SKEPTIC’S GUIDE TO INVESTING
Straight Talk for All, Nonsense for None
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Your Hosts - Meet Steve Davenport, CFA and Clem Miller, CFA as they discus the latest in news, markets and investments. They each bring over 25 years in the investment industry to their discussions. Steve brings a domestic stock and quantitative emphasis, Clem has a more fundamental and international perspective. They hope to bring experience, honesty and humility to these podcasts. There are a lot of acronyms and financial terms which confuse more than they help. There are many entertainers versus analysts promoting get rich quick ideas. Let’s cut through the nonsense with straight talk!
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SKEPTIC’S GUIDE TO INVESTING
Trump Puffery: International Affairs
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Navigating political puffery reveals the absurdity in exaggerated claims made by leaders, showcasing how distractions shape public discourse and investor perceptions. Understanding these dynamics helps listeners critically assess the implications of such statements on global relationships and policy.
• Defining puffery in political terms
• Canada as the absurd notion of a 51st state
• Greenland's strategic importance and its dismissals
• The Panama Canal's exaggerated claims of ownership
• Jingoism and the Gulf of America concept
• The complexity of the Ukraine conflict and Trump's role
• Ranking the most outrageous claims discussed
Please check out our other two podcasts on Puffery Immigration Ideas and Puffery Regarding Tariffs.
Straight Talk for All - Nonsense for None
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https://skepticsguidetoinvesting.buzzsprout.com
Welcome everyone to Skeptic's Guide to Investing. I'm Steve Davenport and I'm here with Glenn Miller, and today we're starting the new year with a bit of a skeptical attitude around what is Trump's statements about international and what's going to happen in the world after January 20th. And I've got a word that I think we're going to try to pull out of our Funk and Wagnalls, called puffery. We can talk about exaggeration, we can talk about lies, we can talk about half-truths, but the word that Clem and I came up with is puffery, because I think it describes a little bit of the outrageousness, a little bit of the arrogance and a little bit of the pomp that the incoming president has for some of these ideas.
Speaker 1:And so, as investors, we've got to separate the puffery from the actual earnings and real things that are going to happen with our companies. And in order to do that, you sometimes have to, you know, hold on and say that's just not happening. And so we're going to get into today on Trump talk, international puffery, and it's going to get into the different parts of the world. What's been said is going to happen on day one and what might take more than a few days to get implemented. So, clem, when you think about all the things that Trump has said before coming into office, what incidents of puffery do you think is the most blatant and the most unlikely to occur? Where do you start with your Trump puffery?
Speaker 2:analysis. Ok, so you know we're talking about international. So we're talking about international. So let's start with the obvious, what I would call distractions, which would be this whole talk about Greenland, the Panama Canal and Canada. To a certain extent, I view these as distractions because I think Trump and his team realize that they've over-promised on some of the other things that they wanted to do as part of their agenda, such as the reversing inflation and immigration and some other things, and we're going to be talking about those on separate podcasts. But I think that you know what we're seeing with this whole Greenland-Panama Canal-Canada talk is really just a lot of distraction. So let's just talk about Canada for a second. You know they talk, the talk is about Canada as a 51st state, and that's sort of the slogan you're hearing. But you know, honestly, canada, you know, has 10 provinces and three territories. So you know, at the end of the day, there would be something like 60 states and each one of these new 10 states would have two senators Plus you would have a whole bunch of new house members, and so I just, you know, I don't think that really, at the end of the day, that's going to happen. I think Trump's Republican allies, will you know. We'll look at this situation and say are you kidding? We're going to have a much more liberal slash Democratic Congress and eventually, perhaps, a Canadian liberal prime minister if we, if we move down that road. So I don't think that's going to happen. I think that's just puffery, to use the term that we came up with. That's just not going to happen, right, it's just a distraction.
Speaker 2:So let's take a look at Greenland. So Greenland has been, you know something that you know different presidents have looked at in the past, and you know there's some talk about how it may have some, you know, strategic benefit. It's interesting that you know climate change is cited by Republicans as a reason for taking Greenland, when there's actually some denial as to whether climate change actually exists. But nevertheless, I think Greenland, while there's some strategic benefit to it, we, you know we can't forget that. You know Greenland is a part of NATO because Greenland is part of Denmark. Denmark is a part of NATO and we have good relations with Denmark, the US and we have actually have a base in Greenland. So I don't think that that really there's any strategic loss in not having Greenland as a part of the United States. I think it's a part of NATO and that should be good enough. So I think that one is also distraction. It's also puffery. So now we take a look at the Panama Canal. But who does?
