[music]

This is Wall Street Week. I'm David

[music] Weston bringing you stories of

capitalism coming to an internet near

you. Artificial intelligence. Will those

helpful chat bots kill the search and

advertising paying for all that content

that you enjoy?

and liftoff of Falcon 9.

>> Plus, the race to make money in space.

Companies are competing to launch

100,000 satellites in the next 5 years

as China builds out its own space

infrastructure in Latin America.

And investing in Bolivia, a new regime

aims to be friendly to private

enterprise. But when is the right time

for investors to dip their toe in the

water?

But we begin with the continuing

conflict in Iran. Harvard professor and

former IMF chief economist Ken Rogoff

chronicled the US dollar's rise in the

beginning of its decline as a global

currency [music] in his latest book, Our

Dollar, Your Problem. It turns out that

it's not just oil and aluminum at risk

in the Iran war. It also may be the

status of the [music] dollar.

Ken, in your book, Our Dollar, Your

Problem, you talk about the position of

the US dollar as declining gradually

over time in relation to other

currencies. We now have a conflict in

Iran. Is that affecting that decline?

Oh,

>> I don't think there's any question that

it will affect the decline. It could go

either way. It depends on how it comes

out. If the US comes out incredibly

triumphant, there's peace in the Middle

East.

uh everyone, you know, looks to the

United States to maintain peace. That's

one outcome. Another outcome where where

it's viewed as a strategic defeat and

China gains. But, you know, it's it's a

step. I don't think either way it's

changing a dynamic that was going to

happen anyway. There are things on the

outside that it influences. So they're

it's definitely going to help China

accelerate getting other countries to

use its currency particularly for

Chinese imports. For example, if China

buys oil or China buys anything, it's

going to help in that dimension. Uh but

it's also affecting global debt because

everybody sees a lot of need for

military expending. The US is the

biggest debtor in the world. We lose the

most when global interest rates go up.

So there are pressures from the outside

coming from everybody's trying to look

for other options and pressures from the

inside that we're you know running this

big debt that is manageable if we wanted

to but there's not a lot of will to want

to

>> is the strength of a currency reflective

of the strength including military

strength of the country in your book you

graduate to the Armada actually with

Queen Elizabeth I and the Spanish as Is

this potentially a barometer of how the

world is perceiving the relative

military strength of the United States?

>> The military strength's a piece of being

the dominant currency. And here, just to

be clear, we're talking about the

dollar's market share, which reached an

incredible peak about 10 years ago. But

also, military strength gives you the

ability to affect negotiations. They can

be over very unrelated things. They can

have to do with how the IMF works. they

can have to do with how global banking

regulation works. So having the military

power at the end of the day says well

you know of course of course it matters

for a lot of things and if you're looked

at as weaker it hurts you and part of

the protection historically going back

to like 1974 was of the Gulf states

countries like Saudi Arabia because of

US military protection. Now, as you say,

it depends on how this all plays out.

But if in fact the United States does

not uh have a triumph of some sort over

Iran, does it really undermine the

confidence of the Gulf States in using

the US dollar?

>> Well, the Gulf States are a really

important anchor of the US dollar. And

you know, it's interesting you picked

the 1970s because it really fell in the

1970s. Europe left the dollar. That's

worth remembering. And the Gulf States

when they sort of did their recycling of

their petro dollars through the United

States and priced oil and dollars, I

think it was sort of helpful. Although

nevertheless, you know, that period uh

was down. I don't want to overstate the

petro dollar. I want to be a little

careful about that because oil is a very

flexible price. We're all staring at

Brent crude and it's still here and it

goes here. it can move very fast. So

it's a little bit like my paying with

Visa or Mastercard.

It matters a lot more whether uh goods

manufactured goods are priced in

dollars. But it but it's important. I

mean it fills a lot of roles. The Gulf

States use dollars. Saudi is still

pegged to the dollar. I don't know how

long that's going to last but they still

are. And because uh so many of them uh

are pegged to the dollar, rotate around

the dollar, they hold more dollars.

They've been very important to our

business model. Not as important as

China, but they've been important. And

it's unclear how this is playing out. I

mean, I think a lot of the Gulf States

are looking at us and saying, "Wait, I

thought you built those bases to protect

us. I didn't know you built those uh you

know uh various military complexes in

our country so we could be target

practice and are you on our side or you

on their side like what's going on?

