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- [00:00]
A
Foreign. Welcome to American Power. I'm your host, Nat Town, stand up comedian, speech writer, many other kinds of writer, and most politically relevantly, podcast host. I'm here with my favorite panel of experts. Up first, our military expert, Chad Scott.
- [00:30]
B
Hey everyone. Yeah, former U.S. army officer, many years of experience there, graduate of Hopkins. Glad to be here.
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A
And up second, but certainly not second in our hearts. You know him as Mr. Global himself, Matt Randolph, our energy expert.
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C
Hey everybody, Mr. Global here. Forbes contributor, energy expert.
- [00:49]
A
So obviously a lot has happened in the last week. We are currently recording this in the evening of Monday, April 13th and as of now, probably the top of line news item is that the US Is now blocking the Strait of Hormuz. I want to go to Matt, Mr. Global first and talk about how did oil markets respond to this announcement originally and now that it's in practice, how is this affecting oil globally and how is it going to impact us?
- [01:15]
C
Yeah, it's been pretty interesting. So upon the initial announcement by the Trump administration, oil jumped 8 to 9% overnight. It opened up this morning around $105. But then China's defense minister came out and said, you know, bet you're not going to stop our oil. We're gonna, we have an agreement with Iran and we're going to honor our agreements and we're going to continue buying oil. So, you know, China is basically defying Donald Trump at this point, saying they're still going to carry on business as usual. There are three tankers currently docked at Kharg island getting loaded in Iran and those are Chinese tankers. So I guess we'll see what happens when they leave the Strait. But China said, no, we're still going to conduct business as normal. And on that message, oil prices actually fell by a few dollars. So they're still up a little bit today, but I think they're around 99, somewhere around there as time of this recording. But it's been an interesting day to see China come out and say, yeah, we're not, we're not, not doing that. It's not.
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A
Find out.
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C
Yeah, basically, yeah, go see what the consequences be.
- [02:27]
A
So what is, who, who does this benefit right now? I mean, China, I, is, is this a tactical move that's financially helping us in any way?
- [02:39]
C
You know, I, I think the idea initially from the administration was, you know, Iran has the straight closed, they're only allowing oil out that they want. 95% of that is their own. We can starve them out. You know, that's basically what they're trying to do. They're trying to starve out Iran. And but I think what they didn't consider is almost all of that oil that comes out of the straight for Iran is going to two very large nuclear powers. And you know, Chad can talk about the implications of that, but you're basically saying the number two economy in the world, China, doesn't get their oil anymore. And also, oh, by the way, Pakistan, which is China's likely closest ally, I believe, also a nuclear power. No, you can't have your oil. So it's going to be very interesting to see how this actually works because he sort of inadvertently pulled these other two very low. And you know, just to be clear, Pakistan hasn't made an official announcement on this yet, to my knowledge, but he inadvertently pulled these two nuclear powers into this conflict by doing this. So it remains to be seen what will happen. I cannot imagine US Military seizing and capturing a Chinese oil tanker. But this is the Trump administration. You never know what's going to happen. So I guess we'll see what happens.
- [04:07]
A
We are in sort of uncharted territory in terms of what would, what would be too stupid for the federal government for the US to do. Let's chat. Scott, let's talk about this for a second. And I want to go back to the, in a moment to the economic realities of this. But, Chad, what's what happens when we suddenly threaten two nuclear powers to drastically cut off their energy sources and disrupt their economy? How's this looking for us and what do you think of the strategic move?
- [04:34]
B
Well, there, I think there's just a lot of problems that the US Military is going to run into when it comes to blockading this specific area. And if there's any country on earth that can do it, possibly it is the United States. But we're, like you said, in uncharted territory. This is something that the NAV has never had to actually do on, on a scale like this. I mean, what they're doing right now is called a blockade at distance, and that is very hard to execute, especially since the area involved is about 115,000 square miles. It's basically they're trying to police an area the size of the state of Arizona or if you are in Europe, a country the size of Italy. So even if you, even if the US Was able just to narrow that down to the Gulf of Oman as a choke point, is still a very large area, still about the same size as Washington State. So we're talking about two carriers as of right now. The, the USS Abraham Lincoln is The one carrier. You're talking about one carrier as of right now, trying to police an area the size of Arizona. And when that happens, you start to run into a manpower and surveillance problem. And a blockade really only works if you can find the ships, then identify the ships, then classify where they are coming from and where they're going. You can hail them, you can stop them, you can them, you can inspect them, and then you release them, divert them or seize them. There's a lot of steps that go with this.
- [05:58]
A
So, and I'm sorry, just to jump, to reiterate one thing. Did you say one?
- [06:04]
B
One right now? Well, as of right now, well, there's 15 ships. One carrier.
- [06:08]
A
One.
- [06:09]
B
So one carrier.
- [06:10]
A
Okay, 15 ships for an area the size of the state of Arizona.
- [06:14]
B
Yep. And so the, the thing is, is I just don't think that's enough assets to do this. So I don't think this is going to be a true complete blockade. It's probably going to be more partial blockade or really a, hey, if you find a ship and can get to it and grab it, do it. But if you can't, it's just the threat of the US Military's reach. That's where we're at. And at this point, this is assuming that ships kind of abide by what the US Military wants them to do, because you know that, I mean, our ships are slow. Their ships are slow. So if you see a ship off in the distance or pick it up on some sort of surveillance mechanism, a drone or whatever, you still got to get there. And they can alter their course. They can spoof their destination data, they can manipulate their transponders. Hell, if they're at it's at night, they can just go dark, turn off the transponders, turn off their lights, and then operate at night. And it just becomes very difficult to try, to try to blockade at distance when, when you have just this one group. And just from a military standpoint, the US Navy's force structure has not built around conducting a blockade. We didn't really think about having to conduct blockades over the last few decades. So the, we don't have a deep bench of small, fast surface combat ships for inspections. That's what the coast.
