BLOWBACK: China Issues Fatal Warning To Washington; McDonalds Proves US Economy Is Done

Added: 2026-05-24

[00:00:00]So, the Russia China summit has wrapped up and this wasn't some photo op. This wasn't empty handshakes and meaningless writing. There were real deals signed, real agreements made, real architecture being built for a world that looks very different from the current one. And Trump, well, he's still out there acting like he's the main character. He came out saying that China's reception of the US delegation was the best. It was much grand. I get along with both of them.

[00:00:28]But I think it's good. I don't know if the ceremony was quite as brilliant as mine. I watched I think we topped him. I think we topped him. Good team. But no, I like I get along with Putin. I get along with you.

[00:00:42]>> But Trump still doesn't understand or refuses to understand the scale of what Russia and China are actually building together here because she told Putin something back into it to a tree that harrows everything that that should have set off alarm bells in every western capital. Remember what China said right now? There are changes the likes of which we haven't seen for 100 years. And we are the ones driving these changes together. 100 years. That's civilizational talk. And the most concrete proof of that partnership is real. Nearly 100% of bilateral trade between China and Russia is settled in either rubles or yuan, not dollars, nor euros, their own national currencies.

[00:01:29]And here's the part that should make Washington furious because the Iran war didn't weaken Russia. It didn't weaken China. It instead gave them an enormous gift. Now at least 15% of global energy supply has been locked away because of the Homus crisis and that amount could get worse. Now the world has been reminded in the most brutal way possible or what happens when you let a single choke point control your energy security. And now the world understands, hey, we can't get all our oil from the Middle East, at least not the majority of it. So who's going to benefit? Russia and China as well. Now, Russia called Shei a dear friend during the summit and that wasn't just optics, right? It was a signal because these two countries are now planning to build a new bigger pipeline. One that connects the Arctic energy reserves from Yamal directly to Beijing and Shanghai, all the refineries there. Guys, we are talking about 50 billion cubic meters of natural gas annually. That's 12% of China's total gas consumption coming from a single Russian pipeline. And if we think what that means on a strategy basis, Russia exports power to China and the US doesn't dare sanction China the way it sanctions everyone else. So Russian energy flowing through Chinese infrastructure into Chinese markets priced in what? The Chinese yuan. This is effectively sanction proof. Then China could take their energy. Either they could use it or resell it to the rest of the world priced in R&B. Every transaction in their own local currency is one transaction away from dollars.

[00:03:15]And this is already happening. 35% of China's crossber trade is now settled in the R&B. It's more than triple what it was just 8 to 9 years ago. Now Trump handed China the perfect crisis to accelerate the dollarization even further. The Iran war didn't hurt brakes. It just helped it in state. Now, let's talk about Iran directly because China's position during the summit was crystal clear and is not what Washington wanted to hear. Now, China doesn't want Iran to collapse under US terms, not even close. In fact, China would rather see Iranian maximalist demand succeed because China wins either way. Now, she has made it explicit. He said a comprehensive ceasefire is imperative.

[00:04:02]Restarting war is even more unacceptable. Adhering to negotiations is particularly important. Now that is a direct warning to Trump. Don't strike Iran again. Don't restart the mess. And the reason China is saying this Iran's demands as extreme as they are align kind of perfectly with China's grand strategy. Now what does Iran want? They want the right to continue uranium enrichment, the lifting of the US naval blockade and the removal of all sanctions and potentially the ability to demand Gulf oil be sold in Yuan to use the trade of Hammus. Now, every single one of those demands is a win for China.

[00:04:45]If the sanctions are lifted, Iran's 50 billion in frozen global assets, you know, we can then use it. Where's the money going to flow? into Chinese assets into gold and that strengthens Beijing's financial ecosystem while draining away Washington's leverage. And if Iran gets to demand yan payments for Homus transit, China's currency becomes embedded in the global energy system in an even bigger way at the most critical choke point on planet earth. And Trump is now obsessed. He's genuinely obsessed with Iran right now. Now if you watch any press conference, he cannot answer a question without veering back to Iran.

[00:05:29]It's becoming his fixation. AI has been amazing because right now we have more jobs, more people working right now in the United States by far than we ever had before. And outside of the war, and I assumed the economy was going to go down, the stock market would go down 20 25%. It's actually up. The stock market is higher now than it was before I started the Iran situation. And >> and China's watching their obsession and they are using it because China holds yet another card that Washington desperately needs. DF rare earths. By 2035, China will still control 54% of global light rare earth supply and 82% of heavy rare earth supply. The US military cannot build their missiles, their jets, their electronics without Chinese rare earths. And China knows it.

[00:06:18]Beijing understands this and everyone in the world realizes this. So this leverage isn't going to go anywhere. But let's bring this home because of all this geopolitical chaos that is the direct cause of the US economy and is showing up in the most ordinary setting we all know. Inflation is crushing the American consumer. And this is not a temporary blip. This is not a short-term pain for long-term gain. And I don't care how many times Trump says it, that is not how the cookie will crumble.

[00:06:52]>> Everybody agrees, short-term pain. It's going to be short-term pain. But the pain is much less than people thought because people thought that the oil would go up to $250. You know, it was $99 yesterday, $99 a barrel. I thought it might go up to $200. I was okay with that. Not that I wanted it, but you cannot let them have a nuclear weapon.

[00:07:13]They will use it on us.

