Dr. Warwick Powell | Economic Shocks mminent: Trump's Market Manipulation Will Face Reality

Añadido: 2026-06-01

[00:00:00]I would like to bring him on. He is a favorite of mine. Give me 1 second. I just want to get one last thing before I do so.

[00:00:08]And >> [snorts] >> right here.

[00:00:12]Come on. Come on. Come on.

[00:00:14]There we are.

[00:00:17]Perfect.

[00:00:18]All right. I'm going to bring my guest on. We are joined with the man himself, Warwick Powell. How you doing, man? You doing okay today?

[00:00:27]>> I'm very well. Good morning to you and your viewers and listeners.

[00:00:31]>> And good evening to you. I'm [clears throat] seeing that you're on the other side of the globe. I'm joined with Warwick Powell. He is adjunct professor at uh >> [clears throat] >> Queensland University of Technology. He is also chairman of Smart Trade Network group of companies and president of Data Integrity and Supply Chain Association Inc. Um Warwick, thank you for joining me, man.

[00:00:56]I really appreciate you joining me.

[00:00:58]Um there is a lot of news and there are several topics that I kind of want to hit with you and get your take on it to figure out what on earth is going on.

[00:01:06]So, last night apparently there were additional strikes that took place um or an exchange of fire. Iran bombed.

[00:01:16]It is believed to be Kuwait.

[00:01:18]But the news is being very squirrely about where they bombed. They're just saying Iran bombed the US base, even though Kuwait's air defenses and everything else apparently went off.

[00:01:30]Um the US bombed um apparently Iran again and they're still saying that the ceasefire is in effect.

[00:01:39]I'm curious on what this has like the longer this goes, obviously the worse this gets.

[00:01:47]But how bad are we looking? How How bad are we expecting this to get? I mean, if this is 30% of the global oil, that means energy is still getting through.

[00:01:57]It's just the amount has been appreciated by a significant percentage.

[00:02:02]How bad is this if this get if this goes on for another 2 months or another month?

[00:02:08]>> Well, it's going to be pretty bad anyway because uh in a global macro sense, the global market is down about 10% or thereabouts of uh supply volumes compared to the 27th, 28th of February. So, and so what's already happening of course is that um some activities that used to rely upon um the products of crude oil are already starting to be discontinued, temporarily suspended. Um and where possible, some of those activities are looking for alternative ways of um conducting their business.

[00:02:45]We're seeing um you know, shortages already emerge in uh products like naphtha, um which uh is is manifest in Japan, for example, where there are already chronic supply shortages. So, it's not just a problem of pricing.

[00:02:59]It's actually that it's hard to get hold of the materials themselves.

[00:03:04]And even if there was even if um you know, peace broke broke out tomorrow, it will take firstly many months before uh shipments will resume uh towards anywhere near what they were prior to the attack on Iran in in late February.

[00:03:19]And that's because quite a lot of the production and loading infrastructure has been damaged. And it would require uh reparations, repair. And of course, we've just got basic logistics problems, too, because the oil tankers, of course, have dispersed to other parts of the world as they're looking for um opportunities to load up and move uh oil to customers.

[00:03:43]And they will need to be rerouted back to the um to the Persian Gulf.

[00:03:50]That's assuming that insurers are happy and that ship owners are happy and that the the the straits themselves are navigatable. So, that that that that will take months even if everything began from today.

[00:04:07]Of course things won't begin from today.

[00:04:09]So, we're going to continue experiencing nothing more than a trickle compared to how things were and globally we're going to be down somewhere in the order of you know 10% of supplies and the strategic reserves that many places have been tapping into and particularly the United States to make up for the the shortages are of course being depleted.

[00:04:38]And they're depleted ironically not only for American domestic uses but in fact they're being depleted by exports because there's you know there's good money to be made on the spot market. So, American strategic reserves are being depleted American oil companies can make more money on global markets but but American consumers are also experiencing significant fuel inflation. So, it's going to get worse before it gets better.

[00:05:13]>> And it's not just from the standpoint of fuel, it's also fertilizer, helium, etc. It's like list of items.

[00:05:21]>> Yep.

