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- [00:00]
A
And the rules of the game was that you had to keep purchasing U.S. treasuries and U.S. treasuries became the collateral of the world. Next we had Uniparty because the Soviet Union collapsed. So then we had the dominant US Petrodollar military industrial complex. But what happened at this time, because there was no constraint on debt, the financial industrial complex became the dominant force in that world which led to the creation of BlackRock, State Street Vanguard as the new, more decentralized Dutch East India Company and British East India Company. And through financialization, securitization, globalization, they were able to control all the corporate interest and manage through lobby financing and bond vigilantism, the transfer of wealth into the equity markets. We're now at the asset stripping phase at the end of that cycle which I think is socializing losses and privatizing gains. Started with Long Term Capital Management, then the global financial crisis. We also before that had the dot com boom and bust. The bailout of private equity, the bailout of retail banking, the bailout of the hedge funds, investment banking. And then we had operations like Covid, the fake war on Terror to justify the military expansion and just real, real concentration of wealth upwards. Now I'd say the closure of the Strait of the Hormuz is the end of the Petrodollar system. The deconstruction of OPEC creating global financial centers in uae, Hong Kong, Switzerland like and really pushing this model of military, financial and technical into multipolar layers around the world.
- [02:08]
B
Hey everyone, my name is Anthony Fatsis and welcome to another episode of the World of Finance podcast. On this episode I have the pleasure of welcoming on Simon Dixon. The global financial system is being rewired in real time. The Iran conflict, the fracturing of the petrodollar and the rise of alternative payment rails across the BRICS block are not separate stories, they are one story and most investors are still only looking at the headlines. My guest today argues that we must reframe the current global instability not as failure of the system, but as a system working exactly as it was designed to function. That by following the money we begin to see how governments have become mere balance sheets and citizens have been transformed into collateral for ruthless game of capital allocation. Simon Dixon is a former investment banker, geopolitical and financial analyst and co founder of bank to the Future which has facilitated over $2.5 billion in investments into more than 100 companies including Coinbase, Kraken and Robinhood. He spent nearly two decades applying a follow the money lens to the forces reshaping the global economy. He isn't here to tell you what the media is saying. He's here to show you where the money is going. Simon, thanks so much for coming on the podcast. There's.
- [03:15]
A
Thanks for having me. Looking forward to it.
- [03:17]
B
Yeah, really looking forward to it. It's the first time we've had the pleasure of having you on the podcast. I've been really interested in, I guess, your perspective on the financial structure of the world, how it's all framed. So you argue that the global instability is not a failure of the system, but the system working exactly as designed. So can you maybe please lay out how the financial system has shaped the world we are in currently, which seems extremely volatile?
- [03:41]
A
Yeah, sure. I think the first thing to understand is that the way that I typically analyze is I ignore the media narrative and I ignore everything that politicians say, and I just focus on monetary flows and incentives. And so whether that be global capital flows, whether that be right down the balance sheet and profit and loss of an individual company, but I find that by following the money, you get a completely opposite view of how people think the world really works. I'd say that we are at a stage of peak centralization and transition. And by that I mean that there is transnational capital that's not aligned with countries. So in the case of the west, collectively, I'd say the number one power is not government, is not politicians. They're captured by what I call a financial industrial complex. Everyone's familiar with the military industrial complex. It's an infrastructure that profits and benefits from war. The incentive means that the design is always to create war and war to never end. It's not a defense budget when you benefit from rebuild contracts, when you can finance it through the bond markets and receive yield, and then you can use it to extract resources and pump stock market valuations accordingly. An example is that if you look at everyone's 401k in America prior to the Iran war and after the Iran war, you'll see that it was stimulative to the US Stock market. Who is making that decision? Well, the politicians are the front decision makers. So everyone's looking at Trump. But I look at who funded Trump, and he was