Glenn Diesen interviews Jiang Xueqin on signs of Western imperial decline
Glenn Diesen interviews Jiang Xueqin, host of the YouTube channel Predictive History, on the accelerating decline of the United States and Europe.
Summary
Glenn Diesen speaks with Jiang Xueqin about the multiple indicators of imperial decline visible across the United States and Europe. Jiang, speaking from Los Angeles, draws on direct observations — extreme inequality, decaying public spaces, unaffordable food, and widespread homelessness — to argue that American society is fracturing along class lines, with a billionaire elite insulated from the consequences of their decisions. He argues that the US war against Iran serves Israeli interests rather than American ones, and that Trump's loyalty to the Israel lobby overrode his America First commitments. Both speakers contend that Europe is sleepwalking into a war with Russia it has no genuine appetite for, driven not by conviction but by bureaucratic inertia and lack of political imagination.
Jiang also highlights a specific escalatory risk: a Ukrainian drone strike on an Iranian cargo ship in the Caspian Sea, which he interprets as Zelensky's deliberate attempt to merge the Ukraine and Iran war fronts — drawing the Americans into Ukraine by demonstrating a unified Russia–Iran axis. He further argues that the Delta Force capture of Maduro in Venezuela, celebrated as a clean American success, fed the arrogance that led to an under-planned entry into the Iran war.
Jiang warns that the underlying social volatility in both the US and Europe — fuelled by inequality, food prices, and failed leadership — could ignite rapidly, and that the private credit bubble and AI bubble represent a pending financial collapse.
Key Takeaways
FULL TRANSCRIPT
Observations from Los Angeles: Signs of Imperial Decline
Glenn Diesen: We are joined today by Jiang Xueqin, a very popular host of the program Predictive History. Thank you for coming back on the program. You're joining us from Los Angeles today. I did want to ask you about how you see the developments now for the United States, because it seems that more and more Americans believe their country is going in the wrong direction — at least this is what we see from polling. This is largely due to stagnant wages, rising oligarchy, economic inequality, social problems, decline in trust in both media and government, diminishing freedoms, endless wars, political polarisation, and the crippling national debt. The list tends to go on.
I'm reminded of Paul Kennedy's book from 1987 on the rise and fall of the great powers, and his concept of imperial overstretch — in which strategic commitments far exceed economic strength. I was wondering to what extent you see indications of this imperial decline in the United States. What are the symptoms you would look at?
Jiang Xueqin: I've been in Los Angeles for four days. It's my first time here, and I was invited by the Theo Von show. I did a podcast with Theo Von and he was very generous in flying me over and having me stay in a very nice hotel. I'll share some of my impressions of Los Angeles and then explain what the signs of imperial decline are.
The first thing that struck me is that I'm staying at a five-star luxury hotel — Theo Von was very generous. In the morning I went for a walk around the West Hollywood area. West Hollywood is one of the most prosperous areas of not just Los Angeles but the entire United States. Gorgeous buildings, beautiful people. As I'm walking through one of the restaurant neighbourhoods, I see a pile in front of me, walk around it, and it takes me a couple of minutes before I realise it didn't actually come from a dog. I think to myself: how, in a society, do you have people who just feel that they can, in broad daylight, do that in the middle of a street and no one cares? What this tells us is a breakdown of the social contract. People don't feel they're part of society. Society has abandoned a lot of people.
I went to a dinner party last night in the Pacific Palisades, where all the movie stars live. The mansion where the party was held was a $20 million property — just beautiful, a huge space. The thing that struck me was how extreme and outrageous it was to have a $20 million home, because you can't actually use the space. It was just one family and their army of domestic staff, but you could fit a hundred people in there easily. I look up the hill and there's another mansion I assume is ten times bigger. At the dinner party I ran into Max Blumenthal. We're sitting together complaining about the outrageous luxury of the Pacific Palisades, so we decided to go to Skid Row as a comparison. We drive to Skid Row for the night, and Skid Row is literally a scene from an apocalyptic movie. It's dark, and there was a woman walking around naked in the streets. These are people — I believe there are about 4,000 of them — who have been completely abandoned by society. The government pretends they don't exist. In the evening I take a walk around my hotel and there are homeless people everywhere.
