制裁的冲击、去全球化、粮食短缺风险与宏观经济前景

Jason Calacanis (00:00:00): I now have a chief of staff. He's pretty great. He's worked for me for a while, and he's he's doing a great job. But it's actually really helped. I will say that. And then I started a family office. David Sacks (00:00:08): Wow. Congrats. Chamath Palihapitiya (00:00:09): What does that mean? You have a place in your home that you call an office? Speaker 4 (00:00:14): Yeah. You don't like to bring to your refrigerator it's an office? Is that a family office? Yeah. It's a family goes in there to talk about office stuff. Chamath Palihapitiya (00:00:21): Where does Jade put the stickies? Let's say we're out of granola bars in the family office? Jason Calacanis (00:00:27): The weather winner is wide. Rainman, David Sagger. And I said, Speaker 5 (00:00:35): open source it to the fans and a discovery. Jason Calacanis (00:00:43): Hey, everybody. Welcome to another episode of the All in podcast episode 72 part d with us today. Again, The prince of panic attacks, the Sultan of Science David Friedberg. The Chamath Palihapitiya (00:00:56): prince of fact. Yes. And, also -- The Zephyr of Zoloft. Speaker 4 (00:01:03): And, also, as you're hearing cackling the Jason Calacanis (00:01:05): Duke of degeneracy, The dictator himself. Shamoff. Molly Hoppertib. And, of course, everybody's favorite, The Rainman himself, The Drunk History Channel Uncle. David Sachs. I mean, David, I I follow you on Twitter. You're tweeting fifty times a day. Chamath Palihapitiya (00:01:23): Oh, I was thinking the same thing. When do you work? Jason Calacanis (00:01:26): What has happened to you? You you won't meet with startups anymore. I I bring you startups. She said, you know what? I'm no longer gonna meet Chamath Palihapitiya (00:01:32): with startups. Like, stuck in your room. Jason Calacanis (00:01:33): Tweet -- David Sacks (00:01:34): I just I don't do first meetings. Jason Calacanis (00:01:36): That is the end of your career. Huge mistake. David Sacks (00:01:40): No. It preserves it preserves my energy. There's nothing more draining than endlessly spending your day in first meetings. Chamath Palihapitiya (00:01:46): No. Why don't you just have a short first meeting, like a 15 minute first meeting? Jason Calacanis (00:01:49): Well, David Sacks (00:01:50): that's what, you know, we have a team for. because they Jason Calacanis (00:01:52): -- I love it. I love it. David Sacks (00:01:54): They don't because we know exactly what we're looking for. SaaS investing is very metrics driven. And so the first meeting Jason Calacanis (00:01:59): -- That's fair. Chamath Palihapitiya (00:01:59): That's a David Sacks (00:02:00): good idea. Exactly. So it's like Jason Calacanis (00:02:01): You David Sacks (00:02:01): know, the first meeting, we just find out, do they meet our basic threshold for Jason Calacanis (00:02:05): -- Love it. For growth and -- David Sacks (00:02:06): For yeah. Jason Calacanis (00:02:07): Exactly. Exactly. Right. David Sacks (00:02:08): So you run the numbers, and then I I will meet with them if they look good. Jason Calacanis (00:02:12): I loved this. I would like all VCs to take the same approach, and I will let everybody know My DMs are open, jason@kalacatta.com. I will take the first meeting. Chamath Palihapitiya (00:02:22): Saks, I need to call you after this. Jason Calacanis (00:02:24): 1 Chamath Palihapitiya (00:02:24): of our businesses, which is not in SaaS, has started to sell SaaS software, And we've already booked $40,000,000 of fucking ACV by complete accident from Jason Calacanis (00:02:34): 0. David Sacks (00:02:34): Wow. Jason Calacanis (00:02:35): You Chamath Palihapitiya (00:02:35): stepped in it? and I need some advice. David Sacks (00:02:38): Okay. Yeah. Let's talk. Jason Calacanis (00:02:39): Alright, everybody. It's been a bit of a crazy couple of weeks here, and I we have to start with the war in Ukraine and and do a bit of an update. It's been over 20 days. The death toll continues to climb. We don't know exact numbers here. It's very hard to get information. We're not experts. We're we don't have boots on the ground. But according to The New York Times, 7000 Russian troops have been killed. And Zelensky said on March 12, 1300 Ukrainian troops have been killed. I I think we've got 3 or 4 angles we need to talk about here. 1, I wanna talk about food supply with Friedberg since you ran climate.com and have a lot of expertise in that. And, of course, Ukraine and Russia are the bread basket of the world. Chabat, I wanna talk about markets, of course, but let's go to our History Chamath, Uncle First, Sachs, you have been going down the rabbit hole looking at the history of this Let me just ask you a just a point in question. Is Russia losing the war And if they are losing the war, if that is a pass is that even a possibility that they're losing the war? Are they losing the war? And then what is the exit ramp here? And what does it mean on a go forward basis? David Sacks (00:03:53): Right. I think great question. So here's where I think we stand 3 weeks into the war. Is that Putin clearly miscalculated. He thought this would be a cake walk obviously has turned out not to be. The Ukrainians have put up very fierce resistance. The Russians have taken very serious. Casualties and losses, And so the war is very much, you know, up in the air. It's the the outcome is very much in doubt. So I think, you know, Putin was overconfident, made a political economic and, you know, obviously, humanitarian mistake. But I think 3 weeks in, here is where I would characterize things, is it feels to me like the west might be making a similar mistake of sort of excessive overconfidence and triumphalism, meaning that we think the rest of this war is gonna be a cake walk. And the reason I say that, let me just give you some examples and then tell you why it may not be a cake walk. So you've got Francis Fukuyama had a piece this week, basically. He's back with the end of history. He predicts that, you know, imminent Russian defeat and that there's gonna be a new birth of Friedberg. For the west, it's gonna be like the Bush doctrine and 20 years of failed policy in the Middle East never happened. You got David from, you know, all but predicting mission accomplished just like the Iraq war. He said the springtime's gonna be bad for anyone who bet on Putin, his words, which in his view as anyone who is in a, basically, a a Neo Conney favors regime change, you had a piece get a lot of circulation over the last week in the US China perception monitor by by, I think, a former Chinese observer named Hue Wei. And he basically predicted that China would be under so much pressure by what the the Russians have done. You know, in terms of humanitarian losses, that they would come out basically denouncing Russia and support the west. David Sacks (00:05:39): And then, of course, I think the final example of what you might call western triumphalism right now is that Absolutely no one in Washington seems to be pushing for a cease fire. They're all, you know, they're all paying lip service at least to this no flows no fly zone idea Biden and the squad seem to be the last holdouts for the idea of not imposing no fly zones. So I would say right now the West seems to be very confident about the way the this war is going and not inclined to make any compromise or concessions. I just wanna flag quickly why the you know, why there might be some clouds on this silver lining. So you had a Washington Post article, first of all, warning. It was very interesting that Ukrainian military progress may not be as great as their, quote, Stratcom, their strategic communications, you know, AK propaganda. So in other words, The Ukrainians are very effective at fighting the information war, but the the Russians are still making progress on the ground. You also had this washing post story about Neo Nazi's flocking from all over Europe to Ukraine to fight for the cause. Again, that story got it's it's very troubling, and it got no likes or retweets because it just doesn't fit the great narrative here. You've got the slow motion humanitarian. Jason Calacanis (00:06:49): Is that true? Like, the -- Yeah. David Sacks (00:06:50): Let's let's come back to let me lay out all the issues and we can come back to You've got the slow motion humanitarian disaster of, you know, a billion people across the world potentially starving if the spring planting doesn't happen, which we should let FreeBird speak to more. You've got the fact that Russia can still escalate this war. I mean, they could still rebel cities. Byeloruse could enter the war And, you know, god forbid, they could even use WMD. And then we you have this idea, this dream of toppling Putin. Probably look. It could happen, but probably a fantasy you add 200,000 protesters, pro war. Protesters turn out in Moscow today. Nationalism is still strong. In Russia, yes, there's anti war protestors there. But the Russian people at the moment seemed to be still behind Putin. And then I think you had today the foreign minister China came out with a statement really throwing cold water on the idea that they support the west. They basically denounced the west's Fer NATO expansion. So this whole idea of of the Chinese bowing to Western media pressure, which they in other context called the Bai Zhao influence, I think that's a fantasy that is not gonna happen. So look, I think that, you know you know, we all support the Ukrainian cause We all support their desire for freedom to to their freedom from domination from this this Russian war of aggression. But what I wonder about is whether this would be the opportune time to for Washington to try and push for a cease fire instead of a no fly zone and we should talk more about what that might look like. Chamath Palihapitiya (00:08:21): Can I give you a psychological assessment of, I think, what's happening right now? Jason Calacanis (00:08:25): Yes. Chamath Palihapitiya (00:08:25): Great. Just as somebody who as as you know, you guys and I were just joking, but 6 days just being mostly off the grid with my notifications off. I was really like, honestly, like, you you you kind of, like, go through this dopamine fast, and what it actually helps you do is pick out better signal. And, you know, with all respect to sex, I think, like, a lot of what you said is not really as meaningful signal as the following. which is the most important thing that happened was both sides basically said the surface area of a deal was very much in sight. and that they were down to 3 or 4 points. And I think that that didn't get reported nearly as much as it probably