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00:17Welcome to the Myers Report and our roundtable on Wednesday, April 8, 2026.
00:24Our subject tonight is what's going on in Iran and how China and the rest of the Far East is
00:31reacting to the Iran conflict.
00:34Boy, what a week. Reports we are getting regarding the opening of the Strait of Hormuz are mixed.
00:42As for the attacks, we don't know if this is just someone in the field who didn't get the message.
00:48That part is not unusual, but working it out with all the parties is going to be critical and they're
00:55all going to try and save face.
00:57In the meantime, the markets have reacted very positively.
01:01Oil prices are down in the past 24 hours between 14 and 18 percent.
01:07Diesel prices fell 12 percent and gasoline is down 7 percent and that's in 24 hours.
01:14This is the market having some faith that what is being accomplished may last.
01:21Regardless, this whole affair has had repercussions elsewhere in the world where nations do not want to be held hostage
01:29by the Strait of Hormuz, regardless of who causes the problem.
01:35So, this is our subject tonight and how the Far East is going to react and what ramifications are going
01:41to have in terms of the balance of power with the oil producers.
01:47Tonight, we have with us Rob Brownsword, who's coming in from the Philippines, someplace in the Philippines.
01:55He's a veteran combat officer, military contractor, and expeditionary operations manager.
02:03He's a retired captain.
02:05He's a specialist in psyops, asymmetric warfare, counterinsurgency.
02:09And right now, he's working in the Philippines trying to undo or to prevent some of the efforts of the
02:17Chinese to raise hell there.
02:19We also have with us Tom Setliff.
02:23He is our China, Chinese industry and modern culture expert, and he knows about the impact of the Chinese Communist
02:31Party on construction.
02:33Tom has provided, Tom, if I've got to make sure I got this right, you're an engineer and you provided
02:40the air and flow systems for over a thousand coal-fired power plants in China.
02:46And you've spent six months a year for 18 years in China so that you are knowledgeable about how the
02:54Chinese work and how their construction works.
02:57We also have with us Paul McGonigal, who was a former diplomat and international banker.
03:04Paul served in the State Department for the Nixon, Ford, Carter, and Reagan administrations, where he was the highest-ranking
03:14individual in the fiscal policy area for the Reagan administration in the State Department.
03:21And he was then an international banker handling country risk for running country risk for banks such as Chase.
03:30Okay, Rob, you projected that China would hit the Philippines before they'd invade Taiwan.
03:38Can you explain why you said that and what the implications are?
03:43Why is that?
03:47Rob?
03:49Yeah, so first of all, can you hear me?
03:53Yeah.
03:54Yes.
03:56Okay, so I don't tell people that it's inevitable that China is going to attack the Philippines.
04:08The long list of options that they have at their disposal, I think it's probably the last one.
04:15But if the math says they have to do it, they're not going to do a frontal assault on Taiwan.
04:20This is the easiest way to go about the task of bringing Taiwan back into the fold.
04:28And an attack does not necessarily have to mean an invasion of gray ships.
04:33It doesn't have to be full-spectrum combat operations.
04:36It could be, or it could just be a soft power takeover, which they've been working on for a very
04:43long time.
04:46And the United States has only recently recognized the threat and pushed back, meaning the last couple of years.
04:55And they've really, I think, only understood the situation maybe in the past.
04:59Don't they have over 10,000 military-aged people in cells that are trained, equipped, and financed by the Chinese
05:07Communist Party?
05:09Two years ago, that's not an official number, but two years ago, that was strongly suspected by many people in
05:15the information space.
05:17I'll put it that way.
05:19Both Filipino and other security operators, whether they're state or non-state.
05:26After the January crackdown, the Marcos administration on the Philippines offshore gaming operations, POGOs, a very large number of Chinese
05:43nationals who were here illegally were sent home.
05:47What do you mean by gaming operations?
05:49Do you mean gambling?
05:52Yes, the Philippines offshore gaming operations, otherwise known as the POGOs.
05:59A POGO is more than just a casino.
06:02A POGO is an operation that launders money for the Chinese government offshore.
06:10It serves as a place for illicit money-making operations, from drugs to prostitution.
06:22And it also serves as an intelligence collection effort for the Chinese government.
06:27And these little POGOs, run in conjunction with Chinese organized crime, were spread all over the country.
06:38But in certain areas, strategically important areas, there was a higher concentration of them.
06:43So, it was getting so bad, like in the area of Tarlac, which is north of Manila, a couple hours,
06:54it was found out that one of the mayors had won her office without proof of citizenship.
07:08The more they dug into it, the more they realized she didn't have, she didn't go to school anywhere.
07:16She couldn't provide any evidence that she was born in the country.
07:21She couldn't produce any relatives.
07:25She couldn't provide a history of what she'd been doing more than 10 years back.
07:31And suddenly, this woman that nobody knew about, there was no evidence of her being born in the country, had
07:38somehow become the mayor of a fairly large town or small city.
07:41And not only that, she's ethnic Chinese.
07:45Her name's Alice Guo, G-U-O.
07:47And the more they started to dig, the more they realized, wow, look at this.
