Transcript of Alex Krainer: Declining Europe vs Rising BRICS

So these huge tariffs, which aren’t selective, fuel a lot of uncertainty, disrupt the supply chains, and inhibit further investments. How can I get your take on this, the whole tariffs, how do you see the global economy moving? Because I can’t really make up my mind yet about this issue.

Strategic Calculations or Impulsive Actions?

ALEX KRAINER: I think I have to go out on a limb, Glenn, because I have a hard time interpreting the events. Much of it doesn’t seem to make sense. And then you’re taken back to the question of are the people in the administration sophisticated, have they thought this through or are they just taking these impulsive actions and saying, “okay, well what the hell, we’ll see what happens and maybe it all works out.”

This is actually a very important question because if you start from the premise that they’re sophisticated and that they thought things through, then you can make sense out of it, and you can try to find an interpretation that perhaps leads to a positive outcome for the United States. If they’re not – if they’re making it up as they go along, then it can go anywhere. So it’s extremely difficult to try to interpret what they’re doing or where it might lead us.

I think that the situation as it was was very unsustainable. It still is. And so Trump’s moves, you know, we cannot blame him for the fallout. I believe that the dry tinder for this crisis has been piling up for a very, very long time. And everybody knew that it was unsustainable. And whatever is unsustainable means that at some point it has to collapse. And so perhaps they decided to rip off the band-aids, so to speak, and to start resetting the world on a different path.

Europe as the Main Target

We’ve seen that the reactions from Europe have been nothing short of hysterical. And we can see why the whole European setup has been based on exporting their manufacturing to the United States and the United Kingdom, which has been absorbing the bulk of Europe’s exports. And then much of these exports were coming straight from China, where many European manufacturers have meanwhile transferred much of their productive capacities in search of cheaper energy and cheaper labor and less restrictive bureaucratic environment.

Trump’s tariff imposed on Europe basically demolished this whole relationship that Europe has been basing itself on. And so I’ll shift our focus a little bit to Europe, because it seems to me that from whatever angle I look at the situation, it seems to me that Europe is the main recipient of blows from the Trump administration.

The Yemen Conflict and Its Impact on Europe

I even thought about the war going on in Yemen now, because when the Trump administration launched this war on 15th of March, the Operation Rough Rider – I don’t know what happened to Operation Prosperity Guardian, but apparently it just kind of withered, replaced by now Operation Rough Rider. They have now accelerated bombing of Yemen, which is achieving nothing. And it was understood by the American military brass that it was unlikely to achieve anything much. So why launch it in the first place?

I couldn’t understand this, but then I watched a panel discussion on Saturday with Larry Wilkerson, Ambassador Chas Freeman, and Mohammad Marandi on Nima’s Dialogue Works.

GLENN DIESEN: Yeah, yeah, I think I saw.

ALEX KRAINER: And I thought it was extremely interesting what Col. Larry Wilkerson was saying about the tabletop exercise that they held about the Red Sea, about the maritime traffic to the Red Sea. Now, this was some years ago, and it was a very major exercise that they were doing because it was sponsored by CENTCOM and AFRICOM and the Pentagon and NSA and a whole bunch of other American and European National Security Organizations. It was represented by Europeans as much as the Americans. So this was not just a small thing, it was a very important exercise.

And they concluded that this was one of the most strategic trade routes in the world that then CENTCOM tagged as “global hub of competitiveness,” because they estimate 55 to 60% of all trade in the world passing through the Red Sea. And the bulk of this is European trade. It’s Europe’s trade with East Asia. And only about 3% of that trade was American trade.

Before the Trump administration launched the Operation Rough Rider, this trade was passing through the Red Sea unimpeded. The only traffic that Ansar Allah said that they would block was Israeli ships. And so once the US Forces launched Operation Rough Rider, then all the trade stopped, which means that the blow was principally against Europe, whether deliberately or not deliberately.