[00:05:22]Absolutely and and it will propagate because when if you just think about how supply chains work and you take something like plastic bags, you know, plastics or packaging that eventually begins to affect a whole bunch of different industries. So, the effects aren't just vertical. They eventually propagate horizontally across industries as products begin to um or shortages of products begin to be experienced um you you know across many different kinds of industries and that will begin to affect things. Food Food's another classic example where fertilizer shortages will in due course um affect certain kinds of food production, of course, but that will then have flow-on effects into downstream uses of those foods. It will then affect things like manufacturing.

[00:06:16]Um it may also affect the the restaurant trade. Um so you know, these cascading effects um are only just beginning to be felt.

[00:06:27]>> What is it like in Australia? Like like for the United States, from my understanding, the US is getting let's say the least hit.

[00:06:36]And I'm saying least as comparative statement because our gas is four 50 on average, which for us is insane.

[00:06:45]I know for the rest of the world, it's normal.

[00:06:48]What is it looking like in Australia right now?

[00:06:51]>> Well, Australia is a is an importer of of most of its refined fuels. So, Australia is of course scrambling to secure um sufficient supplies to to maintain or to even improve the strategic reserve.

[00:07:08]Australia's strategic reserve, when the war broke out again at the end of February, was sitting almost at 30 days of reserves, which of course is well short of the agreed um levels of 90 days, which countries um are supposed to try to keep for themselves. So, Australia itself was already well down on its reserves and it then spent some time, the government that is, spent some time scrambling uh amongst the region into Singapore, Malaysia, uh China uh to secure some additional supplies and it did secure some supplies of diesel for instance an extra three or four days worth of diesel. It secured an extra three or four days worth of jet fuel recently from a visit or some some visits to China.

[00:07:58]So it has been sort of keeping the reserves hovering around that high 20s 30 day mark. The other thing the government's done to keep a lid on price pressures is that it's halved the fuel excise that had been traditionally levied on fuel at the at the pump.

[00:08:17]Now that's going to end soon. It was a temporary measure to ease the financial pain on motorists but but when they you know go back to usual that'll add an extra about 20 cents Australian 20 cents American actually per liter. And so at the moment a gasoline prices and diesel prices have actually not been crazily high but I think that there is a little bit of well basically the government's excise reduction has made a big difference but give it another six weeks and we're going to start to I think really feel the pinch here in Australia.

[00:09:05]Across Asia we're already filled we're seeing a markets feeling the pinch you know the Philippines is feeling the pinch for example and you know the United States will be amongst the last to experience physical shortages but because it's connected to the global market it's already experiencing price impacts.

[00:09:27]>> Are we looking at like stagflation recession and [clears throat] I'm talking about this from a global perspective cuz this seems to be a global issue. Meaning it doesn't seem to be lasting in one country. It seems to be across the world.

[00:09:42]>> The the the the modern industrial system uh in so far as it is a global system and in many ways it is uh will it it will be affected. So, if you take um you know, the the main fuel that drives the the industrial system and the industrial transportation system >> diesel >> That's a global problem because diesel is what fuels the ships that move from, you know, one place to another. And so, we're going to see things like increased costs and they'll be passed on through transportation and shipping. Um and uh and and in due course it will affect the entire globe. Uh regions and countries that have lim- limited or zero refining capabilities of their own, of course, are the most exposed. And of those, the poorer you are, the more exposed you are because as prices get pushed up uh poor countries will come under increasing pressure as far as their ability to finance those purchases are concerned.

[00:10:50]And because you got to you need to purchase them with foreign exchange, with US dollars typically. And if you're short on those US dollars, you're going to come underneath increasing pressure um trying to keep the diesel flowing and the and the petrol and things flowing into your own country. So, poor countries will be affected first and they're already being affected. Then then it's the not as poor countries, but ones without sufficient refining capabilities at all. They'll be next.

[00:11:19]And eventually we'll start to see countries that do have some refining capabilities, but in truth never quite enough affected. The United States is affected not because it it doesn't have refining capabilities, but because it actually relies upon oil from the Middle East for for the production of of a lot of the diesel that the United States economy uses.

[00:11:41]The United States in and of itself does not have enough of the right kind of of crude oil to make enough diesel for the American economy. So, this is this is how interconnected these things are.

[00:11:54]Now, as shortages begin to take hold and prices get pushed up, some economic activities will, of course, cease.

