Richard Haass: A New World Disorder? What Investors Need to Understand Now
Summary
New World Disorder: The guest frames a shift to greater global unpredictability, stressing that leadership quality—not just quantity—will shape market outcomes.
Oil Prices: The Iran conflict and partial closure of the Strait of Hormuz threaten a fifth of global oil and gas transit, keeping prices near $100 with risk of further upside if disruptions persist.
Energy Security: Saudi pipelines can only replace 20–25% of Hormuz flows; refineries and other energy installations remain vulnerable to drones, missiles, and mines, heightening infrastructure risk.
Europe’s Role: While initially reluctant, European participation in securing the strait could be negotiated in exchange for concessions on tariffs or Ukraine, contingent on a credible U.S. operational plan.
Russia Beneficiary: Russia gains from higher oil prices, eased sanctions pressure, U.S. munitions drawdown, and diminished focus on Ukraine, making it a geopolitical winner of the crisis.
China Dynamics: China modestly benefits as U.S. assets shift away from Asia; increased activity around Taiwan appears more signaling than imminent conflict, but remains a strategic risk.
Market Mispricing: Equities have largely shrugged off the oil spike, which the guest sees as underpricing the duration and destructiveness risks, especially if energy assets become direct targets.
Investment Focus: No specific tickers were pitched; key exposure centers on the Energy sector—particularly midstream infrastructure tied to oil transport and global energy security.
Transcript
The world as we know it is changing. Many are talking about a new world order under President Trump. Things are of course changing rather quickly. We've seen Venezuela just in January. Now the attack on Iran. The question though is like what is the game plan here? Is there a game plan and how can we make sense of it as investors as well? I've invited a phenomenal guest to the program today. His name is Richard Hos. He's the former president emeritus of the Council on Foreign Relations. And of course, he's also uh with his Centerview Partners right now. So, he can make perfect sense to of the situation for us. But before I switch over to my guest, hit that like and subscribe button. It helps us out tremendously and we really really appreciate it. So, thank you so much for doing that. Now, Richard, it is my great pleasure to welcome you on the program. Thank you so much for your time today. >> Good to be back with you. >> Yeah, really looking forward to the conversation, Richard. lot lots to discuss, lots going on of course in the world, but we need to set the stage first. Um we're entering a new era of course. The question though is what does it look like at a very high level? Um c can you frame it for us a little bit. >> Yeah, and you're you're exactly right. We are entering a new era. That said, it's it's easier to describe where we've come from, what's in the rearview mirror than, if you will, what we're seeing through the windshield. We've come out of, you know, four decades of cold war where the world was highly structured. We've now come out of three and a half decades since where the United States for most of that time enjoyed great advantages. And what we're beginning to see is a world in which the degree of American advantage is perhaps less than it was in part because of the proliferation of capabilities. uh China. We're seeing it even places like Iran or or or North Korea, not just military capabilities, but economic capabilities and the like. And we're also seeing uh choices being made in the United States that raise questions about what path we're prepared to uh take. And essentially, a lot of what a people thought they could assume about American foreign policy may no longer uh be true. So there's again this combination if you will of um more capacity and more hands than we've seen in in in really in in recent times. Plus the United States that's less uh predictable and less certain. It wants to continue to play the sort of role that we ought all grown are familiar with. Uh plus on top of that there's new technologies and you know from AI to things in the biotech space. Suddenly a lot more is is up for grabs in in international relations. And I think for a business audience, the challenge here is one to see opportunity, but two also how to protect yourself against the the downside of this. >> Absolutely. The question though is was this actually inevitable or is that really can we pinpoint it just on one person? Is is that unfair? Were we headed down that path anyway of a new world order? Maybe things changing the fourth turning comes to mind something Neil How has has been talking about. Is is that was that uh that pathway clear for us anyway? >> Well, a couple of things. One is I'm not sure we're heading towards a new world order. We might be heading more towards a new world disorder. Second of all, nothing's inevitable in history. You know, I've been lucky enough to work for four presidents, uh for President Carter, for President Reagan, and for both Presidents Bush. And my my principal takeaway is nothing's inevitable. Uh the people with the power to make decisions make those decisions and implement those decisions. And for better or worse, they have tremendous uh tremendous impact. But a different group of people would come up with very different policies. And right, you know, we're having this conversation in the middle of this war with Iran. This war was not inevitable. In many ways, it wasn't even uh it wasn't even uh predictable. So my my point is simply that uh you know, a lot makes again it makes it hard on business because a lot is uncertain. I also think that what you're getting at in your question, Kai, is this has been building for some time. And over the last what, 20 odd years, 25 years. At times, I would argue my own country did too much. Say the Iraq war in 2003, it overreached. At other times, not nearly enough. Ultimately, the way we got out of uh Afghanistan, the way we've pulled back from trade uh agreements, what we didn't do in the Middle East at various times. So I think uh you know we have added uh we have added to this uh this as well. Now the current administration the Trump administration is qualitatively different. I accept that and you know when you look at their strategy the national security strategy again you you you have to come away with a sense of of departure that this is something in many ways different but it was building for for some time if you will the departures they've introduced came against what you I would argue is growing uncertainty in American foreign policy. >> You used the term new world disorder. I just want to follow up on that. The question though is that temporary or is that something we need to get used to? temporary, meaning in two and a half years we'll have maybe a new a new political situation in the US for example. Do we have to get used to that disorder? >> I would argue a degree of greater disorder is baked into the cake. Uh I don't know what's going to happen over the next three years during this administration, but you'll have more capacity and more hands. China is not going to stand still. the war in Ukraine is not going to be put on hold. I don't know what's going to happen in the Middle East or in the Americas and so forth. You know, history doesn't stop. So, a lot of a lot of phenomena, shall we say, will will continue to to unfold. I also think it's very hard to restore uh to use that word um if the if the United States continues to move in ways that this administration has moved and the idea two things. one that there'd be a consensus in the United States to go back to quote unquote the good old days. Not at all obvious to me. No matter who wins, there'll be a lot of pressure to focus on things internally uh in this country. Plus, the rest of the world will see the United States differently. Uh allies in particular are going to say, "Whoa, hold it. You you you the United States, you did this and you did this and that. How do we know you're not going to do it again?" So you