Ambassador Freeman said that Ansar Allah effectively leveraged Lloyd’s of London against the Europeans. And I thought, yes, exactly. Except was it Ansar Allah or was it the Trump administration? Because they held that exercise. They knew the importance of this trade route. They probably knew the impact it would have blocking it. And they went ahead with it all the same, even though the direct target, meaning Yemenis, would not be harmed.

There’s collateral damage. But in strategic terms, nothing changes. The Yemenis continued attacking US Naval ships and Israel. And we know that this is very exhausting and depleting for the US Forces in the region. And so to launch such an extravagant operation, kind of knowing that it will not have much of an effect against the target, because Yemenis had been at the receiving end of Western attacks, either through the proxy of Saudi Arabia or the Prosperity Guardian or the British or the Israelis or the Americans for more than 10 years now.

So they have been sustaining these bombardments many thousand times over. They’ve endured enormous hardship economically. They sustained famine. They sustained a cholera epidemic. They never capitulated to the empire, so why would they do it now?

A Deliberate Strategy Against Europe?

And so it seems to me that the most devastating blow of this operation is going to be against Europe. And I wonder if this isn’t deliberate because it’s consistent with so many of the administration’s policy decisions, not just the Trump administration, but even the destruction of Nord Stream 2 pipelines. Obviously this wasn’t done by the Trump administration. But as we also know, there are higher powers that are defining foreign policy than just whoever is sitting in the White House.

If I were an investigator, my list of suspects would be topped by Wall Street banks. And so once you start analyzing the situation from the point of view of American banking and corporate interests, then it starts to make a different kind of sense. And now it no longer looks stupid. It may be devious, it may be underhanded and destructive, but it’s not stupid anymore. It’s devastating to Europe.

At the same time then you see that the European, the best, most competitive industries from Europe are going to be even more incentivized to move to the United States. Europe, which is still ruled by its degenerate colonial oligarchies and which has been the source of two world wars in the past, which has been the source of colonialism, starts to find itself at target of very significant attacks.

And then Donald Trump kind of confirmed all these suspicions to me a day before yesterday when he was on Air Force One and he was speaking to the journalists and then he said that the whole point of the creation of EU has been to rip off the United States. So wouldn’t it make sense then for the United States to strike against the EU, against Europe and let’s say, redress what they perceive as an injustice from Europe done against the United States.

So this is how I see it. And then it makes the attack at Europe’s energy infrastructure, the tariffs and the war against Yemen, it starts to make sense as general warfare against the old continent and the leadership of Europe which has been so single-mindedly obsessed with the project Ukraine hasn’t even seen it. They’re completely unprepared. They’re barely even aware that they are in trouble, let alone having any answers, having any contingency plans and policies to put in place to defend the interests of Europe.

Europe’s Self-Inflicted Problems

GLENN DIESEN: Yeah, I think in Europe many people are underestimating the contempt there is for Europe in the signals from JD Vance. It’s quite obvious also what it says in the open. But also he referred to the attack on Yemen as doing the Europeans a favor by helping open up that transportation corridor. But you are correct, though, that did intensify the attacks instead.

ALEX KRAINER: Well, it did exactly the opposite, didn’t it?

GLENN DIESEN: No, I know. So, it’s interesting because it’s a bit like the tariffs. You more or less said, is there some calculated, clever idea behind this? Is there order in the chaos or is it just chaos? At times it can be difficult to know if anyone’s behind the wheel.

But Trump is not all incorrect with this. The European Union’s collective bargaining power was to a large extent incentivized by the idea that the Europeans should have parity with the United States. So collectively bargaining for better deal with the US – now, whether or not one wants to define it as ripping off, of course, that’s just semantics, I guess.

But it’s also worth noting that the Europeans have put themselves, they made themselves enemies of Trump’s to a large extent. Before the elections in the US they were talking about making NATO “Trump-proof.” So no matter what, if Trump gets elected, at least we can continue the war in Ukraine. This was the main idea. So essentially overturning the significance of him winning.