[00:12:06]They simply don't have enough fat in the activity to carry the increased cost.

[00:12:10]And as And this is the crazy part, Jamal, but mainstream central banking usually responds to inflationary pressures by increasing interest rates.

[00:12:22]Because what they're trying to do is dampen demand further. So, we'll have rising energy costs, demand destruction happening as a result of that, coupled with central banks pushing interest rates up, which will further contract aggregate demand, which will then further impact economic activity.

[00:12:42]And this is where you do get your You know, your your major deflationary effects from an economic activity point of view.

[00:12:51]We could be in for a very very rough ride in in many parts of the world.

[00:13:00]>> And yet the dollar has strengthened.

[00:13:04]Like when I was reading the thing today, it says something like the price of oil has gone up and the dollar has effectively strengthened. And I assume that it strengthened just because of the petrodollar effect. But is that what we're looking at? Or am I getting it >> Oh, it's not. Yeah.

[00:13:23]It Well, and be because folk need the dollar to buy the oil.

[00:13:29]And so >> I see. Because it's allocated in dollars. In which case Okay.

[00:13:35]>> Mainly, yeah. So, the the the only oil that isn't um it well, the only oil that weren't was Venezuelan oil, Iranian oil, and Russian oil. Now, Russian oil is is um by and large still settled um in non-US dollar terms. Though, as we know that the the sanctions have been had been suspended temporarily.

[00:13:56]Iranian [clears throat] oil hadn't been transacted in US dollars for a long time. So, you know, that wasn't really part of the equation.

[00:14:04]There was some oil from Saudi Arabia, for instance, that was being um traded in uh Chinese RMB.

[00:14:11]And and and increasingly so, but it was certainly not uh of an order of magnitude that that, you know, would suggest that we were staring at an imminent demise of the US dollar as a means of paying for oil.

[00:14:25]So, you you know, countries um or, you know, companies um needing to purchase oil will be uh making sure that they've got US dollars to be able to do that with.

[00:14:37]>> Hence, the dollar strengthening.

[00:14:39]Interesting.

[00:14:41]Um give me your take on I know this is difficult to predict.

[00:14:48]And so, I know this is a prognostication, which as an economist you may not want to do, but I'm very curious to see your take on this.

[00:14:57]When people are looking at this, they're thinking to at least me, Al Sidney. When I look at this, I think to myself I don't have a model for this.

[00:15:06]Because I'm stuck with this idea that hubris versus the global economy, and I don't know which wins out from a standpoint of a president.

[00:15:14]Meaning, is the president willing to for lack of a better term, look like an for attacking the country in a war of aggression, and then losing and having to back away from it and accepting it back, or with presidential hubris and narcissism, risk the global economy.

[00:15:36]I don't know which one. Meaning, I don't know if he does renewed strikes. I don't know if he's going to risk the global economy with Iran's reprisal strikes on us.

[00:15:46]How do you factor this into it? Meaning, when you're looking at this A, because you're looking at it from a different angle than I am. [snorts] Where do you think this goes?

[00:15:56]>> Well, the the first thing I'll be uh looking at this is from the perspective of a president and a um and a GOP staring at electoral headwinds leading into the midterm elections.

[00:16:10]That's the first set of circumstances that I guess uh are likely to um create behavioral pressure, okay?

[00:16:19]And uh and we we saw in the last 24 hours President Trump, you know, hubristically dismissed the idea that he cared about the effects politically.

[00:16:29]But, politicians will say that, you know, that the the I haven't yet seen a politician who will publicly come out and say, "Look, I'm I'm very worried about how the voters will react to my crazy policy." Um you know, they tend to you know, they you know, I'm very confident the voters will understand why I'm doing such and such, and in due course they will appreciate that I'm doing it for the right reasons. But, of course, deep down they're looking at the polling numbers, and no doubt they're hearing each day from the pollsters what's going on, and I think that there is some deep worry um amongst the uh the political professionals inside the beltway that uh voters are sitting on their porches um with baseball bats um waiting for GOP candidates to come knocking on the door because they're going to be held responsible for um not only a national humiliation but more importantly I think for for a lot of voters it's actually the impact this is all going to have on their hip pocket and so I think that that's the first factor so you're talking about this question of global economy versus hubris I doubt in there the domestic economy and the domestic fall out which leads to the next issue which is the question of what is known as the decent interval problem and the decent interval problem arose during the Vietnam War when everyone inside the beltway knew that the United States military could not defeat the North Vietnamese but no president wanted to carry the can and consequently instead of backing out and figuring out how to back out the problem was how to keep it going so that you could push it beyond the next election or to make it the next candidates problem and I think that there is a part of that dynamic at work too that nobody wants to own the defeat prior to the midterms so that's the second thing you've got going the third thing you're trying to do and you can see this is to try to keep a lid on on prices because that that affects the first problem and the jawboning of the market by President Trump has been quite successful to date but that success will I think diminish as the weeks and months go by >> Right.