history you is rarely if you will rarely repeats itself. So I I don't think we we go back to where things were five or 10 or or or 15 years ago which is not to say it's it's chaos or anarchy. I simply don't think that it's possible to to to walk it back. >> Now it's it's interesting a lot of food for thought here of course um as well because the question is like is is it maybe the wrong time to take uh leadership to the next level perhaps? we can discuss whether it's the wrong or right kind of leadership perhaps on a on a global scale. Richard, um because you mentioned like China and other powers at work on a global scale. So the question is um is it maybe fair to say that uh too little American leadership is also um not helpful at this point. >> It's really what matters more than the amount of the leadership is the quality of the leadership. Uh you know what's interesting about the current American administration, whatever it else it is, it's not isolationist. It's quite active. It is however not known for its leadership because leadership suggests followership. And this is an administration that in many ways is quite unilateral whether it was towards Venezuela or the kind of comments made about Canada or or Greenland. The introduction the widespread introduction and use of tariffs. this war with uh Iran which seems to have been coordinated mostly with Israel but not with with other countries. So again I wouldn't call this leadership. I would call this quite a lot of activity but at times it's quite uh quite unilateral and that potentially you know is not without its drawbacks shall we say. >> Absolutely. Um the question is though there are a lot of advisers around the president though. Are they just followers? Are does none of them have the guts to stop him or are they just happy to follow, right? And happy to to sort of that this is happening. That's I'm I'm curious cuz yes, he he is the president. He's got the executive orders and all of that. The question though is is he all alone by himself there? >> Well, I wouldn't say he's all alone, but he he enjoys a degree of uh primacy inside the American political system that we really haven't seen. uh and the last president to be this dominant in many ways was Franklin Delanor Roosevelt during World War uh two, but that was a time of one the war and two the Great Depression. What's so interesting to me is Mr. Trump has become so dominant. President Trump's become so dominant at a time without a crisis of anything like either of those. And it has a lot to do with what has traditionally, not always, but traditionally been a differential Supreme Court and obviously a very compliant uh Republican controlled uh Congress. So, and then within the administration, what strikes me is uh how the machinery of government in many cases has been hollowed out. the National Security Council, something where I served for four years under President Bush the father, is far far weaker and less consequential and influential than it was in uh in those times. And what you see in this administration is very much a top-down uh culture where the president tends to set a lot of the goals and and then the the the the job of those around him is more to follow up, amplify, implement. doesn't seem to me to be a bottomup, carefully organized, orderly, rigorous policy review. And there's downsides with that. I mean, the good side, I suppose, is it gives the president a lot of initiative, things don't leak as much. The bad side is you can initiate and launch a lot of things which you come to regret, uh, or where you didn't foresee many aspects of it, many of the complications and so forth. And I think this war in Iran's a pretty good example of that where there were certain assumptions made and policies uh introduced that in retrospect or I would argue even beforehand would not have held up to to scrutiny. But in this case there wasn't to scrutiny because it isn't that kind of an organized rigorous policym apparatus. >> We do have to discuss the game plan a little bit and maybe strategy papers if they even exist here. Uh- Richard um beginning of the year we learned about the Donro doctrine for example. Um like the question is what what does it mean like in in practical terms like how is it being implemented and is is that the game plan really like but that would just mean North and South America. Well, the most interesting strategy document of this administration was the national security strategy introduced either the end of November or beginning of December of last year. And it actually was quite revealing. The greater emphasis on the Western Hemisphere was quite revealing. The the greater emphasis on commercial transactions and commercial goals for the uh for the United States. A lack of emphasis on the promotion of democracy and human rights. tremendous antipathy towards towards Europe. Uh somewhat sanguin to say the least approach to uh Russia and China uh a mistrust of international institutions and on and on and all that was in there and a lot of what we see what we've seen over the last what 13 14 months is pretty consistent with it. What's so striking about the war in Iran is it is uh almost entirely at odds with it. The National Security Strategy talked about reducing the American involvement in the uh Middle East and obviously it it wasn't looking for uh new foreign entanglements. So my point is simply that this national security strategy is quite revealing. It's quite useful. is quite informative, but it's not a blueprint. And this is an administration that at least in the case of the war with Iran is not acting consistently with its with its own for its own national security strategy as as articulated and published. >> It it feels like we're a dog chasing a car and now the car has stopped and we don't really know what to do with it, right? Um the question is like how should we handle the Iran situation now? Like should we go all in? Should we do you know p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p pull back out like where are we here and how should we handle this? >> Look, we are where we are. So we could have endless conversations and I'll leave that to historians and others about whether we should ever should have arrived here, but we are where we are. Uh I would say at this point it's hard for me to see how continuing military operations as have been going on for several weeks now, for two and a half weeks, that there's a lot of payoff there. I think we're we're up against what you might call diminishing returns. I you know the Iran is is much weaker than it was in terms of its conventional military capabilities, but more military effort on our part won't fundamentally change that. We can't make them all the more weaker. Uh I don't see any sign that the regime's uh stability is in play, that regime change is about to come. So I would argue at this point we ought to be focusing on two things. the reopening of the straight of Hormuz through which what roughly a fifth of the world's uh oil and gas uh transit and right now it's only really open to Iran and I would think that's a an unacceptable situation and we want to make sure we place a verifiable ceiling on Iran's nuclear activities. As bad as this war is, we don't want to wake up in a given amount of time that Iran suddenly has nuclear weapons either to threaten its neighbors or to provide a shield so then it could act aggressively towards towards them. So I would I would you know if I were to boil it down I would say uh how do we end the war in a way that again frees up the straight of Hormuz to be an international waterway and second of all puts a cap or a ceiling that we're comfortable with and can verify when it comes to the Iran's nuclear capabilities and that's the challenge and that's where you know you can I don't see how we can get there with military force. We're unlikely to get there. So the question is uh if if you agree with me, can we get there with uh with negotiations, with diplomacy? And I think President Trump has to make that choice. >> Well, he he's asking other nations to help him uh secure the straight to Formoose and especially