07:51Her name is on the paperwork for this property.
07:56Her name is on the paperwork for this gaming company, this casino, this hotel or whatever.
08:06These various different buildings.
08:08And then they did a raid on that property, and they found prisoners, double-digit number of prisoners locked up
08:19in rooms throughout the facility of various nationalities, from Chinese to Filipino to other.
08:25And they started to uncover some really...
08:31I know there were men, for sure, because they were being extorted.
08:35There were probably also women, because a lot of these places do traffic, and women.
08:41This happened a couple years ago, so I'd have to go back and reread, maybe it was a year and
08:48a half ago, all the finalities of the whole thing.
08:52Do you know what happened to her as mayor?
08:55Did they let her stay as mayor?
08:57Yeah, so, no, she was put under investigation, where she pulled a disappearing act.
09:04We think she traveled by small boat out of the country.
09:11I think she was hiding in Malaysia.
09:14The Philippine authorities eventually caught up to her and brought her back.
09:20I would imagine she's being held in detention.
09:23I'm not sure what the status of that is.
09:26But it's an example of how serious the threat is here in the Philippines.
09:35When we were talking about the 10,000 soldiers, which is an estimate, and I'm not sure if that number
09:41is still considered to be 10,000.
09:44But there is a very large property just outside of Manila.
09:49It's an island that's connected by a bridge.
09:52And it's widely known that the Philippines authorities are not allowed out there.
10:00And there are all these high-rise buildings that contain Chinese nationals who work on the project.
10:11There's a part of the Philippines where Philippine authorities are not allowed?
10:21There's a lot of those, and there used to be more.
10:25So, on this island, it's quite possible that a large combat formation may have been hidden.
10:36It's possible they're still there.
10:39There's a lot of ports in the Philippines, mineral extraction ports.
10:48I've surveyed just outside of quite a few of them that are Chinese-owned.
10:54And these are for bulk carriers to come in and pick up ore, zinc ore, and other types of mine
11:07ore.
11:07Were these part of the Belt and Road?
11:09And they either take out the ore or they take out the tailings by ship.
11:13And a lot of these ports, there's no...
11:20What's that, Paul?
11:20Paul had a question.
11:22Rob?
11:22Paul?
11:23Were these ports part of the Belt and Road Initiative?
11:26There's no oversight.
11:33Rob, can you hear us?
11:36Rob?
11:41They could be.
11:47Maybe...
11:49Yeah, I can hear you.
11:57Rob, I think we're losing you.
12:02Some of the issues that we were also going to talk about, what the rebuilding of the various islands near
12:10the Philippines,
12:13where the Chinese are making manufacturing islands because they're interested in the offshore oil interests.
12:23Because, obviously, they have a problem with their oil.
12:26Their problem is that 10 years ago, they were using 10.5 million barrels of oil a day and producing
12:36only 3.5.
12:37Today, they are producing 800,000 barrels a day more, but they're using 5.5, 6 million barrels a day
12:48more.
12:48So, their situation is getting really, really bad.
12:52Rob, can you hear us now?
12:55Yeah, I could hear you.
12:56Just for some reason, you guys couldn't hear me.
12:59Okay.
12:59Okay.
13:00So, Paul asked...
13:01Paul, you had the question about Belt and Road?
13:03I asked if the ports you were talking about, Rob, were those part of the Belt and Road Initiative?
13:11You know, maybe unofficially in a clandestine way.
13:15Okay.
13:17I hadn't thought about that, but it's not like it was announced in the news that Philippines goes into partnership
13:25with China to do X, Y, and Z.
13:28It wasn't like a big diplomatic thing, but maybe, yeah.
13:33I mean, basically, it's the same thing, I suppose.
13:35Yeah.
13:37Okay.
13:38Yeah.
13:39Tom Setliff, well, actually, Paul, but before we go on to Tom, the issue of Belt and Road, isn't, Paul,
13:48isn't that really a new form of colonialism?
13:51No, it's the old form of colonialism in its most recent manifestation.
13:57And, Tom, what have you seen there about it being a problem with debt?
14:05Well, that's what they've been talking about.
14:07It's all debt-trapped diplomacy where they offer these large loans and larger loans than they know that particular country
14:16is ever going to be able to pay back.
14:19And then they build shoddy infrastructure that's not profitable and so they can't pay their bills and they end up
14:26having to sell them harbors and things like that in exchange for this debt that they've incurred.
14:37And they sort of doubled in that, you know, they promise that the construction and all that will be done
14:43by local contractors, but then they bring in Chinese to build this product that they're, that doesn't end up being
14:54of any reasonable quality.
14:57So, and they've been getting away with it, you know, I'm surprised a lot of these people don't just not
15:04pay their bills and not sell out anyway.
15:07I don't understand, you know, how they have to oblige by these contracts when they've produced a far superior product
15:15than was promised.
15:17But, you know, I guess I know how that works is that the politicians that are involved have been given
15:25bribes.
15:26So they, you know, all that money goes full circle and, and, you know, in some of these smaller countries,
15:33like in Africa, it's going on in some of these smaller countries, you know, they're, they're able to get their
15:39foothold on the beach, so to speak, that way.