- [07:32]
A
We considered building a wall.
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B
Yeah, just a, just a wall seems
- [07:38]
A
like a popular strategy. And you'd have to dig down a little far. What about like in the Revolutionary War across the Hudson River? We just do a big change, just, just longer.
- [07:46]
B
Put the president on the front of a boat pointing, and it'll be A big painting that they can put up in the, in the Smithsonian.
- [07:53]
A
But, oh, sort of like a, like have him be like the mermaid like. Or like pointing across the Delaware.
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B
It'd be like he'd be like the Washington. Well, I mean, he's post. I mean, he's already posted a picture of himself as Jesus. You might as well just do George Washington at this point too.
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C
So.
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B
But I don't know if you saw that.
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A
I have to imagine he's got one of those, at least in the private collection.
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B
Well, no, he posted.
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C
I mean.
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A
Oh, no, I saw, I saw the Jesus Ragnarok healed Jeffrey Epstein suspiciously demonic character behind him, USA dinner plate novelty gas station graphic that he posted.
- [08:24]
B
Yeah, I mean, the thing is, is when you look at the equipment we have, we have the best destroyers in the world. There are what's called Arleigh Burke class guided missile destroyers. They're designed for massive area operations. They're not designed to chase down ships and boats all over the, all over a specific area. They can do it, but it's a very expensive endeavor. And if they're pulling destroyers away from the traditional mission of trying to conduct air defense or missile defense or land attack, when in like 12 days this ceasefire is supposed to end, that mission is going to be split. So the Navy's going to be in the, trying to do this blockade. Those destroyers are going to be chasing down tankers as Trump wants, whereas they should have been dealing with an Iranian threat. And that could be a potential problem.
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A
Well, let me ask an obvious question, or maybe it seems obvious to me. Don't our allies also use the Strait of Hormuz? Are we, let's say there were a potentially successful blockade. Are we not harming our allies as well?
- [09:31]
C
I mean, the US says they're only targeting ships that stop at Iranian ports, right? And that statement in itself really shows how little they understand the situation. If you think back to the movie Casino, towards the end of the movie, Joe Pesci swaps cars like 20 times in parking garages trying to avoid the FBI, right? That's exactly what can happen in the straight of Hormuz. There's hundreds of tankers there and they can do ship to ship transfers. So a ship can load up in an Iranian port, right? And it can literally be transferred to a different ship somewhere else that never touched an Iranian port and sail right out of the strait. Now they should be able to tell which tankers are loaded by how deep they sit in the water. Like that's pretty simple. You know, I'm sure those destroyers that Chad's talking about has that technology. But there's a very slim chance that a ship that actually loads at an Iranian port is going to be the ship that has the oil on it when it leaves the strait. And that's what I'm wondering. Like how are you going to do that? How are you going to manage the ship to ship transfers? Because this is how these dark fleets get this sanctioned oil all over the world. They do ship to ship transfers and they swap the ships and they also do the spoofing and the other stuff Chad talked about. So I don't even know set aside just the massive amount of square miles they're talking about that you know, Chad says they have to cover. But how do you even know what ships have the oil like that were at an Iranian port? Like there may not be a ship that was sitting at an Iranian port. Even leave the strait and they'll think they did something great. So you know, I, it's, it's like that, it's like a giant game of Whack a Mole is what it's going to be. It's going to be an international Whack a Mole game. The international Whack a Mole World Championships is what we're looking at right here.
- [11:22]
A
I mean, I feel like you're describing a Whack a mole machine that's the size of the entire Dave and Busters though. And you're running around with like two mallets. Oh my God, this one's miles away.
- [11:31]
B
We love to hear the term blockade because it seems clean and easy. But first and foremost, I'm imagining a
- [11:36]
A
big wall, a fence, you know, a big chain across the street. Like it's visually appealing.
- [11:40]
B
You think about it. And when we think historically we think about the, the, the blockade or the quarantine that we put around Cuba in the Kennedy area. Well, Iran is not Cuba. Not even remotely close. First and foremost. I mean, first of all, Iran is not an island. Yeah, it's bordered by seven countries and then it has access to Russia and Kazakhstan via the Caspian Sea, which the United States does to because it's landlocked. But it is an enormous body of water and that is why Tehran actually sits on the Caspian Sea, so it can trade with those, those different countries that are tied to it. When you look at it from. And I just don't think that they really thought about this. It just sounded like the, the blockade was just a good idea. I call it the good idea Ferry in the military just came along and Said, ah, we'll just throw blockade out there. It sounds good, but six of Iran's top 10 trading partners are going to be completely unaffected by this blockade due to the fact that they share a border with them. For instance, Turkey is a major trade partner. You have Pakistan, they border it, you have all these countries. And then as Matt talked about China, who's their number one trade partner, is now daring the United States, hey, go ahead and stop us. Russia's in there. And one of the, one of the key partners as you were alluding to, is, is Germany. Germany has a lot of trade with Iran, probably their cars. Are we really going to stop a NATO ally? Are we really going to interdict? And if they decide and say, as the UK has already said, the UK said we will not stop this. We are a sovereign nation conducting. Not that the UK has a lot of trade with Iran anyways, but they're just kind of making a point. If Germany says the same thing, says we're not stopping, are we really going to try to interdict, Are we really going to start shooting rounds over the bow of a German ship, try to, to board it with, with weapons? What an international incident that would cause, what a complete breakdown of the international order. Vladimir Putin, Xi Jinping, the whole gamut of authoritarian leaders would just, that would be their, it's like their birthday. They would love that. Because the, the Iranians really aren't going to be affected when it comes to this, this oil situation, when it comes to trade. Because when you look at the broader impact of their. Only 14% of Iran's total economy runs through the Strait of Hormuz. And I'm talking more than just oil, obviously Iran has agriculture, things like that. 90.
