Economic Competition in the 21st Century w/ Jonathan Ward author of China’s Vision of Victory.

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Ryan Morfin:

Welcome to Non-Beta Alpha. I’m Ryan Morfin. On today’s episode, we have Jonathan Ward, the author of China’s Vision of Victory, talking to us about the economic competition coming to us in the 21st century. This is Non-Beta Alpha.

Ryan Morfin:

Jonathan, welcome to the show. Thanks for coming on today.

Jonathan Ward:

Thank you. It’s good to be here.

Ryan Morfin:

So you wrote a book recently called China’s Vision of Victory, and I think it’s a very important book that our viewers should pay attention to because a lot of the financial community, Wall Street, have really benefited from globalization. But I think as you talk about in your book, and in many of your media appearances, that we might be funding a national security crisis. And so could you talk to us a little bit today about what is China’s View of Victory and what should Wall Street pay attention to going forward?

Jonathan Ward:

Absolutely. So the way this all adds up, and I’ve been working on this question for nearly 15 years now, when I first started going to China, learning language, exploring the region, wound up doing my doctorate at Oxford after traveling for many years across the Eurasian continent and such, and then consulting for the Pentagon, and, finally, releasing Vision of Victory, and then beginning to advise US corporations on how to revise their Asia strategy.

Jonathan Ward:

So I’ve taken in a lot of different angles on this over the past decade. The bottom line was coming to understand the strategic view at the heart of the Communist Party of China provided an entirely different view as to what was going on when we think about the rise of China. Many people, particularly in the business community or on Wall Street, think about the rise of China basically in economic terms, but what they wouldn’t have had access to is what the real sort of end game is for the Communist Party of China.

Jonathan Ward:

I lay all of that out in the book in their own words. I was working on this using archival sources from China that have been closed to the world, using all kinds of different strategy documents and statements that go way back in modern Chinese history and also have just recently been coming out in the past years. But the bottom line is they seek domination of the international system.

Jonathan Ward:

They see this as a return to power. The whole narrative of the century of humiliation, which I think people have had a sort of glancing exposure to, the idea that they were once the center of the known world, and that’s really a medieval view, but then they were humiliated at the hands of other empires. And then with the founding of the People’s Republic of China and Mao Zedong and all the rest of this, they would set themselves on a course to ultimately rise to the top of the international system again.

Jonathan Ward:

How they’re doing this is through all of the news. I mean, if you gather all of the sort of daily information feeds about Chinese industry, economy, finance, the buildup of their military, any of that, I mean, these are really just little facets of a very big vision, which they call The Great Rejuvenation of the Chinese Nation, that seeks to create a world in which China is at the center economically, technologically and militarily, and ultimately really to live in a 21st dominated by China and its system of governance.

Jonathan Ward:

So that’s what we find ourselves in today. This is not lost on the capitalists of Asia, from Tokyo to New Delhi, and it is not lost on Washington across party lines. We all understand that China is the primary national security threat to essentially democracies worldwide. So to be investing in that, as though it’s some sort of growth opportunity, I think places many investment institutions into direct conflict with US national security and with the national security of many other countries worldwide.

Jonathan Ward:

So this is really a reckoning that needs to take shape and you have to get our economy, our business interests and our investors on back on the side of the United States of America, because globalization has essentially created this very dangerous force in the form of the People’s Republic of China, and it seeks power.

Ryan Morfin:

So a lot of people often tell me that, “Look, this was similar to what happened in the US with the Japanese in the 1980s.” How is a rising China in the 21st century different given the circumstances today?

Jonathan Ward:

Well, right. I mean, think of Japan. Japan was our treaty ally throughout the Cold War. That all took shape in a Cold War world where Japan was on our side. So even if they were becoming a sophisticated economic and technological rival, they were a national security partner. China is in the opposite camp. I mean, China is building a military that’s designed for conflict, for war with its region, and for conflict with the United States.

Jonathan Ward:

So even though economics is at the heart of what they see to do… I mean, they’ve envisioned themselves as surpassing the United States in the 2020s… what they’re doing… Here’s an assessment of the latest Pentagon report on China. They now have the world’s largest standing ground force, the world’s largest navy with 50 ships more than the US Navy, largest coast guard, Indo-Pacific’s largest air force, world’s largest substrategic missile forces. And their rhetoric is all about preparing to fight and win wars. Xi Jinping says this on a regular basis. He says, “All must be done with the ultimate goal of improving battle command capacities measured by the standards of being able to fight and win wars.”

Jonathan Ward:

So you ask yourself, what wars? They have territorial conflicts with Japan, with India. You saw the first use of the Chinese military against a neighbor in the 21st century in the Himalayas this summer. They’re talking openly about seizing Taiwan now. They’ve enacted the National Security Law in Hong Kong. Their main alliance is with Russian, and the United States is, as they see it, their primary adversary as they go after all these regional ambitions. So we’re in direct national security confrontation here.

Ryan Morfin:

Maybe you can talk a little bit about their diplomatic prowess as well about entering and maybe infiltrating, if you will, international institutions post Bretton Woods, how they’ve been picking apart the infrastructure of the Old World Order from the 20th century to redefine it in the US in that anti-US context and the 21st.

Jonathan Ward:

Right. This is where I think one has to begin talking about American strategy and the big change that’s underway here. I mean, the entire US strategy towards the People’s Republic of China since Nixon and Kissinger was essentially to bring them into the international system to the largest degree that we could, and that kept expanding so that they could help us balance the USSR.

Jonathan Ward:

Ultimately, they became a market, and we thought that that would create stability in the international order. Instead, what it did was it enriched the People’s Republic of China, which is an unreconstructed, Leninist, authoritarian, dictatorship, as we’ve all come to realize. I mean, those that have studied this in real depth understood that. But the US strategy, which we called Engage but Hedge, has failed completely. The idea was that engagement would lead to then becoming a responsible stakeholder and that we’d be able to hold the military balance and disincentivize them from any sort of regional adventurism.

Jonathan Ward:

But the bottom line is what we’ve actually done is funded an arms race against ourselves and against their neighbors. And that’s one that they’re essentially winning. That’s the part that we have to remember, is that we are losing this competition with China right now. This is not one where… Our edge shrinks with every passing year as their resources grow.

Jonathan Ward:

So, ultimately, this leads to the need for a new American grand strategy. And that’s after a year and a half since Vision of Victory came out and I’ve done over a hundred speeches, media appearances, articles, interviews, all kinds of things. I mean, everything that was coming to me, whether I was speaking to India or Japan or people in the United States or people in a variety of different industries or in the military, the questions that I got were usually two-fold.