[00:18:45]>> simple reason that you can't jawbone extra molecules into existence so at some point at some point the the the the tanks are emptier than they were and that will become noticeable and so the jawboning effect will diminish and we'll start to see prices go up and you know really catalyze the dynamics that we discussed before the real political calculation here is whether they can get to the midterms before all of that unfolds.

[00:19:15]Add to that concerns around the AI bubble, the pressure points on the electricity system. So, you've got energy problems in oil, but you've also got electricity system pressures building as a result of AI and the associated bubble. And you've got some very significant political risks from a from candidate's point of view.

[00:19:39]I mean, imagine if in October there was a run on stock, which caused the popping of the AI bubble, and at the same time you had a whole bunch of induced demand destruction in the economy because prices went to, you know, $6 or $7 a liter for a gallon for diesel. You know, if if those things happen around that time, you know, there's going to be, you know, President Trump talked about a bloodbath when he, you know, was talking about Chinese EVs coming into the market.

[00:20:15]Well, you know, you could be looking at a political bloodbath if that happened.

[00:20:20]I did some modeling about a week ago.

[00:20:22]Just and a little bit rough, but it was essentially a form of attrition-based modeling. So, I just think of um So, the model is is relatively simple.

[00:20:33]It was looking at at crude oil and and diesel.

[00:20:36]And looking at four regions of the world. So, Russia, China, four or five or six regions. Actually, Russia, China, US, Southeast Asia, Africa, UK, EU.

[00:20:47]And And it and it had in there parameters around how much diesel each region consumed, how much diesel each region manufactured, how much crude they they produced, how much crude they imported.

[00:21:00]And And And the conclusion of that little basic model is that come July, the EU and Asia and Africa and South America will really begin to observe the pinch. And come end of September, Russia, well, and the United States in particular, Russia's a little bit immune from this unless they had some dramatic collapse in productive capacity. And China has been well prepared for a whole bunch of other reasons. So, the United States come end of September, early October, will begin to experience some of these additional problems, particularly around diesel. And diesel's very ubiquitous. Not only is is it used in some urban transportation, but it's used in buses, it's used in long haul semi-semi trailers, it's used in trains.

[00:21:58]It's used in ships.

[00:22:02]So, just about everything that moves in in the American economy is moved because of diesel.

[00:22:09]And and if there is shortages and not to mention, of course, farm machinery. So, farm machinery, I saw I think one of your your viewers posted a question about fertilizers. So, you add in there shortage of fertilizers, increased cost for diesel affecting farmers and their operating expenses and you've got, you know, two problems straight away in farming. Then you've got problems in delivering things to farmers, the cost of delivering goods to them will rise. In any case, the cost of them shipping whatever they produce to to the to the silos or wherever, that'll rise as well. So, these are the cascading effects that we can be looking at and October, November is is going to prove to be critical. So, I look, you asked me to sort of crystal ball a little bit.

[00:22:59]I don't know President Trump's sensitivities in this sort of stuff, but I think these are the things that he's going to be constantly being pushed and pulled on.

[00:23:10]And um on top of that, you've got your global economic stuff, which you touched on, which is the pressure that will come on the United States from its so-called allies. Because let's not forget, a lot of the so-called allies are the first ones who are actually going to be hurt.

[00:23:26]>> Yeah.

[00:23:26]>> And from from the Europeans who he doesn't seem to care that much about. Um but but the Australians, again, questionable how much he cares about. Um uh the you know, the folk in Southeast Asia. Um they're not really allies, but they're certainly ones that I think there'll be a lot of pressure inside the administration to not do too much damage to.