[00:07:15]>> Now, CBRI has sped to 3.8%. But that headline number doesn't capture what's actually happening happening at a grocery store. Just go to Walmart. Just go to Target. You kind of know what I mean. Because in April, grocery prices jump more than what they had in the previous four years combined. weight is up by 8%, milk is up by 5% and vegetables cost 44% more. 44% just to eat healthy. And this is where the energy crisis bleeds into the food crisis in a way that people don't really connect it until it's too late. Higher energy prices doesn't just mean higher prices at a pump. That means higher cost to grow food, higher cost to transport food, higher farm diesel bills as well, higher heating bills for everyone. So every single input into the food supply chain is energy dependent. And when energy energy prices spikes, food follows with a lag time. Now that lag is what makes this situation dangerous.

[00:08:22]People they see gas prices go up. I think they understand the pain. But the food price spike that comes three to six months later, that's when reality really hits. And now McDonald's is ringing the alarm bell. Fast food, the things that Americans and many people in the world, they turn to when they are broke, where they can't afford real restaurants, when they can't afford all the organic food.

[00:08:47]Even fast food is becoming unaffordable now. rising energy cost, rising beef prices, and tighter cash flows. This is what's happening to McDonald's, the franchises, the restaurants around. So, the only way for them to survive is to raise prices. And when you raise prices, you're essentially passing the pain down to customers. Now, think about what that means for working-class families. When fast food becomes a luxury, guys, I think you know that something has broken in the system. And wage growth isn't keeping up either. Now, this chart is supremely important. Wage growth has been falling for over a year. People are earning less while paying absolutely more. The American standard of living is being quietly dismantled. This is a consumptionbased economy. And when consumers stop consuming because they literally cannot afford to, GDP is going to take a hit. So, the food crisis is going to affect everyone, everything in the economy. And here's what Trump is not talking about and what most financial media is not covering nearly enough. The hormones crisis has absolutely smashed the global fertilizer supply chain. Now since the start of the Iran war, global fertilizer prices have surged by 35 to 44%. Not one type of fertilizer, all of them. 23% of global ammonia supply is locked behind the street. 34% of ura and 20% of phosphate.

[00:10:18]Now these are the fundamental building blocks of modern agriculture. You need fertilizers and without them crop yields they're going to collapse. And the thing about fertilizer prices is that they don't show up immediately in food prices. Once again there is a lag time we need to appreciate and lack time we all need to respect. Now, farmers buying fertilizers for this season's planting, they're going to get hammered. If they can afford it, this harvest might be okay. But what about the next harvest and the one after that? The one planted with fertilizer that cost 44% more.

[00:10:54]That's where the real price spike is going to hit. Now, Thomas Messi has been one of the very few voices in Washington actually trying to explain this lack effect and he does it magnificently.

[00:11:07]These uh temporary disruptions have long tails because right now is when farmers decide how much fertilizer to put on and whether they're going to grow corn, which takes a lot of fertilizer, or whether they're going to grow soybeans.

[00:11:19]You cut corners and you say it's high this year. So, I'll just try to coast off the fertilizer from last year. And I'm afraid there'll be a lot of farms that do that and there'll be less hay produced this year. Now, the coming harvest might look fine on paper, but the supply crash could happen in the next cycle, and when that hits consumers, they're not going to see it coming. Now, agricultural prices have already risen 9% since the Iran war, and that's just the beginning. Fertilizer prices have essentially gone to the moon. You have soybean prices, wheat prices, corn prices, they haven't caught up to the fertilizer shock just yet. But ladies and gents, they will. And farmers are getting squeezed from both sides.

[00:12:04]Farm diesel, they cost more. Fertilizers cost more. So farmers, they face a very impossible choice. You cut back on planting and watch supply crash or you absorb the high input cost and pass them on to consumers. That's going to crush demand. So, there's really no good option here. Either way, prices, they're going to go up. Either way, supply is going to get tighter. And if the street of hormone stays shut for a prolonged period, we could be looking at food prices that are 35% higher by the end of 2027. This is what the math says. When you trace fertilizer cost, energy cost, and crop yield risk throughout the entire supply chain. Now, the entire US economy is stacking risk on top of more risk. And they're not stacking very neatly. They're compounding. Food prices could be the straw that breaks the camel's back because Americans, they're going to have to tolerate a lot, right?

[00:13:00]You have high gas prices, expensive flights, you have all the food companies now jacking up prices. But the moment feeding your family becomes difficult, that's when the entire system is going to crack. And now JP Morgan is warning of much high interest rates ahead. Think about what that means across the board.

[00:13:21]The US government needs to borrow more.

[00:13:23]Big tech needs to borrow more as well to fund their trillion dollar AI bet.

[00:13:29]Farmers need bigger loans to afford inputs for next year's harvest. Small businesses also needs credit. They need to pay their salaries, right? So, everyone needs to borrow and they just isn't enough money. Savings are being drained and the higher yields go, the more pressure stacks on every single one of these players simultaneously.

[00:13:51]Now, Russia and China, they're just watching this unfold with supreme patience. They don't need to defeat the US on the field like Iran. They just need to keep building their pipeline.

[00:14:03]They're going to keep trading in yuan and rubles and they're going to keep accumulating their rare earth leverage.

[00:14:09]And of course, they're going to support Iran. So, time is on their side. Time is not on Trump's side. But let me know what you think. If the US does strike Iran again, will China intervene and how will they do so? And are we already on a path to a global food shortage? Let me know what you think in the comments below. Stay safe. Smash the like button and subscribe as we navigate through this crazy times.