15:43Tom, guess how bad is, you know, we can think of bad construction in our country, but from what I'm
15:50gathering, the Chinese construction is a lot worse than what we have, even in the worst circumstances.
15:56Can you tell us about that?
16:00Well, I struggled with our equipment.
16:03You know, we installed flow measurement equipment for measuring air into the furnaces and big coal burners.
16:09And, and we did a lot of that for a long time, still are.
16:13I got a big job from Shanghai electric constructors just this year, or maybe it was late last year, this,
16:22this last fiscal year for us.
16:26But, you know, when I would go do the startups, or when I would have problems, you know, I would
16:31find that the wiring was shoddy, the enclosures were not properly sealed.
16:37And of course, these are very dirty environments where you've got coal dust everywhere and coal dust doesn't, electronics doesn't
16:45like coal dust because coal is conductive.
16:47And so you end up with a lot of problems, especially in today's microelectronics.
16:53So I was, you know, we were operating in a very, very dirty environment.
16:59And, you know, that, that was my experience.
17:01I even, I even flew one time right after New Year's on an emergency to visit a small power plant
17:10called Dingzau Power between Shanghai and Beijing because of some problems on some installations.
17:15And it was easy as I opened up one enclosure and found the wires all laid around in there and
17:22they wasn't properly taped up and they were shorting out electronics.
17:27And, and I had struggled for weeks trying to get these guys just to show me photos of what they
17:32did.
17:33And I could never get everything sent to me that was needed.
17:38So I was going over there regular enough that I said, okay, I'm not going to, they literally wanted me
17:43to make a trip between Christmas and New Year's.
17:45And I said, no, I'll be there right after New Year's and I'll stay two months because that was my
17:49MO.
17:50And, but I went to this power plant and basically got angry at everybody and my, my own field service
17:57people because they were guilty as well, but they were Chinese.
18:01And, you know, they just, their, their culture isn't to do things in a neat and orderly way.
18:07Well, that, that being the case, are they capable of building anything of quality that lasts?
18:17Including military equipment.
18:19It depends on what you want to call last, you know, like I mentioned before, you know, the empire state
18:24building has been up how long?
18:26And I doubt there's any building in China that's going to be up as long as the empire state building
18:31has been up, you know, just because of infrastructure problems, steel problems, cement problems, things like that.
18:39But, but I don't, I don't foresee.
18:42Depends on what you mean by long lasting, you know.
18:45Well, do they have bridges that fall down within a couple of years?
18:49They have a lot of that going on now and you don't hear about it either.
18:53And the fast trains that are, you know, the latest I've been hearing about, and this is just through, you
18:59know, online research and listening to some of the people I know is, you know, a lot of the fast
19:06trains that they built, you know, the support structures for those are not properly founded.
19:12And their foundations are not proper, so they're not flat.
19:15And the fast trains are in a lot of these lines.
19:18If they haven't been abandoned because they weren't profitable and nobody needed them in the first place, they can't run
19:24them fast because they're not flat.
19:26And, and they've had a lot of accidents.
19:31And, and you don't hear about these accidents.
19:33My, my Chinese friends don't even hear about it because it's all suppressed from the news.
19:38And, uh, uh.
19:39Would you ever fly a Chinese airline?
19:42I did a few times.
19:44And looking back on that, it terrifies me.
19:46So, and, uh, I flew China Eastern many times all across China.
19:52That was the way to get around.
19:54And, uh.
19:57Not long before the old slow train days.
19:59I feel like that was the safest thing I ever did over there.
20:02Well, Paul asked the question about, can they build good quality military equipment?
20:11Well, they're good at fireworks.
20:13So I imagine their explosives work really well.
20:15And, uh, uh, but, you know, artillery pieces that are accurate.
20:21I don't, not to any degree like what we do.
20:25And I think we've shown that.
20:27So just recently, I think.
20:29What about their fighter aircraft and their capacities to carry things?
20:33Yeah, their fighter aircrafts are underpowered.
20:36So they, you know, we won't sell them our jet engines because we don't want them to have the proper
20:42power.
20:43And so their, their homegrown engines cannot handle a full load of armaments and a full load of gas at
20:50the same time.
20:51So they have a big problem projecting power of any, of any consequence.
20:56So in 1963, I had a professor tell me that the Chinese had the most powerful army in the world
21:04at 50 yards.
21:08And I don't know that that's changed much.
21:13Uh, I think they, you know, we Vietnam just after that and found out they were the second most powerful
21:19army in Vietnam.
21:20You know, they also did not do well against the Indians.
21:27Rob, you gave an explanation.
21:29Well, here's the point.
21:32We, we get, we, we don't want to get off track.
21:35One of the things we were talking about, and Rob, can you get us, what you've been hearing,
21:40is that there is an effort on the part of, uh, Bongbong Marcos, the president of the Philippines,
21:47to do a joint venture to develop oil fields, offshore oil fields with the Philippines.
21:54Can you tell me what's, what the fuel situation is like?
22:00Yeah.