Towards the end of 2024, when British and French joined in on this long-range direct attacks on Russia, again, huge escalation. This was also very clearly to create a deeper divide between the West and Russia, prevent any efforts by Trump to make peace. And even now, you see the EU trying to keep the war going and sabotage, to a large extent, Trump’s efforts to negotiate an end to the war.

In Europe now, they define it as “we want to help with the ceasefire by sending troops in to oversee it.” But the Russians would never accept this – it’s a way of sabotaging it. If the Russians suspect that our troops are going to enter, this is a way of ensuring there will be no ceasefire. But this is, of course, the language we use.

I guess my point is it does appear that the Europeans make it very obvious that they’re working against Trump. So one can’t dismiss the idea that Trump, when he says they’re ripping us off, that he doesn’t have the best intention for the European Union.

But where do you see the Europeans going with this, though? Because the Americans might be able to steer their way back into growth and to cement a powerful position for themselves for the decades to come in the international economy. But where do the Europeans go from here? Because as Europeans, we kind of put all our eggs in the American basket and now we’re learning that the world isn’t that American-centric and the Americans aren’t really that interested in us anymore. Where do the Europeans go from here? Because it is chaos now, isn’t it?

Europe’s Dangerous Complacency

ALEX KRAINER: It’s a very dangerous moment for Europe because obviously the European leadership has grown complacent with this relationship where they could rely on the United States as the big market. We could export advanced European goods there on favorable terms, even outsource much of the manufacturing of these goods to China and use the United States as a go-to market from which Europe was basically deriving its prosperity. And now, all in one fell swoop, this all starts to implode and the European leadership is completely unprepared. They are only now realizing what hit them.

Meanwhile, they have also destroyed their relationship with Russia. And, you know, if you listen to Europe’s High Commissioner for Foreign Affairs, Kaja Kallas, she’s talking about, “How are we going to defeat China if we can’t defeat Russia?” So they’re talking about taking an adversarial position against China as well. Taking hostile stance towards all the major powers in the world has been basically the conduct of foreign policy of the European leadership.

They have no idea what to do. They understood that Europe has in other ways lost competitiveness. So if you remove the American market as an option for them, we have no competitiveness. You know, apart from these bottle caps that don’t come off when you unscrew them. This is brilliant, but apart from that, we are in serious trouble.

Domestic Repression and the Path to Conflict

The result of this is that it’s going to exacerbate social pressures in Europe. And given that European powers are still ruled by the same essentially colonial power elites that have been in charge since the middle of the 19th century, they will do everything they can to make sure that they don’t get swept out of power in a social uprising. Because we see increasing talk about civil wars breaking out in places like Britain, France and Germany.

Since they’re at a loss how to deal with the United States, how to deal with Russia, how to deal with China, they will take their war to their domestic populations. And we’re going to see an acceleration in all these efforts to introduce digital IDs, central bank digital currencies, pervasive surveillance, censorship, medical assistance in dying, all of these dystopian measures aimed at repressing the populations and reducing the numbers of populations.

I think that this will be topped off by a process of Nazification of the continent and introducing a fascist form of government, and then probably doing their level best to make sure that in another five, six, seven years we are at war against Russia, the European continent collectively.

For two, 3,000 years of history, whenever the ruling oligarchies got into trouble because of the process of wealth polarization which is symptomatic in these kinds of regimes, and they don’t know how to deal with it, the battle cry has always been “barbarians at the gate.” What you achieve with that is that you compel the fighting age male population to go and confront foreign enemies. And there you get a massive bloodletting which eliminates a large percentage of fighting age males, which are exactly the greatest source of risk to the ruling oligarchy, because they could be the revolutionary elements in your society.

This is the reason behind the sudden coordinated allocation of trillions of euros of capital that we don’t have towards defense industries and towards military establishments and preparations for war. And now we’re starting to get the propaganda “Russia bad.” You know, absurd stories like Vladimir Putin maintains his health by bathing in blood derived from deer antlers.

