00:47:49

Is Europe, right?

Marko Papic: 00:47:50

Mm-hmm.

Marko Papic: 00:47:50

It looks like Europe has found, uh, a way to deal with Trump and,

Marko Papic: 00:47:55

uh, you know, you like Mertz.

Marko Papic: 00:47:56

Friedrich Mertz came out, gave an interview, uh, recently, I think,

Marko Papic: 00:48:00

uh, in the UK where he basically said like, look, president Trump was right.

Marko Papic: 00:48:05

We were free riding and you know, like, I have no problem with JD

Marko Papic: 00:48:10

Vance's speech at uni conference.

Marko Papic: 00:48:11

This is an example.

Marko Papic: 00:48:12

I mean, look it up if you don't know what I'm referring to.

Marko Papic: 00:48:15

For our listeners.

Marko Papic: 00:48:16

You know, but, but it underpins exactly how you defined it.

Marko Papic: 00:48:20

It may just be that all these countries have figured out how to

Marko Papic: 00:48:25

deal with Trump, send him basically love letters through text messages.

Marko Papic: 00:48:30

Mark Ruta did.

Marko Papic: 00:48:32

Mm-hmm.

Marko Papic: 00:48:32

The NATO Secretary General, like so effectively just go on TV and

Marko Papic: 00:48:35

say, president Trump is awesome.

Marko Papic: 00:48:37

He's right, but then work on.

Marko Papic: 00:48:41

Divesting yourself from your security trade and economic links with America,

Marko Papic: 00:48:45

which is obviously not good for the us.

Marko Papic: 00:48:48

So I really like the radiation analogy, and I think that, um, a lot of people

Marko Papic: 00:48:52

listening to this would say, we're being unfair to President Trump because

Marko Papic: 00:48:55

your appeals have fallen in line.

Marko Papic: 00:48:58

I would raise the question, but are they falling in line by increasing

Marko Papic: 00:49:01

defense, uh, spending, or are they simply becoming geopolitically mature?

Marko Papic: 00:49:06

Exiting the geopolitical adolescence that actually served American

Marko Papic: 00:49:11

interests for the past 70 years.

Marko Papic: 00:49:13

And so they've just learned how to massage this rhetorically like, oh,

Marko Papic: 00:49:18

president Trump, you're awesome.

Marko Papic: 00:49:19

You're our daddy.

Marko Papic: 00:49:20

Meanwhile, hey guys, let's build up our own capacity.

Marko Papic: 00:49:23

'cause Americans are unreliable.

Marko Papic: 00:49:25

Um, so yeah.

Marko Papic: 00:49:26

I think you're right.

Marko Papic: 00:49:27

I think that's the, and about Europe.

Marko Papic: 00:49:28

Like

Jacob Shapiro: 00:49:28

I, I've been reading this quote from Emmanuel Macron, uh,

Jacob Shapiro: 00:49:32

who, who was fairly down on our trade value leader list, but because he is

Jacob Shapiro: 00:49:34

a lame duck 'cause he can't run again.

Jacob Shapiro: 00:49:36

And I know that like he's got lots of problems as a politician, but he's

Jacob Shapiro: 00:49:39

still one of the smarter ones out there in terms of diagnosing geopolitics.

Jacob Shapiro: 00:49:42

He said this in a speech last week when he was celebrating, uh, a c day quote.

Jacob Shapiro: 00:49:46

To be free in this world, you must be feared.

Jacob Shapiro: 00:49:48

To be feared.

Jacob Shapiro: 00:49:49

You have to be powerful.

Jacob Shapiro: 00:49:50

The whole nation must be stronger.

Jacob Shapiro: 00:49:52

End quote.

Jacob Shapiro: 00:49:53

You could put that in the 1930s leader and you wouldn't know that it was

Jacob Shapiro: 00:49:56

Emmanuel Macron speaking in 2025.

Jacob Shapiro: 00:49:57

So sure.