should have. And what I thought was psychologically interesting was that as soon as that was said, the next few days was when the rhetoric got ratcheted up extremely aggressively on both sides. And the way that I interpret that typically is having done deals. That's typically when you're closest to a deal and you're trying to get the last few Ts and Cs. And in that same construct as applied to Ukraine and Russia, I suspect what's happening is they both put out the trial balloon. It was well received on both sides. The surface area is now down to a few points. I'm not saying that those are justifiable in the end, but I think that if both of these two folk parties wanna come to a cease fire, which I think it does, We're probably much, much closer than anybody thinks. And right now, all of this rhetoric is meant to basically try to get the other side to budge a little bit more. And so I suspect, and you know, I could be completely wrong, is that we're much closer to a cease fire than anybody thinks. And I suspect that you could see something in the next 2 to 3 weeks. And I think that that's really hopeful because you want this thing to come to an end. Jason Calacanis (00:10:06): The thing I'm trying to parse here and I don't know if anybody here can even answer this, is how did how did we either underestimate or overestimate depending on the time Russia's ability to invade another country. Chamath Palihapitiya (00:10:23): I think I think the thing is we we have we can't even estimate correctly. So for example, the something that said there was a 100 out of a 100 Russia. It has a 170 battalions, apparently. I don't know if that's true or David Friedberg (00:10:34): not. Right. Chamath Palihapitiya (00:10:35): Of which a 100% did, we don't know if that's true or not, of which Ukraine apparently destroyed Jason Calacanis (00:10:40): 50, Chamath Palihapitiya (00:10:40): of which we don't know if that's true or not. So we're left to guess. And, unfortunately, what that does is if people psychologically then fit as David has used in the past your priors. What are your biases? Right? What narrative fallacy do you wanna believe? And then you're gonna fit. So the pro Russian factions will say that's entirely not true. The pro Ukrainian factions will say, actually, it's even greater than that, had huge sustained military losses. The truth is somewhere in the middle that will only get accounted for after a cease fire is in place. So I think we almost need to again, we can get caught in this fog of war and and talk about this stuff in ways which we don't accurately know, or we can level up and say, the thing that we both know is there was on the record statements by the foreign minister of Russia and the president of Ukraine. that a ceasefire and the surface area of that ceasefire is within sight. And unless something has materially changed in in the last 3 days, which it hasn't it means we are really, really close to this being done. David Sacks (00:11:38): So I I agree with a lot of what Jamal said. I don't think contracts or anything I said before. I I agree that there was a big piece of news this week that caused markets to rally for 3 days, which is the announcement of a proposed 15 point peace deal. And the we do know sort of the key features of that deal. It means that the 3 big features are u Ukrainian neutrality. So they don't become members of NATO. You had Zelensky saying, that NATO membership was off the table. Ukraine can't host foreign troops based on our weaponry. There'll be limits on Ukraine's military, but they would get security guarantees from the allies. So it wouldn't be a complete demilitarization. And then the the other pieces of it were Ukraine recognizing Russia's control of Crimea recognizing that's not coming back, and then some sort of independence recognized for the disputed territories in the Donbass. So I think you're right, Chamath, that Everybody now knows the broad contours of what a peace deal would look like. And the markets are starting to price in the them getting to that piece deal. But I'm worried that if you look at it from the point of view of what people in Washington say, that there's no pressure here coming from Washington for Zelensky, our who's basically our client, he's an American client, to make a deal. You know, if you compare this to, say, the 1973, Kyper War, where the US was on the side of Israel, it still acted as a peacemaker and got a cease fire done. You know, Kissinger got that deal done even though we were on the Israeli slide. You don't really hear anyone in Washington saying, let's get a deal done. So I I hope you're right. But -- It's Chamath Palihapitiya (00:13:15): because you're not we're not talking about the elephant in the room, which is that in the Jaumkibre Borer, the unitary resolve and the military dominance of America was undisputed. And so as a result, its ability to be the mediator was also undisputed. We've already talked about this when Biden called the UAE in Saudi, they wouldn't even pick up the phone. The people that are negotiating this peace peace treaty right now are Naftali Bennett, an Emmanuel Macron. So we're not at the table. So I think a lot of what we're hearing as well is just a lot of the rejection in the psychological you know, kind of anger that we have to not being even part of the process. David Sacks (00:13:51): I think the real Jason Calacanis (00:13:52): world doesn't want us to have such an outsized role. -- Chamath Palihapitiya (00:13:54): point is it's we we've we've moved past that whether you wanted us to be involved in it or not, we're not involved, and we are not the principal mediators in this, and we I hope to god. that Israel and France and whoever else is at the table gets this done. David Sacks (00:14:08): Yeah. Yeah. I I agree with that. But here here's my concern is that I think everyone knows a broad contours of the deal. But if you're a rush or you're Ukraine. You're getting daily reports of what's happening on the battlefield and if you think you're winning, you have an incentive to stall the peace process to cement greater gains and get more leverage for those remaining details and negotiating points. And so if Zelensky thinks that the Ukrainians are making progress, on the battlefield, he's gonna wait. And so neither one of them, I think, left to their own devices, can be fully trusted to make a deal. I think you need the US applying some pressure or acting in a in a constructive way towards the process I think it's a huge problem that the US is not viewed as a peacemaker. We're basically viewed as so partisan and on the side you clearly have no one else involved. Jason Calacanis (00:14:57): David, we've talked on this pod about us not being the global police officer of the world. and that other people need to stand up. So maybe the lesson here is, you know, maybe strategically Chamath Palihapitiya (00:15:07): Jason, it's not like we were called on and we didn't stand up. We weren't called on. Jason Calacanis (00:15:11): Well, okay. That's we assume that. I mean, we we don't have perfect information either. But let's let's get to Friedberg here. I think the other wrinkle in all of this And I think it's quite positive is sanctions are seeming to have a profound impact here, and people are looking at them as potentially maybe cyber warfare and just, you know, actual tactical warfare on battlefields, is less important than economic warfare. And Russia has been essentially canceled from the global economy from Visa to McDonald's. to exports. And these sanctions are not just government sanctions. These are people opting into them, whether it's corporations, and other entity saying, we're just not gonna do commerce with Russia. Unfortunately and this is something you have great expertise on. And so we're lucky to have you here to talk about it. People may or may not know this. I'm happy to be here. This is the bread basket of the world, they export more wheat than anybody. And they also export fertilizer, soybeans, and some other inputs, which we talked about previously. that provide meat for the world. So what can you tell us about the downstream effects of they're not being potentially or half as much crops coming out next year and what would happen in places that are the beneficiaries or dependent on wheat and fertilizer from Russia? David Friedberg (00:16:39): So there's a number of first order and then second order effects that are not just about sanctions but also about export controls by Russia that are creating swings in food markets like we've never seen and will almost certainly lead to widespread famine by the end of this year at this point. So the first important point to note is about 15% of the world's calories come from wheat About a third of that wheat comes from Russia, Ukraine. Russia has banned export of wheat. And the the wheat spring planting season is like now this week. And there's not a lot of planting going on. You know, a lot of commodity folks are in the field trying to figure out who's actually gonna go to field and plant, but no one's making you know, the concerted effort that they normally would under normal circumstances. So not only is the current wheat supply in Russia, Ukraine blocked up and cannot make its way to countries like Africa or Countries in Africa and elsewhere. But the future planting season is now significantly at risk. And, again, that's 15% of global calories. And just to take a step back, the whole planet Earth operates on a 90 day food supply. So once we stop making food, humans run out of food in 90 days. So another way to think about that is our food supply excess Our capacity in excess is about 25 percent of our global production. So if our global production goes down, by 12%, we've lost half of our global food supply. And that's not just linearly across all nations. What happens is the most vulnerable nations lose their food supply first, and the richer nations buy that food supply to secure their population's salaries. And so you very quickly see a bifurcation happen when you have a shortage and a food supply like this of just a few points where suddenly salmon is a real risk. And we already have about 800 million people on earth that are subsisting on below 1200 calories a day. So this very quickly tips the bucket in a significant way in a number of countries that's gonna be really awful. And that's just on the wheat supply and wheat planting problem. The bigger problem is the energy price plot problem and the phosphorus and potassium problem. David Friedberg (00:18:53): All fertilizer is made up of nitrogen, phosphorus, or potassium. Those are the 3 major