22:01So the, the, the fuel situation here in the Philippines is pretty severe for Filipinos.
22:08I say that, like, it's pretty bad in California, yet California is not collapsing.
22:14The United States is not collapsing.
22:15We've, we're more resilient.
22:17You know, Americans have bank accounts.
22:20At least some Americans have some savings.
22:23And, uh, I, I think most Americans can absorb these price hikes a little better and a little bit longer.
22:33The Filipinos, a lot like Africans, live day to day.
22:36And, uh, not the billionaires, but, but the 99 percenters who are out there schlepping it every day,
22:43especially those who make a living driving a, driving a bus or, uh, some type of motorcycle taxi
22:50or, or something, some type of Uber taxi, uh, they call them Grab here.
22:56They are extremely affected.
22:59Um, yesterday or two days ago, there was a strike of all the, the jeepney operators.
23:05And a jeepney is an old custom-made bus that was either made of old World War II jeeps
23:14or replicated by the jeep design in this really long, um, uh, bench seat, um, type design.
23:26And, and, and they cost very little money.
23:28They're very colorful.
23:29And a lot of people in this country depend on jeepneys.
23:31Well, they had a strike.
23:33It's the second strike that they've had during this, uh, crisis to show the government,
23:37hey, we can't sustain these massive, uh, hikes and fuel prices.
23:41Well, now you got a huge part of the population that can't make it to work.
23:45Um, and so it's, it's, it's a real political hot button for President Marcos.
23:53And so he tried to, he tried to score a win.
23:56Um, the first thing he did is he, uh, he arranged the purchase of a, uh, a large product, uh,
24:04tanker
24:04at sea, all, all its, uh, all its oil.
24:07And I think, uh, Patron, the, uh, the one, I think the last of the, uh, the, uh, fuel producers
24:16here, um, turned that into whatever fuels they turned it into, but that didn't affect
24:23the price.
24:24Of course, you know, it's still continues to climb.
24:27So there's, uh, there's a lot of panic there.
24:30And then, um, and then President Marcos's administration reached out to Iran and they
24:36said, hey, let's secure the transit, the safe transit of Filipino flag vessels of all
24:41types, uh, through the Strait of Hormuz, uh, please tell us that you won't shoot at us.
24:46Well, that, that agreement was made.
24:48So, um, when was the weather, uh, this is like two days ago, three days ago, maybe.
24:55So, you know, these aren't necessarily measures that are going to, uh, fix.
25:00Things right away, but I would say they're a political win for the president to be able
25:04to say, hey, look, I'm doing something, but it also reopened a conversation that went back
25:12to, I think the end of the Duterte administration or the beginning of the, uh, Marcos administration
25:20must've been Duterte.
25:21Cause I think it was four years ago.
25:22There was a discussion to do a joint, um, project, joint investment or development with
25:29the Chinese, uh, of this oil and gas field.
25:32And that went to hell in a handbasket, uh, probably over West Philippine sea issues or all the other
25:42soft power aggressions, um, perpetrated by the Chinese.
25:46And there are, there's a litany of the, of all the things that the Chinese are doing to
25:51apply pressure to, to bring the Philippines under their, um, their control.
25:58Um, but so what, what, what I'm trying to figure out is, is this a sincere
26:06re-ignition of these talks?
26:09Does Malik and Young, their version of the White House really intend to go down the path
26:16of partnering with, uh, with China, not, not to become allies with China, but kind of like
26:25some non-alignment, just try and stay, you know, walk that narrow gray line between the
26:33United States and, and, and China.
26:36Um, Hey, let's stop all the war rhetoric.
26:39Let's calm things down.
26:41Stop hitting us with water cannons out in the, in the West Philippine sea.
26:45Let's talk about some partnership.
26:47So when you say water cannons, the Chinese are using water cannons on, uh, Filipino fishermen?
26:56Yes.
26:57Yeah.
26:58Okay.
26:59And, and, and other commercial vessels and naval vessels.
27:03Uh, they're really taking it really, they're really pressing it hard.
27:07Tom, uh, what would happen?
27:10What's your estimate that would happen if the Chinese were involved in off in an offshore
27:15drilling, uh, program, would it work?
27:22Well, I think it would work in short term, you know, uh, they'll be able to drill holes
27:28and find oil.
27:29Um, I think in the longterm, you know, the, again, the quality of the materials is subpar.
27:36So I think the lifespan of that oil rig or facility is, is limited.
27:43Uh, and, you know, and in some cases it may never even go online.
27:47I mean, I, I worked at some power plants in Vietnam and, uh, unit one and two were built
27:55by, uh, the, the Chinese circulating fluidized bed boilers.
28:00This is just outside of Da Nang and, uh, I'm sorry, uh, uh, uh, Hanoi just outside of Hanoi
28:08and unit three and four were built by the U S contractors and Foster Wheeler and such.
28:15And, you know, one and two were never, ever started up.
28:18They were abandoned before they were finished due to quality of material and workmanship.
28:23And I guess, piping material problems.
28:26And, and I was there for the startup of unit three and four.
28:31So they have a history of not completing projects.