That's been a delicate dance. I I don't

think we know how it comes out yet. So,

you know, China's kind of playing it

cool. A lot of people say they may

benefit. They might, but but I I just

think we have to see what the endgame of

this is. the Chinese might benefit. Will

will the yuan benefit? Because we see

Iran saying, "We'll let oil through the

straight moves if you if you sell it in

yuan, for example." And China certainly

wants more transactions denominated.

>> They're doing quite a bit in crypto,

too, also, by the way. Yeah. I mean, if

they get paid in dollars, we can

sanction them immediately. They're

putting it hostage. Why the heck should

they do that? That's certainly

significant. But the big thing of the

Iran war in the future of the dollar is

it's raised global interest rates. They

were going up and up and up. So if I

look at the dynamic of how I see things

unfolding, it's that there's this

pressures from the outside that are very

slowm moving but they're happening to

have a more multipolar system. And there

are problems on the inside where we're

the richest country ever, ever, ever.

But we still have trouble paying our

bills and running these crazy large

debts. There's no political consensus in

either party. The Republicans don't want

to tax anyone. The Democrats think 1% of

people can pay, which doesn't add up.

And so we are racing towards having a

fiscal problem. And then central bank

independence becomes a problem because

when you have a fiscal problem you're

kind of looking for the central bank to

bail you out and if all that's happening

that's sort of what happened in the 70s

in a way it undermines the dollar.

>> So so what are the metrics that people

should use in figuring out where we are

in the relative prominence of the

dollars? What do you look at? I mean for

example were you surprised that the

dollar was not more of a safe harbor

when the Iran conflict broke out? So uh

there are people in finance uh who are

doing all these papers showing that the

premium we used to extract on longer

term debt is gone. So on short-term debt

there's still a premium to dollars. It's

still the safest asset. Long-term debt

it's not there anymore. I mean it's

safer than let's say uh you know some

African or South American countries debt

but if you compare it to many European

countries uh Japan it doesn't rank that

way they used to and so there are ways

in which what we're getting out of the

deal is going down. Now we can crowd

everything into short-term borrowing and

Secretary Bessence said I think interest

rates are going to go down. I'm going to

borrow more short-term.

Okay. But that's very risky. In fact, I

think he was saying not to do that 10

years ago. And so we're losing you you

see that in many uh measures. On the

other hand, you know, these things are

very slow moving. If you do uh foreign

exchange trading is overwhelmingly goes

through dollars. If you do uh currency

of denomination of debt, it's

overwhelmingly dollars. Of course, part

of that's because more than 50% of the

debt of the advanced countries is ours.

More than that in global bonds, it might

even be 60 or 70% is ours. So there's

there's a lot of liquidity in it. I

still remember 20 years ago a prominent

European economist getting up at a

meeting and saying, "Today is a big day.

There's more euro euro debt than dollar

debt." Which was true that day. Well,

how did that work out? You know, I mean,

it's I I think this is a slowm moving

thing. We're seeing it in the interest

rate spreads. We're seeing it in

reserves. So what countries are choosing

to do uh we're seeing it in uh actions

that the Europeans and the Chinese are

taking to develop independent systems.

But this isn't something the private

sector is just going to do. It's mostly

the Chinese, the Europeans are leading

the way. We are digging our, you know,

grave so to speak. And it's all the

actions of the governments. It's not

something that's happening overnight.

>> Coming up, the content business made a

long and difficult transition from print

to the internet. But what happens if

scrolling online is now replaced by AI?

We bring you the story of another

revolution in how we get our information

and entertainment.

>> [music]

>> This is a story about big changes on

tiny screens. Since its inception, the

internet has become where we turn for

content. Content we mostly access

through search. And that's mostly free.

But of course, it's not really free.

When we searched on platforms like

Google, we were directed to web pages

created by publishers who got paid for

all those ads we spent time looking at.

Now all that is changing and as AI

becomes the new gateway to the web, it's

transforming the economics of the

internet.

We believe the high water mark for

internet traffic like [music] that was

sent out from social media and search

and AI tools which are quite nent at the

time was 2022. [music] Essentially over

the last 4 years those numbers have been

dropping. [music]

>> Rand Fishiskin is an author and

entrepreneur who specializes in online

search

the main way that most of us interact

[music] with the web. I do a lot of

research with clickstream data which

essentially looks at devices and what

they visit [music] and and don't visit.

Whereas in 2011, Google was sending

north of 70% of all searches to a third

party website, right? A website not

owned or controlled by Google. And today

that number is in the mid40s and

falling. Um that clearly indicates this

zero-click trend.