[00:23:53]Because keeping those countries open to dealing with America, particularly in the context of the wider geopolitical competition with China, is going to be an important consideration.

[00:24:06]You know, you don't want You don't want to rub everybody up the wrong way all at once. Um you know, it not only is that not the art of the deal, it's not the art of making friends and influencing people. So uh so these global pressures will start to, I think, be pushed back into the White House um as countries begin screaming at ambassadors, as ambassadors begin walking the corridors of power in the Congress, literally saying, you know, you you've got to you've got to stop this. This is, you know, you got to bite the bullet and find a way out of this because this mess is starting to really affect um uh you know, our economies, and people are going to get very, very angry, and they're going to blame you for it, you know, America.

[00:24:52]>> Wow.

[00:24:53]Just wow.

[00:24:54]Um you mentioned AI bubble.

[00:24:57]So, it is a bubble. I mean, that was the kind of the I looked at AI kind of in the way I looked at dot com.

[00:25:04]I mean, that's just historical context and maybe, you know, it rhymes even if it's not exact.

[00:25:10]But it seemed like all of these tech companies, like did I read this correctly? Like 97% of all of the gains in the US economy came from AI.

[00:25:22]>> Um, I think it was very close to that. I can't remember the number off hand now, but it was a very large proportion of GDP growth is basically from um from the capital expenditure from the AI industry. You know, whether it's buying building building data centers um and uh but yeah, it's basically the AI AI is at the moment the entire story of the American economy's growth.

[00:25:51]>> So, is that producing anything? Like meaning it's not like um productive capacities that is producing something that begins to produce something else.

[00:25:58]Basically, it's >> Data centers, right? And um and data centers drives up demand for a whole bunch of things, but many of those things are actually not made in the United States. So, if you looked at uh sales of uh microprocessors from say TSMC um in Taiwan, uh you'll see that the sales have gone through the roof that America's imports from Taiwan Island have been going through the roof. And there's only one reason for it. Data centers are gobbling up uh uh microprocessors being made by TSMC. Uh so so um uh you know, so a whole bunch of this activity is really driving American imports. Um it's creating bottlenecks for pretty obvious reasons because it's competing for uh for a whole bunch of workers, for example, who, you know, used to work in other industries, you know, electrical workers, uh trades workers, licensed skilled blue-collar workers.

[00:26:59]And um and they're not available. So, there's a shortage of skilled workers um relevant to the development of data centers. Uh some data center projects have been stalled and deferred and canceled because they can't get enough um of the right workers to be able to pull them together. Not to mention the shortages around things like transformers. Uh transformers is um is critical to data centers because you need the transformers as part of the upgrading of the electricity delivery network, and there's multi-year waits on transformers at the moment. So, again, just about everywhere that you turn, uh we're starting to run into a whole bunch of blockages. And uh and and as those blockages, you know, really become manifest, the next And again, it's important to think about the cascading effect. Uh if it was just blockages, and you say, "Well, data centers are delayed for 6 months, 12 months." You sort of shrug your shoulders a little bit. Um but, when you realize that it has a cascading effect on other industries because it's bidding up the price, it's causing other industries to have margin shrinkage, it's causing other industries to not be able to put on more workers.

[00:28:13]So, we start to see shrinkage in other industries because they're being outcompeted by the AI industry for critical resources. Um you know, great for the AI industry in the short term, but certainly not very good for many of these traditional industries, let alone the workers who worked in them because a lot of those workers can't just suddenly go and work in a data center project, you know, wrong skills. So, >> Right.

[00:28:38]You made a point of saying collapse. I mean, it meaning the the very notion of calling it something a bubble implies that the bubble is going to get popped.

[00:28:49]>> Yeah.

[00:28:50]>> Why call it a bubble?

[00:28:53]>> Well, it's it's really an asset price rise, isn't it? So, so you see incredible valuations around these companies. And and a lot of them are listed, of course, which you know, generates a lot of buzz and activity and excitement. You know, all the way through to you know, mature companies that are part of the industry, but of course, around you know, significantly because of it. I'm thinking of companies like Nvidia.

[00:29:19]And and And and when demand for what they do drops substantially, their share price is likely to take a big hit.

[00:29:31]And and so you know, it's it's almost as inevitable as night follows day.