Speaker 1:it benefit. When you make a statement like that, that people would say, wow, that's a great idea. I don't know why we didn't think about annexing Canada or Mexico or, you know, having Greenland be part of the United States. I mean, we could also just to be, you know, a little bit of a skeptic here. We could also just say that they are like Puerto Rico and they're not full states and they are a part of us, but they're not necessarily going to be given statehood and senator rights and all that.
Speaker 1:So your idea about whether they would have 16 states or nine states or one big state. They would also have to go through the whole process of becoming states, and I'm not sure anybody is going to. But first of all I got to figure out why is he saying it?
Speaker 2:What is there to benefit? It's totally a distraction from impending failure, right, certain economic and policy initiatives.
Speaker 1:So you would introduce the shiny object even before you have a reason to introduce the shiny object.
Speaker 2:Yeah, I mean, it's a shiny object. I forget what movie it is, a cartoon or whatever. Squirrel, right, somebody gets distracted by the squirrel, I think you know, I think it's a distraction and they're they're throwing it out there and there'll be, there'll be, additional distractions in the future and people will forget all about you know all about Greenland and I got all about you know all about Greenland and the Panama Canal, right? So I just you know I see these as total distractions. I think that you know the security benefits of having a base in Greenland are sufficient. I think the security benefits of being able to have access by our military ships through Panama Canal, which we have now, is sufficient. I think Canada, denmark are allies, strong allies, of the United States. I think it makes no sense to try to alienate them. So you know these are just distractions, pure and simple distractions.
Speaker 1:The only thing I can come up with is that they feel that these two areas would then represent a huge increase in our ability to get you know natural gas and oil as part of the US versus as part of these other countries, I mean to me there's the economic reasons that there's potential, for if we're going to have development, you can't have those areas be covered by any of the prior legislation that's been established right, by any of the prior legislation that's been established right, because they weren't part of the country.
Speaker 1:They can't have zones that are out of bounds in terms of development. So in some ways I can see the economics behind saying they're a part of the US and therefore they now become an asset in terms of their natural resources. Because I think that, as we see with China and the special metals, you know, there's there is a time and a place where we don't have the resources for everything, so we'll adding these to give us more resources. That will, you know, start to make us.
Speaker 2:There's a there's, there's a gigantic national park already in Greenland and you know Danish national park to be sure. But if you bring in Greenland, then you know clearly they're not going to give up that national park, right, the national park is still going to be there and I don't know if the resources are in that national park or what, but you know clearly the national, the natural resources of Greenland are going to be difficult to extract. You know, you have, you know there are natural resources in northern Canada and and those are difficult to extract. When you get past the permafrost and into the Arctic it's very difficult to extract natural resources.
Speaker 1:Right, and I guess I'm thinking as the world gets warmer, all of those areas, the line's going to change, right, and so we're going to start to see areas that were normally too cold now not necessarily be too cold for development. Is that how you see things evolving in the future?
Speaker 2:I don't think I think you. I mean I believe in climate change. I don't believe it's going to happen tomorrow. I mean I don't believe we're going to have an ice free Arctic in five years. I really don't. I think I think we're going to see. I think it's a, it's a longer term trend Climate change. I think that there are weather variations around that trend. But to make economic decisions based on expectations regarding imminent climate change, I think is ridiculous in my opinion. Okay, I mean when, when businesses look at quarterly performance or annual performance, and maybe even in strategic plans of three to seven years, I don't think, you know, looking at climate change as an opportunity really fits within that timeframe.
Speaker 1:Well, I I I'm just bringing it up as a possibility. I don't pretend to know what's going through the mind of the next administration, I'm just trying to look at it from an economist and investing standpoint. There's got to be some reason, I mean tell me about the benefits of calling the Gulf of Mexico the Gulf of America.
Speaker 2:It's ridiculous, right? How does that turn us? Well, that to me. To me, that just proves even further that all of this is about distraction. Okay, you don't believe in the Gulf of America.