Jonathan Ward:

One was, “Is this really possible?” And the answer is yes. When you go through all their strategies, as I’ve laid out, you see them making progress on this. The answer is yes. They could achieve this. The other is, “Can we stop it?” That’s the question that matters. So for me, for the past eight months or so, the entire thing has been, “What do we do about this? How do we stop it?”

Jonathan Ward:

It’s going to be a new American strategy that allows us basically to maintain the military balance but to fight and win the economic competition. So we’re going to be… I mean, the heart of this contest with China is economic, and this is another reason that the finance community is so important and that they have a genuine understanding of what’s going on here, as opposed to sort of understanding that it has to do with investment and growth alone.

Jonathan Ward:

We are going to have to out-compete China in the strategic industries and the emerging technologies that matter. We’re going to have to hold the military balance in the Pacific, create new and deeper alliances with other countries like India, and, ultimately, we’re going to have to stay ahead of them economically.

Jonathan Ward:

So the other side of that coin is that we’re going to have to do some level of containment on China, making sure that they do not grow into the superpower that they see themselves becoming.

Ryan Morfin:

And so the State Department in some ways has been reduced post the Cold War. Nation building and soft power have not been our strong suits, I would say, as we kind of scale down a bit.

Ryan Morfin:

Back in the 1940s, we had the Office of Economic Warfare. What do we need to do as a government approach to recalibrate how we’re looking at competing against the Chinese military-civil fusion?

Jonathan Ward:

Right. So yeah. Military-civil fusion or civil-military fusion has a variety of different names here. I mean, it’s basically the militarization of the Chinese civilian economy, which means that any strategic industry, any emerging technology will be brought to the Chinese military so that it can close the gap with the United States and ultimately build a military that can defeat the United States and other partners for us, such as Japan or India or Australia.

Jonathan Ward:

That means that you take things like Made in China 2025 and you start looking at their civil military fusion applications, and you take a list of industries, like next generation ICT or aerospace or robotics or high-tech ships. All of this, obviously, has dual-use implications. You take their investments in AI or quantum [inaudible 00:10:06]. And what we’re going to have to do is we have to remember that China only got here because we invited them into the international system.

Jonathan Ward:

The People’s Republic of China, their history in the 20th century is not one in which they were part of the sort of formation of these international institutions. They were not. They were excluded fundamental… somewhat late in the 20th century. And we brought them in thinking that that would bring stability again.

Jonathan Ward:

Ultimately, it’s going to be about cutting them out of the things that give them power and that give them undue growth potential and the ability to exploit the international system and the international economy such that they continue to progress in industries and technologies that count. At the same time, China’s rise is basically made up of access to global export markets, to global capital markets and to technology worldwide. So you start to cut back on those three things.

Jonathan Ward:

Many people see inviting them into the WTO is the turning point, but we’ve really just begun to use the toolkit. The US has a very sophisticated toolkit for economic containment and even economic warfare. Commerce is unleashing that and in a variety of different directions that go beyond technology. You look at China Communications Construction Corporation being sanctioned over the summer, and you’re seeing that this has been applied to industries that are not just the high-tech contest. And then, we’re going to have to start doing that.

Jonathan Ward:

Ultimately, Treasury is going to have to get involved too. It’s our financial system. It’s China’s access to the international financial system that really will allow them to reach the next horizon in their quest for power. So we’re going to have to start cutting them off from that too bit by bit.

Ryan Morfin:

What are your thoughts on the TikTok transaction and how that’s unfolded? It seems that [inaudible 00:11:59] in the US, Trump took a hard line on this and multinationals came into the rescue for the Chinese company with a very opaque solution that similar to the, we’ll call it the Germans in the 1930s, have some vague language about how the outcome is going to look so they can stretch the outcome in the way they want to.

Ryan Morfin:

What are your thoughts about what happened with TikTok?

Jonathan Ward:

Well, I guess we are in the midst of that news emerging. So, at this point, we’re sitting here with a potential Oracle Walmart purchase there that would keep [inaudible 00:12:40] in the picture, and that therefore would keep the Chinese government in the picture.

Jonathan Ward:

I think the other thing that’s happened as this news emerges is that the Party’s Central Commission released a new basically policy guideline in strengthening the role of the Party in the private economy. So, now, there’s even less reason to believe, not that there ever was a reason to believe, that the Party was separate from private businesses. But now they’re breaking those lines down even further.

Jonathan Ward:

So they’ve called to strengthen ideological guidance in private corporations and to create a backbone of private, essentially, business people who can be reliable at useful critical moments. And then for private companies to participate in what they call major national strategies from [inaudible 00:13:23] to the basically safeguarding China’s overseas and other national interests.

Jonathan Ward:

So bottom line is if China is still in the deal, Chinese [inaudible 00:13:33] anything, that to me seems to be the heart of the problem. So the idea that it would be American controlled, the algorithms would be turned over to the United States, the data security would be protected that way, that seems to be the only outcome that’s really going to solve the objectives that the president stated as to safeguarding of [inaudible 00:13:53].

Ryan Morfin:

There’s been movies about it. It’s starting to get more traction in written press, this idea that Chinese companies are getting listed in the US with potentially fraudulent financials, and they’re not held by the same standards. Can you talk a little bit about that?

Jonathan Ward:

Sure. And Secretary Mnuchin said that they would have to be compliant by 2022. So the bottom line is there is a timer being set as to the old rules on Chinese listings on US exchanges, the idea that they could call their books national state secrets and therefore not let the SEC see them. This is crazy. This is the entire sort of meltdown of US engagement with China.

Jonathan Ward:

At a certain point, nobody was watching this strategy anymore and everybody just assumed that the end state would arrive that integrating China was an inherent good, so we just let them break every single rule. They never became a market economy. They never abided by SEC rules in their listings. None of this. You take the entire list and they’ve broken everything.

Jonathan Ward:

Now, it’s almost as though, guess what? All we’re trying to do is impose the rules that existed that we just never held them to. And that still is going to create a series of disruptions, because it’s going to mean less integration of China into the global economy, and it’s also going to be more pushback from the Chinese government.

Jonathan Ward:

They have their own way of fighting this contest against the United States. We’re going to start to see that happen too. The biggest problem we’ve gotten, I think, is the exposure of multinational corporations to the China market. This is why, as we were talking earlier, you’re really going to want to see… I think there may be some level of fiduciary responsibility to explain a company’s risk exposure to China, supply chain risk, market risk, risk of retaliation.