Zero click. It's a term for an online

search result that doesn't [music] lead

to any other web pages. That can be good

news for users if their question has

been answered quickly and correctly. No

need to spend time scrolling through all

that text and pages of ads. But if you

are a publisher counting on that click

to bring [music] traffic to your website

and to sell those ads, it's very bad

news. Which means the creators of all

that web content have [music] to rethink

the game. Long before AI, Google started

disintermediating content providers by

answering questions right in the search

results. [music] You search for the MET

score, the score is right at the top.

And AI just enhanced their ability to do

this.

>> For an idea of just how big this change

is for Google itself, here's the

company's head of search talking about

incorporating AI just last month. Now

we're entering the next chapter of

Google search where incredible AI

features aren't just in search. Google

search is AI search through and through.

Now this is the biggest upgrade to our

iconic search box since its debut over

25 years ago. The problem is that most

people don't click on the links in

Google and that has

>> Caitlyn Petri is author of all the news

that's fit to click and a professor at

Rutgers who studies the way algorithms

shape online media

>> news sites that were counting on

referrals from Google for their traffic

for their ad revenue to draw maybe

subscribers who might come to the site

get interested and then subscribe are

now seeing in some cases very dramatic

decreases is in the traffic that they're

getting from Google.

>> The move from print to the internet,

many people think actually eliminated

some news sources. A lot of local

newspapers, for example, were eliminated

partly because of the business model

challenge, the revenue challenge. Uh do

we face a risk of that with AI that we

will eliminate even further sources?

>> I think we do. Um I think it's a major

concern.

>> It was really revealing. Perhaps nobody

in the world has a better view of these

changes and what they mean for online

content creators than Neil Vogle.

>> What happened was our audience, right?

And and we're we reach half of America

each month. Our audience on the internet

was 75% from Google search

2022, maybe a little bit more, maybe a

little bit less, but ballpark that. That

is now 25% of our audience.

>> Vogle is CEO of People Inc. The largest

online and print publisher in America.

It reaches 175 million people each month

with dozens of publications whose names

you know well.

>> Better Homes and Gardens, People,

Entertainment Weekly, Travel and

Leisure, Food and Wine. And we put all

of these brands together because we

believed we understood how to run these

classic heritage brands on the internet.

And we've been proven right. Although

Vogle has had a front row seat to the

collapse in search traffic that AI has

ushered in, he also told us something

surprising. His business is booming.

>> We're very profitable and we're defying

the narrative around publishing. That is

publishers can't succeed in this world

and we're succeeding. We feel really

good and really optimistic about the

future of media. Back in the day, before

there even was an internet, believe it

or not, there was a time. Uh if you look

at a publisher, newspaper, magazine,

their revenue came from two sources,

subscription and advertising. What's

your revenue model?

>> If you look at the internet, that is

where we thrive. That is our bread and

butter. 90% of our profitability comes

from our internet and our online

presence. That is very much advertising,

but it's also lots of other things.

Those other things include deals and

branded products, but Vogle says they've

also got a new revenue stream.

>> We licensed content to LLM and AI

engines. We sat with Sam Alman at OpenAI

right before they could launch the first

commercial LLM. This is the fall of

2022.

And we saw this LLM and and

[clears throat] we saw what it could do.

And we were like, uh-oh. Like the world

is going to be different from here. And

there's moments in your life who know

the world's going to be different. Like

you have your first kid or the

Philadelphia Eagles win the Super Bowl

and you know that like your world's

going to be different from there. This

was one of those m this was like the

business version of that moment. And we

took a look at this and our first

reaction is thank god we have brands

because what we knew was this was going

to be a new paradigm in media and we

knew there were going to be risks and

there going to be opportunities and we

made the bet and had the thesis that

says if you have these intangible assets

that really really mean something to

people you have something that is going

to increase in value in an artificial

era. And starting in 22 and 23 we

started to build other ways to

distribute our brands. Tik Tok,

Instagram, YouTube, our own emails,

product licensing, all of these things

we did. And cut to today, five years

later, we've made 10 straight quarters

on Wall Street. We're growing in an area

where at most publishers are struggling.

And we did it because we have these

amazing brands that can live in all

these places and our aggregate aggregate

audience size is multiples what it was

when we started here. You mentioned that

you do have licensing arrangements with

some of the LLM large language models.

>> Uh how does that work for you? Is it

real money?

>> So it's real money. It's material for

us.