- [14:02]
A
When you're talking about these bordering countries, are you saying that there are like land shipping routes that are. Absolutely so. So a lot of their trade is ship is, is over land. Yeah, necessarily.
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B
Turkey specifically.
- [14:16]
A
So it's not interrupting. We're not putting a massive economic sanction on them or not sanction, but you know, we're not, we're not dealing them massive economic damage because most of their trade is, is above ground or, you know, and two sympathetic bordering nations.
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B
Yeah.
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A
And the Caspian Sea, as you mentioned.
- [14:32]
B
And the thing is, is like not even the Persian Gulf to the, to the west is being blockaded so Iran can run their oil tankers or ships, not that they would, but their trade ships across to say Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates, who's their number three trading partner. They still can do that because The US Is not blockading within the Persian Gulf. So where this is going to hurt Iran is in immediate access to oil cash, which it would impact them. But this is the country that wrote the book on suffering. When it comes to other countries applying sanctions, ghost fleets getting around blockades to the point where Russia in the initial stages of their war with Ukraine went to Iran and said, hey, how do you do this? How do you get around sanctions? How do you get around other ships interdicting you? And Iran taught Russia how to do it. So this is a country that is going to be resilient. And I just don't think the, the, the clock is in favor of the United States when it comes to this, this type of action. I believe we have set ourselves up to either be, escalate to a point where we are in a situation where that is very bad, we're escalating with China, Russia, or worse case scenario, escalating with our own allies over them wanting to get through our blockade or in a few days, maybe when this podcast comes out in two days or a few days after that, we see a rollback of this because they just don't want to deal with the geopolitical fallout.
- [16:03]
A
I mean it puts Trump in an interesting, I mean, interesting as a bad position. Interesting as in self created and bad.
- [16:10]
B
Yeah, absolutely.
- [16:11]
A
I don't understand how he, he, it feels like his options are to back down very publicly and accept a deal with Iran that at least his base doesn't want or to escalate into an all out war. Like, I don't understand what this, this particular move can be beyond escalation because it does seem like you're, you're drawing in other major powers. You're, you're attempting to, you know, extract this out of Iran ineffectively. It doesn't seem like this is going to accomplish what he wants. So it feels like his options, he's bluffed. His options are to back down and have it used against, effectively to, to escalate to maybe ground troops. I mean, I'm speculating here but, but I, I'm curious, like what do you think about this? Like what are, what are next steps here? Like what can we do? Because, because it feels like he's, he's really wedged himself into a no way out situation.
- [17:05]
C
One thing that this administration, a lot of people in the media honestly continue to miss every single day is a thing called time and distance. Right. So time and distance are very important in our universe. Right. So listen, Iran is still going to be getting money for another eight weeks from the oil they have sitting in the oceans that haven't reached their destination yet. So when you form a blockade, you should understand that for eight, the next eight weeks, which is what, twice as long as this has already lasted, they're still going to be getting money. So if your goal is to starve them out, that doesn't even begin for two months.
- [17:48]
A
So that oil is already on its way. They're going to get profit from that.
- [17:51]
C
That's how long it takes for oil to get around the world. People don't realize, like, there are countries that are just now getting the last shipments of oil that left the Strait of Hormuz the day before it was closed. And it's what, April, the what, 1314. And they're just now getting it. That that happened February 28th. And these countries are just now getting their oil. So anything that Iran has sent out of the Strait hasn't even reached its destination yet. And that's when they get paid. They get paid on delivery. So for eight more weeks, Iran's getting paid. Not only are they getting paid, but they're getting paid hundreds and hundreds of millions of more dollars because we lifted their sanctions. So they weren't selling that oil for 60, they were selling it for 110. So they're getting nearly twice as much money as they were. So this entire blockade, I, unless they're considering that is useless for a couple of months. It is completely useless for a couple of months.
- [18:50]
A
But meanwhile, all of the other effects will be felt for those two months that affect us negatively. Like we're waiting to start them out, but it won't. It hasn't started yet. Like, it effectively has not started yet for them. Plus, like you said, they lifted the sanctions. So like now this is almost a enviable situation for them because now they're selling at a higher profit. And that.
- [19:08]
C
Yeah, but the first ship that we stop, yeah, the Bob El Mandeb Straight, is closed. Like, there hasn't come anything. Nothing has come out today about the Bob El Mandeb Straight. But I guarantee you the first ship that gets stopped coming out of the straight of Hormuz, the Babel Mandeb Straight, will be closed immediately by the Houthis. It's just gonna happen. Like they've, the Houthis said they were going to do it. Iran came back later and said, yes, we're going to help them do it. So that straight will be closed.
- [19:35]
A
So wait, explain that to the listeners, though. Like, what's the what, what's the political calculation there, like, why is that? What triggers the Houthis to close the Bob El Mandam Strait?
- [19:45]
C
Because it inflicts more economic pain on the world. Like 10, 12% of all global trade goes through that strait. A significant amount of oil, but I'm talking about all trade. Grain, fertilizer, just anything in the world that can be shipped. Now, when most people. Yeah, most people think of stuff coming out of it, but most of the stuff goes through it. It's a huge shortcut. So you don't have to go around the Cape of Good Hope in Africa. People go into. Into the Red Sea, go through the Suez Canal, and that's how they get to Europe and the east coast of the United States. When you close that off, you add two weeks to every delivery of cargo that heads in that direction in the entire world, and that causes shortages on shelves, that causes price spikes. So it'll be a huge pain point and choke point when they close that. So almost every arrow points towards more escalation by this blockade that literally doesn't do anything to Iran for two more months. That. This is what doesn't make any sense to me at all about the blockade. Because unless you're willing to have the Strait of Hormuz closed for two more months and the Bob El Mandeb straight closed, like that is a huge impact on the global economy. That's when you're looking at global recessions. And that's how.