Jonathan Ward:

And that risk in any earnings call should be a much bigger discussion now, whether you’re Nike or Starbucks or Apple or any of them, because at the end of the day, I don’t think the market really has priced in the nature of this geopolitical turning point. We’re at the beginning of the decisive decade in US-China relations.

Jonathan Ward:

This is where the contest really gets serious, because they could surpass us economically. They will try, and we will realize that that’s unacceptable. That’s the heart of the competition. A whole bunch of new tools are going to have to be deployed. So our companies need to be dealing with this in their boardrooms, in their C-suites, in their strategy offices, in their risk offices. And so do our banks. Because at the end of the day, our companies are how we win this.

Jonathan Ward:

You start to bring the US Fortune 500 back to a sort of US national interest worldview. That’s how we won World War II. That’s how we won the Cold War. It’s even how we won the mini contest with Japan, which was not at all as serious as any of these events.

Ryan Morfin:

In a recent survey from Bloomberg, 84% of companies, US companies, have no intention of moving back infrastructure back to the US. They spent $14 trillion last year in long-term investments globally into China.

Ryan Morfin:

What way can we wake up the boardrooms, can we wake up the C-suite, institutional investors, shareholders? What do we need to do to get Americans focused on bringing back infrastructure to Mexico or near shoring it somewhere where they can have a much friendlier, just in case kind of footprint for supply chain?

Jonathan Ward:

Sure. I think they’re dealing with the supply chain questions already. That’s sort of become the… Hot topic right now is China Plus One or diversification or just… But I don’t think they’re moving fast enough. I think that’s clear.

Jonathan Ward:

I think we have to remember that there are two ways that people actually wake up to big things, and that’s either with foresight or through events. You don’t want to be in a boardroom that’s dealing with the US-China problem because it was an event, because something has really happened in your sector or to your company that you just chose to ignore or sort of cross this bridge when we come to type thing.

Jonathan Ward:

People need to be looking a little farther down the field. Not even 10 years. Ideally, you’re looking at a timeline that gets you to the whole 2020s and understanding how this shakes out. But at least three to five to understand how this relationship between China and the world is really changing, because then suddenly getting deeply into that market doesn’t look so wise.

Jonathan Ward:

This is a country that’s in confrontation with its region and with the United States. So to consider that that’s going to be a stable long-term bet just doesn’t make sense.

Ryan Morfin:

No, that’s interesting. That coupling that you mentioned is really interesting. Like in the financial industry, we always have to disclose conflict of interest. Some might say that the huge amount of treasuries China buys gives them undue leverage in our political system and our capital markets.

Ryan Morfin:

Do you think we’re at risk as a country? I mean, whether it’s the university systems, corporate America, of falling into a trap where knowingly or unknowingly Americans and executives have… There’s been an engineered kind of bribery scheme by the Chinese, as they implement in Africa, in Asia. Have they created these conflict of interest that may put leadership at the highest levels here in this country exposed to conflict of interest?

Jonathan Ward:

Well, I think they’ve been very sophisticated at… A lot of China’s influence operations, which at this point are very well documented and well understood. The United Front Work Department, the way that it operates globally from Australia to Europe to America, this is known. They’re basically trying to create an image of China is a friend, China is an investment, China is a win-win, China is an inevitability. That’s done pretty sophisticatedly throughout the international system.

Jonathan Ward:

There are many, many countries that are exposed to that, including our own. But I think at the end of the day, it’s basically something where I don’t think they’ve really made those inroads as profoundly in the United States as they have in many other places. It’s still very possible to… I think the political consensus has already emerged in both parties that China is the main adversary.

Jonathan Ward:

Look at what’s been passed in Congress on a regular basis. It’s being passed almost unanimously, whether it’s Hong Kong or related to Xinjiang or all sorts of things. So I think you’re seeing a real coming together around this issue here. But what’s more dangerous is the incentivization of the business community to continue to engage in China. That’s really where they’ve been most successful, much more so than with governments or politics in general.

Jonathan Ward:

So you really don’t want a world in which, as has happened, a group of CEOs are going to Beijing and coming back to sort of say, “Hey, look, we really should try and fix this relationship.” That is arguing against the broader national interest here. So I think the more that the business community waits to acknowledge the sort of scope of this problem, the harder it’s going to be, not just for their risks in China but for their opposition to US strategy and policy.

Jonathan Ward:

We really need to make that switch as soon as possible, where we can start working on the same team, looking for new growth opportunities, looking to rebuild a lot of things in the United States, looking to position the United States as the leader in all the key industries and technologies of 21st century, and looking to continue to globalize across the international system that is made of democracies. That’s still two-thirds of world GDP, from Europe to Japan to Australia.

Jonathan Ward:

We take the whole sort of US Alliance system and you’re talking about two-thirds of the planets gross domestic product. So that’s where we want to be focused. I think those that are thinking that way are playing the long game, whereas those that are trying to go into China are playing the short game that’s going to put them in a pincher between both the Chinese Communist Party and ultimately the US government.

Ryan Morfin:

How do we bring our allies along? You’ve got Germany kind of at odds with us on the Russia treatment. You’ve got Australia saying, “We’d love to confront China, but they’re our biggest trading partner.”

Ryan Morfin:

What can the US do to get that alignment of Western democracies to confront China?

Jonathan Ward:

Well, it’s case by case. Each country has its own sort of assessment. Germany is a good example of a country where, by most accounts, Merkel has been all about engagement, even as that becomes sort of a longer walk off a short pier, in western governments. Whereas, her backbenchers aren’t having this anymore, and that’s starting to become a real reckoning in German parliament.

Jonathan Ward:

But I think the real key to this is going to be… And I think India is a very important key to this picture because you have to have the potential for another center of growth, another emerging economy that can handle some of the… do some of the things that don’t make as much economic sense in the industrial democracies. I think once you have India as kind of a linchpin of an international democratic system…

Jonathan Ward:

If Indian America are working together, as we clearly at this point have a very robust military relationship, but the economic relationship hasn’t reached its full potential. I think many companies outside of certain industries, like tech and IT are just… India is too complicated for them. But going and figuring out India in the 2020s, I think we would benefit similar to those that spent the ’90s and the 2000s trying to figure out China.

Jonathan Ward:

One of the important pieces of that is the long-term political stability of the US-India relationship and the fact that many of these other countries that you’ve mentioned, from Australia to parts of Europe, are also… I mean, the security relationship with India is becoming more and more important in the Pacific. You look at the Pentagon, for example, and the entire… I gave the opening speech to the Indo-Pacific Command last year at their China conference, and the entire command was renamed from Pacific Command to Indo-Pacific Command to essentially account for what the geopolitics of Asia look like today when you include India and China.