[00:29:39]The the earnings of these AI companies is simply not there to justify their valuations. I mean They're not making enough money, you know, let alone making enough profit.

[00:29:53]You know, the you know, it really reminds me of um Uber, right? You know, a great sector dominating company.

[00:30:07]Now, that company did not make a profit for from memory 12 years or 13 years.

[00:30:15]>> What?

[00:30:17]>> And and so in that time in that time, it relied on working capital injections from investors to keep the show going.

[00:30:30]And the promise was that by keeping the show going and keeping the business model going, which was essentially one that aimed to in effect monopolize the sector by crushing alternatives. And you'll remember in the early days there were a few other um you know, app app ride you know, all ride app um businesses around that were Uber competitors, but you know, barely anyone can remember their names now.

[00:30:59]>> Yeah.

[00:30:59]>> And and and so so the aim was to be the category killer.

[00:31:04]And um cuz that's the promise to the investors. Once we can become the monopoly then we're going to really um mop up.

[00:31:12]And so investors kept pouring money in on the basis that at some point this turning point will be reached. And of course it finally was. And um but it took 12 years or 13 years. And it almost feels like that the AI business model was designed on a similar idea that American AI with its general models, the large language models um would be so advanced that no one else in the world could compete with them. There'd be a big moat around them cuz it cost you know, hundreds and hundreds of millions of dollars to train and run these models.

[00:31:48]And at some point anyone who tried to come near them would be crushed. And then they could start charging a lot of money because they've now captured the um the monopoly or the duopoly position or what have you. And that seems to me to have been the ambition.

[00:32:05]Hasn't happened yet. Um look, one of the reasons why that kind of model I think has largely been destroyed is because about half a dozen Chinese AI companies have launched free open source versions of these LLMs. And so much so so much so that some of these models are actually far more prevalent in the developer community in the United States than American models. So um look, I think the American AI business model um is basically unviable and um and and it will lead to a big shakeout in the industry.

[00:32:45]>> Well, speaking of that, Huawei just released Let me let me explain it. So, it's There's Moore's law.

[00:32:56]>> And Tao's law.

[00:32:58]>> What is it called? Well, they're calling it Tao's law. I'm But I'm going with Moore's law first with this idea that there's a limit in regards to processing power just because of the speed of light. And the smaller these things get, the closer to that limit you're basically going to hit. Meaning, initially the thought was that you can increase programming or let's say um the power of chips um exponentially going forward, but there's a limit to it by the speed of light.

[00:33:27]Now, as you point out, Tao's law was something that Huawei came up with and it has something to do with the way that they're scaling their chips.

[00:33:34]But maybe you can explain this cuz I didn't fully understand the way that they were trying to explain >> I've actually got a a piece on my Substack which tries to touch on all of this and um So, Moore's law and I'm going to dumb this right down um because it helps me understand it too, right? But this in a sense dumbing down is probably the wrong way to think about it. It's It's really about getting to the essence of something. And so, from size to speed. So, Moore's law was really about this this continual focus on um on being able to to squeeze more onto a smaller onto a smaller size um form factor device.

[00:34:16]And and that way you could, you know, do more and more things um in smaller and smaller um you know, bits of equipment.

[00:34:24]So, that that was the basic idea. And Huawei, of course, had limitations in terms of how small they could go because they didn't have UAV machines.

[00:34:33]And they began thinking about something a little bit different. Not entirely different. It's not like they reinvented the wheel in every respect, but they started thinking about another set of metrics as they were confronting these um uh limitations on on um making things smaller and smaller and smaller and smaller.

[00:34:54]Uh because you because as time went by, of course, the efficiency was actually diminishing. You weren't getting the same bang for buck each time you made something smaller.

[00:35:06]And Huawei has basically uh come to the view that the next phase of development of the microprocessor industry is actually going to revolve not around making things smaller and smaller and smaller, but making things faster, faster, and faster.

[00:35:24]And for them, faster, faster, and faster is actually linked to the question of how much energy or electricity is used for a given amount of work that these processes do.

[00:35:38]So, the aim is to have a performance metric that enables you to achieve improving outcomes on compute over energy over time.

[00:35:51]And uh and and to get to to use less electricity tomorrow to get the same computational work than you had to use yesterday.

[00:36:04]>> I see.