Speaker 2:You know it's there. There was a term back around the time of McK mckinley who, uh, by the way, was involved in a lot of expansionism and teddy roosevelt. It was called jingoism. You might remember that term, yeah, and that's where you you use terms like gulf of america and and the canal of america. You know, america, land for Greenland, right, okay, it's, it's jingoism. And the whole, the whole idea about it is to try to create a, you know, boost up nationalist sentiment. And I think that that that Trump is doing so because you know he, you know he has, he wants to build up his own personality cult, so to speak, and in order to do that, to sort of, he's wrapping himself, he's wrapping himself in the flag and he's using this jingoism to try to do that, right, so, and he's using this jingoism to try to do that right.
Speaker 1:So yeah, I guess I my. My question is is would be a focus on the things you can do more quickly and easily than focus on the things that, um seem like a distraction. If you only going to have, you know, as we've talked about, two years guaranteed, where you have congress on your side, it feels like spending time and energy over here is is wasting time and energy that could actually go towards some of the things that you need to do I agree with you um does he have?
Speaker 2:that much extra goodwill and support. I think you and I agree that these are just distractions. I have a feeling there might actually be some people within the incoming Trump administration who actually believe that Greenland and Panama Canal and Canada would be quick wins, so to speak. Okay, and actually allow for some chest thumping, so to speak, even if other things don't get done.
Speaker 1:Well, you've kind of implied that we're militarily going to take over these places. But are there some legislators up in Canada whoarily going to take over these places? But is there is? Are there some legislators up in canada who are going to say I propose we merge with the united states? I mean, it doesn't seem like there's that kind of a political alignment between the republicans and anyone in canada. Is there?
Speaker 2:no no I mean is there a?
Speaker 1:party, that's the right party.
Speaker 2:No, there's no, there's no, there's no. Let's join the America party in Canada. Right, All right, they're all, they're all united on that, on that front.
Speaker 1:You are an international expert, so I'm trying to figure out all these things about these countries.
Speaker 2:Yeah, they're all they're all united on that front. And and yeah, can you find, like individual, individual, I mean on the street who might suggest that, who might say I'm tired of our government, I'd love to join the US? Yeah, you're going to find individuals on the street who would do that, who would say that, individuals on the street who would do that, who would say that. But the political establishment in Canada, no way are they going to be in favor of that. And you know, the same holds true. You know there aren't that many people in Greenland, right, but the same holds true in Greenland as well.
Speaker 2:My understanding is, when Trump's son, don jr, went to Greenland, uh, they brought together a bunch of indigents into a bar there, fed them food and then had them talk about America first. So I mean, really okay, I mean they couldn't find anybody in the political establishment, uh, which I don't know, maybe five people or something, right, they couldn't find anybody in the political establishment to say, yeah, it's a great idea for us to join the United States, right? You really kind of.
Speaker 1:I mean, I think we can. We can analyze that Well. I mean, I find that it travels everywhere. It's a puffer.
Speaker 1:So I mean, I think that you know the one about the gulf and its relation to mckinley and jingoism, I think is a is a great way to tie it back to. Why is he doing it and what does he think their precedent is? And you know, what will he be able to do that someone else couldn't do? And I'm saying that once you go past that original statement of I'm going to change the name of this or I'm going to take Panama Canal back, and then you start to unearth, you don't have to go very far before you can see that there's no there there, right, yeah, but one of them we got to talk about is on day one he's going to call Putin and we're going to end the Ukraine war.
Speaker 1:My question to you, clem and you've got to answer this with a yes or no answer. There's no obfuscating me, okay. Will he call Putin before breakfast in the inauguration or wait till before the inauguration balls later in the day? I mean, what's the best time to call Putin and how do you make sure that he takes your call and that he also ends the war, so that you can go to the balls and feel good about yourself.
Speaker 2:Well, I believe that Trump probably has already spoken to Putin, or at least his incoming national security advisor and or secretary of state have. Mike Waltz or Marco Rubio have done that. So I believe that they have have done that. So I believe that they have, and I think when you look at what the statements have been you know both in terms of statements that have been made orally as well as statements that have been made with weapons I think it's clear to me that Putin has no interest in a settlement. I believe he has no interest in it. I believe that that he thinks that, ultimately, russia will prevail over this, over over Ukraine. Now, it may not be that Russia will take over all of Ukraine, but I think he he believes that that, given enough time, that that he can wear down the nato alliance, including including uh, a trump run united states and uh, and basically take over uh much of ukraine. That's what I think he believes over much of Ukraine.