Jonathan Ward:

So getting a new view of the world, that’s really what needs to happen in every boardroom and every chief investment officers’ team, just starting to understand what the dynamics of 2020s really look like, because we haven’t been through geopolitical disruption on this scale since the end of the Cold War.

Jonathan Ward:

This is an era-making disruption. I think looking at it in a short-term way is going to be very dangerous. You really want to have a long-term game plan.

Ryan Morfin:

Absolutely. It’s something that people needed to be factoring into their investment strategies.

Ryan Morfin:

Are you worried at all about China’s alignment further with Iran, and now you’re seeing the peace deals between Bahrain, UAE and Israel. Are we starting to see the shaping up of a conflict Sunni-Shia, Shia backed by China, West backing the Sunni, for a broader disruption here in the Middle East?

Jonathan Ward:

No, I think that’s possible. I spent a couple of years in the Middle East. Arabic is one of my languages. I got to see a whole lot of the region. Yeah, the realignment of the Middle East is basically happening because of Iran’s growing power and the Israel sort of Arab alignment that’s happening now is driven by that. And then China is stepping in, partly because you can look at a whole lot of their international strategy simply as resource procurement and energy security and that kind of thing.

Jonathan Ward:

It’s like, where can they secure long-term political relationships as they begin to understand that the West is going to come into some kind of coalition against them? So I think that Iran certainly seems to be where they’re making their long-term bets, And it also has, from their vantage point, the added benefit of being in the anti-Western camp.

Jonathan Ward:

So if you put Russia and China and China and Iran and the sort of three of them together, I think you’re starting to see one of the bigger geopolitical alignments that’s going to last for a while, if that does indeed continue.

Jonathan Ward:

Iran does have relations with India, of course, and that’s going to make things very interesting too. India has been looking to offset China’s CPEC corridor through building their own relations with the Iranians.

Jonathan Ward:

So a lot of these things are going to change at a very tectonic level. This is not going to be the politics of globalization, sort of competitive advantage and full-spectrum just economic possibility of this is going to be the sort of investment landscape of oppositional blocks that have sort of different capabilities here. But yeah, I think China and Iran is shaping up as an interesting piece of the picture.

Ryan Morfin:

A few last final questions for you. This is what we call the human factor. It’s just a quick yes or no type of answer to these questions we ask all of our guests and the end of season two.

Ryan Morfin:

First question is, if there is a COVID vaccine available right now, would you take it?

Jonathan Ward:

Oh, I don’t think I should comment on that.

Ryan Morfin:

Okay. No problem.

Ryan Morfin:

Number two, who do you think is going to win the election? Trump or Biden?

Jonathan Ward:

I think it’s a coin toss, at this point. I think it’s easy to argue that either way. But American politics is… I spend more time thinking about sort of US strategy and such than US politics. I think, one thing that’s worth talking about, commenting on here, is a lot of people see this election as a juncture in the US-China relationship. I don’t think that’s entirely true.

Jonathan Ward:

I think that the assessment of what China means in the Pentagon and the intelligence community and Congress, that’s fully there. We know that China is the adversary. I think in US government very broadly that that’s known. So then the question of how you go out and deal with this is another subject.

Jonathan Ward:

I think Biden would prioritize some things and Trump would prioritize others. Biden, for instance, likes to talk about being able to go out and build a coalition around this problem. Trump has obviously demonstrated that they’re willing to take the bull by the horns when it comes to the economic issues.

Jonathan Ward:

So either way, you’re dealing with this. This isn’t going away. I think if we take our foot off the gas on this, for any reason, the problem just gets bigger. So this is what’s going to happen in the 2020s. We’re dealing with the problem of China.

Ryan Morfin:

Do you think we’re in an economic recovery right now? Does it feel like that too?

Jonathan Ward:

I’d say to some degree but not compared to what it’s going to be when we all get to leave the house again.

Ryan Morfin:

Anything you achieved this summer, personally, that you’re proud of, like any new hobbies or write a new book?

Jonathan Ward:

Sure. Well, bringing my company online. So I founded Atlas Organization in 2017, realizing that over the long run, pretty much every American business is going to have to change its strategy towards Asia and that this is the central geopolitical issue of our time.

Jonathan Ward:

I basically did that, built the business by going out and speaking to numerous audiences. And then I’m necessarily an internet guy, but I’m starting to take it there and do all kinds of briefings to funds and banks and companies through the internet, which actually can lead to a whole lot of engagement here. Because it’s a lot easier now to bring your team together around these questions, start dealing with them and they’re pressing issues. They are issues that give you foresight. But it’s never been easier to get people together to start digging into this and what it means for you, your portfolio, your company, and our country.

Jonathan Ward:

So that’s been a big benefit, but as an entrepreneur and a sort of former scholar, bringing this all into the new era of sort of how things work has been a real summer project.

Ryan Morfin:

Absolutely. All businesses have shifted their marketing channels, which is great. It’s making us all, I think, more efficient. Any silver linings you see for us, the US-China relationship in ’21?

Jonathan Ward:

I guess the way I look at it, some people say that the US-China relationship is the world’s most important relationship, and I really don’t think so. I say this as someone with a doctorate in sort of Chinese studies, China-India relations, who’s been studying this since I first got into the language as a 21-year-old.

Jonathan Ward:

I don’t think our key relationship is with China. Our key relationship is with everyone else. It’s about bringing the world together. I think the silver lining here is that there’s still an opportunity for us to go out and build the world that we wanted to have before these dictatorships grew powerful in the free system. So that can be built now. I think that’s where the opportunities are.

Jonathan Ward:

Again, the right way to go is to be working on how growth works in America, how integration works around the democracies and the allied nations, and what the next frontier in strategic industries and key technologies is going to be. Because it’s going to be driven by the biggest tailwind of geopolitical necessity that those living today have ever witnessed.

Ryan Morfin:

Wow. That comment you made there a minute ago, “Our key relationship is with everyone else,” that’s a really powerful comment and I totally agree with that. It’s building those allies.

Ryan Morfin:

Last question for you. What are you reading, watching, listening to on podcasts? What are you doing to kind of gather more information or achieve your interests?

Jonathan Ward:

You asked about another book. I am working on a new book about US grand strategy in the 21st century. So a lot of what I’m reading is sort of esoteric tomes, like Western Economic Warfare in 1957 to ’65. I’m reading something by Clyde Prestowitz right now that’s fascinating. Talking to a lot of people that actually were part of the US-Japan 1980s, and getting back into American grand strategy, history US grand strategy.