Another very important sign of imperial decline is the inequality and the moral decay. These people have just been abandoned by society and left to their own devices. The massive inequality is a major indicator.
The third thing: I went for breakfast and tried to find the cheapest place I could, and I ended up paying $17 for avocado toast. I'm not sure if you've had avocado toast, but it is not a $17 item. I don't know how people can afford the prices in this country. There's inflation, but what the inflation really tells us is the degrading of the currency. The US dollar isn't really worth anything anymore because they've printed out trillions over the past ten years and continue to print trillions to sustain the economy. You have the AI debt bubble that everyone thinks will pop sooner or later. There's a war in Iran where tens of billions are being spent every week with no actual purpose and no strategy in sight. Meanwhile you have political polarisation in Washington where, rather than focus on core issues, both Democrats and Republicans are pointing fingers at each other.
So I think there are lots and lots of signs of imperial decline, and I'm not very optimistic about the future of the United States.
The Abandonment of Economic Philosophy and the Revolutionary Mood
Glenn Diesen: It's a very strange economic philosophy they now have, because there used to be a time when an economy was assessed by its ability to serve society. In the 19th century you would have American economists — including liberal economists — who would point out the importance of taxing rent-seekers to prevent the rise of an oligarchy, and that taxes should finance infrastructure not just to enhance competitiveness in international markets but to enhance the standard of living for the average citizen. These days you get the impression — I remember there was an article in the '90s saying the solution to all these dying towns in America was just to move. If you can't adapt, you adapt or die. All these people who fell behind, there's no room for them anymore in the economy. They're essentially ignored by the state, pretended not to exist. But this can create a very revolutionary mood if a significant part of the population no longer believes it has a vested interest in preserving the status quo and is willing to throw a wrench into the system. For many people, voting for Trump was that wrench.
One thing I also wanted to ask about is the proclivity for using military force. I often talk to retired colonels — not from the US military — and they always make the point that we're heading toward an economic crisis, we can't afford this empire anymore, we should retrench, avoid these forever wars. Again, why people voted for Trump. But instead we tend to see that declining great powers seem more likely to use military force at a time when they essentially can't afford it. How do you explain that dynamic?
Jiang Xueqin: I think the use of military force is just another sign of imperial decline, where you have an elite who live in bubbles and are not the ones being sent to fight overseas. They're not the ones who suffer the consequences of military losses. If the United States loses a war in Iran, the taxpayers foot the bill, not the billionaire class.
I think of this absurd situation where the elite live in their mansions, their fortresses in the Pacific Palisades, and host their pointless dinner parties. They only know each other. They live in a bubble, and they're intent on maintaining their imperial hubris. They want to maintain their standard of living, make more money for themselves, and they're willing to sacrifice society. They want to burn off society in order to maintain their imperial privilege. They want to feel good about themselves. They want to live in a world where America is the only superpower. They have this nostalgia for the United States of the '90s, during the unipolar moment, when the entire world was looking to the United States for salvation. The Soviet Union had collapsed and the United States was seen as a fundamental force for good in the world. These people, the elite, are stuck in that world. Meanwhile American society has declined and become much more corrupt because of the extravagant greed of the billionaire class.
Even though we on the outside see this as folly, even though we believe the United States cannot possibly defeat Iran in a war and this will cause economic turmoil not just in the United States but throughout the world, the elite themselves live in a separate reality. They think that America is doing good by getting rid of a fundamentalist terror regime intent on nuclear weapons and on dominating and destroying the Middle East. They believe the war is going well — that it's crippling the Iranian economy, that the leadership is in disarray, and that any day now the Iranians will surrender. What Donald Trump has said is: we're winning the war. Is it our fault if the Iranians don't recognise they're losing? These are people who are essentially the baby boomer class, and they just live in their own separate reality, completely divorced from ours.