28:36And, uh, you know, I think, uh, I think it'd be a mistake for the Philippines to get involved
28:42in this, but, but again, it, it might be driven by corruption.
28:45You know, the new Marcos might get a basket of money, you know, to, to agree to do this
28:52and give China a bigger foothold.
28:55Could this be a potential economic, uh, could be an ecological disaster?
28:59Oh, it's for sure.
29:01Going to be that.
29:02So how sure are you?
29:05A hundred percent.
29:07You know, they're already, they're already tearing up those, those, uh, coral reefs and
29:12stuff just to build their islands.
29:14You know, they've destroyed squares, hundreds of square miles, probably of, of coral reef just
29:21to mine the material, to pile that sand, turning coral reefs into sand.
29:28But people think that they're digging up sand.
29:30No, they're grinding up coral reefs and piling them all in one place to build a, a little
29:36mound of, of, of property in the middle of Scarborough Shoals.
29:41And, and that being said, I know Rob will agree with me.
29:44That stuff's not defendable.
29:46The U S will get rid of that in one day because it's not like, you know, Iwo Jima where
29:53you
29:53have an Island with mountainous rocks so that they can hide in it's, it's a sandbar and, uh,
30:00and it's not going to be functional for any lengthy period of time.
30:05Okay.
30:06If there was, what about an, or an ecological problem with an oil spill?
30:13I think it'll be continuous with the leaking piping and things like that.
30:18Okay.
30:19So it won't be, it may not be on a major scale unless they have a severe accident, but, uh,
30:25but they're, they're going to be continuously leaking product.
30:28Yeah.
30:29And will that affect the fishing areas around the Philippines?
30:36Um, you know, oil dissipates pretty good in the saltwater sea, you know, but, uh, but
30:42it's not going to be healthy.
30:44So Rob, what do you think about the fishing areas?
30:47Are they going to be vulnerable?
30:51Rob?
30:52Yeah, well, I, yeah, yes.
30:58Can you hear me?
30:59Paul, we were discussing that, uh, with what's happening with the Strait of Hormuz, that there's
31:07going to be a shift.
31:08If there's a redevelopment, if there's a development of oil resources in the Philippines, could that
31:14be an example of what's going to happen in other parts of the world?
31:18Oh, yes.
31:19I think so.
31:20And what will that do?
31:22I think there'll be a systematic effort to rearrange the logistics of international oil.
31:28And what will that do to the, uh, power and influence of the current, uh, Middle East oil
31:34producing countries?
31:35Well, the Middle East oil producing countries will be okay, assuming they're using the, the,
31:40the alternative routes that get developed.
31:42You want to explain what that, that's about?
31:44Well, it could be, it could be the, you know, the Ambu pipeline, for example.
31:48The most recent thing I heard today is that there might be the incipient, uh, the beginning
31:55of, of discussions between the Saudis and the Israelis for a pipeline from Saudi across
32:00Israel to the Mediterranean.
32:04That would have some other, uh, yeah, it has, it has a number of knock on implications, doesn't
32:10it?
32:10What are the, what are those other implications?
32:12Well, it means, it means a, uh, a significant rapprochement between the Saudis and the Israelis, which
32:20means the Palestinians get thrown under the bus.
32:24Uh, because the Saudis have been the last holdout in the Middle East.
32:27You know, most of the middle, most of the Gulf countries and other Middle East countries
32:30had refused to re-engage Israel, for example, in the Abraham Accords, until a two-state solution
32:37was launched for the Palestinians.
32:41Um, some of them, some of them caved and tossed the Palestinians out of the bus, but the key
32:46actors, the Saudis, did not.
32:48And they had always, and they had said, unless we get at least the beginning of a two-state
32:54solution, uh, you can forget about a rapprochement in Israel.
32:58Meanwhile, they were cuddling up to Iran.
33:00Well, that's over.
33:02Um, and, and, uh, and, and, and so I think, I think what you're going to have is, um, is
33:11a, a renewed effort between the Saudis and the Israelis for a diplomatic, if not a broader
33:18economic and political rapprochement, which means the Palestinians get tossed under the
33:23bus because the Saudis dropped the demand on the two-state front.
33:27Now, considering that the U.S. has basically pushed the Chinese out of Venezuela, and Iran
33:36may become neutralized, and there's going to be more production coming out of Guyana,
33:42what does that do to the Chinese?
33:45What kind of pressure are they going to be under?
33:48Well, it depends on what happens to the Straits.
33:50I mean, if the Straits get open, the Chinese will be okay.
33:54Well, there's still a position of having, uh, the weirdest thing I saw this morning, and
34:00I have no idea what the actual, it was on X, I guess, um, Trump proposed that the Iranians
34:07and the Americans do a joint venture on, and tolling vessels going through the Straits
34:14of Hormuz and share the revenues.
34:16How's that grab you?
34:19Strange.
34:21Yeah.
34:22But the question is, is it true?
34:24And he said it's a beautiful thing, is what he said.
34:27You know, as somebody put it, uh, you don't have to believe everything that Trump says,
34:35but you should listen to it.
34:36You should definitely listen to it, yeah.