Jonathan Ward:

But my bookshelf is mostly China, India related stuff from the old doctoral days. But the key thing now for me is figuring out how the US goes forward and how we engage our business community. I read a ton of CEO biographies as written biography [inaudible 00:31:55]

Ryan Morfin:

Fantastic. Well, Jonathan, learned a lot today. I appreciate your time. I appreciate your book. I appreciate your scholarship on this very important issue. As we go into the post-election season, it’s something that I think no matter who wins is going to be top of mind, top of agenda. So thank you so much.

Ryan Morfin:

Thanks for watching Non-Beta Alpha. And before we go, please remember to subscribe on Apple Podcasts, YouTube and Spotify. This is Non-Beta Alpha, and now, you know.

 

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Ryan Morfin: Welcome to Non-Beta Alpha. I'm Ryan Morfin. On today's episode, we have Pini Althaus, CEO of USA Rare Earth, talking to us about the supply chain glut in rare earth minerals. This is Non-Beta Alpha.

Ryan MorfinPini, Welcome to the show. Thank you for coming on today.

Pini AlthausThank you for having me, Ryan. Good to be here.

Ryan Morfin: So you're an investor and a miner in rare earth minerals. Can you share with our listener base, what are rare earth minerals? Why are they important and why is there a geopolitical race going on globally?

Pini AlthausYeah, I mean, rare earths are an extremely ubiquitous part of all advanced manufacturing or technology manufacturing today's day and age. Several years ago, I had not heard too much about rare earths myself. I was not that familiar with it and being involved in this sector, in this company, for the past few years has given me an education of course. And I mean, I was sad to hear that 50% of all imports into the United States contain are earth elements and it runs the gamut from consumer electronic devices that we use every day. Our cell phones, our laptops, most communication devices, medical equipment. So there's a tie with COVID, which we can touch on at your discretion. Electric vehicles, defense equipment. So pretty much anything or everything high tech today has a rare earth element or critical minerals contained within them.

Ryan MorfinAnd what are some of the names of some of the more important rare earth? I know there's lithium for batteries, but what else is considered in this category, critical?

Pini Althaus: Yeah, so lithium is a separate category to battery material. The rare earths are 17 rare earths. The four, let's call it, key rare earths that we're focused on at our company, the four rare earths that go into the permanent magnets. And these are the magnets that are found, there are a number of them in your back of your cell phone or an iPad. But if you look at an F35 striker jet, you've got about a ton of rare earth magnets in those. And we've got two heavy rare earths and two light rare earths is part of the permanent magnets. You've got dysprosium, ytterbium are the heavies, and then you've got neodymium, praseodymium as the two light rare earths. So those would be key rare earths that are the focus.

Ryan MorfinAnd you use these in, I guess, in military applications as well, but historically, where has the United States sourced the rare earth for supply chain?

Pini AlthausYeah. And that's the shocking part. We've been securing those materials from China. So China controls the rare earth sector and has done so for the past 30 years or so. And it was a significant misstep on the part of the United States, allowing China to have this control. And actually this wasn't a question of China coming in and doing anything nefarious as far as stealing IP or anything. The US government made a conscious decision about 30 years ago to allow China to come to the United States and acquire the processing capabilities for rare earths. So just as part of some background, you've got the rare earth materials containing various mining projects, but once you extract them, you have to then process them and they go through certain phases before they get to the magnet phase. And China, the thought process was let China do the mining, let China do the processing.

Pini AlthausWe don't need to do that here. And we'll buy the materials from China cheaply and the premier of China at the time, Deng Xiaoping made the comment, he said, "The Middle East has oil. China has rare earths." And unfortunately we weren't smart enough to understand what he was saying. And the Chinese understood that the future of manufacturing is going to revolve around control of the rare earth and critical mineral supply chain. So if you think about it today, Ryan, we cannot build... Forget about consumer electronics and medical equipment. We cannot build the equipment that the US Pentagon or the US armed forces require, whether it's F35 fighter jet, Tomahawk cruise missile, communications equipment, without going to China and obtaining those materials. And it's obvious to all that this should be extremely alarming. We've seen China use this as a weapon, if you will, as far as how it interacts with other countries back in 2010, when there was a dispute between China and Japan on the East China Sea.

Pini AlthausSo China cut off rare earth exports from Japan for 40 days. Japan obviously being a significant user of rare earth elements for their high-tech manufacturing sector, that was stopped after 40 days. But in fact, it was President Obama that first made the United States aware of this, formed a division within the Department of Defense to handle this issue, but not much has happened. And we continue to be relying on China for these materials. And what has been made about trade war with China and whether the trade war is really the impetus for China withholding rare earth exports. And that is a huge misnomer. Whilst China had been talking or implying that they would cut off rare earth exports, the truth of the matter is that China, under it's made in China, 2025 mandate, its belt and road initiatives and others. And you seem to control the critical minerals and rare earth supply chain so that it can continue its dominance as a manufacturer or a global supplier of these materials and finished products.

Pini Althaus: It's the backbone of its economy. And in fact, China has become a net importer of rare earths from different countries like Miramar and others. So with that, they are decreasing the exports to countries like the United States, Japan and others.

Ryan Morfin: And was it ever a risk that the Chinese were going to turn off the exports of rare earth to the US during the trade war? How close were we to that? And was that ever some saber rattling that went down during trade negotiations?

Pini AlthausYeah, I think it was saber rattling. I think it would be paramount to an act of war. I can't say with any authority that that would not happen, but it would be probably, aside from war itself, it would be one of the most significant acts of war cutting the United States off from the ability to procure rare earths. But that being said, I mean, if you look at, as an analogy, the oil and gas sector and the reliance of the United States had for many, many years on OPEC countries to supply us with the oil. And we had embargoes and we had price manipulation by OPEC. This is far more significant given the ubiquity of where these rare earths go. And yes, we're always under the threat that China can cut off exports under the guise of a trade war or for any other nefarious reasons.

Pini AlthausBut I think even more importantly, to just as the natural run of the course of things with regards to their business and their desire to maintain themselves as the global leader in manufacturing and exporting of goods, China is in a position now where it actually requires these materials for their own domestic consumption and can legitimately cut off rare earth exports by stating that they need it for manufacturing and that would actually be somewhat correct. So we're in an extremely dangerous position here with this reliance on China. And it wouldn't just be China. If it was another country, it would be similar issues, not to the same extent, but reliance on one country for these materials is dangerous.

Ryan Morfin: And it's been mentioned in the past that in 2010, China flooded the market to really kill all the competitors in the rare earth mining industry. Where was the World Trade Organization during this period? And how did that play out and how does that set the chess board for China to run the tables?