from Europe. That's what I've seen in the news today. He's got a resounding no, we're not going to help you. Um so what what kind of levers does he have? Like can he rope any other partners in there? Like the NATO, he's been addressing NATO. it might be a big mistake for NATO not to follow through or maybe support the US in this situation. NATO might fall apart. We're back to that discussion. Um does he have any levers to pull? >> Well, sure because the European countries pay a price for the fact that the straight of Hormuz is effectively closed to them. Uh they also don't want to have this have it's a crisis in the Middle East become a crisis in you transatlantic relations. So I would think the smarter answer for Europe is not to say no even though I understand why the European governments are to put it gently miffed over the lack of consultations here. They're miffed over tariffs. They're unhappy about Greenland. I get it. I understand. I'm even sympathetic in many instances. The question is uh could they have a conversation with this administration about if how would I put it? how to trade their involvement in here if you can come up with a viable plan uh for some things they may want about Ukraine or about tariffs. So I if I were if I were in a European capital I would see this as uh an opportunity dependent on one reality that one can design a a viable uh operational plan. It's very dangerous to put expensive uh naval vessels and their crews in areas like the straight of Hormuz. it it makes them vulnerable potentially to drones, to missiles, to to mines, even to speedboats loaded with a explosive. So, I think I think it's on the United States to demonstrate that it has a viable operational plan that that has a a real chance of achieving the goal, which is to free up the straight. If they can do that, then Europe ought to participate. But I think it's on us, the United States, to come up with such a plan. Just on the oil angle real quick, I've been reading up today as well, like Saudi Arabia actually has an oil pipeline that goes across the country for 1,200 kilometers, but it it doesn't have the capacity. But it seems like, at least from my perspective, that that's what why the oil price is somewhat >> hanging in there at around $100, I would say, and it's not at $150 or so where potentially should be. Is that a fair assumption? >> Part of it. Look, the pipelines could probably be a a substitute for 20 25% of what traditionally has gone through the uh straight of hormones. Not a not not anything remotely like a full substitute. I think the oil price is also leveling off a bit because of some of the tactical measures that have been taking about releases from uh reserves and the uh like also both sides have shown a degree of deterrence and haven't gone after the energy installations of the uh >> of the of the other. But you again I'm not over I'm not sanguin here and you what we've seen is just how vulnerable these uh installations are either to intentional attack or even to accidental uh intact and I would think that every day or most days the strait remains closed. Uh we'll see the the secular trend will be the ticking up of prices. >> Yeah, absolutely. Um just just staying on Iran or the Middle Eastern region in in general like who who's the benefit the most from the current situation there? like who who's a are are there winners and losers of course geopolitically and who who might be winning here. >> Well, those who are winning speak Russian. This has been a really good war for Russia. The price of oil has gone up what 50% or so. That's that's good for Russia. Plus, sanctions have been eased. Plus, the United States is burning through a lot of munitions which at least in principle could have been provided to uh Ukraine. Plus, relations between the United States and its allies h have been rubbed, shall we say, rather raw yet again. So, if you're Vladimir Putin, this is all good. Plus, no one's talking about Ukraine. No one's talking about Russia. So, the lack of focus is also something good. So, I think Putin may be the the big winner of this. I think China to a lesser extent is a winner for some for some similar reasons. Uh but after that I think you know like most wars there's there's mostly losers at least so far you know Iran has paid an enormous military and economic price. United States uh has Europe and Asia have given the cost of energy. The you know I think though it's premature. It's a little bit like judging the score of a game or the outcome of a sporting match before it's over. And a lot is going to depend upon how long this goes on and what does the resolution look like. What are the terms, if you will, of of war termination? And where does that leave Iran? Where does it leave the neighbors? Where does it leave Europe, Asia, and obviously the United States? >> Absolutely. No, I I appreciate you touching on Russia and China as well. Those are last two topics that could I want to touch on here the last 10 minutes of our conversation, Richard. Maybe we'll stay we'll start with China here. Uh ju just today, actually, I've been reading up that they've intensified military activity around Taiwan again. Do do you see anything happening there um in in Asia on that front? And do do you think they might be using that that window of opportunity right now? >> I see no signs that China is about to do something, shall we say, historic or uh dangerous, but but look, they don't need excuses, if you will, to amp up their military activity off Taiwan. They've been doing it for years. China is not a status quo power when it comes to the situation uh opposite uh Taiwan and they may be trying to send signals to Taiwan or to the United States. They may be uh doing some exercising to see what the American response is when we're engaged elsewhere. Uh they might want to see what what you know Japan how it uh how it reacts. China's also had changes in its military leadership owing to the purges. It might be a way of working some things through with with new leadership. I don't know. Uh all I know is that China is not a status quo country when it comes to Taiwan. For Xihinping, this is clearly central to his to his legacy. Uh we still have the scheduled trip uh pres visit of President Trump to China. Um it's set for the end of March. We'll see if it it it goes ahead. But I would simply say this type of Chinese military muscle flexing or exercising about Taiwan has been going on has been going on for years and either from the air or at sea. So I don't see this as qualitatively different. >> Okay. No, appreciate that. Um ju just on the USChina relationship like six months ago we'd have said okay China is perhaps holding um the trump card here meaning critical ele critical minerals for example have been used widely as an example. um they might have the upper hand in a discussion with the US. Has has that deck been reshuffled? And what kind of cards does the US hold now given what we've seen over the last just two and a half months? >> Well, the good news for the US is it's shown its ability to use military force effectively. The bad news for the US is that it is using military force and as a result has less of it to devote elsewhere, including to the part of the world where China uh resides and all these munitions that are being used up. We do not have the ability, our defense industrial base, our manufacturing base is not such where we can replace them uh quickly to to to say the uh the least. So, you know, for China, this I'm not sure how that weighs out. There's there's good things and and not good things uh in what's happening in the Middle East. Meanwhile, it's, you know, it's insulating itself largely from the region, you know, from any oil shut off importer of Iranian uh oil. I don't think China minds that uh US Marines were taken from Japan. I don't think China minds that miss, you know, air defense systems were taken from South Korea. So, all things be equal, I think this, you know, this crisis is probably all in all served China well. >> Just just hypothetically, I just had a thought and just curious what you think. Do you think the US is