>> I think we made a decision. Um

maybe it's right, maybe it's wrong. So

far I think it's right that we wanted a

seat to the table. The important thing

to understand and realize is AI needs

three things. It needs power, which has

been a lot of talk about power. It needs

a model. It's been a lot of talk about

models and it needs inputs. We are the

inputs. We are the training of the

models. Now we believe and I think if

you talk to any of these AI

professionals believe the internet's

been crawled. All the data in the world

is already in the models. So the value

should acrue to those of us that are

still making substantial amounts of new

things that are needed for the search

use case which is a very big use case

and are needed for all the corporate

clients that want to use LLM for their

stuff. So it could be something simple

as we have 50 new recipes with avocados

in them and avocados are important to I

can tell you every single thing Kim

Kardashian did yesterday. But these are

things that are very valuable these

pieces of data. The other thing we did

which is really important here is

part of having a seat at the table is we

wanted to control our own destiny. Last

uh summer and in July, we made a

decision and we partnered with a group

called Cloudflare to block every AI

crawler you could possibly block. So,

you cannot get access to our content

unless you pay us for it.

>> And given your model uh to license the

um training using your content

>> to an LLM

>> is basically found money, right? It's

not taking away from your other business

because that's based on brand.

>> I mean, so it it's interesting. Is it ah

it's funny we have this conversation all

the time like and the answer we always

come back to is cash is cash it would be

amazing if we could make money the way

we made money three or four years ago be

super fun I'd have a lot more free time

but I don't and we have to work hard so

it it is what it is

>> for a publisher with strong

wellestablished brands even the

uncertain future with AI may be bright

but for smaller publishers and for the

web as a whole the outlook may not be as

encouraging potentially in the longer

run. What could this mean for the

internet itself? Because the internet

really has thrived on very rich

production of content. If content

providers don't get paid for that,

sooner or later there's not going to be

as much content.

>> Yeah. This this death spiral that you're

describing has been something that

people have theorized over the last

three or four years with no discernable

solution. I I'm going to tell you what I

think is the most likely scenario, but

it's also the most tragic one, which is

that in a few years, AI tools find

themselves unable to get enough content

to train on, whether that's video or

text or audio, long form, short form,

and they decide to build their own

publishing departments. And in years to

come, a decade, two decades from now, it

would not surprise me if

OpenAI or Anthropic looked a lot like

Tik Tok where they have a creator fund

and they pay creators a certain amount

based on the amount of traffic and page

views and value to the training set that

these creators provide. And so they're

contract employing these creators and we

get a we get an AI shaped internet,

right? an internet that is built not

only for but by AI tools. That um that

seems quite probable.

>> I think that that is something that if I

worked at an AI company, I would really

be thinking about because if the traffic

drops so significantly that we see even

more jobs in journalism be lost. We see

even more, especially local outlets, but

a lot of news outlets shutter themselves

because they can't stay afloat. um that

diminishes the amount of content that

these LLMs can train on too, right? So,

this is something that I think we should

all be concerned about, not just

journalists, but um also those who work

at AI companies, anyone who cares about

the future of democracy should be

thinking about this right now.

>> Tell me how broadly apart from people,

beyond people, how do you think

generative AI is going to change the

nature of the internet, the content on

the internet? I so we can end up being

fairly myopic around here and looking at

our own use case. I am um and I have to

be I'm like a crazy optimistic person

and um I am very optimistic about AI for

us, right? The risk for AI for us is

already out. It's already killed our

biggest piece of traffic from 5 years

ago. But we've built something even

better over here that we use AI to do

more of. Like we are today, we make

about 50% more content than we made when

this whole process started for roughly

the same cost and humans make every

single thing you read and see because

we've been able to use AI in the

background to streamline so many

processes. If you look at as an

opportunity, it's incredible for us and

we have no choice but to look at it that

way. If we look at it any other way,

it's too scary. And it's sort of like

riding a bike. Don't look down. Look

towards the horizon like and you'll

[clears throat] be fine.

>> Since we talked with Neil Vogle, People

Inc.'s parent company made an offer to

buy the part of MGM it doesn't already

own. In making the bid, chairman Barry

Diller emphasized the value of what he

called realworld assets that AI cannot

easily replicate. Pursuing a part of the

media world very different from the

online content brands that Vogle

continues to build. Up next, we've come

a long way from Cape Canaveral. Today,

there's a booming business in space

launches, which means a long waiting

list for satellites trying to get into

orbit. [music] And the latest

opportunity may lie 1,000 mi south of

Florida in the Dominican Republic.

This is a story about making money

22,000 miles up, meeting a commercial

need for tens of thousands of satellites

to be launched by 2030. There is a race

on to get all those satellites into

orbit, but also a race with China, which

has already built a range of satellite

ground stations in Latin America.

Something that's gotten the attention of

the US government.