types of fertilizer that farmers around the world have to use every year order to grow that crop. With that fertilizer, plants don't grow. Nitrogen is made from natural gas. Jason Calacanis (00:19:06): 98% David Friedberg (00:19:07): of the world's ammonia is made from natural gas. Natural gas prices, as you guys know, have doubled, and the and the futures market looks like in some places, natural gas prices going up like 4 x. As a result, the price of ammonia fertilizer, nitrogen based fertilizer has gone from $200 a ton to a $1000 a ton. So it's five times as expensive to buy basic ammonia fertilizer today than it was a few weeks ago or a few months ago. And so this is now leading a lot farmers around and then the other big problem is phosphorus. Jason Calacanis (00:19:35): So phosphorus David Friedberg (00:19:39): you know, by some estimates, I mean, you know, there there's a little variation around here. but about 10% of the world's phosphate comes out of Russia. And about, you know, call it, 25% of the world's potassium comes out of Russia, potash. Both of those markets are blocked up. They they are they are sanctioned, and they they have banned exports Russia has through the rest of 2022. So around the world, the cost to make nitrogen fertilizer has skyrocketed because of natural gas prices because of the Russia problem. And Russia is not exporting potassium and phosphorus. And as a result, the price of nitrogen's gone from 200 to 1000, the price of potassium's gone from 200 to 700, and the price of phosphorus has gone from 250 to 700. So now it's so expensive to grow a crop that a lot of farmers around the world are pulling acres out of production. and they're actually gonna grow less this year than they would have otherwise because it is so expensive and they cannot access fertilizer locally. to plant crops. So not only do we have the the wheat problem, we now also have the fertilizer problem and the acres coming out of production problem, And so food supplies are gonna go down even further, and this is gonna become even more catastrophic. And so there's a scrambling going on right now. You know, food prices around the world as a result, Everyone starts buying up all the commodities. They buy up all the corn. They buy up the soybeans. They buy up the wheat. And the price for corn has nearly doubled at words, you know, from where it was in July of 2020. the pot price of soybeans, the price of wheat are all skyrocketing. And in a lot of countries, they cannot afford to acquire, and individuals cannot afford to to buy food with the skyrocketing commodity prices that Jason Calacanis (00:21:15): were -- Can I Chamath Palihapitiya (00:21:15): ask you a question? I think it's estimated that the US food supply If you could x out the waste, would actually feed most of the developing world because I think 30 to 40% of all of our food is wasted. Can you do something with that? David Friedberg (00:21:29): Yeah. That that is actually true. A lot of that happens at the point of consumption, so it's in people's homes. So it's a reverse supply chain problem. where, you know, we throw away a lot of, like, stale bread and cereal that goes bad or or whatever. There's some in the fresh vegetables market, but, generally, the core calorie producing commodities are rice, wheat, potatoes, and corn. those commodities don't go bad in the supply chain. They end up getting cost out at the end of the supply chain, which is at the point of consumption at at home. So you know, I'm not sure there's a real solution there right now. The the the bigger issue is, like, how do you get bulk commodities to the places that are gonna need them over the next 12 So, look, right now, we're reducing food supplies, stocks around the world. There are strategic reserves that are getting opened up and being released. as that starts to get diminished, diminished. And as the production kind of numbers start to come out, it looks like less acres are in production. You know? And god willing, we have a good weather year everywhere this year because, you know, a bad weather year in some markets could completely decimate the remaining supply that's coming out this year. Regardless, it is gonna be a humanitarian disaster within a year, and we will see hundreds of millions of people go starving and there will be potentially, I think Jason Calacanis (00:22:43): -- You said hundreds of millions of people -- 100 David Friedberg (00:22:46): of millions of people will Jason Calacanis (00:22:46): go start. -- never happened in the history of a pandemic. -- David Friedberg (00:22:50): people already live on below 1200 calories a year right now. Jason Calacanis (00:22:53): That's predicting that a over a 100,000,000 people Chamath Palihapitiya (00:22:56): will die because of this? I don't David Friedberg (00:22:57): know about Death Salmon. Like, Chamath is this, like, you know, short of calories. You know, within a within a market, it's not like, hey. There's no food. Like, you know, there will be strategic reserves release. There will be stuff, but it won't be enough. we just don't have enough. And the way supply chains are set up, there just isn't enough. And so Jason Calacanis (00:23:12): -- So once again, we found another supply chain weakness like we did in COVID over and over again. And -- Boys. So it's a free bird. -- eyes will be released, but then hoarding is starting. So David, you take it after this. But one question I had was maybe talk to me about this concept of hoarding because there seems to be a cascading effect, and you you kind of Yeah. It's not just talking about it Chamath Palihapitiya (00:23:33): a little bit. David Friedberg (00:23:34): As with any market guys, as you know, when there's scarcity people come in and buy at a at a faster pace, you know, everyone And so this is a market dynamic. It's not like people are physically hoarding loaves of bread, but commodity traders, countries, strategic reserves, they start buying up what they can get. Jason Calacanis (00:23:51): to David Friedberg (00:23:51): prepare for the famine that's coming, then prices go even higher, and then it kicks other people out of the market that couldn't afford to buy it. And the whole thing gets really ugly, really fast. Jason Calacanis (00:23:59): There's no off ramp here. There's no way to solve this. David Sacks (00:24:01): Well, what Friedberg, yeah, the thing I wanna ask you is if we had a peace deal right now, a cease fire, would we avoid this outcome? I mean, like, how long how long do we have to avoid this? David Friedberg (00:24:10): We need Russia to reopen fertilizer export markets now. We need natural gas prices to come down now, and we need them to plant the spring wheat. Those are three things that need to happen to solve this problem. If those three things don't happen, we're going into spring right now. So around the world, in the northern hemisphere, farmers are making plans. They're planting. They're deciding how much fertilizer to use. And so as this market starts to kind of work itself out over the next few months, a lot of the commodity traders and the the departments, they publish these planting reports and they talk about how many acres of what were planted, and then everyone forecasts how much the supply will be. And we're gonna start to see these uglier numbers come out. over the next few weeks months. Meanwhile, we're seeing supplies dwindle, and Russia's holding all this stuff. So, you know, they're holding hostage phosphorus potassium, and the natural gas pricing is just what it is. Remember, there are there are ammonia plants everywhere. There are ammonia plants that I and all ammonia plants use natural gas to to, you know, to create this nitrogen based ammonia. Chamath Palihapitiya (00:25:09): Let me make a statement, and I'd love your reaction. We're finding out all of these externalities that was made with underlying poor scientific rack reasoning that has caused these issues to be exacerbated. So we know for example that our over reliance on Russian hydrocarbons. could have been mitigated with nuclear, but we fell for shoddy science, and we fell for a bunch of uninformed people who ran this banner of, like, environmental protection. Right? So they screwed us. Okay? And those people now have meaningfully less credibility. Let me give you another cohort Friedberg and you tell me. All the people that pushed back on GMO and said GMO was unacceptable, it could never happen. It has to be x, y, and z way. And there are ways where we could have been working on plants that had different mechanisms of action in order to actually absorb and retain nutrients from the soil in different ways that would have made us less reliant in exactly the way in which fertilizer works. True or false? David Friedberg (00:26:14): Yeah. GMO Technology, as a former Monsanto executives, you can call me a Monsanto Chill here. But yeah, GMO technology has been hindered globally by a challenge to adopt it. And there are techniques and technologies that have not been aggressively developed because of the concern on approvals. just to get a single GMO trait approved, in the United States today and get it to market, can take 7 to 13 years. And even then, you have to still go get China to approve it because they're the biggest importer. And you have to, you know, get all these other market participants to approve it. And there are multiple agencies to get to approve it Europe is finally the EU is finally coming back to the GMO problem and saying, you know what? Precision Gene editing can actually be beneficial to growing that at more stuff. Now would it have solved this particular crisis? Sorry. Can can I Chamath Palihapitiya (00:27:05): can I just say what's so ridiculous about this? Yeah. The fact that we have a modern agrarian economy is because we actually did figure out a way to do GMO, except we used a punnet square, and we used successive iterations. But the minute that you try to scientifically scale it in a lab, all of a sudden, that same process is not does not make any sense. To me, that's it's just intellectually so inconsistent. David Friedberg (00:27:28): Yeah. The thing that really scares people about GMO look. I mean, I've spent a lot of time on GMOs and and the reason people are upset. I I have a broader flow at that point? Jason Calacanis (00:27:36): -- Chamath Palihapitiya (00:27:36): believe in that do you believe in that inconsistency, that intellectual inconsistency. Like, how do you think somebody from, you know, pre BC to today Jason Calacanis (00:27:42): -- David Friedberg (00:27:42): I think that agriculture reiterated on our route. No. I