drawing out the involvement in the Middle East or in Iran right now just to bring China to the communic to the table? Trump called himself China's savior at one point just trying to keep the straight of Hormuz open. Do you think they're keeping it intentionally blocked just to put some more pressure on China perhaps? I'm just just a hypothetical hypothetical thought. I have no evidence of that, but uh just curious. Look, my understanding is China continues to get oil that Iran is shipping oil in China along with what Turkey I think India, Pakistan, these are countries that how I call it Iran is declaring exceptions for and oil is going there. So at the moment between that and its own uh equivalent of a strategic petroleum reserve, I think China is in not not at the moment feeling any pain. >> Okay. No, no, fair enough. It's just a random because we also talk fertilizer and many things. the growing season starts soon as well, right? So, just just a random thought wondering if there's political pressure perhaps to be applied because the tariff negotiations aren't over yet. >> They're not over. And look, and at some point the United States could take action where it decides to make it impossible for Iran to continue to send oil to China. And at some point, the United States may go to China. You have to be part of the solution here. You you simply can't be a bystander. You can't expect that, how would I call it, the China exception will continue. So I think that that remains to be seen how this plays out. >> What are your expectations for the Trump she meeting? Any any particular outcome that we should be planning for or anything that you expect to happen. >> Well, first of the biggest question is whether it goes ahead. I find it a little bit difficult to imagine then it does but but who knows. uh you know I think all along the question has been whether it's mainly an economics meeting where you know China maintains this enormous surplus in its trade with us and to what extent does the does the meeting level some of that out to what extent also does the United States relax is is the United States prepared to relax certain export controls and so forth that's one set of almost an economic trade conversation the other conversation that people like me have been wondering about to what extent does geopolitics get introduced into the mix. And the idea that, you know, here you have a president and an administration in the United States that prioritizes commercial interests in ways that we haven't historically seen. To what extent, if any, might they be willing to compromise on some geopolitical uh issues visav Taiwan for example? And that to me has been the the most interesting and biggest question mark about this uh summit if it again if it if it happens. >> Yeah. Richard, I want to use the last four minutes just really talk about the impact market impacts of what we're seeing right now. Um what do you think the the biggest risks are that the market is currently mispricing? A lot of my friends are saying, "Well, the risk isn't fully priced in yet." What what are your thoughts? >> I think your friends are on to something. Uh I'll admit it. Uh I looked at the price of oil. Look at it this way, guy. If we had had this conversation a month ago or six weeks ago and you had said that the price of oil would be in the neighborhood of $100 rather than 60, how much would the stock markets around the world, the equity markets have gone down? And the fact in the United States it's gone down less than 5%. I I haven't measured it today. I would say three or 4%. That seems to me relatively sanguin as markets go. Obviously markets have gone down more in places like South Korea. Uh I I understand it but all things being equal I am struck how the the markets the equity markets have largely if not entirely uh shrugged this off. So they are confident I think that this is more of a blip and this is not the new normal and that sooner rather than later this will get resolved on satisfactory terms and maybe they're right. Uh but I think you know there's two issues here. One is the duration of the crisis. The other is the violence or destructiveness of the crisis. So, you know, obviously the longer this goes on, the more of an impact it has on equity markets, but also the more destructive it is. For example, as we talked about a few minutes ago, are the are the parties going to continue to be able to essentially have a a war in which energy, you know, gas and oil reserves and refineries and the like are not direct targets because that would fundamentally change the game or desalinization plants. So, I think there's there's a there's uncertainties there that I would simply say the markets were not pricing in. I'm not predicting they're going to happen, but uh but I'm surprised at how relatively steady or stable the markets have been for now for two and a half weeks. >> Yeah, you you and me both. Quite honestly, I expected gold to do much better. Of course, oil was going higher, but also the S&P perhaps uh take take a bit of a dive here, which which hasn't happened. So, which is good because a lot of Americans are saving in the S&P 500 and I don't want anybody retirement accounts get obliterated. Right. Um, but Richard, maybe closing question >> particularly old old people like me. So, thank you. >> Exactly. No, but but but Richard, maybe closing question. If we chat again in 12 in 12 months time, what what do you think the conversation will be like? >> Well, in 12 months time, I think the biggest variable over the next 12 months probably three things come to mind, guy. One is the outcome of this conflict going on now. Second, we already alluded to where are US China relations at that point. And third, and this may surprise you, is uh what happens here in the United States in November. We have the midterm elections. It's what is the process and what are the out what is the outcome look like? And is the integrity of these elections widely accepted? if the what is the outcome likely to be the polls suggest the Democratic party will do rather uh rather well probably gain control of the House of Representatives does all that go forward in a fairly automatic familiar way or do we have something of a a political crisis in this country and that that to me if it happens or doesn't happen could be an extraordinarily significant event >> fantastic Richard what a wonderful conversation I can't wait to do this again soon not just in 12 months time by the Okay. Um because we haven't even touched on the Russia Ukraine situation. So if we find a time here in the near future, it'd be great to do a part two with you. Um but in the meantime, where can our audience find more of your work? Where can they follow you? >> Thanks for asking. The easiest way to follow me is on Substack uh the social media substack.com. I published weekly though in the last few weeks I published two or three times a week a newsletter called home and away and where I write about domestic trends in the United States and even more of an emphasis on exactly what you and I have been talking about today whether events in the Middle East or the Americas or Ukraine or China or or what have you. So it's called home and away. The good news is it's free. It will not force anyone to make a withdrawal from their from their their accounts or their IAS. So, I will not contribute to uh any any worsening of their economic status. Oh, >> fantastic. Awesome, Richard. Much appreciate it. Really appreciate you coming on. Thank you so much. Stay on for just one more second. And everybody else, thank you so much for tuning in. I hope you enjoyed this conversation with Richard Hus. I tremendously have I love talking geopolitics. There's so much going on and Richard helped us understand what what is really happening, what should be objectives, what should be the goals and what might be the outcomes here as well. So, really appreciate you tuning in. If you haven't done so, hit that like and subscribe button. It helps us out tremendously and we really appreciate it. Stay safe out there and don't let emotions run your investments for you. Take care.