The Roman Republic Analogy and the Collapse of Strategic Thinking
Glenn Diesen: It's often made the point that the collapse of the Soviet Union also introduced disaster for the US. It was celebrated that the adversary was defeated, but what's often missed was that that adversary balanced the US — it forced the US to embrace strategic thinking, to constrain itself, to be measured. Afterwards, the hegemonic strategy was essentially to be everywhere. This diminishes strategic thinking because suddenly you don't have to make priorities. You're going to absorb a lot of pain, make a lot of mistakes. And there's this arrogance that you already have all the answers. In short, the imperial overstretch — having obligations in every corner of the world, the US insisting on having final say — this unavoidably exhausted the US. Many people did warn about this in the '90s. All the resources from the core would be siphoned off to the periphery to run an empire. That's largely what you're talking about, isn't it — all the infrastructure investment, the increasing poverty, all the money that could be spent on the population going abroad to run an empire?
Jiang Xueqin: You're absolutely right. A very good historical analogy is the Roman Republic. There's been a lot of debate about why the Roman Republic failed, but the Romans themselves believed it failed because they destroyed Carthage. Right before the Third Punic War, there was a huge debate in the Roman Senate about whether to attack Carthage. People like Cato the Elder wanted to destroy Carthage once and for all because they saw it as the final and ultimate threat to the supremacy of the Roman Republic. But others cautioned: we need an enemy to balance us out. If we destroy Carthage, we will become arrogant like every other empire in the past. We will be torn apart by civil war and civil strife. We will embark on pointless military adventures overseas. We'll expand too fast. We will financialise the economy and bankrupt most of our population while an elite becomes corrupt, arrogant, and insular. And that's exactly what happened. They destroyed Carthage and the Roman Republic fell roughly 150 years afterwards.
This is a very similar situation to the United States. There's been reporting that when Donald Trump ordered the attack against Iran, he did not believe the Iranians could maintain cohesion. He didn't believe the Iranians would strike GCC energy infrastructure. He didn't have a plan B. They didn't have a plan to continue the war for more than four weeks. They thought bombardment and decapitation would be enough. This is reporting from the Trump White House, and everyone says this makes no sense — they can't possibly be that stupid. Not that stupid, but they are that arrogant.
Remember, it was not just the collapse of the Soviet Union that fed American arrogance. It was really the 2003 Iraq War, where in a couple of weeks the Americans went in, bombed the Iraqi military, decapitated the regime, and imposed their will. Then you have, on January 3rd of this year, the Delta Force strike on Venezuela, where they were able to very smoothly, with no casualties, capture and kidnap the president — the sovereign head of state, Maduro — and now Maduro is standing trial in New York City. A lot of things don't make sense, but that's because we're not living in their world. In their world, everything is perfect and everything will go their way.
Trump, the Israel Lobby, and the Abandonment of America First
Glenn Diesen: I think that was a disaster for them. That success in Venezuela probably emboldened them — they wouldn't have gone into Iran with guns blazing and full of optimism if it hadn't been preceded by that victory. But a lot of Americans did recognise the indications of imperial overstretch, and I assume that's part of the reason why many people voted for Trump. The whole principle of America First can be interpreted as: if our commitments around the world have exceeded our economic capabilities, the solution is to shed some of those international commitments. That's essentially how America First was initially communicated — let's put this country first, we can't keep protecting everyone. Trump didn't want to walk away from empire entirely, but indicated he wanted a return on investment — that satellite states should at least pay for the privilege of being protected. But it didn't go that way. He's got more wars now. He was initially going to cut costs with Musk, and that kind of went out the window as well. How do you explain what happened to America First? He had a good point during his campaign — I recognised the disease of imperial overstretch, I thought: what do they need to do? Scale back the empire, restore fiscal discipline, shed some international commitments. What went wrong?