[music]

So, it's about 45 minutes on a

helicopter flight. It's probably about

four or five hours driving.

>> In the western part of the Dominican

Republic, on the border with Haiti, lies

Pedanales, a quiet coastal province that

will soon be home to the country's first

spaceport and what is slated to be the

first US-owned commercial spaceport in

Latin America.

>> If they were to identify this region as

ideal for commercial space, be

essentially the Straits of Hormuz for

space. When we talk about the straight

of Hormuz, we think of all that oil and

fertilizer and aluminum trying to get

through a narrow sea channel. When it

comes to space, it's satellites. And

[music] the choke point isn't a sea

passage, but launch pads that we simply

don't have enough of. [music]

>> How many pads are you going to have

here?

>> Four.

>> Four pads here.

>> Burton Catage is a former Air Force

colonel who founded aerospace company

Launch on Demand in 2018. The amount of

support that they came back with was

amazing.

>> He's now developing a $600 million

commercial spaceport in this remote part

of the Dominican Republic.

>> The ecosystem at Cape Canaveral more or

less has grown out of ad hoc. Okay. It

has it was not necessarily built with

the idea for the commercial space

industry. The entire market has changed.

You know, the space industry is

something on the order last time I

checked it was like $650 billion. um

it's supposed to be over a trillion um

in by 2030, maybe a trillion and a half.

And some people are even saying that's

pretty low. [music]

>> To relieve the bottleneck in launching

the growing number of satellites we

need, the US has to have more

spaceports, [music]

creating a business opportunity for

companies like Launch on Demand. Right

now, there are over a dozen US

spaceports across the country [music]

and just one internationally, Rocket

Labs launch site in New Zealand. I think

the United States from the space economy

perspective is in a position of extreme

opportunity and they are in a growth

phase. Ryan Brookart is a senior partner

at McKenzie who focuses on global

aerospace, defense [music] and space

companies.

>> I think the infrastructure in in the US

is becoming a bit stretched, right? If

you look at our launch sites, we're

launching, you know, every day or a

couple times a day from some of these

launch sites. There's a huge backlog of,

you know, US companies looking to launch

things into space and to be able to

accomplish their mission and get the get

the return that their investors are

looking for.

>> Right now, uh, I've heard that it's

about three-year waiting list to get a

satellite on orbit.

>> What accounts for that demand ramping up

so dramatically? And do you expect it's

going to continue to increase that much?

>> Well, in order to have global coverage

of the entire Earth, you have to have a

lot of satellites. Right now, there's

about 14,000

satellites in orbit. The FCC tracks all

the number of satellites that are going

to be submitted, and they're looking at

over a 100,000 satellites by 2030. So,

if we got 14,000 satellites, and it's

2026 already, and we have to launch

100,000 satellites by 2030.

That's a lot of launches that have to

happen between now and then. That may

explain the need for more launch sites,

but where

>> the goal for a rocket is to get to space

in the most efficient and effective way

possible. And engineers spend hundreds

of millions of dollars trying to finesse

what does that efficiency look like? But

eventually comes down to two things. How

much fuel can I put on the rocket? And

how much mass can I put on top of the

lift? So they're always playing with

that equation. Well, the geography has

an important part in here this because

in order to achieve escape velocity, a

rocket has to achieve 17,500 mph.

And the Earth closer to the equator

spins faster than it does at the poles.

What that translates into is you could

put more satellites up with less of a

smaller rocket. And so the goal of most

spaceports is to try and get to the as

close to the equator as possible. But

why does it take me to Dominican

Republic?

>> So what we ended up doing about 3 years

ago was doing a technical feasibility

study. We looked at everything we could

possibly look at. But as we did our

analysis, it started shifting to

paradales which has a relatively low

population and because it's on the

coastline and because people don't live

in the water, we have almost a straight

shot to orbit without hazarding the

public.

>> So if something goes wrong, it goes in

the ocean.

>> That's right. So that's why a lot of our

space ports are built next to the coast

is not necessarily because of the water.

It's because of the low population. It's

not really about whether the rocket

explodes or whether the rocket gets to

orbit. It's all about public safety.

>> Safety is no small concern in the new

space race as we saw just last month

when Jeff Bezos Blue Origin rocket test

blew up in spectacular fashion. and

liftoff.

>> Along with the expected trillion dollar

IPO of Elon Musk's SpaceX, it's a

reminder of just how public the failures

and successes can be in this business

and how big the players are.

>> The pad will be 2 miles to the coast.

>> That's one reason that Burton would

rather work with them than against them.