Richard Haass: A New World Disorder? What Investors Need to Understand Now
Summary
Transcript
The world as we know it is changing. Many are talking about a new world order under President Trump. Things are of course changing rather quickly. We've seen Venezuela just in January. Now the attack on Iran. The question though is like what is the game plan here? Is there a game plan and how can we make sense of it as investors as well? I've invited a phenomenal guest to the program today. His name is Richard Hos. He's the former president emeritus of the Council on Foreign Relations. And of course, he's also uh with his Centerview Partners right now. So, he can make perfect sense to of the situation for us. But before I switch over to my guest, hit that like and subscribe button. It helps us out tremendously and we really really appreciate it. So, thank you so much for doing that. Now, Richard, it is my great pleasure to welcome you on the program. Thank you so much for your time today. >> Good to be back with you. >> Yeah, really looking forward to the conversation, Richard. lot lots to discuss, lots going on of course in the world, but we need to set the stage first. Um we're entering a new era of course. The question though is what does it look like at a very high level? Um c can you frame it for us a little bit. >> Yeah, and you're you're exactly right. We are entering a new era. That said, it's it's easier to describe where we've come from, what's in the rearview mirror than, if you will, what we're seeing through the windshield. We've come out of, you know, four decades of cold war where the world was highly structured. We've now come out of three and a half decades since where the United States for most of that time enjoyed great advantages. And what we're beginning to see is a world in which the degree of American advantage is perhaps less than it was in part because of the proliferation of capabilities. uh China. We're seeing it even places like Iran or or or North Korea, not just military capabilities, but economic capabilities and the like. And we're also seeing uh choices being made in the United States that raise questions about what path we're prepared to uh take. And essentially, a lot of what a people thought they could assume about American foreign policy may no longer uh be true. So there's again this combination if you will of um more capacity and more hands than we've seen in in in really in in recent times. Plus the United States that's less uh predictable and less certain. It wants to continue to play the sort of role that we ought all grown are familiar with. Uh plus on top of that there's new technologies and you know from AI to things in the biotech space. Suddenly a lot more is is up for grabs in in international relations. And I think for a business audience, the challenge here is one to see opportunity, but two also how to protect yourself against the the downside of this. >> Absolutely. The question though is was this actually inevitable or is that really can we pinpoint it just on one person? Is is that unfair? Were we headed down that path anyway of a new world order? Maybe things changing the fourth turning comes to mind something Neil How has has been talking about. Is is that was that uh that pathway clear for us anyway? >> Well, a couple of things. One is I'm not sure we're heading towards a new world order. We might be heading more towards a new world disorder. Second of all, nothing's inevitable in history. You know, I've been lucky enough to work for four presidents, uh for President Carter, for President Reagan, and for both Presidents Bush. And my my principal takeaway is nothing's inevitable. Uh the people with the power to make decisions make those decisions and implement those decisions. And for better or worse, they have tremendous uh tremendous impact. But a different group of people would come up with very different policies. And right, you know, we're having this conversation in the middle of this war with Iran. This war was not inevitable. In many ways, it wasn't even uh it wasn't even uh predictable. So my my point is simply that uh you know, a lot makes again it makes it hard on business because a lot is uncertain. I also think that what you're getting at in your question, Kai, is this has been building for some time. And over the last what, 20 odd years, 25 years. At times, I would argue my own country did too much. Say the Iraq war in 2003, it overreached. At other times, not nearly enough. Ultimately, the way we got out of uh Afghanistan, the way we've pulled back from trade uh agreements, what we didn't do in the Middle East at various times. So I think uh you know we have added uh we have added to this uh this as well. Now the current administration the Trump administration is qualitatively different. I accept that and you know when you look at their strategy the national security strategy again you you you have to come away with a sense of of departure that this is something in many ways different but it was building for for some time if you will the departures they've introduced came against what you I would argue is growing uncertainty in American foreign policy. >> You used the term new world disorder. I just want to follow up on that. The question though is that temporary or is that something we need to get used to? temporary, meaning in two and a half years we'll have maybe a new a new political situation in the US for example. Do we have to get used to that disorder? >> I would argue a degree of greater disorder is baked into the cake. Uh I don't know what's going to happen over the next three years during this administration, but you'll have more capacity and more hands. China is not going to stand still. the war in Ukraine is not going to be put on hold. I don't know what's going to happen in the Middle East or in the Americas and so forth. You know, history doesn't stop. So, a lot of a lot of phenomena, shall we say, will will continue to to unfold. I also think it's very hard to restore uh to use that word um if the if the United States continues to move in ways that this administration has moved and the idea two things. one that there'd be a consensus in the United States to go back to quote unquote the good old days. Not at all obvious to me. No matter who wins, there'll be a lot of pressure to focus on things internally uh in this country. Plus, the rest of the world will see the United States differently. Uh allies in particular are going to say, "Whoa, hold it. You you you the United States, you did this and you did this and that. How do we know you're not going to do it again?" So you history you is rarely if you will rarely repeats itself. So I I don't think we we go back to where things were five or 10 or or or 15 years ago which is not to say it's it's chaos or anarchy. I simply don't think that it's possible to to to walk it back. >> Now it's it's interesting a lot of food for thought here of course um as well because the question is like is is it maybe the wrong time to take uh leadership to the next level perhaps? we can discuss whether it's the wrong or right kind of leadership perhaps on a on a global scale. Richard, um because you mentioned like China and other powers at work on a global scale. So the question is um is it maybe fair to say that uh too little American leadership is also um not helpful at this point. >> It's really what matters more than the amount of the leadership is the quality of the leadership. Uh you know what's interesting about the current American administration, whatever it else it is, it's not isolationist. It's quite active. It is however not known for its leadership because leadership suggests followership. And this is an administration that in many ways is quite