Pini Althaus:

Yeah. So the WTO stepped in when China cut off rare earth exports from Japan, I think it lasted for about 40 days because the US and Japan protested the WTO, and they stepped in and China resumed exports. While I'm not an expert on these trade matters, one thing that I am aware of is that one of the reasons why China had to resume the export of rare earths was it did not legitimately need all the rare earths for domestic consumption. So therefore it was a nefarious act, if you will, to cut off rare earth exports. Now that has changed, which means China have to cut off rare earth exports today, they have a legitimate case to say that they require these materials. There's a shortage of these materials and they require them for their own domestic purposes. It is the backbone of their economy and there's very little we could do about this today, which is why it's becoming an even more urgent issue.

Ryan Morfin:

And the US government started stockpiling some of these after that incident. Can you talk a little bit about what DOD and DOE has done to start making sure that there's not a critical supply shortage going forward, and is it enough?

Pini Althaus:

Yeah, again, there is a national defense stock pile, and there are materials still that the United States needs to procure in order to shore up its stockpile. There are magnets, the finished magnet products as well, the United States government needs to stockpile. Again, there's a limited amount that the United States government has. It requires approval from Congress, whether it's in the NDAA or other approvals from Congress, to allocate monies for the national defense stock pile of these materials. That being said, there's no endless supply of these materials. And unfortunately, the apparatus, the way it's set up right now with the US government, it's going to continue to require having a secure supply chain of those materials for many, many years to come. So it's not a question of stockpiling for 10 or 20 years, and then this complacency and saying, we'll kick the can down the road. But keep in mind as well, Ryan, that US government accounts for low single digits of overall rare earth imports into the United States.

Pini Althaus:

We're talking about defense contractors, we're talking about the manufacturing sector. The direct impact this has on the economy, jobs, the automotive sector, and others is significant. So it's not just limited to the United States government. If you look at over the past couple of weeks, the sanctions that China have put on Raytheon, Boeing, Lockheed, et cetera. I mean, the question is where are they going to get those materials? And if we go beyond that, you need rare earths for the 5G network. Now that Huawei has been banned from installing the network, not only in the US but other countries, we have to have the ability to get a secure supply of these materials as well. Which currently, again, trying to control the hundred percent. So it runs across the board, both for government, defense and manufacturing in this country.

Ryan Morfin:

Well, and so help me paint a picture for our audience. Does China have all the mines for rare earth, or they're the only ones who started mining it? Or are their mines globally dispersed and nobody's been doing the actual infrastructure to do the mining?

Pini Althaus:

Yeah. So finding rare earth projects or rare earth elements is not the difficult part. It's finding them in significant quantities that makes a project economically viable. And part of that consideration are the environmental rigors that companies in the West have to adhere to. And China, even by their own admission, have had a complete disregard for mining these materials and even for processing these materials. And in fact, just the last week or so, the BBC did an expose on this, 60 Minutes has done an expose on this. But the Chinese have not denied this and have talked about cleaning up their act, but it has an effect on the bottom line for what the costs of mining and processing are if you have no environmental standards to adhere to. So China have exploited those rare earth projects they have, primarily in inner Mongolia, and have brought a number of projects online and quite quickly, and in a significant way, with a complete disregard for the environment.

Pini Althaus:

So it was seen as an environmental no-no in the West for many years. Now, what's happened over the past few years is you're starting to see rare earth projects in different parts of the world sprout up. You've got the Mountain World project in Australia owned by Linus, which is a producer of Nd and Pr, neodymium and praseodymium. So two of the light rare earths. They may have some heavy rare earths coming online at some point in time. And you've got Arafura, which is another company in Australia that we're working with to assist them with their processing so they don't have to send the materials to China for processing. But really these are a drop in the bucket for what the requirements are for the United States. And certainly what the requirements are for allied countries, the EU, et cetera. So there is a race, if you will, worldwide to start bringing projects online. The Chinese are very active in trying to secure assets outside of China.

Pini Althaus:

So in Africa. They have ownership of a project in Greenland. So there is somewhat of a race. The Australian government has stepped in and has started limiting the ability for China to own, or have ownership in, or off takes for the Australian rare earth projects. And that's part of the strategic Alliance between Australia and the US. Canada, similar thing as well. There are a number of projects that are looking to come alive, but these projects are, for the most part, will take many, many years to come online. We have to expedite the process. We have to assist with a [inaudible 00:14:41] supply chain and the domestic rare earth sector, because previously investors have been scared off by things like China flooding the market, which is not a possibility at this point in time, given that China can't actually afford to flood the market. They are already very heavily subsidizing their mine to magnet supply chain there.

Pini Althaus:

This is more now a case of being able to get production from non-Chinese sources so that the United States and allies have a viable, secure supply chain of these materials. And it's a concern worldwide. We speak to governments all over the world, and we're all facing the same issue. Some more than others, especially countries like Japan, that don't have their own rare earth projects there and are reliant on Australia where they've made some investments there. And in the United States, they've made an investment recently in Africa. So there is this race, if you will. And I think we've got a five-year window here to at least stand up a few projects worldwide. Otherwise we've lost this race and we will be dependent on China for many, many years to come. And Ryan, it's a bit of a hypocrisy. If you look at it where you've got materials going through clean, green energy applications, like electric vehicles, wind turbines, et cetera.

Pini Althaus:

That we're sourcing these materials from China, where they've, again by their own admission, has been complete environmental devastation to water bodies around these mines and processing facilities, to the communities. People have been getting sick around these projects yet we're putting these materials into our electric vehicles or wind turbines. It makes no sense at all. And people are starting to wake up to this. And that's why the sector is starting to see a lot of support come out of Congress and bi-partisan support. And in fact, it's one of the only bi-partisan issues right now in Washington. And it's good to see that some things decided to move in the right direction.

Ryan Morfin:

And is there a special process? You talk about the expense, is it really difficult to mine these? You have to go through a special chemical process to extract and clean and purify. Is it a lot harder than, say, gold or silver or some of the other, we'll call, more traditional elements?

Pini Althaus:

Yeah. It's all about the processing to some extent. So if you look at MP Materials in California, which used to be Molycorp before they went through their bankruptcy. They are a miner of Cerium and Lanthanum, which are two of the light rare earths, the lower valued light rare earths. Given that they do not currently have processing technology, they are sending those materials to China for processing where China is tariffing those heavily. Linus is also, they're doing their processing work in Malaysia and elsewhere. So it's really about the processing at this stage. One of the things that we've done, after we put out our PDA last year with our upgraded resource, which now includes a significant amount of lithium. We make a decision that, based on the test work that we had done around our processing methodology, that we were not going to send our materials to China. That it's paramount for us to do this work in the United States and in a collaborative effort as well.