>> You are though competitive with SpaceX,

right? Most of the feedback that we have

gotten from all the commercial operators

is they would like the ground

infrastructure to be more responsive to

be more not we launch on this day we

launch on readiness and right now the

infrastructure and the processes are not

designed that way. So right now um

statutoily the office of commercial

space has 6 months to review it and give

you a decision. We're going to give you

a license in 45 days. That's very

attractive. We don't look at ourselves

as competitors to the rocket customers.

We look at us as enablers.

>> What's the attraction for investors and

what's been your experience so far on

people stepping up?

>> There is a large appetite right now for

space. This is kind of like the early,

you know, early internet age, if you

will. The problem is there's not very

many investment opportunities or good

investment opportunities to get into

space. The first phase of the spaceport

is going to be about $600 million of

investment. Um and uh the response that

we've gotten is has been really quite

significant.

>> As launch on demand prepares to break

ground later this year, a larger race is

already underway in Latin America. Space

infrastructure has become a [music] new

front in the US China rivalry.

>> China is aggressively making investments

in our hemisphere particularly in Latin

and South America. also partnerships

that they have made with Caribbean

nations to have aerospace applications,

satellite demonstrations,

civilian applications, also with

military application components to it.

>> A recent [music] report from the Select

Committee on the Chinese Communist Party

warned about China's growing space

footprint in the region, including more

than 10 satellite tracking stations.

Congresswoman Haley Stevens of Michigan

is a member of the committee.

>> This is a call to double down on the way

our system works and so we don't want to

be seeding ground to China. We don't

want to see them uh continuing to eat

our lunch uh with our neighbors and we

can win this race.

>> I guess you could look at it as a

marathon or maybe an ultramarathon, but

I don't see an end here. There is not a

clear finish line. Carrie Bingan is a

director of CSIS's Aerospace Security

Project.

>> Well, I thought what was really

interesting in the decades that we were

competing against the Soviet Union, so

much of what was happening in space, it

was fueled by government. I think what

you're seeing now, which really sets

this current era apart, is so much of

what's happening in space is commercial.

Over 80% of the satellites on orbit

today are commercial systems. a lot from

the United States, SpaceX, Starlink, but

many other countries are now players in

space. The technology is much more

distributed across the globe. Launch

costs are a lot cheaper. So, so any

country or even entity can put something

in orbit and much of that is now fueled

by private capital, not just taxpayer

dollars. China has ambitions to be the

world's space power.

their presence and their capabilities in

Latin America are part of that strategy.

They want access. They want influence.

They want to be able to band together

with these countries in bodies like the

United Nations to start shaping where

the standards are.

>> We started this program well before

people realized that China was, you

know, very interested in taking over

real estate in Latin America. as we have

gotten the Trump administration and

President Abbena's administration

together, they are aligned on what has

been called, you know, the the pivot to

the Western Hemisphere. So, I would call

the spaceport more of an artifact of the

decision to pivot to the Western

Hemisphere rather than, you know,

anything else. And we emphasize this is

run by a US company that is designed to

be commercial that is complimementaryary

not competitive with the spaceports in

the United States and we work very very

hard to make sure that they understand

we're a friend not a foe and so so much

so that when we have talked to the

president of we said we want to adopt

the US safety standards for launch and

re-entry and he he agreed and so if If

you're a customer that launches from the

United States, the standard will be the

same if you launch from the Dominican

Republic.

>> We have holes. We never thought that

missiles would be launched across the

southern hemisphere. So, we did not put

a lot of radars down in South America or

in Africa, for example. But we're

realizing we need to have coverage

[music] of of everything that's

happening in orbit. We're seeing China,

we're seeing Russia maneuver satellites

much more frequently.

Are they benign or do they have a hidden

weapon? Um, we don't know, but we know

that they're testing these kind of

capabilities and so you need to be able

to monitor that.

>> Are there restrictions on who can use

your spaceport?

>> We want to stay in line with US foreign

policy. And what do I mean by that? So

even though I'm a US company operating

in Dominican Republic, I need to make

sure that my host country, the US in

this case, is aligned with what I'm

doing. [music]

So if I sort of, you know, went kind of

off the off the beaten path, I would

essentially be cutting myself up from

the largest commercial market in the

world, which doesn't make much sense.

Launch on demands being aligned with the

US government on the geopolitics of

[music] space infrastructure in Latin

America is important to CatLage. But

make no mistake, at its heart, this US

spaceport company is a business, one

that Called believes will be a [music]

good one. So, we estimate that by about

the 10-year point after we hit full

operations, we'll be generating about $8

billion. And so, this will be the first

private [music] revenue generating

spaceport in the world. And the reason

why is was because we're leveraging all

the technology that's been invented.

