Thank you, thank you. Okay, take two. So, cybersecurity, check, we got this. But now apparently the world's going to come to an end. Are we in a cold war? I think there's no question that we're in a cold war, one that is actually remarkably similar to the first cold war. And let me just walk you through the reasons why. So first of all, and it's a cold war, I should say, with China. China with the United States. But just to compare the first cold war and the second cold war, we have yet again a global competition for supremacy. We have two presidential candidates, Kamala Harris and Donald Trump, talking about China and the need to compete with China and beat China. It plays out in every sphere of the world, not just in the region. And it plays out in technology, it plays out in economics, it plays out in trade, it plays out militarily, geopolitically, and so forth. You have an arms race, both a conventional arms race and, by the way, a nuclear arms race. China right now, for the first time in decades, is trying to dramatically increase its nuclear arsenal, going from about 300 warheads that they've had since they built their nuclear deterrent to well over a thousand by the end of this decade, and trying to meet the numbers that we have of over 1,500 by mid-2030s. We're doing the same thing, by the way. We're not increasing the arsenal, but remodernizing it. We have a space race. The defining moment perhaps of the first cold war was the race to the moon. What are we trying to do now? Get back to the moon before the Chinese do, right? And maybe on to Mars from there. You have a tech war, you have a spy war. The FBI says that the level of espionage against this country right now from the Chinese intelligence services is at its greatest that's ever been, far eclipsing what we saw during the first cold war with the KGB, in part, of course, enabled by cyber. We have a race for military bases. We are building military bases in the region, shoring up our defenses in Guam and Japan, sending forces and particularly equipment to Taiwan. China is doing that in Cambodia and Pakistan and Djibouti. So you have all the elements of the first confrontation. And the only pushback I hear when I raise this issue is, 'Well, look at this economic interdependence that we have with China, right?' And I find that a peculiar argument when I just gave you a litany of reasons why the two conflicts are similar. You give me one on the other side and say that that one is everything. But even that one is inaccurate because it assumes the wrong history. It assumes that when we had the first cold war and the confrontation between the Soviet Union and America, that there was no economic connections between the two blocs, and that was just plainly false. And I write in my book 'World on the Brink' that there were massive amounts of investments that were going into the Soviet Union, particularly in the early stages of the cold war, but even in the later stages. In fact, as far in the cold war as the 1980s, basically the entire Warsaw Pact was running on loans that were provided to them by Wall Street banks, UK banks, and German banks, literally financing their economy, financing the arms race. We, of course, starting with the 1960s, the Soviet Union started to export fossil fuels, as Russia continues to do today, including to Western Europe. In exchange, they were buying wheat. If you remember the Lada cars that the Soviets were driving, I certainly do as someone who was born in Moscow, it was produced under a license from Fiat from Italy in a city called Togliatti in the Soviet Union. So numerous connections, economic connections throughout the first cold war that people have forgotten about. Certainly the magnitude is much, much greater today with China, but even there you're starting to see major changes: tariffs, decoupling, de-risking, as some call it, that's taking place, and the interconnectedness between the two systems are declining. Convince me there is a cold war happening right now. Now, here are some things I want to know about this cold war. First of all, is it going to lead to a hot war? And if so, when? So I hope not, but I argue that just like in the first cold war, we have a regional flashpoint. Again, many people have forgotten now because the Cuban Missile Crisis, of course, has become such a defining moment of the first cold war, but there was actually a much more dangerous location during the first cold war that almost led to nuclear confrontation between the Soviet Union and the United States, and that was West Berlin. In fact, for the first 15 years of the cold war, West Berlin was that point where the United States and the Soviet Union were literally facing each other right at Checkpoint Charlie and other places and were preparing for war. The Berlin Airlift happened in the 1940s, but in 1961, a year before the Cuban Missile Crisis, you had a meeting between Khrushchev and Kennedy in Vienna. And Kennedy came into that meeting, he had just been elected, he'd just gotten through the Bay of Pigs disaster, and he wanted a better relationship with Khrushchev. He wrote to him a letter asking for this meeting, saying there's no reason why our two countries should be in a confrontation with each other, let's figure out a way to coexist peacefully. Sounds familiar? We're trying to do the same thing with China right now. And they go into this meeting, and basically Khrushchev wants none of it. He's saying the only issue I care about is for the Allies to leave West Berlin. He views it as a violation of the agreements that had been made to Stalin after World War II, and he's saying if you're not going to do it voluntarily, I will push you out with my military. And Kennedy comes away from the meeting completely shook up, convinced that we are going to go to war that summer of 1961 with the Soviet Union. He goes on American television, he says to the American public to prepare for war, nuclear war. He asks Congress for funding to build fallout shelters across the country and tells the American public why this outpost surrounded by Germany is going to be worth risking the entire civilization for, right? And that continued throughout the entire summer of 1961, until one Saturday in August of that year when he's woken up and he's told that the East Germans, on behalf of the Soviets, are building the Berlin Wall. And he says, 'Thank God, thank God.' Right? 