Pini Althaus:

We've been asked by some of our investors, "Well, why would you be looking to help other projects with their processing?" And the answer is simple. There's no one project or one company that's going to put China out of business or make a dent, or somehow be able to take care of the overall demand worldwide for rare earths and critical minerals. And it's very important for us to have processing capability in the West. So that was the impetus for us opening up our own rare earth and critical minerals processing facility earlier this year, which we did in Wheatridge, Colorado. And in fact, we've made some significant progress on the method that we're using for this. And we're starting to collaborate with Australian companies, Canadian companies. We're currently talking to a group over in Europe as well, because this has to be a collaborative effort.

Ryan Morfin:

How does Europe solve for these problems? Do they have this better under control than the US?

Pini Althaus:

No, they're in a far worse position than we are. The EU commission recently put out a report, I think, a couple of months ago that the requirement for rare earths is going to increase tenfold within a short period of time. Lithium 18 times. They don't really have rare earth projects. Again, there are the Greenland projects, which people have heard in the news recently. Those need to further development work so they don't have rare earth projects ready to come online there. There are a couple of lithium projects that are spread around Europe, but for the most part, Europe is in an even more precarious position. If you look at Germany with the auto manufacturers, you look at the big companies like ThyssenKrupp and others, all these countries and companies are looking for alternatives to China, because we've already seen in the news about China withholding or reducing exports of some of these rare earths that are required for these industries.

Ryan Morfin:

And you mentioned earlier the regulatory posture of the US makes it difficult to mine. Is it becoming a more bi-partisan issue that we need to maybe relax some regulation around the mining exercise, to incentivize private sector to come in and start producing this? Or is the Republican party versus the Democratic party on two separate pages of music?

Pini Althaus:

Yeah. Good question, Ryan. I mean traditionally the Republican party is obviously being more pro-mining and in favor of less regulation when it comes to these things. With regards to our project, we're on Texas state land. So we don't trigger federal environmental permitting at this point in time. And obviously Texas being Texas, a mining state and oil and gas state, things are a lot easier in Texas than they are on projects on federal land where the Bureau of Land Management controls the environmental process around that. But the thing is here, and I don't want to step into what other companies are doing, et cetera, but we do need to be reasonable about allowing projects to come online if they're adhering to environmental standards that are acceptable worldwide. And what we do know, is that China is destroying the environment and cities and water bodies around their mines and processing facilities.

Pini Althaus:

We have standards here in the United States, and I think what we need to do is make it easier for companies to mine, while at the same time protecting the environment. And there are ways to do that. And we're definitely seeing buy-in from Congress, from both sides, with regards to looking how we can stand up a secure supply chain. And, obviously under the Obama administration, they had very strict regulations when it comes to mining. And that's changed under the Trump administration. Hopefully what we start to see is some normal middle ground that'll allow other projects to come online.

Ryan Morfin:

And typically in these rare earth mines, is it amalgamation of different minerals that are all consolidated together and you have to separate them out? Or do you ever find pure play, Europium, I can't even pronounce some of these. Gadolinium, Cerium. I mean, are they all mixed together and you've got to filter and sift them through, or are they pure play mines?

Pini Althaus:

No, they're generally they have a mix. So they're polymetallic projects. They have a number of different materials. Some projects, you more to what we call the light rare earths like MP in California or Linus in Australia. Our project is actually on the opposite end of the spectrum. We have a very high concentration of heavy rare earths. That being said, we do have to go through a process of separating these materials. But the case of our project where we've got 30 materials. We're not going to produce 30 materials. We're not going to market 30 materials. So what we're doing is we're focusing on the key materials that are marketable, that we need for permanent magnets, lithium as well, and working on the separation and the optimization of those materials in particular. But we're all faced with the same processing challenges and that is something that can't be set.

Pini Althaus:

There's no easy way to do this. There are different technologies that have been used in different parts of the world. So predominantly there's a process called solvent extraction, but it's big, it's bulky, it's not benign. It's a bespoke solution for one particular project. So it doesn't work for feedstock from other projects. What we've done is we're using a processing technology that's actually been around since the 1940s. It was part of the Manhattan Project. It's called continuous ion exchange. In fact, the Chinese use it to increase the purities from 99.99 to four nines, five nines, and even six nines. So for some applications you require higher purity levels. It's a far easier processing method to scale up and to take feedstock from other projects. In fact, we've demonstrated for the Department of Energy that we can take coal waste from Pennsylvania and do high purity separation of rare earths using our processing methods. So it's not a step that can be skipped unless one needs to send it to China for processing, which is not going to help us with our objectives here.

Ryan Morfin:

How many other, we'll call it, going concerns on any other businesses that are doing this, that are trying to, I guess, start the development of these mines. Are you guys one of a few or are you one of many? And is it an international or just a US game? Who's leading the charge at going after this?

Pini Althaus:

Yeah, well, I'd say the Australians are leading it outside of China right now. You've got some really good projects in Australia. Again, more skewed toward the light rare earths. There's one more heavy rare earth project in Australia, which is not yet producing. The United States, you've got MP Materials, you've got Ucore in Alaska, you've got the Bear Lodge project in Wyoming, which is also another light rare earth project. So as far as a heavy rare earth project that looks like it will come online in the near term, that would be our project. In Canada there are a couple of projects there as well, and again, more skewed toward the light rare earths. But we really need to get as many of these projects online as possible. Because again, I don't see it as competition. We all have a problem doing supply agreements or offtake agreements for our materials.

Pini Althaus:

In fact, one of the things that we're going to have to consider is looking at potentially scaling up our production, based on the demand that we're already starting to see. And I think other companies would find that as well. So it's all about the economics of the project. You have projects that were economically viable back in 2012 or rare earth prices with 35% or so higher than they are today, and are not necessarily viable today. So that's the challenge as well, economically viable projects. And we've got to get as many of them online as possible. It takes many, many years. I mean, our project has had over $70 million put into it to get to where we are today, and we're close to getting to the production scenario. It all revolves around processing at this point in time.

Pini Althaus:

We'd be very happy to see another couple of projects come online, because this is extremely important for national security and for the economy as well. I mean, if you think about it, Ryan, if you've got a billion dollars of rare earth materials, that translates into a trillion dollars or I should say trillions of dollars of finished product. So you've got a magnet in your phone there that's worth a couple of dollars and the cell phone's a thousand dollars. And electric vehicles and defense applications even more.

