All right, Alexander. Let's talk about

what is happening in the UK and the UK

economy and

Starmer's

final days as Prime Minister where it

appears that he is trying to get as much

money

to the military as possible.

>> Mhm.

>> And uh

And I was listening to a speech from

um Kemi Badenoch,

>> Yeah.

>> the Conservative

leader.

And uh she was complaining that

Starmer's not giving enough to

the military. They're playing this game.

I mean, it's obvious that that they're

both on the same page and

it's this good cop, bad cop. You know,

Starmer I'll give 10 billion or 11

billion and then Kemi comes along and

says it's not enough. And so you have

this little game that they're playing,

but they're all working for the same

team.

Anyway,

>> [clears throat]

>> uh Starmer's trying to get more money to

to the military.

And uh this is something that uh a

pattern that we're seeing throughout

Europe. Uh what are your thoughts?

>> Well, this is exactly right. I mean,

we've got another commitment to spend 15

billion pounds more on defense over 4

years.

Now, um

the problem is and we've discussed this

in many programs now.

Uh

Britain

is very heavily taxed. Some would say, I

would say over taxed.

Um it is in a very acute debt. Debt to

GDP ratio is about 100%.

Um there really isn't very much room to

increase defense spending in the way

that people continuously [clears throat]

and persistently demand. The only way to

increase defense spending is either to

borrow even more, which of which is of

course what is happening in Germany. But

then the Germans are not yet at a

debt to GDP ratio as written is. So,

they have a little bit more space to

borrow. The British don't. So, how are

you going to fund increases in defense

spending? Well, Starmer

obviously has decided to increase

defense spending. That was inevitable.

The way he's done it is by cutting the

infrastructure budget. So, there'll be

less spending on roads and on the energy

system, which has upset many people.

>> stuff?

>> Who needs that stuff? Exactly. So, So,

that that is his proposal.

Then, of course, what happens is you get

all the military people in the military.

The military is now demanding more and

more money to be spent

because

as far as they're concerned, more is

never enough. Um we have the entire

political class

uh from one end of it to the other

demanding that even more money

should be spent.

Nobody explains how this money is going

to be funded, what exactly is going to

be cut

in order to fund defense spending.

Uh you sometimes get the impression that

some people think that the benefit

budget can be cut.

Well, probably it can. But then, of

course, if you start cutting benefits

for people, social security, that tends

to be very unpopular. And which group

within society whose social security are

you going to take away to fund defense

spending? Um bad enough can people like

that never ask that question. And then,

of course, the other thing that you

quickly discover

is that when you drill into Starmer's

figures

yes, he is increasing the amount the

total amount that he's spending on

defense.

But, the greater part of it is actually

going to go

on

beafing up Britain's nuclear forces.

>> [snorts]

>> Which means that the conventional

forces, the army, the navy, the air

force are actually going to get less.

And the point is that spending money on

the nuclear forces is very, very good

for the big defense

contractors because that's where the big

contracts are, the big amount of money

is.

But, spending money on making drones and

building tanks and all and, you know,

shells and artillery guns and all of

that kind of thing. Nobody really wants

to do that because there aren't big

profits to be made in it. So, what

ultimately is going to happen is we're

going to spend more on defense, we're

going to see our infrastructure in

Britain deteriorate, our roads and our

energy system deteriorate.

And we're going to get more in terms of

our nuclear weapons capability in about

20 years when all of these investments

eventually

deliver something if they ever do. And

in the meantime, our army, our navy, our

air force will continue to decline. So,

we spend more and we get less.

>> Yeah, sounds like a good a good scheme

that he has going on there.

>> It is it [laughter] is a perfect

It is a perfect

>> It is the drones were were were the

wonder weapon that's going to defeat

Russia.

>> Well, there are a lot of people that are

talking about drones.

>> Not big margins, nowhere near big

margins. And you see what all what is

already happening is

um

who are being asked to build drones are

coming forward and say, "Well, you know,

you we we can make these drones better.

So, let's add a jet engine here. Let's

add a radar there. Let's make them more

and more sophisticated because of course

that increases the profit margins and

makes it worthwhile to build these

things." So, the result is that um we

are going to get more drones, but

they're going to be very expensive and

they're going to be very complicated and

they're not going to be drones of the

kind that many people are thinking

about, the simple cheap drones that

we've seen being used in the war in

Ukraine. And that, by the way, I predict

we're going to see the same pattern

right across Western industry, in the

United States and Europe, too, because

ultimately it just isn't profitable

for companies to make

drones. Except, of course, that you will

get scammers.

>> [laughter]

>> And I I you know, I want to say this

because already

there there's some evidence

that some contracts in Britain

are being picked up by people who you

might

describe as scammers, people who have no

experience of weapons production,

no experience indeed of any kind of

production, but are well connected and

probably they will make quite a lot of

money out of this, but what they will

deliver exactly nobody can ever be quite

sure. I have to be extremely careful

what I say here because obviously there

are legal issues, just to say. But, um

already this has been talked about and I

know it's been talked about privately

and we're going to see an awful lot of

this happen. By the way, that is also

going to happen across European

industry, too.

>> Yeah, but you said Germany has more of a

more more space, more flexibility.

>> Germany has more space and it has a

bigger, of course, industrial base. And

they can buy

and they can borrow but even Germany's

now running into problems. So,

we've had a major crisis a couple of

about a week ago in the German railways.