Speaker 1:That's what I think he believes. Why has he been holding back? I guess my question is if Russia could have taken over more of Ukraine, wouldn't they have tried to do it before? We gave them planes and anti-aircraft missiles and all of the resources that we've given in the last six years.
Speaker 2:Well, he was, and he's clearly been failing, right, he had to go get North, he had to get drones from Iran, he had to get troops from North Korea. He's not doing a great job, right, of prosecuting this war against Ukraine and he's got, you know, the entire, almost the entire world, except for his, you know so-called allies against him, and yet he still perseveres in this, you know, in this operation, so to speak, as he calls it, right, yeah, and it's sort of like a man of La Mancha thing, right, tilting at windmills, so to speak. I mean, he's dead set on taking Kiev because, you know, historically, in 800 AD, 700 AD, kiev was the, you know, the original home of the Russian people, so to speak, and so he's dead set on taking that over. And I just, you know whether he's able to right now he's not able to, right.
Speaker 2:But if the US withdraws assistance from Ukraine, if there's you, if, if the EU starts to crumble in terms of their support for Ukraine, like, let's say, the AFD in Germany, this new right wing party that Musk has been supporting, let's say they take over or influence German foreign policy, that would be a disaster for, for Ukraine, german foreign policy. That would be a disaster for Ukraine. Yeah, I think we may see some unusual reconfigurations of power within Europe. Poland obviously is very concerned about Ukraine because they would be next, yeah, ukraine, because they would be next. The Scandinavian countries Finland, sweden, norway Remember, finland's a part of NATO now right, and they've got a very yeah, and Russia didn't like the fact that now it has all that border Right.
Speaker 2:Finland's got a very powerful military force. Right, finland's got a very powerful military force, and so that's so. I think you know, I think it's not a day, one event in your mind, it's all, it's clearly not a day, one event.
Speaker 1:I think that Ukraine is going to comments about ending the Israel-Gaza conflict and there's talk about that ending, but I'm not sure it's really ending, or as much. It is a ceasefire or a truce until further notice. So let's wrap up this idea of international puffery with our ratings. Let's wrap up this idea of international puffery with our ratings. What would be your top five? The most puffy, the most inflated thing that you can think of, is it in his international statements as number one down to number five, being still puffery, but it has a little bit of potential kernels of truth to it. So we'll start and we'll make the list, and the list is Greenland, a part of the US, canada, a state in the US, the Gulf of Mexico becoming the Gulf of America, the Panama Canal becoming US-owned again and the Ukraine War. Which thing do you think has the most puffery? Which thing do you think has the least?
Speaker 2:Well, in terms of puffery and this is not a measure of likelihood, right, this is a measure of puffery.
Speaker 1:It's the opposite yeah, yeah.
Speaker 2:Which thing is so outrageous that it will never happen versus you know Well, canada is most outrageous in my mind, greenland is second most outrageous, Panama Canal is third most outrageous, ukraine is fourth most outrageous and the fifth is the Gulf of America idea, because you know, you could always have maps that say Gulf of America slash Gulf of Mexico. I mean, when you think about, when you're responsible for putting out there you're going to.
Speaker 1:You're going to hire the mapmaker to change the name.
Speaker 2:You're going to hire the map maker to change the name. There are international bodies that do that. But consider the fact that in this body of water that's called the Persian Gulf. Well, the Iranians call it the Persian Gulf, but the Saudis and the Qataris and the Kuwaitis and so on refer to it as the Arabian Gulf.
Speaker 2:So, there is a good example of where it could be both the Gulf of America and the Gulf of Mexico. But I mean really how significant, how important really is that issue. Right, I mean it's just, that's just we've got to rally around something.
Speaker 1:Yeah, I mean, but let's wrap it up there. Is there any other?
Speaker 2:and let me tell you this one more thing If we're talking about names, what's going to happen with New Mexico?
Speaker 1:Oh, are we going to?
Speaker 2:happen with New Mexico? Oh, are we going to rename that New America?
Speaker 1:I think that's a good point. So I thank everybody for listening. I appreciate all the support and please check out our other two podcasts on Puffery Puffery Immigration Ideas and Puffery Regarding Tariffs. So we appreciate all you do. Please like, share and recommend our podcast to others. Anything else, Tom?
Speaker 2:Nope, that's it All right. Thanks everybody, Thank you.