- [21:02]
A
When they say Trump is playing 5D chess, what they mean is that time and distance mean nothing to him. He's tesseracting to the moment of impact.
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C
Yeah. Plus there's not even 5Ds. I don't know where they come up with 5D chess. Like, there's only 4Ds. Right.
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A
There are theoretical dimensions.
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C
And then when they say he's playing 3D chess, I'm like, dude, that's just regular chess. Like, that's the chess we all play.
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A
I guess it's kind of 2D. But he's also not even good at 2D chess. Let's not pretend for a moment that there's another dimension to go through. Say that again.
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C
Is that your MacBook chess, where you're just looking at a flat screen?
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A
Yeah, that's what I'm saying. If you're playing online, you know, leechess.com, your Internet chess. I don't think he has an account.
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B
Podcast. Le Ch.
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A
I'm sorry. No, Lee, chess is open source. We're not. They're not a profit no way that dude plays chess.
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C
There's no way Donald Trump plays chess. It's not a thing. It can't be a thing.
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A
No, I even, even, I mean, he doesn't, he doesn't play any game. He can't win by cheating, first of all. So golf. And that's about it. So.
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B
Well, and the funny thing is you both brought up time and that's, it makes, it makes this really complex for the United States because the military authorization for use of the authorization for use of military forces, which is vaguely what Trump is using to, to conduct operations not only in Iran, but also Venezuela, by just declaring him a terrorist organization that doesn't cover a blockade, period. End of story. So a blockade, the authorization for use of use of military forces was supposed to be to go after the perpetrators of 9, 11, et cetera, et cetera. They were never a nation state, so you can't blockade a terrorist group. But right now we're running into the ceiling of the War powers Act. About 16 days from now, we'll run into the 60 day mandated war powers act ceiling where Trump has to actually physically request to continue this war from Congress.
- [23:00]
A
He gets. Does that matter? I mean, I hate to say it, but it does seem like presidents don't have to respect that.
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B
And that's the thing is like, will Congress do anything about it?
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A
Right.
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B
We don't know. He gets an extra 30 days for withdrawal time, quote, unquote. But it's if, if we, doesn't that
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A
require Mike Johnson to introduce something?
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B
Yeah.
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A
So, like, what are the odds that, that that happens?
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B
Yeah, exactly. There's, there's, it's virtually zero. And so that. It's funny because I think Iran keeps seeing these time gates that we used to hold ourselves to, and Trump just keeps blowing through as if the law, the rule of law, the Constitution, etc, don't matter. And they still keep applying pressure and it keeps working. But I do have, I do have a question for Matt though. When it comes to the oil futures, I'm not a, I don't know what I'm looking at, but it seems like every time Trump tweets something, they go wild or something. And I'm like, you'd think that they would have already kind of figured that into the system. Like, why, why is it that oil futures are just wildly changing based on the, the comments of someone who clearly is, is struggling to understand how the world works? Is it, does it not matter because the real prices of oil stay stable? Or is it, or am I just watching and curious we don't have any
- [24:16]
C
evidence or we don't have any hard evidence, but a lot of people believe that the US Treasury, Scott beset, is manipulating oil futures and using taxpayer dollars to do that. And if that's true, taxpayers are going to lose a fortune. But people that, that run in my circles and do what I do, we don't even really look at the oil futures anymore. Now we just look at the physical market because they're so detached from one another that when you're looking at oil futures, you know, that's when you Google the price of oil, it, what it says does not matter because it's not.
- [24:48]
A
You track more though, right? Like it used to be a better indicator and now it's more chaotic.
- [24:52]
C
So historically, physical oil and oil futures stay within a dollar of each other. Historically, you can go back how many years? 50 years that within a dollar, sometimes a dollar 50 if they get to $2 apart. That's crazy. They're over $30 apart right now. And that's because the futures market is so manipulated. There's so much money flowing into it betting on shorts, betting on longs, just betting on whatever they can bet at the time to keep that psychological number under $100. Because people lose their shit when oil hits that hundred dollars. Right? It's just like the difference between 399 gas and 409 gas. People lose it when they see that.
- [25:32]
A
For how would that of the Federal Reserve, like specifically, you're saying he's using taxpayer dollars hypothetically to manipulate the futures prices. What's the practice there? How does that work?
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C
It's not supposed to happen. It's not supposed to work. But we have an administration, it's the U.S. treasury, like that's where all the money is. I mean, Scott Besson can literally go write a check like out of the U. S. Treasury. So, you know, they have accounts set up and they have authorization. It's just something they're not supposed to do.
- [26:01]
A
And it's that simple.
- [26:02]
C
When you don't have anyone to stop you from doing anything you want, I mean, they just go do it. And that's the problem, is we have no way to track this to see if it's actually happening. But there's never been a time in history where the futures market, the paper oil market, didn't track with the physical oil market. The physical oil market is the only thing that matters. And so if people are spending $140 a barrel for physical oil delivery, it does not matter one bit what you can trade oil for in a paper market, it matters what's it's being bought for physically because that's what refiners pay. And that translates back down.
- [26:44]
A
To reiterate, the physical price is the actual price at point of sale of purchasing oil that has been shipped.
- [26:51]
C
Yeah, if you want to go buy a million barrels of oil, it's $140 a barrel. If you want to buy contract futures on the paper market, it's like $99 a barrel. That don't mean nothing. That's just pieces of paper. Like it's, it's fugazi.
- [27:03]
A
99 sounds a lot less than 100, man.
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C
It's fugazi. You know, you've heard fugazi, right? It's fugazi. But the physical oil, that's the real actual oil that impacts us so.
