KB: When you talk about the Chinese banking system, let's assume that it has to restructure.
They're very smart.
SB: Let's talk about this.
Here's how smart they are-- when we went over with Trump's visit, remember, they didn't
make any other changes.
They weren't going to let us in on anything outside of that, except they would open up
the finance sector.
KB: Says the spider to the fly.
SB: Exactly.
KB: They've already wrecked their financial system.
And now you can invest.
SB: Now you can invest.
KB: Why does the world not see this, Steve?
SB: The world absolutely sees this.
KB: They're starting to see it.
SB: Hang on, Kyle.
KB: The world's economists are just starting to see this.
SB: No, no, Kyle, Kyle.
Kyle, you are much too kind.
You're a good man.
OK?
You've got to call it like it is.
It's bullshit.
OK?
You're telling me the guys at the Wall Street Journal, Financial Times of London, and The
Economist-- these smart guys and think tanks don't know exactly what's going on?
Some moron like me can look at the balance sheet of these banks and say, hey, guess what?
I think we have a ticking time bomb.
They know exactly what it is.
KB: But you know what they say?
But it's China.
That's what I hear all the time.
I agree with you.
But it's China.
So we're going to keep writing what we write.
SB: Yeah.
That's got to stop.
OK.
We cut a deal with China in the late '90s.
Remember, you had a spectrum back then of the China cheerleaders, the rational accommodationist,
and the hawks.
So let's talk about this.
Back in '99, that was the pitch from the appeasers.
The people have to understand it's both political parties.
This is not about ideology.
This is all Democrats and Republicans.
OK?
When they're talking about China, they're just trying to figure out how to get more
money in their own pockets.
So the cheerleader said, hey, it's China.
Once we get them into the most favored nations, once we get them into the WTO, they're going
to turn out to be liberal capitalists.
They're going to vote.
KB: Liberalize our economy.
They're going to democratize.
They're going to let us invest in everything.
SB: They're going to be middle class.
KB: Maybe create a rule of law.
SB: Rule of law.
It's going to be nirvana.
OK.
So we know 17 years later-- guess what?
They're a totalitarian, mercantilist regime.
They've got a system that works for them for the elite for their regime.
And it works well.
Now you have two sets of folks.
The cheerleaders are gone.
Nobody's a cheerleader.
You have rational accommodationist, and you have hawks.
Rational accommodation has got a new name.
Its Thucydides Trap.
It's your buddy Graham Allison and Henry Kissinger.
And here's the great concept they got.
Their great concept is America's a declining power.
China's a rising power like Athens was a declining power, and Sparta was a rising power.
And what you have to figure out to avoid a global conflict, which has only happened 16
times in world history.
And 12 times, they just weren't wise enough to take it.
What has to happen is the declining power can figure out how to noodge the rising power
to kind of get into their system.
Now you'll always be the junior partner, but you'll make the big guy work with you.
And everything will be happy.
This is the exact same nonsense from the exact same people from Allison Graham and from Henry
Kissinger that they spun on Nixon in the late '60s about Russia.
Let's go back in time.
It was the same exact pitch.
Russia's a rising power.
America's a declining power.
And what we need is detente.
We need a rapprochement.
We need to let them have their sphere of influence.
It was bullshit then.
And it's bullshit now.
Ronald Reagan came in and said, hey, you know what?
How big is their economy?
And they said Russia's economy is the size of California.
He says, why do people fear them?
The very first thing that Andy Marshall at the Net Assessment Group in the Pentagon and
Bill Casey at the CIA did was do a complete analysis of the Russian economy.
And they found out it was only half as big.
Whoops.
I have a miss.
It was 15% bigger.
KB: And they were desperately short dollars.
SB: Desperately short of dollars.
This is the whole thing that always happens with a regime.
KB: So exactly where China is.
SB: Because they did the exact same thing as China.
They put it into military spending that was not productive.
So here we go with the exact same set of guys.
And what they tell us 40-50 years later is hey, America's a declining power.
China's a rising power.
And I look at it.
It's the exact same thing.
They have an economy with no dollars.
Here's a point I make to them-- how about this.
How about we stop being a declining power?
That is not a law of physics.
A process that manages us to decline is not a process I accept.
I am looking for a leader to step up and make America great again.
And that's Trump's basic pitch.
And guess what?
In two years, he proved the Chinese are a paper tiger.
KB: When you think about their grand strategy, our pushback, and where we are in the globe
today, what do you think China's next step is?
If you were predicting what their next step would be, given our assertiveness that we've
stepped forward on the economic side of the coin and pushed in some tariffs, and are starting
to reassert ourselves, what do you think they're going to do.
What's textbook?
SB: Number one, they want regime change in the United States.
They believe they have an 80% chance of getting Trump-- winning the House and doing whatever
they need to do with psychological warfare, with money, with whatever they have to do
to basically thwart Trump and lose the House of Representatives and see him impeached this
year.
And there's 100% probability they'll beat him at 20-20.
Number one is the removal of Donald J Trump as President of the United States.
Because they say, that is the rail head of everything that's happened to us badly.
We've got to get a globalist in there.
KB: They're game just to wait him out.
SB: Not just wait him out, but I think take active measures.
Pence said yesterday-- and Axios and other people reported-- there's classified information
that shows the Chinese involvement and real meddling.
This is not some Russia guys on Facebook.
This is the real deal because this is all the chips in the middle of the table.
That's number one.
Number two, the Italians said today that hey, China's going to be our big buddy.
I think you're going to see a double and triple down on One Belt One Road.
I think you'll see a double and triple down on Made In China 2025.
I think you're going to see the East India Project in SubSaharan Africa, the Caribbean,
in Venezuela, and Latin America double and triple down.
They've got a lot of RMB to spend, right?
And if a guy can take RMB-- KB: But no one's going to take RMB.
SB: Well, this is going to be the great question we're going to have in front of us.
KB: It's the key.
SB: They're in the Gulf right now.
They're all over the UAE.
They're all over Saudi Arabia.
They're all over Qatar.
They're all over every resource area in the world from Argentina to Sub-Saharan Africa,
to South Africa.
And they're going to try to see it -- And number three, remember in the great textbook
that they put out and basically printed in English in the late '90s written by these
two brilliant Colonels in the Chinese War College called Unconventional Warfare.
Unconventional Warfare.
KB: Admiral Lou?
SB: Yeah.
It's a book that should be read by everybody because it laid out China's strategy.
They said there's three types of warfare.
There's information warfare.
There's economic warfare.
And there's kinetic or guns up warfare.
And what we want to do is avoid kinetic because the one thing America can do is kick your
ass, right?
So we want to avoid that.
OK?
And so let's focus on information and economic warfare.
And they've run the tables.
It's textbook.
If you go back and read that, they've done exactly what they said they were going to
do.
I think, and I believe that given the fact that Trump is now converging all forces of
government power onto the economic warfare, and they are taking back, and the regime is
under huge pressure, because I believe the Deng Xiaoping faction.
And others, even at the highest level who believe in collective leadership, have said,
hey, what we have here is a cult of personality.
KB: You mean the ones that haven't been jailed or killed yet?
SB: The ones that haven't been jailed to killed yet have sat there and go, Deng believed in
working with the West.
Deng believed in reform.
Deng believe in opening up.
But Deng believed in being a good partner and particularly keep your lights down.
Don't get up in somebody's grill.
What they see with Xi is a return to the cult of personality of Mao.
And he's under tremendous pressure internally.