think agriculture itself is technology. Think about it. Humans humans used to go out and just eat whatever was lying around what nature gave us. Then we started making rows in the ground and putting seeds in the ground and putting water on the ground. We engineered the earth Chamath Palihapitiya (00:27:58): to make so forth. Jason Calacanis (00:27:58): -- Chamath Palihapitiya (00:27:58): started to breed. And then we did plant breeding David Friedberg (00:28:00): and traditional plant breeding, through Norman Norman. Norman Warlock saved Chamath Palihapitiya (00:28:04): the world. Hypronetically, it's modifying things. David Friedberg (00:28:07): It is. And then what we did with GMO's, which is the distinction just to be really clear about the definitional distinction, between GMO and traditional plant breeding. GMO is when you take DNA from another organism and you put it in the plant's DNA to get that plant to do something very specific. And, Jason, you came with me to Monsanto. I mean, you took it for a year that you remember. Jason Calacanis (00:28:24): -- cautious -- Yeah. -- we should be cautious about anytime we're doing stuff like that. Chamath Palihapitiya (00:28:27): Right. But David Friedberg (00:28:28): And then there there's generally, like, a very visceral reaction when I make that statement, and people are like, wait. You're taking the DNA from bacteria and putting it in plants and do I know that's gonna work? And so there's these layers of concern, which, you know, are deeply psychological layers, but we can, you know, scientifically resolve this over time. But look, at the end of the day, humans today, you guys remember last year how much I was talking about that stark synthesis paper and how important it was. we don't need to grow plants to make the stuff we need to consume. If every city around the world had a starch synthesizer and it took CO2 from the atmosphere and water from the ocean and had this technique developed out, it could synthesize its own calories in a physical device without needing to rely on the ammonia supply chain and the phosphate supply chain and all of the systems that we rely on that are super outdated that are all a scaled up industrialized version of old school agrarian techniques. Humans today, I think, have the ability to synthesize and print food over the next couple of decades, particularly catalyzed by what's going on in Russia, Ukraine today, we're gonna see these technologies accelerate. It's obviously where I spent a lot time, but I'm super excited about it. Yeah. Chamath Palihapitiya (00:29:34): I think we suffer from a very insidious kind of plague in the world, which is the plague of over educated dumb people. And it's it's almost as if, you know, the because of their degree in the school, you give them inordinate power to make value judgments that that really put the world in a very difficult position. And so when you have something like a war in Ukraine, it just lays everything bare And you find you find all these things like, you know, simple another another version of this example. How did an entire continent? And specifically, I mean, Europe Abdicate their entire energy security to the group of a to a group of environmentalists and to, you know, to a sixteen year old girl, without even thinking about what the right answer was for themselves from first principles. That's really crazy that that happened, and you need a war you know, where tens of thousands of people have to die to realize that that was a really bad set of decisions that have been compounding for decades. Here's another example where food security is yet another one where we weren't able to think cleanly from first principles. And so depending on who had more money or who was able to create more psychological guilt or fear, was able to get an outcome that fundamentally puts the world at a 100,000,000 person plus famine. So somehow we need to rethink how our institutions work because we are giving folks who haven't prove that they can handle power, the ability to influence outcomes for the wrong sets of reasons. Jason Calacanis (00:31:04): What's even worse, Shamont? These people you talk about who are smart, dumb people. They're so privileged that they're living in some bubble making decisions for people who have food and security or energy and security. And it's only when COVID showed, hey. Oh, semiconductors. I can't get my car that I want because it doesn't have the chip in it or I can't get drugs. I can't get PPE, then all of a sudden, they see the value and redundancy and supply chain. But when they were living high on the hog and had nothing to worry about in 20 different flavors of Captain Crunch, they, David Friedberg (00:31:34): you know, they can't even think about people in Africa. Jake, I think it's really important to speak to the capitalist incentive and how you get there. So Okay. You know, we've globalized supply chains because as a business, it doesn't make sense for me to do every step of the thing that I wanna do because you can get better utilization in out of CapEx if a system is running all the time to make stuff. So if one step of the system doesn't need the other system running 247, it's gonna outsource that. And that's kind of think about like, semiconductors, think about food manufacturing. Right? It doesn't make sense for a farmer today to make his own ammonia. there's a pneumonia plant that centrally makes that stuff 247 distributes it out to a bunch of farmers. That brings the cost down per unit of production And so these systems have existed because we've had less capital with a higher ROI on capital invested at every point in the system. by, you know, distributing and having a kind of, you know, centralized supply chain system like this. Now what we're looking at today is what happens when one part of that system fails. And now I think the big trend for the next decade or 2, everyone's gonna have, like, a institutional memory of this. you're gonna see companies that are gonna start to vertically integrate supply chains. They're gonna vertically integrate their their manufacturing. We're gonna see a lot of businesses make what would have been really, quote unquote, bad CapEx decisions and bad investment decisions. And they're gonna say, you know what? We need to have redundancy because we cannot face the cataclysmic kind of circumstance that we faced in the past. Chamath Palihapitiya (00:33:00): I also think those should, by the way, the easy decisions. I also think that there are some more complicated ones of morality that we may have also misappropriated. I'll give you one example. So if you think about energy independence of America, I think there's there's not gonna be there's not gonna be many who think that it's not critically important. Well, then you go and say, we have a short term bridge with hydrocarbons, and the long term solution is renewables. But underneath renewables is the idea that you have to store these things. Right? You have to store the energy you make, whether it's from wind or solar, even if it's from nuclear. Okay? And all of that results in us needing batteries while batteries need lithium. There's enormous lithium deposits in the United States that today He never get access because we've decided that the, you know, the upper land grouse of a state is more important than America's energy independence. Right? So when push comes to shove, a small rat like creature is prioritized more importantly than America's energy independence. The downstream implications of that are now obvious. Rising costs, inflation, unemployment, potential recession, war, death, famine, Is the upper land gross that fundamentally more important than all of these systemic risks to humankind? And the thing is for a long time, we would never even think about the trade offs to actually think about why that decision should be made that way. And now we actually have the ability to remake these decisions. So it's gonna be really interesting to see whether we upend all of these existing frameworks. You know? And they're there's enormous environmental lobbies that have been created, that have raised 100 of 1,000,000,000 of dollars to fight these battles thematically wherever they come up. Chamath Palihapitiya (00:34:42): And in some ways now, what people will say, well, you've really prevented progress, and you've actually done more damage. That's gonna be a really Interesting point in our Jason Calacanis (00:34:51): -- Good intent. -- evolution. Good intent. Save the environment. And then there are downstream impacts. Let's go to Saks about the sanctions. We saw a level of sanctions we didn't expect. They were ferocious. They were unilateral. They they they're, you know, undeniably having an impact. Do you think Putin would be at the table? Do you think these sanctions are really having a dramatic impact? And do you think that there'll be a tool that we should use in the future? Or do you think maybe we need to be more thoughtful about them, in other words, cancel culture comes up as a an analogy here. People are saying, oh, it's like cancel culture for a country. I think it's pretty great that a country that is murdering their neighbors doesn't get to participate. But, obviously, you could have some serious concerns if fertilizer and supply chain issues as we just discussed are going to cause famine. So what's the balance here? David Sacks (00:35:46): Yeah. I think I think it's a a great another great example of you know, may we're not thinking through the second and third order consequences of what we're doing. We're just reacting. And so to to Friedberg point, So, you know, first of all, we have to realize this was more than just sanctions. This was a complete severing of economic ties. I mean, basically, every western country pulled up stakes out of Russia. They and they did it on their own too. I mean, they did it because for the reasons you said, because they wanted to make a statement that what Putin did was wrong. So every Russian who is working for one of these companies basically got fired and all the stores closed and and so on. So I think I think it is the repercussions of it are gonna be severe. However, these things the economics of it take time to play out. And so do I think it creates pressure on Putin to make a deal, yes. But, you know, if the if this is gonna be determined on the battlefield one way or another in the next month, Do I think it has time to operate in that time frame? Probably not. And I think what's likely to happen here is that in the same way that the real repercussions of this war are gonna be felt in grain production in 6 