34:37The point is, what I see, is that, um, if there is any sort of a normalization and pullback
34:46where Iran becomes less of a recalcitrant, or becomes, let alone becomes no, not a recalcitrant,
34:54particularly if there's a regime change, uh, that puts China in a box, because they'll
34:59be limited as to where they can get oil, and if they're at some point...
35:03Wait a minute, why wouldn't, why wouldn't a reformed Iran sell China oil?
35:09I suppose it might, but it's not going to give them a special deal.
35:13I wouldn't think.
35:15No, especially if we make sure they don't.
35:16They might have a price like everybody else.
35:17Well, the concept here would be, the enemy of my enemy is my friend, and in this particular
35:23case, if Iran is now part of the rest of the civilized world, uh, that puts them at
35:30odds with the Chinese, and then if there's a settle...
35:34They still need money, they've got to sell the oil.
35:37Okay.
35:40That's going to be interesting.
35:41Yeah.
35:42Okay, so...
35:43Go ahead, Rob.
35:44I think the, I think the key will be, um, what the, uh, how things end in this conflict
35:52and what the partnership is with the United States.
35:55I, I think, I think, uh, the current administration has no intention of allowing Iran to do as they
36:04see fit at the end of this.
36:06I don't know what they can leverage.
36:08I don't know what they can actually, uh, enforce.
36:12You talk about the current American administration.
36:15The, the Trump administration, the same guys we're talking about.
36:18Yeah.
36:18Just, uh, I, I, I doubt.
36:20I mean, I, I think that there's a plan on, on, uh, what they intend to enforce.
36:28Realistic or not, I think that's, uh, that's how they see it moving forward.
36:33Telling Iran...
36:34How do you see this working out?
36:35...who they're going to sell to in front of us.
36:36How do you see this working out for the Philippines?
36:40So, um, so one of the things that I, I read today kind of made me feel a little bit
36:47better
36:47about last week's, um, approach to the Chinese saying, hey, let's, let's look at this discussion
36:55and see if this is something that we want to do in conjunction with, with, uh, with China.
37:00The initial response, uh, a day or two later from China was kind of the, um, the strict
37:09parent to the poor student child who wants to go to a ball game, say, well, let's see
37:17what your grades are like in May.
37:19They, they, they actually said, we will determine your seriousness, something to that effect.
37:26And so I thought that was an interesting reply.
37:29One, one, it puts the, uh, it kind of puts China in the higher position and, and Philippines
37:36in the lower position.
37:37Um, it's like when the kid asks one of their parents if they can do X, Y, Z and the
37:42parents
37:42say, yeah, yeah, exactly.
37:45That's exactly the impression I had.
37:47Uh, yeah.
37:48And, uh, and so that, that was within a couple of days.
37:51This was last week.
37:52And then, um, and then this morning I read an article that one of my guys said to me, uh,
37:59that, uh, it, it, it phrased it as we are taking a harder look to see if this is viable.
38:11So it's almost, uh, the, the, the, the, the connection with the Philippines is not the greatest.
38:25The Philippines has stepped back a little bit.
38:28The Philippines has stepped back, um, from on the, that's all possible that President Mark had no intention of engaging
38:38the Chinese on this again.
38:39And, uh, and it could have been.
38:46Tom, from your experience, do you think a joint venture or something along these lines with the Chinese, with almost
38:53anybody is long-term viable?
38:56No.
38:57Why?
38:59When is it?
39:00Because they're not trustworthy.
39:02They don't follow their promises.
39:04And, uh, when has it ever been done?
39:07The only part of the chip is, when has it ever been done?
39:11Yeah.
39:12Paul, has it ever been done successfully to your knowledge?
39:14As far as I know it has not.
39:17So there's no reason to expect it here.
39:20So the, Rob, can you hear us?
39:24I think we're going to chip in for a Starlink satellite connection for Rob.
39:30He needs something.
39:31And this, this happens, he's, he's in different places in the Philippines, sometimes in, uh, the expression in Yiddish would
39:39be Kishnev, which means where God lost his shoes and there is no internet.
39:44Rob?
39:47You're back?
39:49More crudely, we used to call it from Buck Egypt.
39:54So I'm not sure if you, if, if you heard the last bit, uh, before I dropped off, Gary, but
40:00I was saying that it's entirely possible that this, uh, announcement to re-engage with the talk about pursuing a
40:10joint venture in the West Philippine Sea for oil and gas.
40:13It's, it's possible that that was a deception, uh, on the part of the Marcos administration.
40:19It's possible that they really have no intention of going back into the clutches of China, uh, and want to
40:30maintain their, uh, their trajectory and becoming closer with the United States again.
40:34And, and that it's possible that they had just said that for other purposes, like to cause a delay or,
40:42or something.
40:43So, um, and I hope that's the case because the last thing this country needs is to go back into
40:49the, uh, the, the China, um, sphere, so to speak.
40:55Yeah, it might make sense for de-escalating what's going on in the Scarborough Shoals, because I know China has
41:03been escalating what's going on there.
41:05So they're using that as a, Hey, you know, calm down and let's talk about oil expiration.