primarily funded by three major complexes. The technical industrial complex, via nodes like Elon Musk, that was the number one backer. So you get the end result of that is I look at their agenda, which is a police and surveillance state that requires a shift away from oil and over to lng, and it requires access to resources for batteries and various Other parts of the AI and robotics infrastructure. The second largest backer of Trump was the Mellon banking dynasty. They tend to be shifting capital at the end of a debt cycle in the US where they're asset stripping the west, but they're moving where the birth rates are, which is Africa, central and south of them, sorry, Southeast Asia. And that means that you have to deal with China. And so in a world where most of these large multinational corporations like Apple and Tesla, they manufacture in China and they sell into the debt consumption market in the US and globally, so you have to create new markets and multipolarity is what the financial industrial complex is looking on its balance sheet, which means asset stripping the west and managing capital outflows into commodity backed markets and markets that have the birth rates. You're seeing that in the relative strength of the S and P relative to other stock markets and currencies. The third agenda of course is how do you manage this transition? Well, you do it through war. And so the military industrial complex was the third largest backer, via Mariam Adelson, which is connected to Israel and Israel I consider a colony of the US war machine for proxy wars in the Middle East. Now the reason that the Middle east is particularly important is because the US dollar post 1971 is propped up by three major constructs. The euro dollar, which is the creation of dollars through bank of Canada, the bank of Japan, the bank of England, the European Central bank and the Swiss Central bank, which is the creation of dollars outside of the Federal Reserve System. And then the Japan carry trade which is effectively propping up the end of the debt cycle of the U.S. treasury market through excessive leverage and hedge funds in Cayman Island. Then the third is the petrodollar. It's interesting that now as a result of this, we're having effectively, I think, the biggest and most significant event that we will experience of our lifetime with the closure of the Strait of Hormuz. One of those is we get a global reset, which is pricing people out of the market, concentration of wealth up to transnational capital. And the second thing is the deconstruction of the petrodollar. UAE left opec, that's half of the petrodollar that is now moving towards a brick de line system. And if you look at everything that Trump has done, he started with Doge, which is pretending that you could pay off the national debt, which you can't. The dollar is debt and so you have to roll over the debt. But that was a data collection exercise for the technical industrial complex. Then what else did he do? He did tariffs that renegotiated everyone to a BRICS aligned world, a Gulf country aligned world, renegotiated and deconstructed everything. The deep state that propped up the dollar as it were through tariff policy. Then he started to weaken the construct of what props up the dollar, the deep state you had the release of Epstein files, things that just attack on the euro dollar virus, NATO relationship, the removal of covert operations through usaid. Everything that propped up the dollar empire. And then finally it culminates in the Iran war as we move to a very unpopular midterm election which will decide decapitate the republicans from any decision making and then they get ready for the next leader for the next couple of years which they're kind of grooming us into at the moment. The closure of the Strait of Hormuz is a major, major event. It resets us into multipolarity, but it also creates the environment through pricing the world out of markets to concentrate wealth upwards. Significantly BlackRock's asset under administration has gone from 12 trillion to 14 trillion. And it's only going up. There's massive outflows of gold from London over to Shanghai. We're having commodity squeezes, pricing events, inflation that structurally bankrupts many small to medium sized businesses. And eventually it will cause civil unrest that can justify the police and surveillance state that's being built through artificial intelligence, social credit scores and programmable money like stablecoins and central bank digital currencies. You could summarize this as a World Economic Forum agenda on steroids and a transition to multipolarity given that the US is at the end of its debt cycle and is at the pure asset stripping phase.
- [11:34]
B
Yeah, thanks so much for laying that out. It's super interesting to hear. And is this something that you mentioned? The shift from I guess the Bresson Woods 1971 off the gold standard to the fiat currency and then after that the petrodollar. Is this where this system began or was it something that was occurring beforehand?