We're bringing that here.

>> Coming up, from the Dominican Republic

to Bolivia for a look at another Latin

American country chasing US investment

with a president trying to shake things

up.

This is a story of rebranding a country.

Rodrigo Paz was elected president of

Bolivia in November, marking a major

shift for the country following two

decades of socialist rule. PA has a

mandate of economic reform, closer

relations with the United States, and

increased foreign investment. But as our

colleague David Guro found out, ideas

and execution are sometimes very

different things.

The Solar Deuni in Bolivia is the

country's crown jewel. It's a sprawling

salt flat on the Andian Alta Plano. So

large, it's visible from space. We are

at u 3,650

m [music] above sea level, my friend.

>> Very high.

>> Very high.

[music]

>> Bolivia's economy benefits from the

tourists who flock to the Solar from all

over the world. What the country's

leadership is banking on is what's

underneath this snow-like layer of salt.

>> So the lithium mining [music] just down

on the salt. The idea of the government

was like do some manufacturing batteries

or electric cars things like that but uh

you know it takes a long time of course

and also we need some technology from

outside you know

>> we're standing on top of one of the

largest lithium resources in the world

[music] and President Rodrigo P says if

the country can develop these reserves

it will transform Bolivia's struggling

economy improving the lives of some 12

million Bolivians.

>> Peru Peru, Bolivia, and Chile

collectively hold the largest

concentration of minerals in the world.

Peru generates $50 billion annually.

Chile generates $65 billion annually.

Bolivia

>> Bolivia possesses the highest

concentration of minerals of the three.

Yet we generate only 6 billion per year.

The question is why do we choose to be

poor?

>> After he was elected last October,

President P signaled Bolivia is open for

business. But as we discovered, there is

a disconnect between his rhetoric and

the realities on the ground. We arrived

in Le Paz to sit down with the president

as violent protests erupted across the

country, shut down parts of the city. We

got the go-ahead to climb through

barricades, part of a police perimeter

that protected Bolivia's Parliament

building and presidential palace.

We were told to wait in a cafe on a

mostly empty plaza.

And as the hours ticked by, we could

hear protesters just a few blocks away

throwing dynamite.

Tear gas hung in the air.

President Paw, we learned, was locked in

tense negotiations. Just before

midnight, we got word from one of his

adviserss the president would have to

postpone [music]

our interview. One week later, we

finally got our chance to talk with him.

It's been a busy week.

>> Three weeks.

>> Three weeks. Many of these protesters

are calling on you to resign, to step

down, and I'm wondering if there's a

point at which that will become

something that you would consider

>> in 5 years from now. When we conclude

our administration, Bolivia will be an

advanced nation grounded in a modernity

made necessary by new institutions,

a frontal assault on corruption, a

controlled fiscal deficit, and a clear

path towards growth within an open

economy governed by clear laws.

Moreover, it will be a country where

racial, regional, and cultural

differences are not exploited to fuel

political conflict. Where I hope I will

leave behind a government characterized

by pluralistic participation.

At a precarious moment for his

presidency, Rodri Pas has gotten public

[music] support from the Trump

administration. Secretary of State Marco

Rubio said the United States stands

squarely in support of Bolivia's

government. [music] Trump and his team

have embraced PZ's new vision for

Bolivia as they've welcomed wins by

other center-right politicians in Latin

America.

Trump

>> I met with President Trump. There is a

relationship regarding the geopolitical

and geoeconomic vision on the

continental level. Bolivia's vision is

very clear. Pragmatic is everything that

is functional for the development of our

economy of the economy of the people. We

will be seated so that we can

collaborate and be part of a global

vision. [applause]

>> I think that investors in general should

have the patience to follow the

situation and see, you know, how well he

pulls it off.

>> Hans Humes has spent his career

investing in frontier markets. He's the

chairman and CEO of Greylock Capital.

the markets generally give a pretty

positive tailwind

um when a right of center government

comes in. So getting the enthusiasm

putting it out there saying we're open

for investment great and then tapping

the markets when they did raising a

billion dollars I think you know was a

good signal. Everybody knows the Bolivia

story. It's an incredibly,

you know, commodity-wise,

it's kind of hard not to see it as a

really easy place to make money. It's

just the sort of the ethnic tensions

there that have always existed. And the

fact that they have a tradition of going

out in the streets, there's been a lot

of turnover of governments and as we're

seeing now, it's pretty easy to sort of

choke the economy.