unilateral whether it was towards Venezuela or the kind of comments made about Canada or or Greenland. The introduction the widespread introduction and use of tariffs. this war with uh Iran which seems to have been coordinated mostly with Israel but not with with other countries. So again I wouldn't call this leadership. I would call this quite a lot of activity but at times it's quite uh quite unilateral and that potentially you know is not without its drawbacks shall we say. >> Absolutely. Um the question is though there are a lot of advisers around the president though. Are they just followers? Are does none of them have the guts to stop him or are they just happy to follow, right? And happy to to sort of that this is happening. That's I'm I'm curious cuz yes, he he is the president. He's got the executive orders and all of that. The question though is is he all alone by himself there? >> Well, I wouldn't say he's all alone, but he he enjoys a degree of uh primacy inside the American political system that we really haven't seen. uh and the last president to be this dominant in many ways was Franklin Delanor Roosevelt during World War uh two, but that was a time of one the war and two the Great Depression. What's so interesting to me is Mr. Trump has become so dominant. President Trump's become so dominant at a time without a crisis of anything like either of those. And it has a lot to do with what has traditionally, not always, but traditionally been a differential Supreme Court and obviously a very compliant uh Republican controlled uh Congress. So, and then within the administration, what strikes me is uh how the machinery of government in many cases has been hollowed out. the National Security Council, something where I served for four years under President Bush the father, is far far weaker and less consequential and influential than it was in uh in those times. And what you see in this administration is very much a top-down uh culture where the president tends to set a lot of the goals and and then the the the the job of those around him is more to follow up, amplify, implement. doesn't seem to me to be a bottomup, carefully organized, orderly, rigorous policy review. And there's downsides with that. I mean, the good side, I suppose, is it gives the president a lot of initiative, things don't leak as much. The bad side is you can initiate and launch a lot of things which you come to regret, uh, or where you didn't foresee many aspects of it, many of the complications and so forth. And I think this war in Iran's a pretty good example of that where there were certain assumptions made and policies uh introduced that in retrospect or I would argue even beforehand would not have held up to to scrutiny. But in this case there wasn't to scrutiny because it isn't that kind of an organized rigorous policym apparatus. >> We do have to discuss the game plan a little bit and maybe strategy papers if they even exist here. Uh- Richard um beginning of the year we learned about the Donro doctrine for example. Um like the question is what what does it mean like in in practical terms like how is it being implemented and is is that the game plan really like but that would just mean North and South America. Well, the most interesting strategy document of this administration was the national security strategy introduced either the end of November or beginning of December of last year. And it actually was quite revealing. The greater emphasis on the Western Hemisphere was quite revealing. The the greater emphasis on commercial transactions and commercial goals for the uh for the United States. A lack of emphasis on the promotion of democracy and human rights. tremendous antipathy towards towards Europe. Uh somewhat sanguin to say the least approach to uh Russia and China uh a mistrust of international institutions and on and on and all that was in there and a lot of what we see what we've seen over the last what 13 14 months is pretty consistent with it. What's so striking about the war in Iran is it is uh almost entirely at odds with it. The National Security Strategy talked about reducing the American involvement in the uh Middle East and obviously it it wasn't looking for uh new foreign entanglements. So my point is simply that this national security strategy is quite revealing. It's quite useful. is quite informative, but it's not a blueprint. And this is an administration that at least in the case of the war with Iran is not acting consistently with its with its own for its own national security strategy as as articulated and published. >> It it feels like we're a dog chasing a car and now the car has stopped and we don't really know what to do with it, right? Um the question is like how should we handle the Iran situation now? Like should we go all in? Should we do you know p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p pull back out like where are we here and how should we handle this? >> Look, we are where we are. So we could have endless conversations and I'll leave that to historians and others about whether we should ever should have arrived here, but we are where we are. Uh I would say at this point it's hard for me to see how continuing military operations as have been going on for several weeks now, for two and a half weeks, that there's a lot of payoff there. I think we're we're up against what you might call diminishing returns. I you know the Iran is is much weaker than it was in terms of its conventional military capabilities, but more military effort on our part won't fundamentally change that. We can't make them all the more weaker. Uh I don't see any sign that the regime's uh stability is in play, that regime change is about to come. So I would argue at this point we ought to be focusing on two things. the reopening of the straight of Hormuz through which what roughly a fifth of the world's uh oil and gas uh transit and right now it's only really open to Iran and I would think that's a an unacceptable situation and we want to make sure we place a verifiable ceiling on Iran's nuclear activities. As bad as this war is, we don't want to wake up in a given amount of time that Iran suddenly has nuclear weapons either to threaten its neighbors or to provide a shield so then it could act aggressively towards towards them. So I would I would you know if I were to boil it down I would say uh how do we end the war in a way that again frees up the straight of Hormuz to be an international waterway and second of all puts a cap or a ceiling that we're comfortable with and can verify when it comes to the Iran's nuclear capabilities and that's the challenge and that's where you know you can I don't see how we can get there with military force. We're unlikely to get there. So the question is uh if if you agree with me, can we get there with uh with negotiations, with diplomacy? And I think President Trump has to make that choice. >> Well, he he's asking other nations to help him uh secure the straight to Formoose and especially from Europe. That's what I've seen in the news today. He's got a resounding no, we're not going to help you. Um so what what kind of levers does he have? Like can he rope any other partners in there? Like the NATO, he's been addressing NATO. it might be a big mistake for NATO not to follow through or maybe support the US in this situation. NATO might fall apart. We're back to that discussion. Um does he have any levers to pull? >> Well, sure because the European countries pay a price for the fact that the straight of Hormuz is effectively closed to them. Uh they also don't want to have this have it's a crisis in the Middle East become a crisis in you transatlantic relations. So I would think the smarter answer for Europe is not to say no even though