The problem is that they don’t control these narratives. So people, when they hear stories like this, they go to X and other social media and they see that they’re being lied to. So now they have to ramp up censorship to make sure that all we know is what the TV and the radio and the newspapers tell us. They want to impose a billion dollar fine against X. They want to silence Elon Musk’s Twitter. And so that’s going to further exacerbate the conflict between Europe and the United States.

I don’t see the light at the end of the tunnel for Europe other than really social uprisings taking traction, sweeping these populist sovereignty parties into governments, and then ultimately the EU disintegrating and individual nations charting their own course, making their own alliances, their own bilateral relationships. With the United States, with China, with Russia and other powers in the region and finding a way to peace rather than this blind march to war and dystopia domestically.

Europe’s Diplomatic Isolation

GLENN DIESEN: I think a lot of this has the origin again in the economics though, because as everyone’s now readjusting to this new world that is the Russians are going east, Asia is growing. I’m not sure exactly how the Americans are going to get out of this but, for the Europeans, there’s just nothing there. As I said, they got contempt from United States. The Russians want nothing to do with Europe anymore. They even alienated the Chinese, which was evident now by the diplomatic snubs from Beijing. And you know, the French have been kicked out of Africa.

The panic is kind of obvious now and every day in the newspapers is this war hysteria and as you mentioned, the crackdown on free speech. If I try to make very non-controversial arguments that NATO expansion was provocative to Russia—I mean you can cite Bill Clinton, his whole administration, Henry Kissinger, the list is quite long of political leadership who recognized why this was problematic—but you can’t even say this in Europe now without someone within a fraction of a second beginning to talk about the 1930s and Hitler and how everything now is Russian propaganda.

There’s no discussions anymore. And as you said, the political instability is obvious now. This is quite dramatic. What happened in France, taking out effectively the political opposition? This happens, of course, not in a vacuum, but with Romania they’re suggesting they can have similar solutions in Germany. They want to find a solution to Hungary, Slovakia. This is not a very optimistic development. Do you think we could see, bit like the Chinese in the mid-19th century, this could be the century of humiliation for Europe?

The Internet as a Game-Changer

ALEX KRAINER: I am not sure, Glenn, because we are in very different circumstances today. You know, we have this thing called the Internet which is, I think whether we recognize it or not, it 100% changes the social equation because it provides us a resource that we’ve never had before in history. And we know that for the ruling establishments, control of the narrative is absolutely essential.

We’ve seen how vexed the European—I hate to call them elites, but I don’t know what else to call them—they’ve been literally throwing tantrums in Davos during their meetings because they said that disinformation and misinformation, as they call it, is a greater threat to them now than even Russian international terrorism. So they are afraid of us knowing the truth. They need to control the narratives. They need to be able to tell us what to be afraid of and who our enemies are.

Today, it is very difficult to control this narrative. Some people, especially people who are paid to not understand things, still buy the official narratives. But it’s clear that the majority of people, at the very least, are starting to grow aware that they’re being lied to and that they’re being manipulated because so many of these narrative toxins that are being emitted into the social information space are not having their effect.

I have a friend who works in NATO in one of the European NATO member countries, and she told me that NATO has been very keenly following the public opinion in European NATO countries with respect to Russia. At the beginning of the special military operation, they were hoping to galvanize the population into supporting a greater war, military escalation against Russia. What they found is that in the former countries of the Warsaw Pact, about three out of four individuals actually sympathized with the Russian position. And in other countries, Western countries like Spain, France, Italy, Austria—not necessarily Germany, but a good chunk of Western European nations—about two out of three individuals living there sympathized with the Russian position in Ukraine.

This is enormously limiting to their freedom of action. They would like for all of us to now be deathly afraid of Russia and to be prepared to go and fight the war against the Russians, but they are not able to make this happen thus far. We shouldn’t be complacent because we have to recognize that Ukrainians didn’t want to fight the war against Russia either. And now they ended up sacrificing 1 million Ukrainians in that war. But their ability to manipulate populations into wars or into compliance with this or that public policy is now very much diminished.