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B
Well, I have, it also has, I have concerns about the Strategic Petroleum Reserve here because it's down to something like 55% of what it was. I know that the United States doesn't necessarily have to worry about it as much because we produce quite a bit of oil, but that's one of those freak me out numbers. Kind of like the 3.99 to $4.09 oil. When I start seeing from a military logistics perspective our oil reserves, I start really under. I start thinking about all the, the pol. The petroleum oil and lubricants that all of our military equipment on. And so when I see that we're in order to stabilize a market trying to create or trying to pull from the strategic reserve to loan, quote, unquote, loan, we'll see if it's really a loan to these oil companies, I get concerned. So I just, I don't know, maybe you could alleviate my fears there or more than likely probably just validate them.
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C
So, so the good news about that is, and look, I was, I was very critical of this loan. You know, it's called an exchange. You know, typically when you release oil out of the strategic, strategic reserve for a global disruption, you sell the oil. That's how you get it out the fastest. That's how you have the biggest impact on oil prices. An exchange, which is what we're doing here, is typically what happens. Let's say a hurricane hits a single refinery on the Gulf coast and they're having a hard time getting oil and the SPR gives them 3 million barrels and then that refinery gives them back, you know, the 3 million barrels plus a premium of barrels, usually 15% or whatever. We've never done an exchange on a global scale and I was very critical of it and for very good reason. The oil companies aren't even wanting to take this oil. We haven't been able, we haven't been able to give away just a fraction of what we've been trying to give away. We just offered 30 million and I think we got rid of 7 or 8. And that's because oil is really high. And if, if we loan an oil company a million barrels and they put a 20% premium on it. Right. So they have to give us back 20% more barrels than we give them. Well, when oil is really high and there's, there's no forward looking, there's nothing looking forward that makes them believe that oil is going to be really cheap in the future, which is how they would offset that premium. They don't want the oil because they're, they're taking oil that's, that's worth a hundred dollars. And as far as they're concerned, if it's still at $100 when they have to give it back, they've just lost a fortune.
- [29:48]
A
Right. So why would you accept it at this current rate when, when you're essentially going to be paying interest?
- [29:52]
C
Yeah, they're not.
- [29:53]
A
If it's going to stay, if the prices are going to stay high instead of dropping, you're just going to be paying more when you eventually have the transaction. Right?
- [30:00]
C
Yeah. They have to believe that oil will fall by more than the premium. Right. So if the premium is 20%, then oil prices have to fall by more than 20% by the time they have to give it back. They don't see that happening. So they're not taking, you know, there are some takers, but at this point we're having a hard time giving the stuff away because they don't want to have to give it back to us.
- [30:21]
A
How does Israel feel about all this? Is this affecting them? Is this helping them?
- [30:26]
B
Well, largely they, so it's kind of this interesting relationship where originally when it came to the cease fire deal, they were, they were extraordinarily upset. They have a completely different set of goals than the United States does. They want a complete regime change. They want a fracturing of Iran, they want to see Iran completely decimated to the point where they're not even a player in the Middle East. That for the rest of the world is enormously problematic because it becomes, if we remember we had civil wars in Syria, civil war in Iraq, and those led to massive amounts of terrorist growth, terrorist cells. It was basically the formation of, of isis, the Islamic State, you Mean to
- [31:08]
A
tell me that trying to institute regime change in the Middle east has not gone well.
- [31:13]
B
No. Yeah. And so, yeah, they, it's, it's kind of funny. Sorry.
- [31:17]
A
It's the first time hearing this. It's just.
- [31:19]
B
Yeah.
- [31:19]
A
I'm just playing over the last 25 years of foreign policy and seeing if I can think of any examples.
- [31:24]
B
Yeah, yeah. Who, who would have thought that we do terrible things in the Middle east and the Taliban would once again be empowered.
- [31:32]
A
Yeah. A five year old sees someone die and somehow he's not rational about the geopolitical circumstances of it. He just wants to get back at the person who did it. That's crazy. I can't believe that didn't work out well.
- [31:40]
B
And the thing is, like, Israel, because of the pivot, because of the, the failure of the talks, the failure of, so far, this ceasefire, which was never, let's be honest, it was never a ceasefire. Everyone was still shooting at each other. The only one that was not shooting at anyone was the United States.
- [31:54]
A
So basically, Israel historically does not respect ceasefires. They kept attacking Gaza civilian population after they signed a ceasefire.
- [32:02]
B
Within 90 minutes, both Israel and Iran had attacked someone else. It was. Israel had attacked Lebanon and Iran had attacked Oman and Bahrain. So it was like within, within 90 minutes of the, the tweet from Donald Trump. The, the ceasefire was effectively broken.
- [32:18]
A
But also, I don't want to brush past that attack on Lebanon. That was horrific. It was massive, innocent Israel. We're brushing over this like it's a retaliation. I mean, this is a, this is a major, you know, this is an event, a historic event in Lebanon. And it's like, oh, this is just like an exchange, you know, I don't want to compare it to, you know, a different tragedy. I hate when people play tragedy currency. But I, you know, I feel like we, like, the way the media has been handling that is like, oh, another mishap in Trump's oopsies. And like, this is, this is a moment in history now.
- [32:48]
C
No.
- [32:48]
A
Yeah.
- [32:48]
B
The Israel strike on Lebanon right after the ceasefire went into existence was the largest Israel had ever conducted against Lebanon in history. And it was almost like a middle finger to Trump. Like, this is what we think of your ceasefire. We're going to just deal with it. And so Israel once again is happy with the Trump administration because they know that this blockade is going to exert pressure on the regime. And so they want regime collapse. They want the entire country to collapse. And so Israel is very pleased right now. We'll see what happens in four Days because the, the Trump administration ebbs and flows kind of indifferent to Israel for the most part, but Israel is still in his ear. They're still chirping like, hey, this is probably a better idea than a deal. And even if a deal starts to get made, they undermine that deal by starting a war. And so, yeah, it's just a very.
