Transcript of the above video: 

This video is one that I am betting, I don't know if people are going to, if I'm going to get a huge view count on this video or if it's just going to be another one that just kind of gets kind of noticed mostly by the core audience and then sort of goes along. This is actually a pretty important video. 

What we are seeing, I did a video within the past 10 days or so, 2 weeks, well the thumbnail had, 'money is still money; no it is not.' It's a scene from the film Schindler's List where Oscar Schindler is talking to a prospective investor and the prospective investor happens to be somebody who is being placed in the ghetto essentially, and the guy says, "Hey money is still money." And Schindler says, "No it is not; that's why we're here." And as I brought up in that video, I think we are at a very interesting, call it inflection point, in the history of global finance insofar as look we had Bretton Woods at the end of World War II. That system, there's varying degrees of debate amongst reasonable economists and things, for how long that lasted. There are a lot of arguments that it never really lasted all that long; it began falling apart immediately. As a practical matter, I think it lasted quite a while because it acted as a framework for people to have a sit down at a table and come up with some kind of working arrangement currency wise that everybody could live with. That said, a major in inflection point in the history of the Bretton Woods system came when Nixon "temporarily" closed the gold window; they stopped redeeming dollars for gold, and at that point, the dollar effectively "floated". Now anybody that knows their history knows, actually simultaneously or concomitantly with that, Mr. Henry Kissinger made a deal with Saudi Arabia whereby dollars effectively began becoming linked to oil and that became known as the Petra Dollar system, which I would argue was sort of Bretton Woods 2.0 and that has lasted from somewhere between '71 and '73-ish until roughly now. And now we're seeing the system shifting again and again, I'm not trying to be Chicken Little up here saying, "oh, all things dollar are bad", Or one of these guys on YouTube, "everything's going to collapse, da, da, da.". That's not my point. I don't actually think that's going to happen, especially out here in East Asia. East Asia has productive capacity; they have actually a fairly sophisticated financial system now. We have out here in Southeast Asia a fairly sophisticated financial system now that can weather these storms, and if anything what may happen is East and Southeast Asia and even South Asia may become sort of insulated if you will from the rest of the world and where the rest of the world may be having serious economic problems in certain places, this area is unlikely to have that. Why is that?

Well there have been a multitude of developments over the past five years. I've briefly discussed it both on this channel and on my other channel where I did sort of long-form stuff, which I'm not doing as much right now. We're kind of reconstituting that. I'm building a new platform for our paid news subscribers as well as for new sort of content for new services which I am finishing up. I will unveil that sooner rather than later. That said, if you want to get information or if you want to access the long form content, feel free to do so. You can email us, [email protected], and I can get you information on how to get on the email list for long form content where I talk about all this stuff in the even greater depth than I'm talking about right here. Also while I'm talking to my book really quickly, my better half and I set up a restaurant here in downtown Bangkok, Pancake Palace, as the name implies, breakfast anytime as well as American Diner style food, chilli bowls, cheeseburgers, hamburgers. We've also got buffalo wings and again breakfast anytime. So if you are interested, links are in the description below to our location; we would love to see you. 

Now going back on this, the point I'm trying to make with this video is not that the sky is falling but that the world is changing, and it's changing pretty fundamentally, and we are even starting to see it at the street level in terms of tourists and expats here in Thailand. I thought of making this video after reading a recent article from the Pattaya Mail, that is pattayamail.com, the article is titled: Why Indians, Chinese and Russians don't complain about strong Baht or Pattaya prices. This is an interesting article. I urge those who are watching this video, go check it out for yourselves, because it's quite a bit longer; I'm going to quote a couple of excerpts here. But on its face, it would seem like, oh it's kind of another article about what's going on in Tourist Thailand. When you drill down even just a bit past the surface, you realize that we are talking about pretty substantial observation regarding the state of the currency market if you will. So quoting directly: "PATTAYA, Thailand -- As debate swirls online about whether Thailand's vibe is "too strong" for tourists, one curious trend stands out: while many Europeans and long-term Western visitors lament shrinking exchange rates, travellers from India, China and Russia seem far less concerned -- or not complaining at all." Quoting further: "The question is, why? Part of the answer lies in spending patterns and perspective." I don't know if the author knows, like if this person is somewhat versed in international economics, geopolitics, currency and is kind of trying to stee her away from those topics in this article, or if it's just not coming to the forefront of everyone's mind. Not everyone is like a geopolitics nerd I guess like I am. So take that for what it's worth. 