Jacob Shapiro: 00:49:58

That's why Mark Red is saying, great.

Jacob Shapiro: 00:50:00

I got the $10 billion worth of weapons from the United States for

Jacob Shapiro: 00:50:03

NATO and Ukraine and everything else I sent in my life letter.

Jacob Shapiro: 00:50:05

Everything's fine.

Jacob Shapiro: 00:50:06

Meanwhile, France is like, eh, like we were gonna increase spending and build

Jacob Shapiro: 00:50:09

French products out to, you know, 20, 30.

Jacob Shapiro: 00:50:11

Now we're gonna do it in two years, and now here's 10 billion euros more.

Jacob Shapiro: 00:50:14

And by the way, Boeing, we've got Airbus over here.

Jacob Shapiro: 00:50:17

We can sell that shit to China too.

Jacob Shapiro: 00:50:19

We're gonna have a new relationship with China as well.

Jacob Shapiro: 00:50:21

So like it's.

Jacob Shapiro: 00:50:22

Yeah, Europe is right there.

Jacob Shapiro: 00:50:22

Like he's created a poll, like both.

Jacob Shapiro: 00:50:25

It's funny, like Russia and the United States for generations have

Jacob Shapiro: 00:50:28

been fighting over Europe basically.

Jacob Shapiro: 00:50:30

Um, and now like Russia by invading Ukraine and Trump, by prosecuting a

Jacob Shapiro: 00:50:33

trade war, have created the strong Europe that both sides didn't want.

Jacob Shapiro: 00:50:37

They both wanted them, like in between.

Jacob Shapiro: 00:50:38

It's just like totally self-defeating.

Jacob Shapiro: 00:50:40

Um, last word to you, Marco, and then we gotta get outta here.

Marko Papic: 00:50:44

Uh, no.

Marko Papic: 00:50:44

I think, uh, I've compared Donald Trump to, uh, cod liver oil in the past.

Marko Papic: 00:50:48

So cod liver oil is what?

Marko Papic: 00:50:51

Was fed to children, uh, all across the world.

Marko Papic: 00:50:54

Uh, I grew up in basically the third world.

Marko Papic: 00:50:56

So we used to, uh, we used to have this even in the seventies

Marko Papic: 00:50:59

and eighties, you know, so, uh, basically you, you swallow it.

Marko Papic: 00:51:02

It's extremely stinky and it tastes terrible.

Marko Papic: 00:51:05

So Donald Trump, if you are a foreign country, he's stinky

Marko Papic: 00:51:09

and he tastes terrible.

Marko Papic: 00:51:10

But the truth is he's very good for you.

Marko Papic: 00:51:15

Like the truth is that Donald Trump is really good for the rest of the world.

Marko Papic: 00:51:20

Because he basically takes away this American benevolence to

Marko Papic: 00:51:25

allies and, and forces everybody to basically take stock of their own

Marko Papic: 00:51:31

capabilities and their own failures and fix them and start fixing them.

Marko Papic: 00:51:36

And so there's two ways to look at this.

Marko Papic: 00:51:38

Jacob, you've taken the approach that this is not good for America.

Marko Papic: 00:51:41

Like he's caught liver oil for the rest of the world.

Marko Papic: 00:51:43

Mm-hmm.

Marko Papic: 00:51:43

But not for the us.

Marko Papic: 00:51:44

This is, this is bad.

Marko Papic: 00:51:46

I see that and I agree with it.

Marko Papic: 00:51:48

From a purely kind of political science, international relations perspective.

Marko Papic: 00:51:52

Yes, you're correct.

Marko Papic: 00:51:53

Uh, America's effectively kind of losing some of these alliance relationships.

Marko Papic: 00:51:58

Allies are just being sy of fans and saying nice things to President

Marko Papic: 00:52:02

Trump or sending him sexts as rooted it, you know, but they're,

Marko Papic: 00:52:06

but they're really like, moving on.