Ryan Morfin:

Yeah, everyone has one of these iPhones now, and there's tremendous amounts of rare earth on the circuit boards here. And I think people take it for granted that that supply chain is not secure right now. So one question for you, there's talk of this maybe medium term to longterm, but there's talk about mining in space. Do you think that's a feasible option in the longterm, medium term? What are your thoughts on that?

Pini Althaus:

No, that's just ridiculous. I mean, we're trying to find ways to make mining on earth economically viable. I think the cost of going up to space would be more than what our capex will be bringing our entire project into production. I mean, we've got about a 350 to $400 million capex to bring 130 year mine life into production. I'm not an aerospace expert, but I think sending a rocket, building a rocket ship and sending it up, I think maybe on the fuel alone, you could bring a couple of projects into production. So unless we have a fortunate situation or an asteroid lands on earth, and fortunate if it lands somewhere where we don't care, I don't see how that happens. And if it's big enough, it's a problem as well. It's nonsense. And even, options aside of the deep sea mining for rare earths, I mean, you've got all sorts of environmental issues around that as well. I think we need to look at projects that we can bring online, that can be done so in an economic way, that can be done so in an environmentally responsible way.

Pini Althaus:

I mean, one of the things that we've done at our project is we've got in excess of 60% of the materials that have come out around top, will have a clean green energy applicability to them. So we're using the benign processing method. We're going to be using renewable energy on site. In fact, we will likely be putting a solar farm on site as well. We've talked to a couple of companies that have approached us about that, and we'll be a net producer of power for the surrounding area. So there are ways to do it which don't affect the environment. Obviously if there's a project that's situated on a sensitive area, that's a unique situation for that specific project. We've seen it with the Pebble project, which is not a rare earth project. The Pebble project in Alaska where their environmental concerns is we've been recognized by both Republicans and Democrats, but we have to be reasonable about the projects that don't have environmental concerns.

Ryan Morfin:

So Pini, in season two, we ask all of our guests a series of six questions. They're usually, yes, no questions, but trying to take a survey of our conversations. And if you want to add a little context to the yes or no, feel free, but here goes the first question. If there was a COVID vaccine available today, would you take it?

Pini Althaus:

Yes.

Ryan Morfin:

Who do you think is going to win the election?

Pini Althaus:

Which election?

Ryan Morfin:

The US election.

Pini Althaus:

Well, I think it looks like Joe Biden's going to win it, but I think what happens, if we go past January six from my understanding is that the house will vote on it and it's one vote per state. But I don't know if I see it getting there at this point in time. I really don't have a crystal ball.

Ryan Morfin:

Third question. What type of economic recovery are we in? What type of shape is it taking? A V-shape, W, U, L?

Pini Althaus:

Yeah, I think 2021 is going to be challenging. I think we've been, and rightly so. I mean, we've had no choice as of almost every other country. We've been printing money for the past year because of COVID. And I think we've got to brace ourselves that, at some point in time, the chickens come home to roost. It was a necessary step. People needed it on an individual level. Businesses needed it as well, but I think we've got to do whatever we can to stimulate the economy, give people confidence to go out and work again, employ people. So I think we've got to watch ourselves, especially in 2021. And I have some concerns, but long-term, I think the approach in the United States is a healthy one.

Ryan Morfin:

During lockdown this summer and quarantine, was there anything in particular that you accomplished that you're particularly proud of?

Pini Althaus:

Yeah. A great amount of family time, which, if you would've asked me a few years ago if I could sit at home and be at home for six months, I would have told you absolutely not. I wouldn't be able to do it for six days, but it has... I'm sure it's done this with a lot of families as well. It's brought families together. We had a baby actually last year on Thanksgiving. So I was doing a lot of travel at the time and thought I wouldn't get to see my daughter in her first year or couple of years too often. And being home with her every day is actually been just the most amazing experience. So thankful at least for some silver lining in COVID.

Ryan Morfin:

Are there any silver linings that you see in the economy going into 2021?

Pini Althaus:

Yeah, I think we've gone through an absolute beating and it looks like we've got the ability to come out of it. And I think that's a testament to how strong the economy was built up in the years preceding COVID. So overall I remain an optimist. I mean, we are a country built on opportunity and going out and making it happen. And we're not a socialist country sitting and waiting for people to send us paychecks or wealth distribution or anything like that. I think the American dream still lives on. I think if you go out and you're willing to work and put your head to it and heart in it, I think we do have the ability to climb out of it. So if we look at what the economy is doing over the past few weeks, it looks like it's starting to rebound. And to me, that's assuring because it could go completely one way as well.

Ryan Morfin:

And the last question is, is there anything that you're watching, or listening to, or reading today that has been impactful on your thinking that you'd like to share with our audience?

Pini Althaus:

Yeah, that's a good question. I think it's been more personal stories. The news, I sort of take that in context or with more than a grain of salt. In some cases stay off the news channels for a number of days at a time, it became quite repetitive. But I think on the personal side, talking to friends, my family's all back home in Australia, they've just come out of 110 day lockdown, which we can't relate to that. It's been very trying on them and seeing the fortitude that they've had to come out of that and stay intact. I think the mental health issues that will come out of COVID are going to have a far longer effect than the economic issues. I think we're going to have to focus on mental health issues in this country for a long time to come.

Pini Althaus:

The impact on kids has been significant with regards to lockdown or remote schooling, et cetera. But to see people come through it. I think it's a testament to people in general and to the country and other countries as well, to see got that fortitude and survival instinct to try to get through whatever adversity we can. So hearing the personal stories, the challenges that people have gone through, I think it's made me a lot more aware of things that I have to be thankful for and where we can help out other people as well. I think we have to be united going forward because there are things...

Pini Althaus:

I think one of the things that COVID has shown us is we can get into this complacency and life goes on and we go one day to the next. And all of a sudden we get hit by something that affects everybody equally. I mean, COVID, whilst there were groups of people, whether it was the elderly or people with underlying health conditions, that got hit the worst. I mean, we all got hit in some form or another. So really, this should be something that unites us, not divides us.

Ryan Morfin:

Well, Pini, I appreciate you coming on today to talk to us a little bit about the supply chain crimp on rare earth and we'll definitely keep an eye on it and would love to have you back in the future.

Pini Althaus:

Thank you, Ryan. Thanks for having me.

Ryan Morfin:

Absolutely. Thank you. Bye-bye. Thanks for watching Non-Beta Alpha. And before we go, please remember to like, and subscribe on Apple podcasts and our YouTube channel. This is Non-Beta Alpha, and now you know.

 

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