- [11:54]
A
Yeah, no, I mean the dollar system. Effectively I'd say this is a 400 year system. So I'd say it started with the Dutch Empire with the construct of the bond markets, the capital markets, equity markets, the private corporation, the Dutch East India Company and the central bank, the bank of Amsterdam that then led to the British Empire and the exact same construct with the bank of England, the British East India Company. And this system creates a Ponzi scheme as the currency. It means that the currency is created as debt, but the Interest to repay the debt requires assets and the economy to grow at a faster rate than the average cost on the debt. Structurally, it's a Ponzi scheme. The money doesn't exist. It asset strips over time and devalues the currency until eventually the government bails out the whole system and all of the wealth is extracted into the British East India Company or the Dutch East India Company. Now we created a more decentralized version of that when we transitioned to the US Empire, it started really three attempts to install a central bank in America. And then in 1913 you got the Federal Reserve which was the completion of the same system. So what did we get in 1913? We got World War I, which was the massive transfer of gold over from the British Empire, Germany, Russia over to Fort Knox and into the Federal Reserve System. They then use the gold as collateral, confiscated all Americans gold and transition to the Great Depression engineered through a pump and dump cycle at the Fed. That then took us into World War II which was a German resistance against the financial system. Hitler created a labor backed currency, but it was also funded by Wall street as well as the Soviet Union, which was a construct of the Bolshevik Revolution, also funded by Wall Street. And remember, the same person that was on the board and the governor of the Federal Reserve, the Wahlbergs, was also on the Rice bank which led to the creation of the bank for International Settlements. And then after World War II you had the Bretton woods system which was IMF and World bank and the export of dollars. You get the whole world to say stop converting your currency to gold, but you can convert it to dollars and will allow you to exchange your dollars for gold. That led to the Cold War and the endless wars and the forever wars, the expansion of debt and then the bankruptcy. That was the military industrial complex model. America had the largest manufacturing base. It acquired a lot of the innovation from Nazi Germany through the Central Intelligence Agency. And the military companies became the shadow government, the deep State. The CIA was created then. Now what happened over time? Well, America was defaulted on its debt in 71 after experiencing very expensive operation in Vietnam, Korea, the Cold War. So they closed the gold window in 1971 and transitioned to the petrodollar. So that's when you got the assassination of King Faisal, many believed by the CIA. You had the creation of covert operations in Saudi Arabia like the Safari Club after the regime change. And you had the commitment that Saudi would price its oil in dollars and then purchase U.S. treasuries in order to keep the Ponzi scheme rolling over this is when we hit a full decoupling from gold, a full fiat currency standard. And the rules of the game was that you had to keep purchasing U.S. treasuries. And U.S. treasuries became the collateral of the world. Next we had Uniparty because the Soviet Union collapsed. Then we had the dominant US Petrodollar military industrial complex. But what happened at this time, because there was no constraint on debt, the financial industrial complex became the dominant force in that world, which led to the creation of BlackRock, State Street Vanguard as the new, more decentralized Dutch East India Company and British East India Company. And through financialization, securitization, globalization, they were able to control all the corporate interest and manage through lobby financing and bond vigilantism, the transfer of wealth into the equity markets. We're now at the asset stripping phase at the end of that cycle, which I think is socializing losses and privatizing gains. Started with long term capital management, then the global financial crisis. We also before that had the dot com boom and bust. The bailout of private equity, the bailout of retail banking, the bailout of the hedge funds, investment banking. And then we had operations like Covid, the fake war on terror to justify the military expansion and just real, real concentration of wealth upwards. Now I'd say the closure of the Strait of the Hormuz is the end of the petrodollar system. The deconstruction of OPEC creating global financial centers in uae, Hong Kong, Switzerland, like and really pushing this model of military, financial and technical into multipolar layers around the world.