But look, it's more than spending patterns and perspective and I will keep quoting. It comes down to fundamental shifts in the economic landscape of Earth; it really is serious stuff. That said, quoting further: "For many Indian, Chinese and Russian tourists, Thailand and Pattaya in particular, remains an affordable luxury compared to their domestic leisure options. Even with the Baht hovering in the mid-30s to the US Dollar or stronger against the Euro, hotel rooms, seafood dinners, massages and nightlife experiences still cost less than equivalent offerings in major cities like Mumbai, Beijing, or Moscow." Interesting, they are trying to steer it back on the dollar, and frankly the dollar - baht exchange rate is not too bad right now; it has hovered right around 32, and I've always said, if it stays, if the Baht is weaker than 32/1, it is good for Thailand in the current economic posture that we're currently in in the world, because that's cheap for exports, or cheap enough that the exports stay competitive and it's cheap enough that tourism stays competitive. It's kind of a good little balance and Thailand gets true value into the country, notwithstanding problems of that value being shaved off in the form of currency, in the form of things like inflation and things. And people forget, the US exports inflation effectively, so that's another thing to take into consideration. But again, a constant focus on the dollar is probably not warranted and I don't think it's a good prism through which to analyze economics anymore, especially out here in East and Southeast Asia or Southern Asia as I will get to here in a moment. Quoting further: "The contrast also highlights Thailand's evolving tourism mix. The days when Westerners dominated Pattaya's streets are fading fast. Today, Indian wedding parties fill beachfront hotels, Russian families crowd Jomtien, and Chinese tour groups once again pour into Terminal 21 and Central Pattaya." And again product of the money. At the end of the day, as I have discussed in other videos, I like to use the Halford Mackinder model when looking at how these things are sort of reorienting; Halford Mackinder was basically, I think he was an academic at the turn of the last century. He came up with the notion of the World Island, what we would call Eurasia, the confluence of Russia, China, the ‘Stans, and then in the Southern part, India, Southeast Asia; all of this comprises what he calls a World Island. And at the periphery, what he called the periphery, we have the Maritime Powers effectively, and you have US, UK, the old Anglosphere, what was once called the British Empire, the Commonwealth, and then you have got to some extent Western Europe, although I think as time goes on, Europe will sort of kind of end up, one way or the other sort of being subsumed into the World Island itself, and then you have got South America, North America: the Western hemisphere. That is basically how to look at the so-called periphery. But the World Island is effectively as Halford Mackinder brought up, where the action is and this is what we are seeing with the consolidation of BRICS. 

And look, I don't want to be talking about this, let me be clear. I'm an American by birth; I naturalized to Thai citizenship. I think that, yeah, I understand the benefits that will come from BRICS but at the end of the day, and I hate looking at this stuff like zero-sum, it does represent a fundamental shift away from the way that things have been, and the way that things have been heretofore. I would say we have come off of largely the so-called unipolar moment, but the Bretton Woods system and things, it constituted a Western centric paradigm, a Western-centric world order if you want to use that term and we are seeing a shift in that. Good, bad or different, there are pros to it, there are cons to it. I don't know how great it is for Thailand. I hope Thailand maintains her national sovereignty, her autonomy and just kind of trades with everybody, keeps everybody at arm's length, that would be good in my mind. But these changes are having an impact on the demographics of who's coming to Thailand because, who has the money. Well it's the people with the productive capacity: the Chinese, the Russians in terms of natural resources, and now the Indians, also similar to the Chinese in terms of manufacturing. These trends look like they are going nowhere. If anything they're going to become increasingly prevalent. 

