You Can Tell an Enemy by the Currency It Keeps

Transcript of Peter Navarro's Latest Taking Back Trump's America Podcast

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NOW THE TRANSCRIPT!

Hi. Peter Navarro here. And in this episode of my Taking Back Trump’s America podcast and substack, I am going to offer up the first episode of what will be several discussing the coming currency wars between the United States of America, Communist China, and Czarist Russia.

In this episode, I am simply going to reprise a segment I did last week on Steve Bannon’s war room where I coined the phrase “you can tell an enemy by the currency it keeps” and then discuss all of the various countries which are getting in bed with either Communist China or Russia to scuttle the American dollar as the world’s global currency reserve.

In a future episode, I will get into the technical aspects of how currencies work and what exactly reserve currency is. But in this episode, I not only talk about the benefits of having the dollar being the world’s reserve currency but also, from my past perch in the White House, talk about the dollar’s deleterious effects such a reserve currency status can have both on our trade imbalance with the world – yes, the trade deficit soars -- as well as our manufacturing and productivity. These side effects are the weak underbelly of what a lot of pundits like to call King Dollar. In this discussion with Steve Bannon, I take a more nuanced view.

At any rate, take a listen to the clip. Or, better yet, click on the link to the video I have put in this substack offering and kick back and watch the show. You will see that it is not just established American enemies like Iran, Russia, and Communist China that are trying to scuttle the US dollar but also alleged friends ranging from India and Saudi Arabia to  even France. Yes, indeed, you can tell an enemy by the currency it keeps.

So enjoy the rest of the show, and please, if you haven’t yet already, become a paid subscriber to Peter Navarro.substack.com. That’s Peter Navarro.substack.com. And if you can, write a review of this podcast.  Now’s here the clip!

NOTE: I’M TRYING SOMETHING NEW BELOW HERE.  TO GET YOU A TRANSCRIPT OF ANY OF THE STUFF I DO ON SHOWS LIKE THE WAR ROOM, I’M TESTING A TRANSCRIPTION SOFTWARE.  BELOW IS THAT SOFTWARE BUT YOU WILL SEE THAT IF YOU COMPARE IT TO THE ORIGINAL RECORDING, THERE ARE SOME MISTAKES.  SO LET ME KNOW WHAT YOU THINK IN AN EMAIL AND I’LL DO A POLL ABOUT THIS TOO.  BEST, PETER

Bannon: China warns Europe not to follow U.S. demands for trade curbs with Beijing. At the same time, you have Brazil, you have Iraq, you have the French. Now through UAE, you obviously have the Bloods and the Cripps in Saudi Arabia and the Persians. This rapid movement to use the yuan to replace the petrodollar could not be more in your face. And I keep warning people about how rapidly it's occurring. At the same time, you've got Macron and the head of the European Union heading to Beijing next week for economic talks. Your thoughts, sir?

NAVARRO: Steve, you can tell an enemy by the currency it keeps. You can tell an enemy by the currency it keeps. Now, the obvious ones who are cooperating with communist China on using the yuan instead of the dollar are Russia and Iran. But let's think about some of the other countries on that list.

Iraq, where we put trillions of dollars of blood and treasure there, is now cozying up to communist China. India, interestingly enough, which is supposed to be our buddy, has a long history going back to the old Soviet Union days of being closely allied with Russia and the then Soviet Union. So there's a lot of ties there.

India is using the ruble and now the yuan to bypass any sanctions. ??????

So that's a little sketchy. France I mean, look, Macron if Trump were president right now, Macron tried to pull something like that. I mean, that that line would be hot. Trust me, that line would be hot.

You have looked a lot at what it means for the United States if we lose our status in the world as a world currency. And I think it's it's more complex than we've been talking about. One of the things that I talked a lot about when I was in the White House with with other folks is the problem we had with the dollar as a reserve currency, making it stronger, higher, more higher value than it would otherwise be, which spiked our trade deficit and effectively being the reserve currency from a purely fair trade point of view was actually a big hindrance.

The other thing that the dollar did as a reserve currency was skew a lot of our investment towards the housing sector rather than productive factories because they kept mortgage rates lower than they otherwise would be. And meanwhile the Chinese were manipulating their currency to make that happen. All right.

BANNON:  his is not a defense of my position because it doesn't need a defense. But I just want to jump in here. You're 100% correct. It's a very complex topic. Yeah. What the Bannon position has been is that we we need to, as a country, determine about our currency. This is why I want to end the Fed. And over time, if we make a decision because being the world's reserve currency comes with lots of obligations that would also go to the obligations of our national security apparatus. But it has to be a conscious decision of the American people. Here's what's happening. What's happening right.

NAVARRO We're about to collapse. Just to be clear.

BANNON [00:06:26] Yeah, just like the British now, because, by the way, people, you know, Navarro was really Trump's top guy when thing about the economy, thinking about manufacturing, thinking about bringing jobs back to America. These were heated debates inside the White House, as you remember. Right. Particularly on the China deal and the complexity of currency. So these are not simplistic, black and white.

The point is right now, and people kept telling us decades and decades, the Chinese and I love your phrase, I'm gonna steal it. You can tell an enemy by the currency they keep. 

They are putting an alliance together, Peter.

They're [Russia, China, Iran] putting an alliance together, starting with one belt, one Road with capital investment. But they're quickly going to currency as what binds them.

NAVARRO: I mean, Iraq, France, you've got Indonesia, Malaysia, you got the Cambodians over there, which has been a puppet of the communist Chinese. So what you've got is this split.

One of the things that we always talked about in the White House, Steve, when when the whole issue of sanctions came up[was] if you look at sanctions as a snapshot, it works really well. Strong supporter of that.

But if you look at sanctions as a movie, this is problematic because the more you use sanctions on communist China, Iran and Russia, the more incentive you give them to get off the dollar. And so what you set in motion with sanctions, [is that]. 

I always said what we should do rather than sanctions only is slap on tariffs and punch line investment restrictions. One of the things I fought really hard in the White House with and wasn't  as successful as I could have been because. folks like Mnuchin and Kudlow was cutting off American investment into China.

There's no reason why our retirement accounts here in America, particularly our defense accounts, should be going over to fund enterprises, particularly military enterprises, in Communist China. But that's exactly what happened.

There's a famous episode in The Situation Room when Hong Kong fell and I was sitting there with Mnuchin and Kudlow, Bill Barr and Mike Pompeo arguing to cut off the Hong Kong clearinghouses so they couldn't use Hong Kong to take money into the mainland. And I lost that battle.

And what was interesting is it wasn't just Kudlow and Mnuchin, it was Bill Barr who was right there soft on China. So these are complex issues.

I'm going to do a substack over the weekend and try to get it out because I want to lay this out, but I love being able to talk about this with you, Steve, because you've been covering this. Your series on the dollar decline is required reading, sir.

BANNON:  . By the way, I did five weekends in a row with Miles Guo talking about Hong Kong. We were the first ones really reporting on Hong Kong.  I was a huge advocate of cutting off the clearinghouses. Then you had what was the Nazi’s Czechoslovakia moment of the 1930s in Hong Kong and we should have come in hard. I know you were fighting.

NAVARRO  Yes, over the friggin executive order. I wrote the executive order to banish the clearing houses and I had all queued up in the Situation Room and Bill Barr and by the way, Mike Pompeo did not have my back on that either. And that was that was a critical moment in history. That's largely gone unreported. But I'm telling you, Steve, now, we let Hong Kong fall without firing of financial shot and shame on Steve Mnuchin, Larry Kudlow and Bill Barr.