[00:36:05]>> So, that's and and to do that at at a faster speed. So, you can get uh the computational work being done quicker and with less energy.

[00:36:15]And that's actually quite an important breakthrough. All the other things they talk about in their paper are the means by which they are seeking to walk this particular pathway towards these particular um performance indicators.

[00:36:31]And so a lot of people of course are focused on things like the folding, etc., etc. But just think of those as the means by which they seek to pursue these new metrics.

[00:36:43]It's the metrics that define the the the radical shift.

[00:36:49]The rest of it's just the way that you go about trying to get there. And they have already had some success. The real proof of the pudding in a sense is going to come when the next Kirin chip comes out and people will be all over it testing it to see whether or not the promise or the claims are being validated by this next production run. Now, I doubt that Huawei would have made these announcements if they weren't absolutely confident that when this came out to the market in the second half of this year, that you know, independent evaluators will, you know, give it the thumbs up. Now, that that's quite a significant breakthrough because it also means that the old constraints around the UAV machines, which were controlled by the Dutch and indirectly controlled by American sanctions and export controls, are no longer the kinds of barriers that they perhaps were 5 or 6 years ago. And certainly no longer the barriers that I think a lot of the designers of the American export restrictions policies would would have hoped them to have been. So, you know, obviously there's some geopolitical implications there because they've overcome that particular barrier sufficiently to in a sense just not be too concerned about it. But I think more broadly speaking that shift from size to speed and energy is is the important piece.

[00:38:20]>> That's the part that is going to make waves going forward basically in regards to the let's say the devices that are used for cuz they're coming out with it's going to be in their phones coming out correct?

[00:38:30]>> Yeah.

[00:38:31]>> That's what I thought. Yeah, they're basically >> if your phone can do the same thing but use less electricity in doing it, that's you know, that's an important improvement. Um and it has feedbacks into um how long the battery lasts, has feedback into how often you need to charge something as a result.

[00:38:51]And and of course in a whole system point of view, it has tremendous implications on the energetic efficiency of the information system as a whole, right? So.

[00:39:04]>> I I was enamored by the term tau and I'll let you go. The the term tau is the part that caught my attention. There is a book called uh It's tau something but basically a ship is going hurtling towards the speed of light and the engines were damaged in a way that they can't necessarily slow down.

[00:39:25]And so the ship continues to add on speed up until the point where it just continues, you know, obviously it can't hit the speed of light but you can get to 99.9999999% and you know, it that's what it caught my attention. I wasn't sure if they were making a reference to the book when they named it with the idea of some backwards speed of light. I don't know. [clears throat] >> But it is but it is about speed, right?

[00:39:53]Speed and energy is actually what it's about as opposed to size. So you know, that's that's the main thing that people need to keep in mind especially for um you know, the the non-technical people and you know, from a broader strategic point of view, a geopolitical point of view, an industrial competitiveness point of view, and a system point of view, you know, if if you can get the same amount of work out of um a microprocessor with a modestly less amount of electricity consumed.

[00:40:25]Um or that there's been less waste, right?

[00:40:28]Of electricity. That and you add that up across the whole system.

[00:40:32]And that that's a significant um you know, advancement.

[00:40:39]Yeah.

[00:40:40]>> Especially since energy is one of the main things for these data centers and what not.

[00:40:44]>> Yeah. Yeah.

[00:40:45]Absolutely. You know, that's that's the name of the game.

[00:40:49]>> Dr. Warwick Powell Manning thank you for this. And Dr. Warwick Powell, he's an adjunct professor at Queensland University of and a professor at the I'm sorry. I need my glasses. I have um This now >> I I think I'm I think I'm well known enough perhaps and we can say for the moment >> Okay, fair enough. But I always like to give a heads-up to the people Warwick Powell, adjunct professor of Queensland University of professor working at the intersection of China, digital technology, supply chains, financial flows, and a global political economy and governance.

[00:41:29]Um Dr. Powell, thank you for this. You be safe, okay? Have a good night.

[00:41:32]>> a pleasure. Have a great Have a great day.

[00:41:35]>> Thank you. Bye-bye.

[00:41:37]All right. Shout out to Dr. Warwick Powell. Shout out to Dr. Warwick Powell.

[00:41:42]He knows his stuff. He always gives fantastic