Marko Papic: 00:52:09

On the other hand, I will just say one thing.

Marko Papic: 00:52:11

Maybe this all doesn't end in a radiation sickness death.

Marko Papic: 00:52:16

Maybe what it produces is a more balanced world.

Marko Papic: 00:52:19

You know, where like, is it really a, a risk to the United States of

Marko Papic: 00:52:24

America that Canada solves some of its idiotic domestic economic issues

Marko Papic: 00:52:28

that Mark Carney's trying to do, like God bless him first time in 250 years,

Marko Papic: 00:52:33

provinces can trade with one another.

Marko Papic: 00:52:35

Is it really a problem that Europe can stand on its own two feet?

Marko Papic: 00:52:38

Is, are Canada and Europe truly ever going to be enemies of the

Marko Papic: 00:52:42

United States relative to Russia or China or some other country?

Marko Papic: 00:52:46

And so in a way, maybe there is a more hopeful vision where the world

Marko Papic: 00:52:49

just becomes a little bit more balanced and the US retrenches by

Marko Papic: 00:52:53

building up some of these countries.

Marko Papic: 00:52:55

And yes, it's not direct positive for the us you are correct, but maybe a, maybe a

Marko Papic: 00:52:59

vasal vasal relationship was not really in anybody's interest to begin with.

Marko Papic: 00:53:05

So I'm just gonna leave you there.

Marko Papic: 00:53:06

I don't have an answer.

Marko Papic: 00:53:07

Because instinctively I agree with you, but maybe you and I are looking

Marko Papic: 00:53:10

at this from too much of a game of risk perspective from a Machiavellian

Marko Papic: 00:53:14

purely realist political science view, and not from a different view, which

Marko Papic: 00:53:18

is that, hey, maybe this will lead to a more balanced world where, yeah, Europe

Marko Papic: 00:53:22

may have the capacity to say no to America, but maybe that's not such a bad

Marko Papic: 00:53:27

thing, you know, at the end of the day.

Jacob Shapiro: 00:53:29

I think it's certainly not a bad thing for markets and investing.

Jacob Shapiro: 00:53:32

That's why I'm so bullish, like in general on the next decade or two.

Jacob Shapiro: 00:53:36

I think there's a monster waiting at the end of this period.

Jacob Shapiro: 00:53:38

Just like in the 1890s there was a monster called World War

Jacob Shapiro: 00:53:40

I waiting at the end of it.

Jacob Shapiro: 00:53:41

So I worry about sort of that, but the, exactly what you just

Jacob Shapiro: 00:53:44

said is why you should be like skeptical and risk, uh, aware.

Jacob Shapiro: 00:53:48

If you're into geopolitics and if you're in investing, you should be like.

Jacob Shapiro: 00:53:51

The party is, is just getting started.

Jacob Shapiro: 00:53:53

Like,

Marko Papic: 00:53:53

no, Jacob, I love that you are completely right.

Marko Papic: 00:53:56

And I kind of feel the same way.

Marko Papic: 00:53:57

That's why like, I'm not bearish right now on, on markets at all.

Marko Papic: 00:54:00

Uh, not this year, not like I don't think the world is ending,

Marko Papic: 00:54:04

but you're right, you're right.

Marko Papic: 00:54:06

A multipolar world is not a bad place to be.

Marko Papic: 00:54:09

We can be in it for 20, 50, a hundred years or when it ends.

Jacob Shapiro: 00:54:15

Usually doesn't end well.

Jacob Shapiro: 00:54:16

Oh

Marko Papic: 00:54:16

boy.

Marko Papic: 00:54:17

Yeah.

Marko Papic: 00:54:17

So,

Jacob Shapiro: 00:54:18

all right, on that note.

Jacob Shapiro: 00:54:20

Good to see you, cousin.

Jacob Shapiro: 00:54:21

I'll see you next week.

Marko Papic: 00:54:22

Same.

Marko Papic: 00:54:23

Thank you.