- [18:02]
B
Yeah, super interesting. Thanks for explaining that. And why would, why is that? The case is just that the US has run its course. It's already basically like a company. It's been leveled up to the extreme and it's gone to the point where it can't pay it back. Or are there other reasons sort of to move away from the U.S. yeah,
- [18:19]
A
if you look at a balance sheet, you kind of look at stability, you look at birth rates, you look at indebtedness, you look at where the value is. And if you're managing a global portfolio, you start to hedge when you realize Americans stop having children, the indebtedness level is leading to civil unrest. There's record drug addiction, homelessness, mental illness. There's, you know, it's just hit a stage where it's ripe for color revolution, as it were, which is the tactic that the military has done abroad. And so they're bringing it home. And I think because China rose, there was A few things that happened. America became energy independent, which means it now competes to export energy. And that breaks the petrodollar. China rose as the world's manufacturing base. And so who was buying all of the energy? Well it was China. And so China was buying all of Iran's energy. China was purchasing a significant chunk of all the Gulf countries energy, Russia's energy. And so China was able to create the Petro Yuan, it was able to compete with Swift and Create Sip. So the 110 companies that need to import from China have to do that through the Chinese banking system. Even though they have capital controls. They use nodes like UAE and Hong Kong to transfer gold over to Shanghai because it was the only way of getting Chinese yuan. They then created the Enbridge Central bank digital currency network that plug together uae, Saudi Arabia, China, Hong Kong and Thailand. And so really all of this infrastructure was built in probably a 20 year cycle where you've extracted the majority of what you can. You keep the system going for as long as you can your asset strip and then you use the assets within America, that is artificial intelligence infrastructure, all of the technology, military infrastructure, you use it whilst you can. And so you rent out the US military to get resources from Venezuela and other places. You use the technological innovation to try and create data centers around the world and negotiate new power. And you use the IMF to pivot to alternative currencies to the dollar and you just hedge your bets, you extract what you can from the old. And so when you're ready to flip the switch, you've built an alternative, more profitable multi center architecture that turns out it's more profitable than just relying on one country than that's going into civil unrest where state power could overthrow private corporate power.
- [21:30]
B
Everyone, sorry for interrupting but just wanted to say thank you so much for listening and I hope you're getting amazing value out of this conversation if you are, we really appreciate it. If you could like share and subscribe. It really helps the channel. It means we can continue to get amazing guests like this one. Thanks again and let's get back to the show. Yeah, it's super interesting. I, I've sort of, I have thought about the comparison between I guess China now with its manufacturing powerhouse versus you know, us maybe as you said post World War I. But I haven't thought about the fact that they're now you know, the major energy importer. So that's another, as you said, another reason for there to be a petrodollar where you know, buy, buy with the one and Then those countries can then buy the manufactured products back with the ones. It's basically just a perpetual sort of system. So it's quite interesting.
- [22:14]
A
Yeah, but they, they want to keep their currency weak, which is why they have currency controls, because they want to export. So what they're really doing is they're using currency controls and sanctions in order to create these black markets that lead to the transfer of gold from the west to Shanghai. So if you want to buy Chinese yuan, the only way to do that is via the gold market. So if you've got US dollars, you go to uae, you purchase some gold, that gold can be transported to Shanghai because structurally they recognize that the west has way more paper derivative contracts across London and New York for gold than exist. And they don't play that game. And so there's kind of like two structural rug pulls that the China is setting up. One is that they know that there's not enough paper commodities to match the derivatives. Sorry, there's not real physical commodities to match the paper derivatives. So they know that the central banks can always lend it to bail out the system and paper it over. They know that ETFs create the demand for non physicality because you can get demand through paper. So China's building all of the actual reserves by utilizing sanctions and these black op systems to make sure that they end up with more. The other thing they're doing is they figured out a way of doing artificial intelligence at 90% the capacity of us, but significantly cheaper and with significantly lower energy requirement and infrastructure. And so the second, you know, if you think of the west as in all of the growth last year came from manufacturing data centers for AI and robotics. The entire growth and that required money from the Gulf. But the Gulf money is backed by China. So you can see how transnational capital is setting up these different games. And the second China wants to release, and we saw that with the, with, with Deep Seek that you can just open source your AI and it had a real impact on markets. That was like a beta test. It seems like we're going through a cycle of money printing in the US which will most likely come from this crisis and it will be most likely a bailout of AI infrastructure, which is the entire growth of us right now. And through that bailout of infrastructure there'll be massive Capex investment. Knowing that China at any stage can say, well we can do it a lot cheaper. And that was malinvestment which would, if you look at Deep Seek, it's raising finance at a 45 billion valuation, whereas OpenAI and everything is raising at a trillion plus and they're looking to monetize it. So they need enterprise solutions and subscription solutions, whereas China released it just to improve the productivity. Given that they're having severe demographic decline at the moment. You can see how these games are being kind of set up long term. But there's two major flaws in the system, which means that American policy in the end is controlled by the financial industrial complex which has partnered with the sovereign wealth funds which is backed by China. So transnational capital has the power and politicians are just actors trying to pretend that they're doing things like making America great again. What they're asset stripping for, for real power.