25 years later, Mr. Gorbachev teared down this wall. In 1961, Kennedy says a wall is not a great solution, but it's better than war. And he realized that if Khrushchev is building the wall, he's not invading, right? And then you had, of course, nine months later, or a year later, I should say, the Cuban Missile Crisis, which was actually an outgrowth of the West Berlin crisis, but an incredibly dangerous point. Today, I believe Taiwan is that flashpoint. President Xi of China has made it very clear that he intends to take Taiwan. Just last week he said that there are blood ties connecting the people across the Taiwan Strait. I'm reminded of another authoritarian leader last century that talked about blood ties of the Germanic people, and we know where that led to. And he is driven, I think, by the same desires as Vladimir Putin to take this place, not just in some distant future, but I believe in his own lifetime. He talks about Taiwan being essential to the so-called rejuvenation of the Chinese nation that they accomplish by 2049, the 100th year anniversary of the establishment of the People's Republic of China. But he also talks about the need to not pass this problem to future generations. What does that mean? He just turned 70 in June. So we know what happens to leaders when they get into their 80s. We just went through that period ourselves. In the Chinese system, they don't tend to elevate their leaders into their 80s either. And I think he's looking at the next decade or so in power for his opportunity to take this. He's not ready today. We know this because the US intelligence community says that he's given an order to the People's Liberation Army, the military, to be ready to invade by 2027, which means that he knows he's not ready to invade today. I don't think he will actually invade in '27 for a variety of different reasons, but I think sometime after '28 the window opens up and potentially closes in 2032, because he'll be up for another re-election as a Chinese leader. He'll be elected almost certainly in '27 to a five-year term, expires in '32. In '32 he'll be 79, so he'll be thinking about transition of power, potentially, whether he wants it or not, maybe even health issues, etc. And if he wants this as part of his own legacy, that's potentially the window that's going to be very dangerous. So nothing until 2027, but sometime between 2027 to 2032, '28 probably, is where you see the chances. What do we do to stop it? Well, there's a lot that you can do. And a lot of people sort of assume that an invasion of Taiwan would be sort of easy or be sort of akin to what we did in 1944, taking the beaches of Normandy. Both of these are false. And by the way, Normandy was by no means easy for us. But just to give you a sense, so we just celebrated the 80th anniversary of Operation Overlord, D-Day, and that was an operation, the biggest, most complex, most impressive amphibious invasion in history, where we carried 150, 160,000 Allied troops from the United Kingdom across the English Channel, the English Channel, by the way, about the width of the Taiwan Strait, to land on the beaches of Normandy and liberate Europe from there. What most people don't realize is that in August it was the 80th anniversary of another amphibious invasion which was much, much larger than Normandy's. It was called Operation Causeway, and it never actually took place. It was a plan that was put together by the Joint Staff of the US military to invade Formosa, as Taiwan was called at the time, where you had 60,000 Japanese troops that were, excuse me, entrenched on that island. So Normandy happens in June, sort of United States military drunk on its own success, you might say, thinking we took one place, we can now take another, right? And that invasion, Operation Causeway, called for double the number of Normandy, 300,000 people. They abandoned the beach strategy that was so successful in France because they realized that the beaches in Taiwan are not takeable. The waters there are very, very rough, and you land on the beaches, they can be easily fire-controlled from surrounding hills. And the biggest problem is that you land on the beaches, there's nowhere to go. If you've been to Taiwan and you walk the terrain, as I have, you're up against mountains. So you land on the beach and you can't just drive across the fields of Normandy as we had done in 1944. It's much more difficult. So the plan called for taking of the port, at the time the largest port was in the south, and then for two months fighting a brutal campaign up the island to get to the capital city. Casualties that were estimated, which is why we never did it, were insane: 45,000 Americans. Right? Just to give you a sense, the deadliest day of World War II was D-Day, 2,500 Americans dead. Right? So ultimately Roosevelt, MacArthur said no, this is too difficult. And of course we bypassed Formosa and we ended up taking Okinawa instead. So 80 years ago, for the United States military that had just accomplished the greatest military invasion in history, Operation D-Day, it was too difficult. It has only gotten more difficult since then, which is why it's so hard for the Chinese to do it. And the only reason that it might be doable is because both the Taiwanese and ourselves