months, you know, there is an economic tsunami headed for our own economy as a result of the blowback from basically severing, you know, a 144 million Russians from the global economy. There's also gonna be geopolitical blowback. I mean, you know, I think it's very likely that the way this is gonna play out geopolitically is that Russia will become a Chinese client. And, you know, all of those natural resources that China produces, the the the gas, you know, all the the mineral wealth, that those resources are gonna flow on a conveyor belt on a belt and road conveyor belt from Moscow to Beijing, and they're gonna fuel the Chinese economy. Chamath Palihapitiya (00:37:44): Yeah. Yes and no. Because the reality is the the the point the thing we have to remember is China is still a fundamentally export driven economy, of which 35% just alone goes to the United States. When you add in Europe and other OECD countries, it's almost 60%. So I think the idea that all of a sudden you Russia will be able to backdoor all of these things through China into the rest of the world, I think, is not really realistic. And this is actually why I think the rhetoric is so high Because those 2 countries specifically are put in a very difficult situation. Like, what do you think the China calculus on Taiwan is looking what's happening to Russia? as it completely export Jason Calacanis (00:38:21): -- What do they cost? Chamath Palihapitiya (00:38:22): It's completely off the table, completely off the table. Jason Calacanis (00:38:25): They would never consider invading Taiwan knowing that it would put Apple in a position or other companies that are entwined in the Chinese economy, they would have to -- Chamath Palihapitiya (00:38:34): Again, I've said this before. everybody is was always, you know, sort of like land basting economic sanctions, you know, even on this pod. People are like, it's never gonna work. It doesn't do anything. And it turns out it's just not true. David Sacks (00:38:46): To be clear, I think sanctions are an appropriate way to create economic pressure so that we can get a cease fire and a piece deal made. Okay? So I do believe in the same way that I believe we should arm the Ukrainians so they can defend themselves, Well, I'm against a no fly zone. The the issue is just are we actually using the leverage that we're creating to drive this process to a success I'm talking the ceasefire process to a successful resolution. Because if we just make this the new normal, which is, you know, a basically, an insurrection in Ukraine that drags on forever and the the China and Russia cut off from the global economy and becomes a client of China. I think there's a parade of horbles that flow from that, and Friedberg just outlined one of them. is hundreds of millions of people across the world potentially starving. So my point about sanctions is not that We shouldn't have done them, but there are gonna be big repercussions for our economy if we don't resolve this situation in Ukraine. Jason Calacanis (00:39:49): let's do best case, worst case with this new this new economic order here and economic sanction ability that the West has now demonstrated, you know, quite effectively For me, the best case scenario here is if you want to participate in the global economy and global is in 2 global globalization 2.0 means You're gonna have to be hit some base behavior level of being a good actor in the world if you wanna participate in the wider economy. Therefore, as Chamath just pointed out, I think quite correctly, Taiwan's off the table. I mean, China is already is having massive economic downturn and and headwinds, the the idea that they would face what Russia is facing right now in terms of sanctions globally would be cataclysmic for them. So do we think what's the what's the best case in your mind, Friedberg, the worst case of this new economic sanctions that we've just outlined? best case, worst case. David Friedberg (00:40:44): Much of this is driven by Russian decision making, not just our decision making. And so there there's a lot of question marks around what they're gonna they've said definitively, we are banning all fertilizer exports through 2022. Okay. So, like, does changing a sanctioned model at this point get enough resolve for them to kinda come back to the table? do we need to kind of weave that in to some discussion, peace discussion that they're having with Ukraine? I think there's gonna need to be this multilateral like, global either support or or partnership model that's gonna have to kind of emerge for this to all get resolved positively. I don't think that it's just about Russia and Ukraine agreeing to a bunch of terms. We're all gonna be affected by what's going on and what Russia has chosen to do back to us And we all think we're in the power and we've blocked them and destroyed the ruble and, you know, knocked them back to the stone age, yada yada, but, like, we're hurting ourselves far more than we realize, and we have to go get something back from Russia in order to resolve it. Jason Calacanis (00:41:49): So Nuance I'm not sure. Chamath Palihapitiya (00:41:51): I totally agree with that. I actually think that, you know, necessity what is it? necessity is the mother of invention. I think that this has the ability just circling back to what we said before for us to rewrite all of these other that were frankly not necessarily rooted in neither 1st principles or long strategic thought in a way that can actually improve the state of play for everybody, not just including us, for the next 50 or a 100 years. So I'm not completely convinced that it says catastrophically bad as you think. Jason Calacanis (00:42:22): Well, what about this, Friedberg? If if we were thinking about food stability. You mentioned your slurry and, you know, being able to make these calories without actually planting any food. If we -- It's not cold anywhere David Friedberg (00:42:35): if you call it a slurry, but yeah. Okay. Let's call it a protein bar. You know, like, like, ultimately, Jason, we can actually create pasta, bread -- Great. -- rice. I mean, that's where this all goes. Perfect. By the way, just so you guys know, I I wanna frame this up. It's super important. 60% of the world's calories come from carbohydrates, which are basically 2 molecules amylose and amylopectin. Okay. That that's what makes up start. So if we can synthesize amylose and amylopectin, we can make it into -- -- long Jason Calacanis (00:43:02): would it take? How long would it take? What would it cost? to build your pasta making machine and rice making machine, you know, to have more David Friedberg (00:43:11): food -- Decade decades long scale up problems. Right? This is not like this is like, hey. We got a Jason Calacanis (00:43:16): a whole lot of movies. -- to nuclear or solar and batteries. Chamath Palihapitiya (00:43:19): Yeah. Yeah. Got it. Okay. David Friedberg (00:43:20): But there are solutions to this. I look. I mean, this is why I keep coming back to saying, like, we're evolving the the global economy and planet earth away from this model of centralized industrial manufacturing into a production system that looks more distributed, more decentralized with better technology. And that that's really a big trend for the century for for our global economy. And that's why right now, I think the near term trend is in deglobalization. People making less capital efficient decisions that create redundancy and supply chains, and there's a lot of ways as investors to play that, by the way. Jason Calacanis (00:43:53): Sachs, what are your thoughts on maybe the the high order bid for the west being a race to resiliency or a race to redundancy in energy in semiconductors, this race to resiliency in food supply. David Sacks (00:44:06): Yeah. I mean, look, trade creates economic wealth that also creates dependency, and we're realizing the downsides of having that dependency. If we're a dependent and or Europe is dependent on Russian gas, Or, you know, you saw during COVID, we've become dependent on Chinese pharmaceuticals, all the pharma companies have moved their manufacturing over there. And then, you know, that got when China was rattling the saber because we were blaming them for COVID. This is back in in 2020. They all of a sudden started implying we might not get access to pharmaceuticals. So Look, we are gonna have to rethink all those trade relationships. You can't have trade without trust because, again, if you if you you are empowering the producer to cut you off when you make yourself dependent on that. Jason Calacanis (00:44:47): Yeah. So David Sacks (00:44:48): so look. I think we're gonna have to rethink all of that. But can I go back to your best case, worst case question? Jason Calacanis (00:44:52): Yes. I was trying to get somebody in there on So I David Sacks (00:44:54): I think it's a good question. And I you know, I hear hear let me lay out the best case and then the worst. So the best case look. The the best case is this sort of the Fukushima argument, this sort of the from argument is this Western Tronfelism, which is luck sanctions, are gonna drive the Russians into submission. They're gonna topple Putin. The people are gonna rise up. They're gonna lose this war. We are gonna strike a great blow against autocracy. and liberal democracy's gonna win. Okay? I understand that argument. k. Now what's the the worst case scenario? Worst case scenario is Freeburg's right. We end up with 100,000,000 people starving. The war drags on because the Russians are gonna give up. So the sanctions you know, while be while hurting the Russians, don't end the war and, in fact, drive them into the arms of the Chinese. You know, the Russia has been called a a big gas station with nukes. That gas station will now fill up the Chinese economy henceforth. worsening the balance of power in Cold War 2. And then there's a big, you know, tsunami or boomerang headed for the US economy. We we have a recession Later this year as gas prices go to $7 $10 a gallon, and so it ends up hurting us. And So I don't I I I certainly see the case for sanctions, but But I wonder if people are really thinking through the downside scenarios. And what what I what I do think is that if that that the removal of sanctions should be certainly something we're affirmatively putting on the table in these cease fire negotiations. And and that sounds obvious, but I saw a tweet from Ian Bremer, who's sort of part of the foreign policy establishment -- Think Chamath Palihapitiya (00:46:34): Tank guy. Jason Calacanis (00:46:34): -- David Sacks (00:46:34): think tank guy who has been pretty good