- [33:40]
A
And it frustrates all of them that we won't change anything. I mean, when we're directly funding them in Gaza even, and they violated the ceasefire or any, you know, any stepping over, oh, we're not going to bomb this. Okay, well then they bomb that area. You know, any agreement like that, whether or not it was a literal ceasefire, the US has very explicitly, not only over Trump, but under Biden, taught them that we will write the blank check, you know, that we will not stop them. Well, not just will we write the blank check, but we won't stop them from crossing a line. Any parameters we put up, Israel just steps right over. And, you know, I mean, even, even though the, you know, it's a thing that I feel like legacy media gets wrong a lot. I'm not anti mainstream media, but I've seen so much coverage of that. And, you know, you'll see coverage like Israel tests ceasefire by bombing hospital or something like that. That's not a test, that's a violation. But the, I mean, the US Media doesn't even treat it like they, you know, of course, if, you know, someone from Gaza throws a rock at someone, it's like, you know, terrorist attacks, Israeli brave Israeli soldiers. But of course, if Israel kills, you know, a civilian population, they'll be like, you know, Israel tests technical limit of ceasefire in, you know, in targeted attack. And so I feel like we both culturally and, and geopolitically taught them, I mean, not the whole world's not doing this, but we've kind of taught them that there's no, there's no consequences to that. So I'm curious, like, how does how does this affect NATO? I feel like we're challenging so many of our allies right now. We're causing chaos in the region, which may benefit Israel, but it's got to be chaotic for, like, we mentioned Germany. How does this affect our relationship with NATO?
- [35:12]
B
Well, I would say the data relationship is strained first and foremost because we keep doing overtly anti NATO things like, and Matt can speak to this, lifting the sanctions on Russia, the Russian energy at the same time. And I get that they were trying to do it for market reasons, but that right there, that is A slap in the face of our NATO partners, along with all the other slaps in the face we've had over the Trump administration recently. But I meant, I was wanting to ask Matt, is that actually even doing anything? Is. Is us taking sanctions off Russian oil? Is that actually we feel, would we really have, like, $5 a gallon oil if it wasn't for these Trump capitulating to Putin? I'm just curious what your thoughts on that are.
- [35:52]
C
So really all it is. And listen, I was like today, years old when I learned that they didn't have group texts in the Middle east, because when everyone kept bombing each other, the excuses were like, well, it takes time for the orders to get down to the field level. And I'm like, y' all don't have a group text. Like, seriously, like, because it's been eight hours and you're still following each other. But as far as the Russian sanctions, the only thing that does is it allows countries that might need that oil really badly to go ahead and buy it in American dollars. It doesn't add any oil to the market. It doesn't do anything to oil prices. But if you look at, you know, countries like Ireland and different country countries in Europe and Asia that are. That are currently running really low on oil and, you know, it gives them the opportunity to bid, it doesn't mean they're going to get it, because Russia is going to get the highest price. So what you're trading for that is, you know, some country that's starving for oil gets to bid on it now, but Russia is making a fortune off of that. So I was really happy to see Ukraine step up and say, all right, and just knock out 40% of their export capacity literally overnight after the US did that, like, literally decimated Trump's lifting of sanctions. Like, Ukraine said, we're not doing that. And they just sent the drones and whatever they sent. But they.
- [37:18]
A
Can you explain what actually happened there? Because I think those are details that are not as common in the coverage.
- [37:23]
C
What was Ukraine's response?
- [37:24]
A
More importantly, how was that affecting the.
- [37:27]
C
Russia lifted the sanctions on. Or Trump lifted the sanctions on Russia on Russian oil. And that night, Ukraine struck every Russian export facility and reduced their exports by 40%. So basically, Trump allowed Russia to do something and Ukraine said, no, we're not going to let Russia do that. And they took out their capability of doing it.
- [37:49]
A
So it proportionately decreased their capacity, at least temporarily, to export that oil. Sort of. Sort of offsetting the discount, essentially, or lack of sanction. But, yeah, lack of Fee.
- [37:58]
C
But, yeah, they gave him a big old black guy. I thought it was funny. I thought it was.
- [38:02]
A
So, so it's going to, they can profit more, but only on 60% as many exports, effectively or roughly, because we've, because Ukraine has gone and taken out 40% of their, their ability to export. But that's not permanent. Right? I mean, Russia will, will adapt and rebuild, I'm sure. You know, obviously, Ukraine can continue to remain involved, but is that so? So even so, even if Ukraine has effectively offset the impact of that, does it just remain so now? So now we, we don't even have the, you know, the, the results of it. Does that just look like a big middle finger to NATO? You know, this just, I mean, not that we have. They have any reason to trust Trump at this point, but that feels like a move that solved nothing and violated our agreement.
- [38:46]
C
It's really a big middle finger to Donald Trump. Yeah.
- [38:49]
A
And I'm saying, I'm saying Trump's. I'm sorry. I'm saying Trump lifting the sanctions on Russia was a sort of like, ineffective, like a needless insult to NATO because it didn't even work.