41:12But, uh, yeah, they, they can't be trusted and they proved it over and over again.
41:18So.
41:19Paul.
41:19You can trust them about as much as you can trust the Iranians.
41:23But yes, Rob.
41:25Yeah.
41:26And that would explain why China would have responded the way they did in this.
41:31Well, let's see, you know, uh, yeah.
41:36So they may have been on.
41:38Here's where I don't agree with something that you said.
41:41You said that the Chinese could buy the oil.
41:43The problem is they're going to have to buy a lot more oil.
41:46And as their consumption goes up and their production doesn't, it puts them at a significant disadvantage.
41:54And their economy already is under stress.
41:57Yeah.
41:58But they still, they need the oil and they can afford it.
42:01For now, maybe.
42:03Right.
42:03Tom, do you think.
42:04They'll still run in a trade surplus.
42:07Tom, do you think.
42:09What?
42:10Go ahead.
42:10Sorry.
42:11No, I'm going to ask you, do you agree with Paul regarding China's economic ability to keep on buying oil
42:17with the producing, if they're not producing enough?
42:21Well, they're also producing a shitload of coal.
42:24Yeah.
42:25And they're also electrifying faster than anybody, any place else in the world.
42:32Are there coal fired power plants working, Tom?
42:37You know, I, I haven't, I mean, they build small ones compared to what we do, 500 megawatts versus we
42:47do like 800 plus megawatt size boilers.
42:52They build those CFBs, circulating fluidized bed boilers, which are, can burn junk coal and burn poor quality fuel.
43:01So they don't have to worry so much about their fuel sources and the quality of their fuel.
43:06So, um, and they are easier to maintain, you know, they're simpler, they're simpler systems.
43:12Um, but, you know, I think the question is how long will each of these plants remain online?
43:18You know, will it get a hundred years?
43:20We've got a hundred years in some of our coal burners.
43:23You know, they've been going through literally a hundred years.
43:27And, and I just don't see these plants lasting that long.
43:32Um, as far as them affording it all, I think that's a, that's a Ponzi scheme of, of finance and
43:42all that, because they're, you know, they are selling to us Westerners, I guess.
43:46But the, the consumption within China, I think is way down, you know, from what I can tell.
43:53I mean, I know my, my business is horrible over there.
43:56Yeah, the consumption in China is way down in their, their, their, their growth is mostly generated from their exports.
44:04Right.
44:05Right.
44:06Uh, which are, which is running foreign exchange.
44:08I mean, they can buy the oil.
44:10But isn't there also a growing issue with that, uh, that they're basically destroying their own water and food supplies?
44:19They're polluting the land and the water and it's going to kill them.
44:24Am I getting that wrong, Tom?
44:26No, it's there.
44:29Uh, I, I heard one statistic that maybe only 50% of the water in China is potable.
44:36So they destroyed a lot of it through pollution issues.
44:41True.
44:42And, uh, and, you know, the pollution is off the charts.
44:46I mean, I used to leave my windows closed or you could watch the dust, uh, you know, build up
44:52on the, on the.
44:53I used to go jogging in the morning in Beijing and I could taste it.
44:58Unbelievable.
44:58Now, why would you do that to yourself?
45:01Well, I was curious, right?
45:03So you could, you could taste it.
45:06But, you know, um, we went through the same thing, you know, and, and Gary, you grew up in the
45:12Chicago area.
45:14People who used to come home from work with their, their, their, their cups and their collars filthy from the
45:19pollution.
45:20Actually, I grew up in New York and I do remember acid rain and all that's gone.
45:27It's a lot cleaner now.
45:29We cleaned it up, but China isn't cleaning it up.
45:32Not yet.
45:32No.
45:33And they probably won't.
45:34It reminds me of Russia.
45:36You know, it reminds me of Russia.
45:39They don't give a shit.
45:42But there's, they also have to, China has to import a lot of things.
45:47They have to import oil.
45:49They have to import food.
45:51So do the Japanese.
45:57Okay.
45:59Interesting.
46:00So where do you, okay.
46:02So let's, let's try and wrap the, do a wrap up on this, uh, Tom, where do you see this
46:09heading regarding, uh, China adjusting to the new oil, the new oil environment?
46:18Gosh, I mean, I'm not an expert on that side.
46:21Um, I mean, it's hard for me to comment on that.
46:29I, I think they're building their coal.
46:32Cause that's a local product, a local source.
46:34They're probably building their coal usage for power, at least, but oil you need for vehicles and other things and
46:42gas, you know, to power your boats, such.
46:45So, um, but I, I don't, I don't know how they're going to get out of that quagmire of their
46:50own making.
46:53So when people protest over here, uh, our pollution, should they be protesting over here, the pollution for China?
47:02And what it's doing to the rest of the world?
47:07Well, yeah, they're a bigger polluter by tenfold, you know, the guys that really get hit with it is Japan
47:14and Korea.
47:15Cause they're getting the dust.
47:17Right.
47:18Yeah.
47:19Uh, Rob, where do you think this is going to wind up?
47:24Sorry.