on, like -- He's smart. He's smart, and he's been good on no fly zone. He's been saying the same things I've been saying like, guys, this is tantamount to a Declaration of war. We're not going there. Also basically saying that, listen, no matter what the Russians do. We are not gonna get into war 3 here. He's been cool headed about that. But he also tweeted that, listen, as long as Putin's in control of Russia, we can't ever do business with them again. Sanctions are sticking around basically forever. And I just wonder if that is an overreaction. If if we're gonna make that policy, I'd rather see us, as America, be willing to put economic relations back on the table as, you know, in this peace process as opposed to saying that the Russians are cut off forever. Because otherwise, they're just gonna become a a Chinese client state. I don't see how that benefits us long term. Chamath Palihapitiya (00:47:26): Well, again, I did but, again, David, what do you think they do with China? China, what are they gonna do? Take 60% of their goods and still export them to us even though it just contains Russian materials that are now considered contraband. They they they so They can't absorb it economically is my point. There's not enough demand outside these OECD countries to absorb all of that. David Sacks (00:47:45): Well, Here's what I think. Chamath Palihapitiya (00:47:47): It's just mathematically not possible. David Sacks (00:47:50): I think so so look. I think you you make a point. But I think if you're gonna look at this 50 thousand foot level. I think there's, like, 2 grand narratives about what is happening in the world. One narrative, sort of the neocon sort of liberal hegemony narrative is that we're in a great battle between democracy and autocracy. The other narrative is that we're in Cold War 2 is that it's more of a great power rivalry between the US and China. I tend to think that the latter is where we're really at in the world. And the reason why I say that is you look at there's a lot of autocracies who frankly we support because we want them on our side. For example, You know, Turkey is run by an autocrat. You know, Erdogan is becoming more autocratic. In Egypt, We had sort of democracy there for a brief moment when Merck got overthrown. Guess what? They elected the the the Muslim brotherhood. And we didn't like that too much, and now we got general LCC in charge. We like that a lot better. You know, we are still allies with the the Saudis, and they're they're a more autocratic government. So I tend to think that, you know, the better way to describe what's happening in the world is a balance of power rivalry between the US and China, which is only gonna pick up momentum in the current in the coming decades. And we have to think about who's on our side of the ledger and who's on their side of the ledger. And, you know, I think at this point, it's we've pretty much driven Russia completely onto the Chinese side of the ledger, and I think that's gonna have, like, very bad consequences for us. Jason Calacanis (00:49:25): Alright. Let's segue from here into the economy inflation and markets. In a previous episode, Chamath, you talked about the the psychological cycle of, you know, ignoring good news, then accepting it being outrage by it and then maybe not taking the good news. In the bad news column, obviously, inflation continues last six months of CPI numbers year over year, obviously. September 5.4. I'll fast forward to November 6.8. January 7.5, February 7.9. Who excluding food and energy, core inflation still rose 6.4 percent That being said, we have 11,500,000 jobs available for Americans or 6000000 people unemployed who are looking for work. Obviously, there will be some mismatch in terms of geography and skills there. And then corporate earnings great, but a recession possibly looming. Where are you on this? And and, obviously, the market's bottomed out. So where are you at? with the economy, hope, fear, and otherwise? Chamath Palihapitiya (00:50:32): Well, I think that we're in the midst of what I would call a melt up. So, you know, probably the next month, month and a half, there really isn't much, quote unquote, bad news that hasn't been priced in. The the the thing that I've learned over the last few years is that Markets don't actually care what the news is. They they can process good news and bad news equally well. what they despise is the uncertainty of what the news could be. And so this week was really important because we had 2 huge buckets of uncertainty taken out of the market. So the one we've already talked about, which is when When the market saw that there was a surface area of a deal between Ukraine and Russia, that was really constructive. because neither side would have signaled something if both parties were very far apart. So that that meant to the markets we're a few weeks out from something getting done. And then the second thing was Jerome Powell and the Federal Reserve, they finally had their meeting. They raised rates 25 basis points, but even more importantly, they gave you a very prescriptive forecast of what the next year will look like at a minimum and possibly even 2 years. And once you could have that, you were able to then go and redo all of your expectations. And what people realized was, okay. you know, inflation may actually start to get tamed in the back half of the year. The economy is still quite strong. and we could actually support 2 2 and a half percent interest rates and still actually grow really well. And so what you've seen in the last 3 or 4 days is a action to the loss of uncertainty. And so there really isn't now the only thing to fly in the ointment could be if the war all of a sudden escalates, not that it gets dragged on because at that point, that's also, I think, been priced in. But if something very meaningfully different and some and and Russia, in this case, ratchets up the intensity, by going, you know, nuclear or something else. Although I think that's a very long tail Jason Calacanis (00:52:45): -- Chemical weapons seems a possibility or corporate bombing. Chamath Palihapitiya (00:52:48): I think these are all very low probability events. But in the absence of these things, you basically have really constructive dynamics right now for at least the next month and a half, maybe even 2 months. Jason Calacanis (00:53:00): How much of this has to do with retail investors who were Yolo, hodlers, speculators, stimmy Chamath Palihapitiya (00:53:08): Chamath, getting Jason Calacanis (00:53:09): super active for 2 years and then maybe getting super spooked right now and maybe needing the money to deploy in their lives. Chamath Palihapitiya (00:53:14): Look. The the the thing to remember and and I hate to be this blunt, but it's true. Retail is not a very good signal of anything. In fact, if you actually look at retail flows, typically, you will make money by doing the exact opposite of what retail does. And I posted this in the group chat to you guys. You know? Every single day of since the beginning of this year, Retail was a net buyer. In all of those days, the market got punched in the face. Finally, at the beginning of March, retail capitulated. Right? And I posted that same day, and I said, guys, this is the moment to buy. And at low and behold, what happened, the markets rallied meaningfully from that point. And the reason is because they were going into the end of q 1. You have a huge tax bill due in April 15th. People were starting to just finally give up. they were buying every single day, and they finally gave up. But that capitulation was the moment that that you buy. So if anything, retail is is is you know you know, I've said before, you fade your faith list. You know, retail flows are something you typically will make money by fading by doing the exact opposite of whatever retail is doing. And you just need to have access to that information. If you have access to it, you can kind of, you know, profit from it. So Where are we going from here? Probably up. Jason Calacanis (00:54:36): David, you've been pessimistic. We're seeing a lot of changes in the private market. funding rounds taking longer, a lot of funds getting closed, you know, venture funds that is. But seems like a lot more diligence is being done. The time meantime to closing a deal has definitely extended massively. What's your batting strategy now as a venture capitalist? David Sacks (00:54:57): I think that there's gonna be a trickle down effect of what's happened in the market to to privates, and the the valuations are gonna go back to their pre COVID levels. I mean, ARR multiples pre COVID were 20, not a 100. So we're seeing a massive repricing of deals, and that's gonna continue And I don't think this is gonna be this, like, transient effect. Everything's gonna bounce back in a few weeks. On the public markets, the finding characteristic of these markets is volatility. I mean, the VIX, which is a measure of volatility, is at one of its all time highs. And so it's true that over the past week, we saw a nice sort of melt up or rally because there was speculation about this peace deal, the Financial Times had that article in the 15 point plan. Chamath is right that if that peace deal gets signed, I think the market rallied strongly because, you know, it went up considerably just on hopes that it might be signed. But on the other hand, if this peace process falls apart, I think the market will give back all those gains and then some. I think we are nowhere near out of the woods on all the risky scenarios that could develop from this war, I think that If there is no peace deal, I think you can almost expect Russia to escalate in the war. They have said this is an existential issue for them. I think that would mean at a minimum, you know, heavy bombing of Ukrainian cities. And then that will step up the pressure even more on Biden and Washington to get militarily involved. This situation could still spin out of control. So, you know, I think in the absence of peace deal and then finally, we have all the risk of recession. We we definitely are seeing a slowdown in the economy right now. And I think if this war continues and we don't get the spring planning and things keep, you know, deteriorating. I think we're headed for a very serious recession in this country. I think we'll go from slowdown to recession. So if I were advising Biden of course, no one's listening to me. David Sacks (00:56:55): But if I were advising Biden, I would be telling Biden, listen, Mister President, we are gonna have a horrible midterms in November and you know, we are gonna have a really hard time