- [39:00]
B
Yeah, no, 100%. And I mean, it just is. It's yet another step in this long history of Trump kind of undermining NATO. I mean, we saw it in between the, the, the fighting and the failed talks, he kind of ramped up the rhetoric against NATO because NATO is not helping Trump at all. And, and there's a reason for it. They're not required to. The NATO alliance is a defensive alliance. The Article 6 states that the focus on the, the defensive aspects of it have to do with a specific geographic region, which is the North Atlantic, and the countries involved in those. And there's historical precedents to where other countries are not supporting other NATO countries in their foolish or often, sometimes necessary endeavors. For, for instance, when you look at the Suez Canal, the Suez crisis, when the United Kingdom and France went after the head of Egypt for trying to nationalize the Suez Canal, it was Nasser at the time. The United States said, we're not getting involved in that whatsoever. And in fact, went to the United nations and rallied against the United Kingdom and France. And it was eerily similar to what is happening now. We're seeing a critical trade straight, a trade point, a trade access route being held up or being controlled by a singular country. So another group of Western allies decide, we're going to open it by force. And other countries are like, we're not doing that. So when Trump sits there and says and complains that other NATO allies aren't helping us in the Strait of Hormuz. There is a historical precedent that that's not why how NATO was designed. So Trump is trying to use the notion that the United States is the, the preeminent power and therefore should control everyone in NATO as an excuse. And it's making him really upset. He's getting really poopy faced about all of this. NATO kind of backing away, kind of keeping out of this fight. But it's necessary and it's a, it keeps the credibility within the alliance. And if we don't.
- [41:12]
A
He's threatened to quit NATO before. Is that, is that, you know, at this point, I don't understand what it would mean to pull out versus just not participating. But is that something that you think would ever really happen, or is it better for him to be involved in NATO and just misbehave?
- [41:28]
B
There's. So there's a couple schools of thought here. First and foremost, there's, it's not he can't pull out of NATO unilaterally. It's. There are. First of all, it's a treaty that was ratified by the Senate. Second of all, in the 2023, the, there's a bill that passed and was signed by the president stating that it requires two thirds of the Senate or the totality of Congress to pull out of NATO. He can't pull out of NATO unilaterally as the president by executive order. That does not mean he can't do some extraordinarily dangerous damage to the alliance. He can do things like cut funding. He can pull out of exercises. He can stop intelligence sharing. He can pull troops to an extent. There is a floor. He can't pull troops below 76,000 in Europe. Otherwise he has to go to Congress and explain why it is necessary to do so. Again, that's a reliance on a Congress that is generally supportive of him right now. But when you look at it on paper, he can't pull out of NATO. I think we're safe in that regard. But he can do extraordinary damage within the alliance, as when it comes to funding, training, any kind of sharing. He can move troops around Europe. Like he can punish specific countries such as Germany. That was kind of a thing that was taking place in the first Trump administration where Germany upset him so he started moving troops to Poland. He can do those things. And the alternate school coming out of Europe is, well, if he's just going to continue to do damage and bully us, maybe it's for the best. If he does just leave. But there's no mechanism to eject a country. We've looked into it for countries like Turkey when they attacked Greece. We've looked at it for Hungary because of their support of Russia. There's no mechanism to eject a country from NATO. So because of that, we're kind of at this impasse where Trump is in NATO. We're not leaving. They can't get rid of us. So it's just trying to mitigate as much damage. And the NATO Secretary General, Mark Ruda, has done an extraordinary job of ego stroking of Trump so that he can. Trump feels good about everything. It's almost like when Tim Cook brings him a fancy new thing. The NATO Secretary General does a great job.
- [43:43]
A
He brings him a fake newspaper.
- [43:45]
B
And that's the thing is it's like, I hate that word.
- [43:47]
A
Tim Apple brings it. But Tim Apple.
- [43:49]
C
Tim Apple.
- [43:50]
B
You said Cook.
- [43:51]
A
Yeah. Zoran Mayer and Tim Apple bring him some toys.
- [43:55]
B
But, yeah, so it's like. So we see. And it's. Mark Ruda is a brilliant tactician and strategic leader, having to debase himself and the European leaders debase himself just so the United States should do something that is strategically good for us. It is good for us to be in NATO. It's just very frustrating.
- [44:15]
C
Just another piece of legislation that was passed just in case Donald Trump was ever president again. I wonder how many pieces of.
- [44:22]
A
You mean to say the. The piece of legislation that says that we need two thirds of the Senate in order.
- [44:26]
C
Yeah. Just because Donald Trump could possibly be the president again and he would try to get out of NATO. Just like they passed the whole January 6th legislation to where that couldn't happen again. It makes me wonder how many.
- [44:40]
A
It's illegal to storm the Capitol now. Well, yeah.
- [44:44]
C
Yeah. But I mean, what does that say about you if on your time off, basically, Congress is just passing legislation in case you come back.
- [44:52]
A
Like, honestly, I wish we had done more of that. A lot of things that I wish were future proofed right now, they didn't. Oh, it's actually illegal to roll back climate stipends. It's also illegal to talk for more than 18 minutes a day on television. It's also.
- [45:08]
C
Yeah. Why didn't I pass the you can't be a felon and be president legislation? Why didn't they pass that?
- [45:14]
B
And like I said, it'll be another episode. But I could go down.
- [45:16]
A
Fair question.
- [45:17]
B
I could go down the whole rabbit hole of how stupid it is for the United States to. To leave NATO. I don't want to do it here because, like I said, that's a, that's a whole nother conversation.
- [45:27]
A
But it sounds also like it's not really what's going to happen. It sounds like he's gonna, we effectively are going to stay in and cause damage.
- [45:35]
B
Yeah. And that's, that's unfortunately, that damage is real. It will be a very damaging effect. And again, Putin loves that. That's what Putin wants. He wants that to be shattered, that whole alliance to be degraded so he can have more carte blanche to do whatever he wants around the world because we're the only counter to him.
- [45:55]
A
And on that cheerful note, I'd like to go to a segment that we call the Least Worst Part of the Week. Chad, what was the least worst story you heard all week?