And the reason for the thumbnail, so in the thumbnail is a graph, and it's an interesting graph. I really like it. I've used it before on things like Twitter and stuff when I am trying to explain the phenomenon that we are seeing. If you look at that graph, and you go back to 1820 - we will go ahead and throw this up on screen - if you go back to 1820, and you basically look at when what I would call the zenith of Colonialism, it sort of hit its parabolic moment, where that hockey stick kind of moment happened and the Imperial powers, so-called Colonial powers began having a lot of economic influence on the world and it was diminishing the powers, or the economic effect on the world if you will or taking up more space in the economic realm than theretofore had been places like India and China. But if you look there is a curve, and it's going the other way now. If you look at it, it's sort of like a wave that is ebbing, okay. China, India, Eurasia generally, Southeast Asia, these places are becoming more economically vibrant, and let's be quite honest, especially in places like the US where we hollowed out our, to use the phrase that Ross Perot used when discussing NAFTA, "there will be a giant sucking sound", and he was dead right. There was a giant sucking sound in the aftermath of NAFTA of American manufacturing jobs. And look, Trump has that diagnosis correct. There's been a sucking sound of those jobs out of especially the United States, but I would say the greater Anglosphere if you will and Western Europe. It was all in favour of these more high-tech jobs and things like that, but now even the tech, as I have discussed in another video where I discussed how I thought that the collapse of Silicon Valley Bank was the sign of a YUASA shift where basically the innovative impetus or momentum if you will, the spark of innovation was moving over to here to East Asia and I think that that is borne out largely since the time I made that video. But these two events coupled together where manufacturing has been sucked out if you will of the West, and then at the same time we are starting to see the innovative, call it sciences, arts, the arts and sciences of innovation are moving into East Asia or the World Island if you will, you're seeing the productive capacity that goes with that, and the economic, the disproportionate economic advantages that accrued to that, going with that as well. And the citizenry of those countries namely India, China, Russia are now having more disposable income. Where are they spending it? Well down here in old Thailand where folks like to come for their vacations. This is what is happening here. We are at one of these moments, "money is still money", "no it is not; that's why we're here." I like that scene; there's a lot in Schindler's List that sums up critical moments of transition in history, and if you can get away from the underlying facts and the underlying storyline of what's going on in that particular story, but there's just observations that sort of transcend any given time period on this stuff, and we are at one of these moments. It is not as negative by a long shot; we're definitely not in as negative a moment, but as I have discussed in other videos, Southeast Asia, through ASEAN, has started doing tons of trade now in local currencies, okay. India, Russia, China: I'll throw this up on the screen here. This is an example or sort of an artist rendering if you will of mBridge which is a project between the People's Bank of China, Hong Kong Monetary Authority, Bank of Thailand and the United Arab Emirates Monetary Authority to create this cross-border platform for international trade wherein they can use their own currencies and it's instantaneous. It's really quite, it's my understanding it's quite efficient; they can start trading now through these mechanisms. The result of this is the system through which we viewed exchange rates is shifting, it's wildly shifting. It is like shaking up an Etch A Sketch if you will and everything is just sort of getting set to a new normal. I kind of hate that term but that's probably apt under the circumstances. And we are now seeing on a street level the consequences of these changes in geopolitics, in international economics, in international finance, on a practical level at the street level here in both expat and tourist Thailand. 

That said, quoting further: "While some Western voices continue to argue over whether the baht is "too strong" or "makes no difference", much of Pattaya's new visitor base simply isn't complaining -- because to them, Thailand still feels like a bargain." And that's the thing. I think a lot of the Westerners are operating under the misguided presumption of "money is still money", and the result as Oscar Schindler puts it in that scene, "no it is not, that's why we're here". I'm not saying money doesn't have value, I'm not saying currency is not still a means of exchange, that's not what I'm saying. What I am saying is in the past, whatever you want to call it, Western currencies, this whole "too strong" or "makes no difference", stop thinking about it in terms of currencies. What you need to be thinking about it in is the productive capacity of the underlying country now, because as these new mechanisms of cross-border trade manifest themselves, it is the actual value that's capable of being created by the country from whence these people come that will more and more dictate the value in terms of exchange rate and the value in terms of what they can get - for example here in Thailand - for their foreign currency more and more. It will no longer be through the prism of primarily the Dollar, but Western currencies and Western financial institutions. It's breaking away from that and these countries are able to come to Thailand now and when they bring their money, it's not through the same pipeline if you will that it once was coming through, and therefore these folks don't feel like it's such a bad deal. 

Meanwhile, the countries that traditionally, Western countries that traditionally had disproportionate purchasing power here in Thailand, especially in the aftermath of 1997, which I've had my theories that recently certain let's call it offshore foreign influencers if you will, undue offshore foreign influencers, have been trying to place Thailand back into a position in 1997 in my mind possibly because they want to have the same effect that occurred after '97 for roughly in earnest about 10 years but really you even felt the aftermath effects of that for 20 years really. It wasn't until, I think if you look back, it wasn't until 2017 where Thailand was really able to get past all that sort of financially. One, Thailand is inoculated against that. We are very well aware of the machinations that can go down to create another 1997. But understand as well, the plumbing if you will of the International Financial system as well as the international economy has changed and so folks that are coming from these countries that are consolidating into a greater-  frankly more vibrant economic system - are coming to Thailand and they are not feeling things as expensive if you will, as folks who are coming from for lack of a better term, the "old system". These are not things I particularly want to see happening, they just are happening.  It's what is coming down the pike if you will and it's evidenced. We are now seeing at the street level in terms of Tourism. I think if you talk to expats and things especially folks that have been around a while, you'll hear similar things being echoed through that community. It isn't a good thing. What is it Daoists say? It’s not a good thing, it's not a bad thing; it is just a thing.” It is what it is. It’s something we are going to be seeing more and more of so don't be surprised when we see these changes in the future. Now that being said, we will certainly be keeping you updated on this channel as the situation evolves.