in 2024 if this war continues and, you know, we head down into recession or any of the other catastrophes that could happen, we need to push for a peace deal right now. And the US should be playing a constructive role, and we should be applying pressure wherever we can to make a deal because the broad contours of this deal, to Sumath's point, have been set. I don't think any of the details, now that we know, look, it's about Crimea, it's about Donbas about neutrality. None of the details that we're still fighting over are more important than getting peace right now. And if I were in the White House, I'd be singly pushing for that. Jason Calacanis (00:57:43): Yeah. It's it's complicated. I I there the the counter to that obviously is this could be, you know, at the beginning of the end for Putin. And, you know, even if that's a 10% chance or 20% chance, The possibility that in our lifetime, you know, Russia could have a leadership change could be tremendous. Obviously, it's a coin toss, which way it goes. but change could be phenomenal. David Sacks (00:58:06): So so look. That's certainly in the cards. And and, look, if somehow magically Putin got toppled and replaced with the Democrat, That would be a wonderful thing. However Jason Calacanis (00:58:15): -- Retention before. It's rare, but it happens. David Sacks (00:58:17): Yeah. Well, tell me when when does it happen? Jason Calacanis (00:58:21): East Germany. Right? We tore down the wall. David Sacks (00:58:24): Yeah. I mean, that was a reunification. Here here here's the basic comment. When We we we understand the Russians in the Russian system, you've got all these oligarchs are basically like bosses or mob bosses. And then Putin's like the boss of Boss Right? So what are the odds if you take out the boss of bosses that he's replaced with someone who's a Democrat versus the next biggest baddest boss I I think, you know look. That that's certainly a possibility, but my concern is that when you play for maximalist upside like that, You're also taking maximalist downside. And a lot of people have have made this point that, look, if Putin's life is on the line, he's gonna be more willing to do anything. And I think the the better approach and you've you've heard people mention this idea of the Golden Bridge from Sun Sue, which is give your enemy golden bridge to retreat. Jason Calacanis (00:59:10): -- mentioned it. David Sacks (00:59:11): So that he's not fighting for his life. Chamath Palihapitiya (00:59:13): So that was that was a really clever framework, Jacob, I think. Jason Calacanis (00:59:18): I think I mean, they're they must Chamath Palihapitiya (00:59:20): get on from Jason Calacanis (00:59:20): -- Chamath Palihapitiya (00:59:21): If you guys went and created a tally, and I'm not trying to be Debbie down here. But, you know, since the advent of the CIA, the number of times that we have tried to incite regime change. And then the number of times it's been successful, what is that percentage? Jason Calacanis (00:59:34): I mean, we don't know because we don't know how many times we've tried. Chamath Palihapitiya (00:59:36): Well -- We know we know of many attempts. Jason Calacanis (00:59:39): Yeah. I mean, we've changed a lot of 2 hours. David Sacks (00:59:41): Jake, every time we try it, we either get the same or worse. So for example, Syria, we tried to give him Assad. He's still there and now it's worse. Afghanistan, we Friedberg. The Taliban are back in power. Jason Calacanis (00:59:51): Well, no. But it it David Sacks (00:59:52): it it takes Jason Calacanis (00:59:53): to take it to the is, what if it does change? David Sacks (00:59:55): Hold on. Iraq. We got rid of Saddam. And now we've handed that country to Iran and a silver platter or the Ayatollahs control it. Gaddafi in Libya. We got rid of him because he was so horrible, and now that country is in chaos. You've got -- We tried Jason Calacanis (01:00:10): -- -- David Sacks (01:00:10): open air slave Chamath Palihapitiya (01:00:12): we tried in in Ukraine. We tried in Ukraine in 2014. So our our track record is not super good. Jason Calacanis (01:00:21): Yeah. No. I mean, I I think regime change is, like, chasing someone out or something kinda Chamath Palihapitiya (01:00:26): like If we were a company at some point, we would have been Piped for our ability to do regime change. Jason Calacanis (01:00:31): I don't I don't think it's a great strategy. I'm not necessarily advocating for it. But -- Well, what Chamath Palihapitiya (01:00:36): what I'm I'm not saying that. I'm saying whether or not it's a good strategy. I think that Jason Calacanis (01:00:39): we are particularly not good at it. Yeah. We need a performance improvement plan on that front. David Sacks (01:00:43): Well, we should just I think we should just stop trying that. We shouldn't be going for a regime change. We Well, Jason Calacanis (01:00:47): this is a good you and I had this thing where I said, you and I are at sync that we both wanna contain dictators and maybe isolation. And you were like, I'm not into isolation. So I think a definition of, like, what is the strategy for containment going forward post a peace deal with Russia and isolationism, you know, I I guess is a bit of a trigger word and it's loaded. David Sacks (01:01:07): But -- Well, yeah. I'm not on isolationist. Jason Calacanis (01:01:09): -- the next person. David Sacks (01:01:10): I would describe my strategy as selective engagement, meaning that we still engage internationally on behalf of vital American interests and our core interests, but we don't stick our fingers in the pie of the internal affairs of all these countries all over the world to try and ferment regime change. So for example, like example of a vital American interest, I would say, standing up to to China in the sense that we do not want them dominating Asia and becoming appear competitor to the United States that can then challenge us all over the world. So Jason Calacanis (01:01:39): -- Some more pragmatist on it. David Sacks (01:01:40): And -- I would be more pragmatist. Jason Calacanis (01:01:41): -- we can be isolationist with North Korea because they're literally nothing they can do for us. David Sacks (01:01:46): And and, look, I would not be throwing countries like Turkey and Egypt and Saudi Arabia out of our coalition in Cold War 2 because we don't like the the nature of their governments. And I'm not saying I support autocracy. I don't. No. But the reality is Jason Calacanis (01:02:02): -- -- dialogue is reasonable because if you don't, then the other side will. Chamath Palihapitiya (01:02:06): The foreign policy playbook is going to get fundamentally rewritten after this Russia Ukraine war, in large part because of the effectiveness of government sanctions plus corporate social responsibility, whatever you wanna call that CSR function. -- sentiment Jason Calacanis (01:02:25): -- Woke is -- -- culture, whatever you wanna call it. Yes. I agree. Chamath Palihapitiya (01:02:29): But the combination of these two things has proved to be incredibly effective at setting the stage for Some sort of compromise or regime change the spectrum of outcomes is there, but the point is that's an incredibly unique set of circumstances were before, we never would have thought an economy that large or a country that important on the world stage. Whatever compromise in the absence of military intervention, and I think that that's important to think about as we think about what our forward going China policy looks like. I think really, like, the the importance of, like, the OECD, right, the importance of all these organized nations that consume from China. Becoming more organized now probably makes more sense. I said this before in a tweet, but the importance of the US dollar has become completely primary which has been an incredible, you know, benefit of what has happened because of this war. You know, very small silver linings in the grand scheme of all of this humanitarian crisis, but Those are gonna be really important things that the United States can seize on. So, you know, we may in some ways have have had some diminished power in order to facilitate peace in this track in in this conflict. But the downstream capital that we could accumulate by organizing these countries more effectively I think could be really important. And then separately, we have to have a moral conversation in the United States about all these things like environmental laws like our approach to agriculture that may have been underwritten Jason Calacanis (01:03:55): -- Speaker 4 (01:03:55): Yes. Jason Calacanis (01:03:56): -- with faulty logic. A little more pragmatism would go a long way. David Sacks (01:04:00): Yes. It would. I'm a little more pessimistic about our foreign policy establishment. And part of the reason I say this is because I'm very disappointed in the Republicans. The Republicans used to be the party a vital national interest, meaning America did not get involved all over the world unless we had a vital national interest, you just never hear them making that case anymore. It's all the way back to sort of bush doctrine. And, you know, as an example, they're all pushing for the no fly zone. They're all pushing for the delivery of the migs despite Jason Calacanis (01:04:27): -- Chamath Palihapitiya (01:04:27): They want war Just say the words. They're weird. Jason Calacanis (01:04:31): I mean, the the those right wingers are crazy. Why are they so long? David Sacks (01:04:35): I've been very critical. I mean, I've been Jason Calacanis (01:04:37): -- -- war on this. I don't understand their -- Well, David Sacks (01:04:39): I think there's 2 possibilities. Jason Calacanis (01:04:40): -- David Friedberg (01:04:40): mutualism, methyema, anxiety. David Sacks (01:04:44): I think I think there's 2 possibilities. I think Jason Calacanis (01:04:45): -- Chamath Palihapitiya (01:04:45): Is it free brew? What is it? Anxiety. Yeah. David Friedberg (01:04:49): And this is why I predicted war at the end of last year, but, you know Jason Calacanis (01:04:52): -- David Sacks (01:04:52): I think that's not a great prediction. Jason Calacanis (01:04:54): -- right. I I look. David Sacks (01:04:54): I've been I've been very disappointed in the Republicans. I think I think here's what I think is going on. I think if any of those Republicans, like, say, Mitt Romney or something look. I think Lindsay Graham is just a crazy sort of warmonger. But But you take someone like Mitt Romney who's basically saying all these sort of more bellicose and escalatory things. If he was actually in Biden's shoes, I bet he'd be making the same decisions