- [26:01]
B
Yeah, it's super interesting as you say, it's all narrative and it's about following the money but behind it. So where does this lead to? As you said, China still has sort of currency controls. They still. So they're not really going to be, you know, I guess the next US in the near term it's going to be more, as you said, these sort of less obvious flows of gold and precious metals and I guess other alternative assets that are going to be main winners. Is that how you see it?
- [26:26]
A
Yeah, multi currency. So gold has already become the world reserve asset in terms of value of central banks holding U.S. treasuries versus gold. Central banks are selling Treasuries but the private demand for Treasuries through institutions is still strong. And so the financial system will use bonds, U.S. treasuries as collateral for as long as they can. And at the same time, if you look at the balance sheet, the actual balance sheet of companies like BlackRock, they're purchasing real assets, commodities, real estate. And also so what I think we move into is a world of pricing in dollars but settling in foreign currencies. So currency wars, multiple currencies. In the central banking side, gold is a world reserve asset, but also a transition to a digital police and surveillance state through private stablecoins in the case of US which is to extract value and build out programmable money. Central bank digital currencies connected together to circumvent those swift control grids and US control grids. And so that kind of plays into a bitcoin play, which I think many of your listeners don't see the value in. But if you look at what's happening around the world right now, anyone settling in crypto is just a scam. Anyone settling in stablecoins is getting a freeze function. Anyone settling in central bank digital currencies is signing up for a police and surveillance state. But bitcoin is being used by the elites and wealthy a bit like they use the British use the islands, you know when the, the crown dependency islands like Cayman Islands and Isle of man and everything else and Jersey, Guernsey as an escape valve for elites. And so if you look at what was confiscated from Iran, they started accepting payments in bitcoin and that wasn't confiscated but all their stable coins were frozen and, and all of these crypto scam defi contracts started reversing chains upon the request of governments contacting foundations. So on the digital side you got digital scarcity with bitcoin. On the central banking side, gold as world reserve asset grids, new grids for all fiat currencies turning into central bank digital currencies, privatized technocracies through stable coins and dollar still pricing everything but increasingly settling through gold networks, oil networks, commodity networks, bitcoin networks and just you know, hard neutral assets.
- [29:20]
B
Yeah, it makes a lot of sense. And then that's as you said, that sort of, I guess surveillance state, surveillance currency that we occur that will then lead to this multipolarity that you're talking about because they're basically probably going to lock half the world out because of sanctions because they're not doing things that they want them to do. And that's where these other systems come into play. Is that sort of how you see it?
- [29:41]
A
Yeah. So Bitcoin's the only system that you, you know, it's run by the largest decentralized distributed supercomputer, it's open source code and it's got 25,000 node operators that enforce the rules. And so at over a trillion dollars market cap, it's been proven that you can't confiscate and you can't co opt it. So it's being used by individuals really that want to escape the system and exit the system. And if, or if we are going to have structural unemployment, which to me people debate whether artificial intelligence and robotics creates new opportunity like other technology. I think it takes a lot of jobs and I think that in that world you need to figure out if we're concentrating wealth into a few companies, those that control the AI and robotics. The S&P 500 is about 45% Magnificent Seven companies. Now if we're moving to that world where a few companies rule the west and you have a CCP as the only government that's like able to work without this large multinational corporate control, then you have a concentrated financial and technical complex, you have the CCP and then you have a bunch of people that negotiate around those grids. What do you do with all the unemployment? Well, the only answer that I can come up with is a universal basic income which is enforced through social credit scores, programmable money and artificial intelligence. And if you don't like it, look at what they beta tested in Gaza, Ukraine, the West bank. They beta tested in uk it's all Palantir. So Palantir is the new pre crime integrated with drones, robotics, social credit score scraping data in order to profit in a subscription model from any tensions that result in this transition.
- [31:55]
B
Yeah, going back to the AI and sort of jobs, that's one thing I've been thinking about where actual countries that historically you'd say their economic prospects are negative because their demographics are worsening and aging. You'd actually say probably in an AI world where there aren't many jobs, you want more older people who are retired and who can live off their wealth first. Younger people who are unemployed and potentially causing societal anarchy basically. So almost these. It's always a flip on demographics and what's actually beneficial for a country.