The German railways which used to be you

know one of the most efficient railway

systems in Europe. They came to a

complete grinding stop. The problems

with signals, the entire railway system

had to be shut down for 2 hours. It took

many days for things to be sorted out.

Anybody who uses German railways today

as I have had to do several times will

know that it is

becoming practically a nightmare.

Um infrastructure in Germany is also in

decline. Friedrich Merz of course when

he became Chancellor he announced that

there would be a relaxation of the debt

break

in order to sort out these

infrastructure problems.

But what is really happening is that the

big profits of course are being in

defense which is where Merz is really

interested. So, the funding on

infrastructure isn't happening to

anything like the scale that many people

expected. Germany continues to run up

debts and it continues to find problems

in increasing defense spending because

even though it has a bigger industrial

base

again it's not geared and it's not

structured for high volume production of

weapons. No Western country today is

geared for high production volume high

production volumes of weapons and we're

starting to get

problems. So, there was this big plan

put together by Rheinmetall to build

very big warships bigger than the

Arleigh Burke destroyers of the US Navy.

It

the whole program proved beyond

Rheinmetall's ability to manage, that's

my own view.

Um

Um the shipyards, which were mostly in

the Netherlands, really couldn't cope

with this program very well. It's had to

be canceled, even though huge amounts of

money have already been spent on it.

They're now thinking of another new

program to build smaller frigates um to

replace these big destroyers. I don't

think we're going to see these frigates

either. We saw the same thing happen in

the United States. The United States was

going to produce all kinds of very

advanced frigates. Then they were going

to produce cheaper frigates, then the

frigates they got uh were more

expensive. This is going to reproduce

itself right across the industrialized

West. We

really would require a major

reorganization in our industrial system

to be able to produce weapons in a cheap

way. The Germans

The Americans might be able to do it.

The Germans, in my opinion, cannot do

it.

The British don't not even try.

>> I'll uh

I'll disagree with you on that one,

Alexander. I I don't think that I don't

think we need to to look at the uh the

military production and reorganize that.

I think we need to look at the

politicians and the political structure.

I think [laughter] we need

>> Oh, absolutely. I mean, well, I'm

But I'm I'm talking about

>> I'm I'm joking, but I'm serious as well.

I mean

>> Yes.

Yes.

>> You know,

this is is it's it's a grift, man. I

mean, what else can I say?

>> That's exactly what it is. I mean,

spending more money on nuclear weapons

in Britain. I mean, we sort of we're

short of those. It's just it's just it's

just going to make little

and it's going to put money in the hands

of people who already have it. In

Germany, too, there's at least two

programs now to make fifth-generation

fighters in Europe. The Russians, the

Americans, and the Chinese already have

fifth-generation fighters.

Uh my guess is it's going to take at

least a decade, probably two, before we

see any kind of fighter jets

appear in Europe, modern fighter jets.

By that time, they'll already be

obsolete. But of course, in the

meantime, lots and lots of people are

going to make lots and lots of money.

We're going to have um all sorts of

trade fairs.

We're going to have links link-ups of

companies. We're going to have all sorts

of stories about how this is, you know,

great European collaboration on

projects. We're going to have all kinds

of projects on missiles, especially, I

suspect, air defense missiles, because

that's going to become the priority.

Weapons

are not going to come out out in

quantities at the end. But the

politicians will be happy, and the

people in business will be happy. And

when I talk about business, not

necessarily even the industrial

companies, but the finance people who

are the people who are putting up the

loans for these things, they're going to

do very well out of this. Because

remember, all of these loans,

even the loans that private companies

take out to build these weapons,

ultimately,

they are done on orders from

governments. So, the governments

ultimately stand behind the loans.

>> Yeah, and don't complain. Don't you dare

complain, because we got to fight

Russia.

>> Of course, it's all about fighting

Russia.

>> Or Iran, or North Korea, or China.

>> Or North Korea, or China, or any one of

these countries, and you know, we can

talk about that and talk about that

endlessly and silence anybody or scare

anybody who says otherwise. But, that's

that's going to be the story and it's

going to be the story in Europe for at

least the next 10 years. Whatever

happens in Ukraine, we're going to see a

major push

for this. And, um of course, the other

thing that's going to happen eventually

is that Ursula is going to say, "We need

pooling."

Um Germany's having struggling to fund

all of this by itself. So, we need

Eurobonds.

And that means we need to

tighten up and integrate our financial

systems even further

because that's the only way that we can

prepare properly to fight the Russians

or the Chinese or the North Koreans or

the Iranians or whoever else is coming

to coming after us. And that's coming,

too. But, in the meantime,

infrastructure, real industrial

activity, economic growth in Europe will

stagnate,

and Europe, which currently runs a

current account surplus, at some point

in the next 10 years is going to see

that going to deficit.

>> Such an obvious wealth transfer that

they're that they're putting on that

they're imposing on everybody. It's It's

as clear as day.

>> Indeed, so. I mean, can I just say

something else? Um

um again, this comes from UBS. In

another program, we talked about how

over the last 5 years there's been a big

increase in wealth, actual [snorts]

wealth that people have in Russia. This

is from UBS.

We have

identical We have studies about what's

from UBS as well, about what's have

happening in Europe over the last over

the last 5 years.

Um

wealth median wealth per adult in

Britain

has fallen by around 23%

in the Netherlands by about 25%

in Germany by about 14%.

Europeans are getting poorer.

>> [snorts]

>> This will continue. Some people, of

course, will get very, very much richer.

>> Uh we know who.

>> We know who.

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