London Paul: Part One – Debt Levels & Instability, The Achilles Heel of the West’s Financial System

Tom welcomes back Paul from the Sirius Report to continue discussing the geopolitical shift from a unipolar world to a multipolar world. Paul highlights the failure of the traditional unipolarity model for economic reasons, particularly since the financial crisis of 2008. The global South wants to assert its autonomy and make its own decisions, which has led to a push for de-dollarization and the development of alternative payment mechanisms. The Ukraine war and the imposition of sanctions on Russia have shown that it is possible to function outside the SWIFT system and conduct transactions in local currencies. The global South also points out that it has a real economy based on manufacturing and production, unlike the West, which is heavily dependent on financialization. The economies of the BRICS countries, in total, are now higher than the G7 economies, further highlighting the shift towards multipolarity. In terms of resources and energy, the conflict in Ukraine highlighted their importance in the world. Russia's resilience in the face of sanctions showed the rest of the world that they could operate outside the dominant Western paradigm. Energy is the lifeblood of nations, and countries like Russia and Iran have vast resources that are essential for the world's energy needs. The global South, with its access to resources and lack of financialization, is in a better position for long-term growth compared to the debt-ridden West. Collaboration and win-win partnerships will be essential for a multipolar world to thrive. Paul also discusses the looming commercial real estate bubble and its slow-burning effect on the economy. The pandemic has led to a decline in demand for commercial real estate, and although the too big to fail banks may not be directly affected, their investments in the shadow banking sector make them vulnerable. The regulators are starting to pay attention, but it may be too little, too late. The Western financial system faces multiple challenges, such as debt levels, deindustrialization, and the instability of the US dollar. Attempting to preserve financialization and the dollar while the real economy suffers is not a sustainable solution. Paul highlights the interconnection between the financial system and the real economy, emphasizing the importance of resources and energy for a sustainable system. He warns against the fudging of financial and economic data, stating that printing money can have inflationary consequences and lead to the implosion of the economy, as seen in Weimar Germany. In contrast, Eastern nations like China are buying gold to preserve wealth and insulate themselves from the US dollar and US Treasuries. China, along with other Eastern countries, focuses on building a real economy and backing their currencies with tangible assets. Understanding these different approaches and perspectives is crucial in recognizing the shift towards a multipolar world. Time Stamp References:0:00 - Introduction0:57 - Complexities & Geopolitics12:10 - Sanctions & Global South17:18 - BRICS & Untapped Resources26:20 - Big Banks & "Assets"35:20 - Dollar System Failing48:06 - West Vs. East Discipline57:28 - Investment in China Talking Points From This Episode - The shift from a unipolar to a multipolar world is driven by the global South's push for autonomy and de-dollarization. - Energy and resources play a vital role in the shift towards multipolarity, benefiting countries with access to these assets. - The Western financial system faces challenges such as a commercial real estate bubble, debt levels, and the unstable US dollar. Guest LinksTwitter: https://twitter.com/thesiriusreportWebsite: https://www.thesiriusreport.