Jiang Xueqin: When a president comes into power in the United States, it's usually because he's supported by many different factions. In Trump's second term, he was supported by two major factions. You had the America First faction — people like Tucker Carlson, Tulsi Gabbard, JD Vance — who wanted America to withdraw its commitments from the world and focus on building up manufacturing capacity. But then you also had another faction that people didn't fully appreciate: the Israel lobby, or the Israel First people. They were always around, and in this administration they are represented by people like Peter Hegseth, Michael Waltz — who started out as national security adviser and is now UN ambassador — and then Howard Lutnik, Jared Kushner, and others.
People didn't really appreciate the influence of Israel in the Trump administration. If you go back to the first term, the presence of the Israel First lobby was always there. Even though the first term had a chaotic foreign policy — Trump declared a trade war against China, was trying to withdraw troops from Syria — one foreign policy directive that was fairly consistent was a pro-Israel sentiment. Trump withdrew right away from the JCPOA and basically destroyed the Iran nuclear treaty. He moved the American embassy from Tel Aviv to Jerusalem, which is something Israel had been asking for decades and no American administration had agreed to because they knew how politically volatile it would be. Trump did it. He promoted the Abraham Accords. He recognised Israel's control of the Golan Heights. And the most dramatic and consequential thing Trump did was order the assassination of General Qasem Soleimani, which is what precipitated this crisis with Iran.
So in his first term, he was very much Israel First. What's interesting is that when he lost power, the people who stayed most loyal to him were actually the Israel First people. This included people like Sheldon and Miriam Adelson — Sheldon Adelson was Trump's biggest financial backer in both 2016 and 2020. People like Sean Hannity, the Fox News host who is very close with Trump — they speak on the phone every day, I believe — and who is an ardent Christian Zionist. He's not Jewish, but he believes in Zionism.
The Israel First world never gave up on Trump. I think that when Trump was in exile at Mar-a-Lago during those four years — when he was under siege, when the FBI raided his home looking for classified documents, when there was Democratic lawfare against him, when he almost seemed on the verge of bankruptcy — the Israel First lobby continued to support him. I think he feels loyalty to Israel because of that. In many ways I feel that Trump launching this war against Iran is a way to thank Israel for its support over the past eight years, because there's only one country in the Middle East that benefits from any of this, and it's Israel. The United States doesn't benefit. The GCC are really suffering. I think Trump is beholden to Israel for whatever reason. We don't know exactly why, but it's clear that he is.
I think this war can only escalate until it engulfs the entire Middle East. We're already seeing that because the Houthis have been brought into the war, and the Houthis represent an existential crisis to Saudi Arabia. Saudi Arabia has recently signed a military defence pact with Turkey and Pakistan, and there's even talk of bringing Egypt into this pact. You can imagine the main purpose of such a pact would be to launch a multinational coalition against the Houthis. Imagine Saudis aligned with Egyptians, Pakistanis, and Turks launching a ground invasion against the Houthis. This should only end in disaster, because the Houthis are heavily fortified in the mountains, they're being supported by the Iranians, and they have access to drones and ballistic missiles. It's very easy for them to destroy the energy infrastructure of Saudi Arabia, and that's already what's happening.
There's complete chaos and turbulence in the Middle East, and again the only country that seems to be benefiting is Israel. We have to imagine that Israel, for whatever reason, has such a hold over Donald Trump that he is willing to abandon his allies — Tucker Carlson, Marjorie Taylor Greene, Joe Kent, Thomas Massie — and is now completely all-in on Israel.
Europe: Cannibalised Allies and the Sleepwalk Toward War
Glenn Diesen: It very much seems to be the case. If he can get these Arab states to fight his wars, that would be one achievement in terms of the US reducing its global commitments — shifting the burden onto allies to carry the weight, which is very different from what we saw after World War II when the US looked after the security of all other states and had generous trade agreements with its frontline states. Now they essentially have to get allies to carry their weight. We see the same in Europe — the attempt to outsource the Ukraine war to the Europeans. Trump talks about ending the war, but at the same time he's using it to push the Europeans to arm themselves to the teeth.