as Biden, because he would not wanna risk war 3, but it's such a cheap, easy partisan political attack to say that Biden is being weak, and he's not doing everything David Friedberg (01:05:30): he can. Jason Calacanis (01:05:31): -- Chamath Palihapitiya (01:05:31): week at all. I think history will look back and think two things about about this whole thing with with the American lens The first thing was for whatever set of reasons, we lost it, then we diminish some stature in the world as a perceived arbitrator and mediator in these kinds of conflicts. But separately, I do think Biden has done a very good job in seeing the forest from the trees. He held the line on military intervention and he has really ratcheted up the ability for others to impose economic sanctions beside and behind the United States. And I think that will turn out to be a masterstroke. David Sacks (01:06:04): I give him credit. Jason Calacanis (01:06:04): And I Chamath Palihapitiya (01:06:05): think that that he deserves to be acknowledged for that. He's gonna agree with you Jason Calacanis (01:06:08): on that because I I think the Biden has done an amazing job of just saying outright, we're not going to war. We are not starting war with foreign courage. Stop. Chamath Palihapitiya (01:06:17): That takes a lot of courage. Jason Calacanis (01:06:18): Yeah. It's not even I mean, and, Zach, you've watered them. I think that shows some intellectual honesty on your part. And to your point, Chamath, There's a reason why we lost our credibility. These misadventures of Saxx calls them in the Middle East have been disastrous. We made huge mistakes and we need to take a different approach, I'll I'll give a Trump a compliment. He didn't start any wars. And if you look at every president who came before him in our lifetime, Every time they start 2 or 3 conflicts, and he was like, we're gonna have a no war policy. And now you got Biden say, we're not gonna go to war either. This could be a tipping point, and our focus, I think, the ultimate checkmate, should be Biden coming out and the EU coming on saying, We are going to start a race to resiliency, and here's how it's gonna look. Chamath Palihapitiya (01:07:01): Jason, it's an incredible point that you just made. I just want to reiterate it. Since Reagan, I can I can explicitly point out incremental conflicts that the president of the United States has approved and greenlit to get us into since Reagan. David Sacks (01:07:17): We've been in we've been in 7 wars. -- alive. We've been in 7 wars since the end of Cold Wars. Amazing. The American people Chamath Palihapitiya (01:07:23): Trump was the only one that did not start a new war. David Friedberg (01:07:25): And so Chamath Palihapitiya (01:07:26): for Biden. David Sacks (01:07:26): You you wanna know why? because he was a populist. the people of the United States of America don't want these crazy wars. They are sick of all these wars. It is the foreign policy establishment that is pushing for all of these wars. And listen, why in Obama the same way, Obama oh, let's just go back. Obama beat Hillary Clinton for the democratic nomination because he was against the Iraq war and she was for it. Yep. Obama had the right instincts on Ukraine. He did not wanna escalate the situation. Remember in 2014? When they took Crimea, he said America does not have a vital national interest that justifies us going to war. He was right. Chamath Palihapitiya (01:08:02): The president that tried to incite regime change, it's it's Right. David Sacks (01:08:06): And you you wanna know why? You wanna know why? Because because the state department lifers. You know who institute who incited that? Our under secretary of state for Russian affairs was Victoria Newland who is a foreign policy adviser for Dick Cheney, and these people bowweavell their way into the foreign policy establishment. They're in the think tanks during the state department. Chamath Palihapitiya (01:08:27): What what would you just use? Bullweavell. David Sacks (01:08:29): They they, like Jason Calacanis (01:08:30): -- Chamath Palihapitiya (01:08:30): Soul reward. David Sacks (01:08:32): They they are the permanent hold on a second. They are the permanent establishment of Washington the presidents come and go. They stay forever. Yeah. She was there She was caught on a phone call basically picking the new leader of Ukraine Jason Calacanis (01:08:47): after a David Sacks (01:08:47): coup in Jason Calacanis (01:08:48): 2004. 14. Chamath Palihapitiya (01:08:49): Is she is she the one that had that famous quote that said Putin? Fuck Putin. Was that Jason Calacanis (01:08:53): -- David Sacks (01:08:53): You know, you said you said, yeah. She said, yes is our guide. Basically, picking Yatsun Yuk to be the new leader. And she said, fuck the EU. When the EU wanted to take a more temperate approach. Okay. Speaker 4 (01:09:05): Okay. Looking at William F Buckle. Jason Calacanis (01:09:06): Here you go, and, Zach? David Sacks (01:09:07): I think the mistake Biden made listen. I think Biden has good instincts on this. I think he had good instincts last year in June when he called for basically an emergency summit with Putin to dial down the tensions. And I think that summit was successful. So what happened? Okay? The intercept just had a great article talking about how tensions ratcheted down after that June summit but they picked back up in October November. What happened between June October? I'll tell you what. On September 1st, Zelensky, met with Biden in the White House, and the state department issued a joint statement basically reaffirming that Ukraine to be part of NATO, They would reaffirm military ties, economic ties. And then on November 10th, they published a giant charter agreement between the United States and Ukraine that was signed by Blinken. Now look, did Biden know about this yes, but this is the state department agenda. And it was on the heels of this charter agreement that the Russians basically said they had reached the boiling point. They basically delivered the ultimatum to the US in December and precipitated the crisis that preceded this war. So my point is just listen. We have a state department with its own agenda. It loves regime change. It loves in having clients all over the world and inserting its fingers in the pie And unless Biden hold on. If unless Biden stands up to his own state department, we will not get a cease fire and we will not get a peace deal, and that will be disastrous for his presidency. Chamath Palihapitiya (01:10:33): What I will say is I think Biden has done a very good job. And I know Tony really well, and I think Tony trying to do the best job he can. I think he's done a pretty good job. All things considered as well. That's Jason Calacanis (01:10:44): awesome. -- any final thoughts here on you know, a very difficult time period we're living through. David Friedberg (01:10:52): The global order is being restructured. It's predictable. I think, again, if you read Ray Dahlio's book, which I recommended heavily last year, it's surprising how much of that simple rubric is playing out today exactly as that rubric kind of estimated it would. And, you know, the look. I mean, by the way, one way to think about the China, Russia, US dynamic, you know, you got a 1, 2, and 3 player Game theories, number 1, wants 2 and 3 to be at it because then they'll, you know, end up diminishing value. Number 2, wants 1 and 3 to be at it. Number 3, wants 1 and 2 to be at it. And so we're seeing that that multi party game theory play out right now. And, you know, again, based on that, rubric, you could probably predict where this is all gonna end up. David Sacks (01:11:40): Brilliant point. Listen. If you were to look at this from the Chinese standpoint, they must be loving what's going on, loving it. Old saying. I think the Napoleon said it never interrupted your enemy when he's making a mistake. Why is China? So quiet right now. Speaker 4 (01:11:54): Well yeah. David Sacks (01:11:55): Because they love their dream. Their dream is the US and Russia attacking each other. Chamath Palihapitiya (01:12:01): Yeah. We have to implement energy independence, writ large, and we have to make sure that it is very clear we have influence amongst all these OECD countries, because if China takes one foot over the line, we have to have the ability to do to them what we've done to Russia economically. it's the only way in which we can ratchet down all this tension and find peace. Jason Calacanis (01:12:27): Yes. The new war is the war on our dependency on dictators. We much must, must have a race to resiliency. We're gonna talk about this and more at the all in Summit, 15, 16, 17. No more. May 15, 16, and 17 all in sum at Miami, 500 of the 700 are gone. If you wanna apply for a scholarship, you can apply. Tell us how much you love to show at the website. Just do a Google search for all in summit. Really excited to announce. Keith Raboy will be joining us. One of Saks's besties, a very iconoclastic person. We're going for iconoclast. Next up, Brian Peterson, friend of the pod from Flexport, talking about all these supply chain issues. number of speakers we're gonna have is gonna be extraordinary. Brad Gerson, a friend of the pod. He's gonna come talking about markets education. Joe Lonsdell is Halfway in, again, another iconoclastic, controversial person. And that's what we're Chamath Palihapitiya (01:13:17): going for today. I know. Jason Calacanis (01:13:18): Yeah. And We'll Chamath Palihapitiya (01:13:20): keep announcing more. Jason Calacanis (01:13:22): We'll keep announcing more every week. Apply for a scholarship if you like, and we'll see you all there. 4 -- Love you, guys. -- Sultan of Science. The rainman and the dictator. I'm Jake Al. Love you, Betsy. Bye bye. Bye. Bye. Best love you, Saxx. Chamath Palihapitiya (01:13:36): Love you, Saxx. Love you, Freeport. David Sacks (01:13:37): Back at you. David Friedberg (01:13:38): Those are good feelings for you to have. Speaker 5 (01:13:41): We'll let your winner slide. Jason Calacanis (01:13:44): Rainman, David Saxon. Speaker 5 (01:13:49): We open source it to the fans, and they've just gone crazy with it. besties are golf. David Friedberg (01:14:05): driveway checks. Speaker 5 (01:14:09): Oh, man. Jason Calacanis (01:14:11): We should all just get a room and just have a be cute, George, because they're all just useless. It's like this, like, sexual tension, and they just need to release their mouth. When you're the b p flirt David Sacks (01:14:22): your feet. What? Jason Calacanis (01:14:25): Where did you get Murphy's artifact? I'm doing all this.