I understand why the European governments are to put it gently miffed over the lack of consultations here. They're miffed over tariffs. They're unhappy about Greenland. I get it. I understand. I'm even sympathetic in many instances. The question is uh could they have a conversation with this administration about if how would I put it? how to trade their involvement in here if you can come up with a viable plan uh for some things they may want about Ukraine or about tariffs. So I if I were if I were in a European capital I would see this as uh an opportunity dependent on one reality that one can design a a viable uh operational plan. It's very dangerous to put expensive uh naval vessels and their crews in areas like the straight of Hormuz. it it makes them vulnerable potentially to drones, to missiles, to to mines, even to speedboats loaded with a explosive. So, I think I think it's on the United States to demonstrate that it has a viable operational plan that that has a a real chance of achieving the goal, which is to free up the straight. If they can do that, then Europe ought to participate. But I think it's on us, the United States, to come up with such a plan. Just on the oil angle real quick, I've been reading up today as well, like Saudi Arabia actually has an oil pipeline that goes across the country for 1,200 kilometers, but it it doesn't have the capacity. But it seems like, at least from my perspective, that that's what why the oil price is somewhat >> hanging in there at around $100, I would say, and it's not at $150 or so where potentially should be. Is that a fair assumption? >> Part of it. Look, the pipelines could probably be a a substitute for 20 25% of what traditionally has gone through the uh straight of hormones. Not a not not anything remotely like a full substitute. I think the oil price is also leveling off a bit because of some of the tactical measures that have been taking about releases from uh reserves and the uh like also both sides have shown a degree of deterrence and haven't gone after the energy installations of the uh >> of the of the other. But you again I'm not over I'm not sanguin here and you what we've seen is just how vulnerable these uh installations are either to intentional attack or even to accidental uh intact and I would think that every day or most days the strait remains closed. Uh we'll see the the secular trend will be the ticking up of prices. >> Yeah, absolutely. Um just just staying on Iran or the Middle Eastern region in in general like who who's the benefit the most from the current situation there? like who who's a are are there winners and losers of course geopolitically and who who might be winning here. >> Well, those who are winning speak Russian. This has been a really good war for Russia. The price of oil has gone up what 50% or so. That's that's good for Russia. Plus, sanctions have been eased. Plus, the United States is burning through a lot of munitions which at least in principle could have been provided to uh Ukraine. Plus, relations between the United States and its allies h have been rubbed, shall we say, rather raw yet again. So, if you're Vladimir Putin, this is all good. Plus, no one's talking about Ukraine. No one's talking about Russia. So, the lack of focus is also something good. So, I think Putin may be the the big winner of this. I think China to a lesser extent is a winner for some for some similar reasons. Uh but after that I think you know like most wars there's there's mostly losers at least so far you know Iran has paid an enormous military and economic price. United States uh has Europe and Asia have given the cost of energy. The you know I think though it's premature. It's a little bit like judging the score of a game or the outcome of a sporting match before it's over. And a lot is going to depend upon how long this goes on and what does the resolution look like. What are the terms, if you will, of of war termination? And where does that leave Iran? Where does it leave the neighbors? Where does it leave Europe, Asia, and obviously the United States? >> Absolutely. No, I I appreciate you touching on Russia and China as well. Those are last two topics that could I want to touch on here the last 10 minutes of our conversation, Richard. Maybe we'll stay we'll start with China here. Uh ju just today, actually, I've been reading up that they've intensified military activity around Taiwan again. Do do you see anything happening there um in in Asia on that front? And do do you think they might be using that that window of opportunity right now? >> I see no signs that China is about to do something, shall we say, historic or uh dangerous, but but look, they don't need excuses, if you will, to amp up their military activity off Taiwan. They've been doing it for years. China is not a status quo power when it comes to the situation uh opposite uh Taiwan and they may be trying to send signals to Taiwan or to the United States. They may be uh doing some exercising to see what the American response is when we're engaged elsewhere. Uh they might want to see what what you know Japan how it uh how it reacts. China's also had changes in its military leadership owing to the purges. It might be a way of working some things through with with new leadership. I don't know. Uh all I know is that China is not a status quo country when it comes to Taiwan. For Xihinping, this is clearly central to his to his legacy. Uh we still have the scheduled trip uh pres visit of President Trump to China. Um it's set for the end of March. We'll see if it it it goes ahead. But I would simply say this type of Chinese military muscle flexing or exercising about Taiwan has been going on has been going on for years and either from the air or at sea. So I don't see this as qualitatively different. >> Okay. No, appreciate that. Um ju just on the USChina relationship like six months ago we'd have said okay China is perhaps holding um the trump card here meaning critical ele critical minerals for example have been used widely as an example. um they might have the upper hand in a discussion with the US. Has has that deck been reshuffled? And what kind of cards does the US hold now given what we've seen over the last just two and a half months? >> Well, the good news for the US is it's shown its ability to use military force effectively. The bad news for the US is that it is using military force and as a result has less of it to devote elsewhere, including to the part of the world where China uh resides and all these munitions that are being used up. We do not have the ability, our defense industrial base, our manufacturing base is not such where we can replace them uh quickly to to to say the uh the least. So, you know, for China, this I'm not sure how that weighs out. There's there's good things and and not good things uh in what's happening in the Middle East. Meanwhile, it's, you know, it's insulating itself largely from the region, you know, from any oil shut off importer of Iranian uh oil. I don't think China minds that uh US Marines were taken from Japan. I don't think China minds that miss, you know, air defense systems were taken from South Korea. So, all things be equal, I think this, you know, this crisis is probably all in all served China well. >> Just just hypothetically, I just had a thought and just curious what you think. Do you think the US is drawing out the involvement in the Middle East or in Iran right now just to bring China to the communic to the table? Trump called himself China's savior at one point just trying to keep the straight of Hormuz open. Do you think they're keeping it intentionally blocked just to put some more pressure on China perhaps? I'm just just a hypothetical hypothetical thought. I have no