I also wanted to ask about Europe, because this continent destroyed itself in two world wars, and you can argue it had its life extended by hitching its wagon to the United States — though as a junior partner, which also trapped the Europeans in a very strong strategic dependency. The goal over the past decades has obviously been to elevate itself through collective bargaining power to achieve some kind of equality with the US. I think over the past 20 years any possibility of achieving this has faded away. What we see now is a very interesting period: the US is losing interest in an increasingly irrelevant Europe, while the Europeans seem to be only increasing their dependency on the United States. What does this tell you about Europe's future?
Jiang Xueqin: What's happening around the world is a very common pattern of imperial decline. What the United States is doing is not shifting the security burden onto its allies — it is cannibalising its allies. There's a very important distinction. If you think about it, there's actually no reason why Europe should be at war with Russia. Left to their own devices, I'm pretty sure the Europeans would conclude a peace treaty with Russia that would be mutually beneficial to all sides and bring peace to Europe. Left to their own devices, Saudi Arabia and the GCC would seek an accommodation with Iran as soon as possible, because the UAE, Kuwait, Bahrain, and Qatar can't afford much longer for the Strait of Hormuz to remain closed. They would want an immediate ceasefire and would probably be willing to pay trillions of dollars to ensure one with Iran. Left to their own devices, you would have peace.
But the American empire has a problem: a $40 trillion national debt. If America were to retreat from the world, this national debt would collapse and the American economy would collapse. The fiat currency — the US dollar — would go to zero without global demand. So the only way to resolve this is to force the Europeans, the GCC, the Japanese, the South Koreans — so-called American allies — to continue to subsidise the American economy by continuing to buy US debt. The best way to do that is to force them into conflict with their neighbours: Japan versus China, Europe versus Russia, the GCC and Israel versus Iran. You sell them weapons that are overpriced, redundant, and not very useful, and this is a way to continue financing the US national debt.
There was a news story about GCC nations — I believe Bahrain and Kuwait — who bought 5,000 Patriot missiles from the United States. We should expect to see more of these news items as we go along. These Patriot missiles — remember, it's been proven over these past three months — do not actually work against Iranian ballistic missiles. Your fantastic guest Ted Postol of MIT has very clearly explained that these air defence systems don't actually do anything, that it's very easy to circumvent them. But the point is not to win this war. The point isn't even to force this war on American allies. The point is just to cannibalise American allies by forcing them to buy redundant and useless American defence systems.
Glenn Diesen: To what extent do you think that American plan could be a recipe for reversing the decline of the United States? If I look toward the future of the US versus Europe, I want to see what made them successful to begin with and which of those variables are still present. It looks as if the US would have more to fall back on compared to the Europeans at the moment — with de-industrialising economies, lack of cohesion among the different states, no clear economic model, no clear place in a multipolar world. How do you see those two actors?
Jiang Xueqin: I think the United States wants the Europeans to go fight the Russians, and there's no appetite among the European public to fight this war. What's going to happen is that the European political leadership is going to sleepwalk into a war with Russia — possibly by sending in special forces in the beginning to aid the Ukrainians, but eventually you will have conscription. You will have young men being conscripted to fight this pointless war in the trenches of Ukraine. This will lead to political revolution in Europe.
People are sleepwalking into tragedy and disaster. It's almost like they're on remote control. It's almost like a zombie political system. They do this not because they hate Russia. They do this not because the Americans are forcing them to. They do this because it's the path of least resistance. It is too hard — conceptually, mentally, and psychologically — for them to seek an accommodation with Russia. In their minds they believe Russia is Satan and they have to defeat it. So it's a lack of imagination, a lack of political will, a lack of energy. Europe is just an inert bureaucracy right now. They're sleepwalking into disaster and there's no way around it.
The Ukraine War, Escalation, and the Merging of Fronts
Glenn Diesen: What you suggest is the need for domestic political change. I can interpret current events in two ways. On one hand you see the political leadership being severely weakened — it's not just unpopular, it has a legitimacy crisis. On the other hand, whoever seems to replace the former ones — for example, in the UK where Starmer has effectively replaced the previous government with a younger version of the same thing, just a facelift. And one gets the impression that even in France, if Macron gave way to someone like Le Pen, would she really be that different? Do you see simple elections being sufficient, or does it have to be a shift like a regime change — essentially a shift in the entire political system?