47:24I, I, I didn't hear what, what Tom said, but, uh, I, the question is, uh, where do you think
47:33this is going to wind up for China?
47:34And how it's going to impact their reactions around the far East?
47:43Uh, well, I, you know, there, we owe us what's going on between, uh, China and Taiwan, what's going on
47:52between China and Philippines and China and Japan.
47:54And all of that's getting worse.
47:57Um, Xi just reached out to Vietnam, uh, trying to improve the relations between China and Vietnam.
48:06And they received him and they were all smiles in the photographs.
48:10Um, but I think now we, we've got Indonesia that, uh, is coming up in the news, uh, uh, where
48:21Indonesia is in conflict with China over the oil exploration attempts.
48:28Um, so now the Chinese Coast Guard is now engaging Indonesia, um, to, um, uh, intimidate, uh, their, uh, attempts
48:43at, uh, energy exploration.
48:45So they're becoming increasingly at odds with all of their neighbors.
48:52Um, I, and I'm not really sure about the, uh, the energy implications.
48:57Uh, I'm, I'm, I'm listening to you guys, uh, on that.
49:01And, uh, I think, I think it shows that China with, with all their collective internal problems is an increasingly
49:09precarious situation.
49:11Um, which I think is good for us in the long run, but I think it's definitely making 20, 28.
49:21Um, what about 20, 28?
49:27They talk about every month seem to be more convincing.
49:31So 20, 28 is the projected timeframe where the U S military has concluded that China will have to come
49:41to the decision that an attack on Taiwan or a, an attack or a soft power, uh, invasion.
49:51Of the Philippines will occur for various reasons.
49:55And, uh, of course, I'm, I'm a believer that the followers of Sun Tzu will not wait until 20, 28.
50:02Uh, so anyway, I think all really try.
50:06Well, like I always say, you'll hear me say this dozens of times on the list of a hundred options,
50:13option number 99 or 100 is invasion.
50:18Uh, if they're, and they're going to make a mathematical decision on this, I'm sure.
50:24Um, uh, it, it, it'll be a conclusion, maybe a begrudging conclusion that yes, they have to invade either Taiwan
50:34or Philippines.
50:35And, uh, probably, uh, option number 100 is invade Taiwan.
50:40Option 99 is go through Philippines, either some, uh, you know, creating a, uh, uh, creating voting conditions favorable to
50:55bring in a pro Chinese, um, uh, president.
50:59Who ousts the United States from the Enhanced Defense Cooperation Act sites and all Bali, Katan, Salak Nib, Masa, other
51:12military exercise that we have here and forces the United States out of the Philippines and allows China to come
51:20in and fill that, that void.
51:24And, uh, um, missiles and, uh, other types of things on the Batanes Island group on the Northern end of
51:33Philippines, then the ability to effectively surround Taiwan and, uh, either hate a, uh, a blockade or the fear of
51:45blockade with the intent to bring about a referendum to bring Taiwan under.
51:52Uh, China.
51:53So, so that is their long-term goal, whether or not they do that militarily or not, we shall see.
52:00But the United States several years ago concluded in their analysis that, uh, 2028 would likely be the year that,
52:11uh, that China would make this, this move.
52:14And the Chinese agreed that they too see that 2028 is the year of conflict, military conflict with the.
52:24Okay, I want to wrap this up with two quick questions.
52:27Number one, uh, with what is going on in Iran.
52:32And so this.
52:35Rob.
52:39Okay, with what is going on in Iran, uh, and how, basically, who do you think, how is China going
52:50to, is China or the U.S. going to come out as the winner?
52:54Tom, what's your, what's your view?
52:58The U.S. always wins.
53:02Rob?
53:03But with the current administration, if we'd have had the other color, we'd be in trouble.
53:10Rob?
53:12Yeah, and, and, and I, I agree with Tom, and that's my concern.
53:16Uh, this could potentially drag out two years.
53:19And if that's the case, um, what is the next administration going to do?
53:27Paul?
53:27Well, I would say if, if, if, if the Iran situation works out okay, and we wind up with a
53:34reasonable regime and a quasi or absolute, or fully open Straits of Hamos, it isn't a question of whether the
53:41Chinese or the Americans win.
53:42We both win.
53:45Okay, and the last question, which is just very simple.
53:48So, with all the tumult and craziness going on, uh, are you optimistic or pessimistic about the future?
53:56Tom, are you optimistic or pessimistic?
53:59I'm optimistic.
54:01Rob?
54:04Are you optimistic or pessimistic about the future?
54:07Same.
54:09Um, I'm very optimistic.
54:12I would say I'm cautiously optimistic because I don't have anything to hang my optimism on.
54:18Um, you know, I mean, I have no idea where the Iran thing is going to go.
54:25Um, if, um, if we've got a negotiation started, we know at the beginning that the Iranian demands were millions
54:34of miles away from what the Americans were willing to offer.
54:37Trump says we have a basis of negotiation.
54:39I find that very hard to accept.
54:42Okay.
54:44With that, I want to say thank you to everybody.
54:47Be well.
54:48Stay safe.
54:49And God bless America.
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