>> Doing business in Bolivia has not

[music] been easy. And there's been talk

of harnessing its lithium for decades.

Today, a lithium plant owned by the

state is running at [music] just 15% of

capacity, and contracts that Chinese and

Russian companies signed with PA's

predecessor haven't been ratified by

Bolivia's Congress. In the near term,

Bolivia wants to boost tourism [music]

as a source of revenue, but the

longerterm vision is to do more with its

minerals.

>> The country's never been closed for

business, right? uh there there's always

been uh foreign investors coming in and

there's always been the ability to do

business but there was always

difficulties with the administration.

>> Jorge Chow is a senior partner at the

law firm Dentons based in La Paz and he

[music] spends a lot of his time working

with foreign investors on deals

involving Bolivia's natural resources.

foreign investors are are a little weary

and and and concerned right that their

rights won't be respected right and they

won't be able to carry out the project

in the terms that they that they want.

One of the main things uh in in some

strategic se sectors was that you needed

to be in an agreement with the

government and to the extent that you

weren't able to um

have a security that the government was

going to actually you know comply with

their side of the agreement that that

was that was a complicated situation. if

the government had too much of a say,

right? And and and you were not in a

position to, you know, uh make your

rights uh upheld, then of course that

gives everyone pause. The fact that the

Bolivia left the the exit convention and

uh was reluctant to enter into

international arbitration agreements,

that gave a lot of investors pause.

>> What needs to happen over the course of

the next year? for President P has a

5-year term, but uh for Bolivia to get

on track in the way that he wants it to,

what needs to happen in in a year's

time,

>> they need to see results of some sort,

right? So, some of those results have

already been seen, right? Uh we need to

stabilize the economy. [music]

>> To do that, Bolivia has turned to the

International Monetary Fund. It's in

negotiations for a $3 billion package

that P says would go towards social

organizations, entrepreneurship, and

economic development. [music]

But just 6 months into President P's

term, many Bolivians seem to be running

out of patience. Protests have followed

his decision to cut fuel subsidies. And

with inflation at 14% as recently as

April, the pressure has mounted. But the

calls for PA to step down go beyond

economics. Some opposition groups have

sought to force him from office

entirely, and the blockades they've

erected are now causing shortages of

food, gasoline, and medical supplies.

Do you see any missteps, things he could

have done differently or should have

done differently?

>> Pulling away subsidies, it's a uh it's

the right thing to do.

Um but it's a wrong thing to do if you

don't manage it well. One of the

problems that you see in a lot of these

countries, whether it's Ecuador,

Bolivia, is, you know, you want to head

off people going into the street. So

maybe there he should have

tried to have a bit of a negotiation on

the timing of removing subsidies, slow

walking it. He probably should have

recognized that stylistically he might

have wanted to do a Malay, but

practically speaking, he didn't have,

you know, he didn't have the national

support um that Malay did.

I imagine there are investors outside

the country who are watching what's

unfolding in Bolivia and wondering how

much has changed if it's still status

quo that there are protests and

demonstrations and overarching

uncertainty. What would you say to those

investors or those prospective investors

about what Bolivia is like today and how

welcoming Bolivia is of outside

investment?

We were promised 20 years of the

possibility of becoming a Switzerland.

That was the promise made 20 years ago.

20 years later, they have left behind a

shattered economy, stripped of the

natural resources such as hydrocarbons

that we would otherwise export.

>> We possess abundant hydrocarbon

reserves. Yet they have left us without

the necessary investments and without

the security required to ensure that

those wishing to invest in Bolivia find

clear rules and laws during this

transition. Laws that would foster an

investment safe environment in Bolivia.

>> President P is pushing for changes to

Bolivia's legal framework to make the

country more businessfriendly. [music]

He's still making his pitch to the

Bolivian people and also to outside

investors. The country just held its

first dollar denominated bond sale in

almost 5 years. What would it take for

you personally to invest in Bolivia at

this point in time?

>> We own some of the bonds. I mean, we're

already in there. We're bond guys. We're

Yeah, I'm not going to buy a lithium

mine. I have friends who might be, you

know, I just wouldn't know what to do

with it. But, um, yeah, I think the

riskreward now it's tricky. I'm not

going to put 50% of the portfolio in it,

but I think it's a good risk return.

We've had a lot of bad headlines. I'm

willing to keep the focus there cuz the

macro story is a good one.

>> That does it for us here at Wall Street

Week. I'm David Weston. See you next

week for more stories of capitalism.