Jiang Xueqin: I think Europe is heading into a lot of trouble. A lot of the opposition in Europe is controlled, as you point out. Look at Spain. A couple of weekends ago there were 50,000 migrants who flooded Ceuta, which is an enclave of Spain on the African continent. This was coordinated and directed by Moroccan authorities as a form of political leverage, putting tremendous pressure on the left-wing coalition led by Pedro Sánchez. You can imagine that given all this pressure, they'll probably lose the election — to whom? Vox. And the leader of Vox has proven to be a pro-Zionist, pro-Israel, pro-war individual. So it's a kind of absurd situation where if you oppose the American Empire, they will fund opposition groups and use all their resources to undermine your credibility and put tremendous pressure on your population. The empire still has a lot of tools in its kit to impose its will on European populations.
I think that for the Europeans, the next ten years they will be stuck doing the bidding of the American Empire and Zionist forces. This is not a very optimistic future for the Europeans. The reality is that we have societies in decline. The United States and Europe are very much societies in decline. It is impossible to arrest the decline. It's only a question of how fast it dies.
Glenn Diesen: If you look at declining great powers, they engage in more wars. One of them is of course the Ukraine war. How long can this war really go on? At the moment it's escalating quite fast within the format of being only Ukraine. If in a few months Ukraine begins to collapse — and I'm not saying it would happen this winter of 2026, but nonetheless one sees huge problems on the front line: the manpower issue, the lack of air defences, and the Russians have decided to retaliate heavily against NATO and Ukrainian escalations by really pummelling Ukrainian cities and even putting a naval blockade along its entire Black Sea coast. It doesn't seem very stable anymore. The ideal scenario for the United States and the Europeans — where the front lines would remain somewhat unchanged and the Ukrainians and Russians would just gradually bleed each other white — appears to be coming to an end. We seem to be reaching a breaking point. How do you see this war progressing? Even some of the most Russophobic countries still don't want to send their own men yet.
Jiang Xueqin: This is not a war between Ukraine and Russia. If it were a war between Ukraine and Russia, it wouldn't have started in the first place. Zelensky would have signed a treaty with Russia from day one to avoid conflict. This is clearly a war between NATO and Russia. Zelensky is clearly a paid actor — he's literally a paid actor, a proxy for NATO. You're absolutely right that the Ukrainian front line is exhausted. They're out of manpower, very corrupt, morale is very low. But as long as they keep getting support from NATO, this war can drag on for a long time.
A really worrying development is that a couple of weeks ago there was a Ukrainian drone strike on an Iranian cargo ship transporting goods in the Caspian Sea. The Caspian Sea is actually pretty far from Ukraine, so the Ukrainians went out of their way to attack that ship. Zelensky announced it, and I think a lot of people are saying his ambition is to draw the Americans into the war in Ukraine by uniting both fronts — by showing that Russia and Iran are allies, and that if you want to defeat Iran, you have to defeat Russia as well. The Americans aren't interested in merging both fronts. Zelensky had to apologise to the Iranians. But we can imagine that these sorts of stunts will continue, because NATO is desperate to force the Americans to support this war in Ukraine.
I don't think this war will end. I think it's much more likely that the war in Ukraine will merge with the war in Iran, and this contagion, this domino effect, will continue to spread.
China, North Korea, and the East Asian Flashpoint
Glenn Diesen: Another area of contention is the South China Sea. Taiwan will always be a flashpoint between Japan and China, and I think North Korea may enter the battlefield sooner or later — the North Koreans have already entered the Ukrainian battlefield in a big way. You do see that Russia, China, and Iran represent the three main powers on the western, eastern, and southern parts of Eurasia — the three main rivals of the United States. To what extent do you think the Chinese might get involved in either the Iran war or the Ukraine war? How deeply involved are they?