- [32:27]
A
Yeah. And you need to make up the consumption somewhere. So you need to give those elderly people some universal basic income. The people that don't own the assets, which is increasingly more this K shaped economy where the rich are getting rich. If you own the assets, you beat the system. The majority don't own the assets and their 401k isn't making up for it because that's wealth when they retire so that the government doesn't need to pay out on state pension, so it's convenient for that. But in the meantime people are just debt slaves in they're on the wrong side of this trend. And that's causing increasing tensions as people start to ever realize this system's rigged and it's structurally benefiting the asset holder which is increasingly held in fewer and fewer hands at higher and higher levels. And so as people discover how the system works, we're getting real productivity decreases, people that are exiting the system, not believing in the system, trust is breaking down. With AI people don't know what to trust. They don't even trust their eyes. They don't trust the establishment, they don't trust the old people. They feel like they got shafted. And algorithms are kind of making the most extreme version of some of our ideologies and they're playing upon that, giving us content that makes us angry, gets us talking more. And the more we talk, the more we're building our social Credit score for this integration. Nothing stops this train. The only way to beat it is to become an asset holder to beat the inflation and get on the right side of this trend and build community system. So a part of my investment and my spending is always conscious of. At the end of the day it's me, then my family, then everyone around me and the supply chains that need to connect to around me. So the way we fight back is more of a decentralized community led investment and spending. At the end of the day you need everyone around you to be okay. So spend your money local with the local farmer, invest local because they're going to be priced out of the market. And the small to medium sized business is getting record bankruptcies as these large mega corporations with access to the money print are able to acquire them in distress. The way we fight back is exiting the system with our money, voting with our money, invest in community and local and just building lots of decentralized structures around the globe. So whatever happens to the government at the federal level, we're kind of insulated at the local level and we've got the wealth that kind of understands the game so that you can support your local community and gold in self custody, Bitcoin in self custody, these, these are things that support, you know, that kind of infrastructure where you might even be creating local supply chains and, and local clearing systems for a smaller and smaller number of people.
- [36:01]
B
Yeah, super interesting. And that's something similar message that Catherine Austin Fitz, one of my recent guests was saying where you know, we are funding the system. If you can actually find ways to, you know, pump it more into community, into other, other avenues that isn't finding the system. That's the way that we, we ourselves can, could possibly have an impact. But. Yep. Simon, thanks so much for your time today. Really appreciate we've covered so much and my last question is what is one message you want people to take away from the conversation?
- [36:27]
A
I'd say that I really think the, the bigger battle is a spiritual battle and the one thing they want is weak people that are addicted to drugs, that are mentally weak, that don't have hard assets, they don't mind a lot of broke people whinging. We've, we clearly can see that right now they don't mind boomers that are locked into the system, that have all the assets and therefore preserve the status quo. What's really scary to them is wealthy people that are willing to speak against the system and have the influence to rechannel vast sums of capital into alternative systems. And that's the one thing that you need to become. And if you're not that yet, then you need to partner and build community with people in that position. Nothing stops this train. And you really have to get yourself on the right side of the change rather than maybe wasting time thinking that the political system can solve it. It can't. You need to focus on, you know, yourself, your family, your locals, and how you're going to deal with that together. Because I don't think politics fixes anything. Only money fixes things in the current environment.
- [37:49]
B
Yeah. Super important message to Simon. Thanks again. If anyone wanted to find out more about your work and what you do, where would the best place for that be?
- [37:56]
A
Yeah, so I follow the money every week on YouTube. So, Simon Dixon on YouTube, I do these long, long four hour rants of looking at all the technology, everything, you know, macroeconomics, geopolitics. But then I put it on my blog, SimonDixon.com and get AI to concentrate it down to 5 minutes and 15 minutes if you don't have the time. And then I'm active on Xymandixon Twit, where I give real time analysis in the moment.
- [38:26]
B
Perfect. I'll put that all just below so people can access you there. But thanks again for your time.
- [38:30]
A
Thanks for having me.