- [46:03]
B
Well, actually, I think this is more than the least worth. I think this is an amazing story. The Hungarian people have stood up and they, they voted out Viktor Orban, who has been a stooge to Vladimir Putin and Donald Trump. He's been a part of that, that blockade of policy to help Ukraine. But also he's just, generally has this illiberal sense about him and he talks about it himself where he's like, I want an illiberal democracy. I, he, he borderlines on a autocracy. He has fed intelligence to Putin. He had his, his whole political existence was on trying to stay in power through gerrymandering, through control of the courts, control the media, basically things that we're seeing Donald Trump do. And the Hungarian people stood up and crushed him. They won something like 135 or 136. I can't remember what the final number was out of 199seats, which means he has a super majority and he can effectively start to change and undo things that Victor Orban did.
- [47:06]
C
Amazing.
- [47:06]
B
And, and the, the people of Hungary are going to see amazing gains here and more importantly for the American people. We watched once again, JD Vance fly to a country and, and try to stump, try to campaign for the, the potential autocrat. We saw this in Germany and it blew up in his face. He did that again here in, in Hungary and it failed. JD Vance campaigned for Orban and Orban lost in a landslide. And I'm really happy because I feel like this, there's this fatigue of corruption. People are just tired of corrupt autocracies. For a while there, it was going the wrong direction, but now we see small uprisings in Russia. We saw Canada push back against Trump with their election, and it's only a matter of time before we start to see other, the other pseudo autocratic leaders such as Robert Fico in Slovakia or Recep Erdogan in Turkey, they may start to fall as well. And that Hungary thing might have been one of the dominoes that fell that could tilt us more into a better, more democratic society. And it's an amazing story.
- [48:15]
A
Yeah. And Orban, I mean, he was in power for what, 15, 16 years.
- [48:18]
B
16 years.
- [48:18]
A
16 years. So in a lot of ways, it doesn't predate Erdogan's political career in some cases, some of these. But he is in many ways a blueprint for a lot of this new far right illiberal autocracy. You know, this sort of 1984 ish Trump pivoting on facts and the sort of like constant emotionalization of the political process. And I think a lot of people, you know, he's been in power long enough. It hasn't been that long, but he's been power long enough to be a blueprint for some of those other leaders. So I think what you're saying is really relevant that, like, not only is this good for the people of Hungary, but it is also something of a mirror to other countries. You know, not only can these people be defeated, but hopefully, like you said, in the next, next year we'll also see, hey, here's the actual improvements that can be made to a society when someone who's not, you know, openly autocratic is, is at the reins. And I think, you know, ultimately people do respond to good news, you know, in terms of like, this is possible. But also, you know, the, obviously the improvement of material conditions. A lot of the reason that these autocrats stay in power is because they claim that they're better for people. And if, you know, Hungary is doing far better economically and quality of life in a year after Orban's out of office, that go that's, you know, that blueprint shows for other parts of Europe and other countries around the world, not just Hungary. I think that, I think you're right, that that's like a really important step forward. Well, congratulations to the people of Hungary and Victor Orban. No, congratulations to you. I hope you disappear forever. Mr. Global. You got at least worst story of the week for us.
- [49:50]
C
I've got two, actually. Oh, wow. I think they're huge hit me. So the first one for unapologetic independence like myself, Dave Chappelle, considering returning to the Chappelle show, which would be nice to actually have a comedian back in the spotlight that's not afraid of being canceled, but an even bigger story. I don't know if you guys heard this, but they're going to track down and get rid of Pablo Escobar's killer hippopotamuses. So I don't know if you guys knew this, but Pablo Escobar apparently had a bunch of killer hippopotamuses that roamed the country and, and hurt a lot of people. I don't know if they had lasers attached to their foreheads like Dr. Evil, but the country of Colombia has decided we gotta do something about these hippos. Like, they're still hurting people. There's somewhere between 80 and 100 of them roaming the country. They're very aggressive. I don't know if they were on the stuff, you know, I don't know how they got.
- [50:48]
A
An unaltered hippo is dangerous. You know, I don't know. I don't know who's training them. But you know, if it's like a dog fights kind of situation, if they're raised to be raised. But hippos are. Hippos are dangerous. They're. They're just because they're comical looking animals, we assume that they're. Because they're so round. No, they're vicious.
- [51:05]
C
They're very fast too. Like you need to have a melon or something to throw in their mouth when they come at you. But congratulations, you know, to the people, the fine people of Colombia who will no longer have to worry about the killer hippos that are roaming the country.
- [51:18]
B
So wait a minute. Is it, is it, is it hippopotamuses or are we hippopotami? Is it. What is it? What is the plural?
- [51:25]
A
I don't think hippopotamus actually comes through Latin. I think it's hippopotamuses. Like, you know how people say octopi? It's not octopus. Doesn't come from Latin. It just ends with us. It comes through Greek. So it should be octopodus or something like that.
- [51:38]
C
I think he called them I hippos. Yeah, I think he called them I hippos.
- [51:44]
A
Well, I'm very happy to hear that they exist and also are going to be reigned in. I will say, Matt, there's a lot of comedians out there who are not afraid to be canceled, Nat Town included. I'm not a huge Chappelle fan due to his virulent transphobia, but he is great on civil rights. I wish he could apply it to queer people. But I think that if you looked out there and you want to find comedians who are unafraid of being canceled. That's pretty much all of them. You'll find some. Some guys of the right who are constantly saying, don't cancel me, don't cancel me. But I think you can find a lot of standup comedians out there who are saying what they mean. So I would. If you want, I'll send you a few links. And if you're a listener to this podcast, I probably won't send you a few links, but, you know, do some Googling.
- [52:26]
C
I've been canceled by everybody.
- [52:28]
A
So, like, canceling is not a thing, only consequences.
- [52:30]
C
I don't even notice it anyway.
- [52:31]
A
Yeah, I'm not big on it. This is. This is what it's come down to. Canceling is a thing that comedians say when they said something bigoted without a punchline and then got mad that people were upset about it. This has been American Power from Find Out Media. I'm Nat Town for Chad Scott and Matt Randolph. We'll see you next week. And remember, power corrupts, but American power corrupts Americanly.