Jiang Xueqin: It is classic Chinese geopolitical strategy to maintain neutrality so as to maximise options. For the longest time China was trying to keep aloof from the war in Ukraine and from the war in the Middle East. China has always kept its distance from the Ukraine war and has been very compliant with American sanctions against Russia. This war in the Middle East directly affects Chinese interests because China gets a lot of its oil and energy from the Middle East, so China was working very hard behind the scenes to seek a diplomatic solution. I don't think the ceasefire would have happened without Chinese intervention, and I think China was very insistent on both parties — the Iranians and the Americans — respecting it.
One really interesting thing the Chinese did was cut off oil imports by at least 50%. The reason they did that was to stabilise oil prices and give Trump the political incentive to seek peace with the Iranians as soon as possible. So the Chinese have done a lot to try to end the war in Iran as soon as possible.
But the Americans are aggravating China by imposing new tariffs, by sanctioning a lot of Chinese companies, and by encouraging Japan to remilitarise. Right now there's a Quad happening in East Asia — Japan, India, the Philippines, and Australia. We can imagine that the United States is pulling a lot of strings behind the scenes. So even though China wants to reach an accommodation with the United States, the United States seems intent on strangling China. There are many in the United States who see China as the real threat. When an empire is in decline, it sleepwalks into disaster. There's absolutely no reason for China to help Iran and Russia, but the United States is giving China a lot of reasons to do so. We can expect a lot more points of cooperation between Russia and Iran. Something really interesting to look at is the Arctic route — China has something called the Malacca dilemma, where most of Chinese trade passes through the Strait of Malacca, which can be easily closed off. So for the past few years China has tried to create an Arctic route, and that is going very well, but it entails direct cooperation with Russia.
Glenn Diesen: We always see that China is included in all these conflicts. For example, General Keith Kellogg was arguing for why it was such a good idea to fight this war against Russia — making the point that you use Ukrainians to remove Russia from the chessboard of major rivals, which will allow a focus on China. At the same time you have US senators and commentators making the point that as the war goes on in Iran, you're able to cut off the Chinese from important resources. Scott Bessent was making this point as well. It does seem like China is the ultimate target. I wanted to ask about the mood in China — if the Chinese recognise that a key goal of weakening Russia or cutting off key resources from Iran is to harm them, how do you see China preparing for a possible conflict with the United States? What are the possible pathways? Because we can already see a possible world war being unleashed through the Middle East, starting perhaps in Europe through the war with Russia, and now a pathway in Asia as well.
Jiang Xueqin: I think the major flashpoint in East Asia will be North Korea. Here's my logic. Right now China wants to reunify with Taiwan — this is the major political agenda for China — but China doesn't want to retake Taiwan militarily. That would be a disaster and would not end well. China wants to create economic and political leverage in order to reunify with Taiwan. The opposition leader of Taiwan, a woman named Chung Li-wen, visited China a few months ago and was welcomed by President Xi Jinping. She is very much interested in reunification and will probably win the next general election in Taiwan. So China believes that over time Taiwan and China would reunify peacefully, and that would be the major political triumph for the Communist Party. It would end China's century of humiliation, when the Western powers came to divide China up and carve it into different pieces.
The problem is that Japan has stated that Taiwan is core to Japanese strategic interests, meaning that Japan relies on global trade, and if China were to take over Taiwan, China could use Taiwan to embargo Japan and block Japan from Southeast Asia. So Japan would not allow the unification of Taiwan and China. These past few months, Prime Minister Ishiba has launched a frenzy of remilitarisation and has been fostering close military cooperation with India, the Philippines, and Australia to counter what they perceive as the China threat.
Chinese geopolitical strategy is to try to avoid kinetic warfare. China does not like to fight wars for a variety of reasons. What happened was that in May, right after Trump and Putin visited China, President Xi Jinping made a personal visit to North Korea. I think the logic of this is to use North Korea as a point of leverage against Japan — if North Korea is lobbing missiles into Japanese cities, this is going to frighten the Japanese population. The Japanese population does not want remilitarisation. There have been lots of protests against Japan's aggression. The great hope is that by using North Korea as a point of leverage, Japan and China can come to a compromise over Taiwan.