for the last 25 years have dropped our eye off the ball, right? We had massive military superiority, including the Taiwanese in the Taiwan Strait, that has eroded dramatically as the Chinese have undergone a most impressive military buildup over the last 40 years while we have been distracted with wars in the Middle East and other adventures. And most critically, the Taiwanese have degraded in their military capabilities. Their defense spending went down while the Chinese was skyrocketing. Their training has become completely inadequate. A lot of that is starting to change, not fast enough, I would argue. But the key thing, I think, to win this cold war is to deter this invasion of Taiwan at all costs. Why is Taiwan so important? Most people don't appreciate that. And to the extent that Taiwan is even talked about in our political system, it's chips, right? Semiconductors. And chips are absolutely essential, right? Some people say chips are the new oil. I completely disagree with that because oil, of course, has alternatives. There is no alternative to semiconductors, right? They're the lifeline of the modern digital economy. You cannot survive without them. Taiwan not only produces, as is often quoted, 90% of all advanced chips, they actually produce 40% of all chips that we need for the world. So either China taking Taiwan or, most likely, those chip fabs getting destroyed in a conflict would immediately put us into a global depression unlike anything we had seen since the 1930s, potentially even greater. So that's one element. But beyond that, and beyond the fact that the Taiwanese people have no interest in becoming part of the People's Republic of China, and in fact, historically, there's never actually been a single moment in the Taiwanese history when whoever fully controlled China fully controlled Taiwan. People talk about, you know, Taiwan belongs to China. That is PRC propaganda. In fact, the Taiwanese people, the indigenous people on Taiwan, are not even Han Chinese, they're Micronesians. And that history is very rich and that culture is amazing. And 70% of the Taiwanese people, even though the majority now are Han Chinese through immigrations that have occurred, trace their bloodlines to the native populations. But there's never actually been a single moment when China fully controlled Taiwan, which most people don't appreciate. And the PRC has never controlled Taiwan. But Taiwan is important for much more than that. The freedom of those people, the importance of its economy. The reason Taiwan is important is that it's a critical node in the containment of China, right? When China looks out at the world, what does it see? It sees itself completely surrounded by US allies and US bases, right? From the Far East, you have the Korean Peninsula, half of which is South Korea, US troops, 20,000 American troops there, and a strong ally in Korea. Japanese Islands further down, headquarters of the Seventh Fleet of the US Navy, Marines in Okinawa, highly capable self-defense forces of Japan. Taiwan at the epicenter of the so-called first island chain, viewed as an outpost of American power. And then closing down the arc of the Philippines, where for the first time in 32 years, we're back, United States military access to Filipino military bases. So this is very problematic for China because as a country that is heavily reliant economically both on imports of valuable resources, food, and energy, and exports, of course, the entire economy is export-driven, being at the mercy of another power, the United States, being able to shut down your trade routes is a really problematic situation. Particularly if you believe, as Xi Jinping does, that he will have the greatest country in the world this century by 2049 or even sooner, you can't have another power, particularly a geopolitical rival, America, do that to you. And taking Taiwan allows him to break out of that containment and actually go on offense and establish dominance of East Asia and then further project power across the globe. So you convinced me even more that there's all the reasons in the world for China to at least attempt to engage. But when I asked you how to stop it, you said deterrence. What does it mean? What do we do? So, you know, to finish the thought, this is very, very hard for them to pull off. If they actually manage to do this, this will be the most complex military operation in history. It is absolutely possible to do this, right? If you just look at the numbers, Taiwanese military has 100,000 forces on active duty, about a million reserves. Now, questionable about the quality of that training, but huge numbers, right? So we were facing 60,000 Japanese troops in 1944. China is facing much, much more. You need to carry at least over a million troops across that strait, which is very, very treacherous waters, land on that island, capture key installations. Very, very difficult to pull off. Through asymmetric deterrence, ability to sink that fleet through smart mines, drones, anti-ship missiles, etc., you can make this nearly impossible. We need to dramatically ramp up that aid to Taiwan, make sure that they're investing in the right things there. But also economically, we need to make sure that we are looking at the broader context of the cold war, because it's not just all about Taiwan. And we winning the innovation fight, we're making sure that we're not decoupling. You can't decouple from China, it's too big. But we are engaged in what I call unidirectional entanglement. What we want to do is actually make China more dependent on us, so we have more leverage in areas like AI and semiconductors and others, and we are less dependent on them in areas where they dominate, which is critical minerals and electric vehicles, batteries, and other technologies, green energy technologies in particular.