evidence of that, but uh just curious. Look, my understanding is China continues to get oil that Iran is shipping oil in China along with what Turkey I think India, Pakistan, these are countries that how I call it Iran is declaring exceptions for and oil is going there. So at the moment between that and its own uh equivalent of a strategic petroleum reserve, I think China is in not not at the moment feeling any pain. >> Okay. No, no, fair enough. It's just a random because we also talk fertilizer and many things. the growing season starts soon as well, right? So, just just a random thought wondering if there's political pressure perhaps to be applied because the tariff negotiations aren't over yet. >> They're not over. And look, and at some point the United States could take action where it decides to make it impossible for Iran to continue to send oil to China. And at some point, the United States may go to China. You have to be part of the solution here. You you simply can't be a bystander. You can't expect that, how would I call it, the China exception will continue. So I think that that remains to be seen how this plays out. >> What are your expectations for the Trump she meeting? Any any particular outcome that we should be planning for or anything that you expect to happen. >> Well, first of the biggest question is whether it goes ahead. I find it a little bit difficult to imagine then it does but but who knows. uh you know I think all along the question has been whether it's mainly an economics meeting where you know China maintains this enormous surplus in its trade with us and to what extent does the does the meeting level some of that out to what extent also does the United States relax is is the United States prepared to relax certain export controls and so forth that's one set of almost an economic trade conversation the other conversation that people like me have been wondering about to what extent does geopolitics get introduced into the mix. And the idea that, you know, here you have a president and an administration in the United States that prioritizes commercial interests in ways that we haven't historically seen. To what extent, if any, might they be willing to compromise on some geopolitical uh issues visav Taiwan for example? And that to me has been the the most interesting and biggest question mark about this uh summit if it again if it if it happens. >> Yeah. Richard, I want to use the last four minutes just really talk about the impact market impacts of what we're seeing right now. Um what do you think the the biggest risks are that the market is currently mispricing? A lot of my friends are saying, "Well, the risk isn't fully priced in yet." What what are your thoughts? >> I think your friends are on to something. Uh I'll admit it. Uh I looked at the price of oil. Look at it this way, guy. If we had had this conversation a month ago or six weeks ago and you had said that the price of oil would be in the neighborhood of $100 rather than 60, how much would the stock markets around the world, the equity markets have gone down? And the fact in the United States it's gone down less than 5%. I I haven't measured it today. I would say three or 4%. That seems to me relatively sanguin as markets go. Obviously markets have gone down more in places like South Korea. Uh I I understand it but all things being equal I am struck how the the markets the equity markets have largely if not entirely uh shrugged this off. So they are confident I think that this is more of a blip and this is not the new normal and that sooner rather than later this will get resolved on satisfactory terms and maybe they're right. Uh but I think you know there's two issues here. One is the duration of the crisis. The other is the violence or destructiveness of the crisis. So, you know, obviously the longer this goes on, the more of an impact it has on equity markets, but also the more destructive it is. For example, as we talked about a few minutes ago, are the are the parties going to continue to be able to essentially have a a war in which energy, you know, gas and oil reserves and refineries and the like are not direct targets because that would fundamentally change the game or desalinization plants. So, I think there's there's a there's uncertainties there that I would simply say the markets were not pricing in. I'm not predicting they're going to happen, but uh but I'm surprised at how relatively steady or stable the markets have been for now for two and a half weeks. >> Yeah, you you and me both. Quite honestly, I expected gold to do much better. Of course, oil was going higher, but also the S&P perhaps uh take take a bit of a dive here, which which hasn't happened. So, which is good because a lot of Americans are saving in the S&P 500 and I don't want anybody retirement accounts get obliterated. Right. Um, but Richard, maybe closing question >> particularly old old people like me. So, thank you. >> Exactly. No, but but but Richard, maybe closing question. If we chat again in 12 in 12 months time, what what do you think the conversation will be like? >> Well, in 12 months time, I think the biggest variable over the next 12 months probably three things come to mind, guy. One is the outcome of this conflict going on now. Second, we already alluded to where are US China relations at that point. And third, and this may surprise you, is uh what happens here in the United States in November. We have the midterm elections. It's what is the process and what are the out what is the outcome look like? And is the integrity of these elections widely accepted? if the what is the outcome likely to be the polls suggest the Democratic party will do rather uh rather well probably gain control of the House of Representatives does all that go forward in a fairly automatic familiar way or do we have something of a a political crisis in this country and that that to me if it happens or doesn't happen could be an extraordinarily significant event >> fantastic Richard what a wonderful conversation I can't wait to do this again soon not just in 12 months time by the Okay. Um because we haven't even touched on the Russia Ukraine situation. So if we find a time here in the near future, it'd be great to do a part two with you. Um but in the meantime, where can our audience find more of your work? Where can they follow you? >> Thanks for asking. The easiest way to follow me is on Substack uh the social media substack.com. I published weekly though in the last few weeks I published two or three times a week a newsletter called home and away and where I write about domestic trends in the United States and even more of an emphasis on exactly what you and I have been talking about today whether events in the Middle East or the Americas or Ukraine or China or or what have you. So it's called home and away. The good news is it's free. It will not force anyone to make a withdrawal from their from their their accounts or their IAS. So, I will not contribute to uh any any worsening of their economic status. Oh, >> fantastic. Awesome, Richard. Much appreciate it. Really appreciate you coming on. Thank you so much. Stay on for just one more second. And everybody else, thank you so much for tuning in. I hope you enjoyed this conversation with Richard Hus. I tremendously have I love talking geopolitics. There's so much going on and Richard helped us understand what what is really happening, what should be objectives, what should be the goals and what might be the outcomes here as well. So, really appreciate you tuning in. If you haven't done so, hit that like and subscribe button. It helps us out tremendously and we really appreciate it. Stay safe out there and don't let emotions run your investments for you. Take care.