Unfortunately, I think the Americans are trying to co-opt the Japanese political system. Japan recently announced it was forming a CIA modelled on the American CIA. We can also imagine that eventually Japan will form an FBI, an NSA — basically creating within Japan the infrastructure of an American deep state so that America can impose its will through these intelligence agencies. America is trying to vassalise Japan and use Japan as a pawn in this great game against China. The Chinese understand this, and they are very patient and think long-term strategically. If China were to bring North Korea into the picture, there's very little Japan can do about North Korea.
Social Volatility, the 1848 Analogy, and the Coming Financial Collapse
Glenn Diesen: Not a country you want to go to war with either. As a last question — because you've been quite successful in many of your predictions — what is it that you keep your eye on at the moment, or what keeps you up at night? Do you see any worrying trends?
Jiang Xueqin: I think society is much more volatile than we think. We're focusing on the geopolitical picture, but these societies are powder kegs. If you go to England, France, Germany, Spain, the population is really unhappy with the way things are. I'm in Los Angeles and it's my first time in the United States in two years, and the signs of imperial decline are everywhere. I can't believe Americans are happy with outrageous food prices. Also — I'm not sure if you've had a chance to visit the United States recently — the food is pure poison. I've been here for four days and every single day I've had an upset stomach. I pay a lot of money for this food and I make sure to go to good restaurants, but they put something in the food — whether it's GMOs, growth hormones, or whatever — and it's causing my system to rebel. All the Europeans say this. The Europeans come to the United States and can't believe the poison that Americans are eating. I don't understand why the American people are putting up with this, and I think that eventually there'll be a trigger and you're going to have a lot of violence in the United States. We're too focused on these flash points and we don't recognise that within all these societies, the population is extremely restive, extremely frustrated with poor leadership, and at any point things can blow up.
Glenn Diesen: Do you see something similar in Europe? Britain doesn't look very stable. In France every now and then you have some generals predicting civil war. In Germany the political culture is looking a bit dark — once you begin to refer to your political opposition as enemies or traitors, you can't really have peaceful transfers of power anymore. The Germans — Merz, the chancellor — recently made secret deals looking at how to essentially strip some of the states in the republic of their autonomy if they vote the wrong way, because he saw them as being too friendly to Russia, meaning not sufficiently enthusiastic about war. And then you have this separate layer where the EU is trying to make sure people don't vote the wrong way and keep everything in place. However, the more it holds everything in place, the more tensions build up. It just looks as if this can't really last forever.
Jiang Xueqin: A good historical analogy is the 1848 revolutions in Europe. If you go to the 1840s, it's very similar to what Europe is like today. You have economic malaise, a lot of inequality, a lot of corruption, an aloof elite — but there's peace in Europe and it seems as though the population, while unhappy, won't rebel. But a few years later, because of climate change and weather patterns, there's a famine throughout Europe. Then, in one nation, there's popular unrest, and like the very next day the entire continent is engulfed in flames.
I think that this war in Iran will create famines throughout the world, especially in Africa. It's going to cause food prices to skyrocket in the United States, and I'm not sure what the pain tolerance is among the American population. These things are impossible to predict in terms of timing, but I think the ingredients are in place. All you need is a spark, and a spark could possibly be massive inflation caused by this war in Iran.
Glenn Diesen: That's an issue we didn't cover — the pending economic crisis. This is another thing that seemingly can't go on forever. We're going to have to leave that for next time, unless we have a quick answer for it. Where are we headed?
Jiang Xueqin: I think we're heading towards total financial collapse. The economy of the United States is just a Ponzi scheme. You've got the private credit bubble, which is worth about $2 trillion, and you've got the AI bubble, which is also trillions of dollars. These are not sustainable bubbles, and I think that once these bubbles pop, the full brunt of economic pain will manifest itself.
Glenn Diesen: Well, on that happy note — thank you very much for taking the time. I always appreciate speaking with you.
Jiang Xueqin: Thanks a lot.