I think that in fullness of time, perhaps European populations will know to push back. This may seem difficult to understand at this moment in time because people seem passive. And many people, if you talk to them, they either don’t want to say what they really think or they express views that are maybe more consistent with the official narratives. But for some reason there is this suspicion that we’re going towards civil war unravelings.

I see that these conflicts over elections in Romania, possibly rigged elections in Germany, judgments against Marine Le Pen in France, these events are gradually bringing us closer and closer to a breaking point, which is not something we can predict when, where, or how things might break. But the pressure is building and something is going to give.

Obviously the American side is supporting these populist movements or sovereignty movements. I believe that they will also find common language with the Russians as well and with the Chinese. So there’s going to be broader political support for sovereignty movements in Europe. And I think that at some point they might mature into real, actual political alternatives that will, at a given point in time, maybe take over. So I hope that the civil war scenario could be avoided.

Europe’s Crisis of Credibility

GLENN DIESEN: I think the biggest flaw in Europe now is the assumption that Europe is some kind of one entity that can remain together even as all of this breaks apart. But you mentioned before this, the Putin bathes in the blood of deer antlers. I mean, this isn’t from the dark corners of the Internet. This story was reported by CNN, Business Insider, all the British tabloids, Newsweek, New York Post, Telegraph. They all wrote about this. That he’s got cancer, so the Russian doctors, savage as they are, argue in favor of him cutting off the antlers of deer and bathing in their blood.

The problem here is that propaganda works best in moderation when it’s just pushing people in the right direction a little bit. But what you see here now is complete panic. We had a narrative which we all had to follow at the end of the Cold War, that the collective hegemony of the West would be the foundation of advancing democracy and human rights. It was supposed to be a benign hegemon which would serve the interests of all mankind.

But now that the power is gone and also the values which were supposed to elevate us – with the EU backing genocide in Gaza, this happy forever war in Ukraine – the morality is now to not engage in diplomacy while hundreds of thousands die. That this is somehow a good thing. All of this is weakening the narrative.

If you look across Europe, trust in the media and trust in political classes is in decline. These are objective facts. This is measured – we don’t trust the media anymore. I don’t see how this can be turned around. I think one has to go back to the economics. We have to find a new footing, a different approach in Europe for development.

On that topic, my last question was about BRICS, because from my perspective, the main problem, the reason we have war in Europe, is we never solved how to organize Europe after the Cold War. Everything is organized zero-sum now. European integration means to decouple Russia’s neighbors from Russia.

Do you think what will be the role of BRICS in the years to come? Do you see any possibilities of Europe finding a future in this? I asked President Putin about this back in November in the Valdai meeting – if BRICS could, given that they can solve some of the differences between the Arabs and the Iranians or the Chinese and the Indians, would it be possible to have a multipolar format to restructure Europe’s relations with Russia? He wasn’t that optimistic, but how do you see the possible role of BRICS, not just in the world, but also as something different the Europeans might be able to use as an alternative now that the rest of the system is falling apart?

The Promise of BRICS and People’s Globalization

ALEX KRAINER: I think that’s a great question and I tend to be optimistic, Glenn, because one of the earliest formulations of these multipolar integration came actually from Vladimir Putin when he was talking about integration of the Eurasian continent from Lisbon to Vladivostok. This seemed very appealing, but obviously at the time, politically it was impossible.

I think that once these ruling structures of Europe start to collapse, there will be a search for alternatives. And I think there aren’t too many alternatives to BRICS. BRICS today is, I think, maybe the best bet for growth and prosperity, not just for the global south, but for Europe as well.

I believe the process of globalization cannot be reversed, but I think it’s going to shift from a process of globalization driven by large corporate interests into a people’s globalization. I see that happening everywhere in real time.

I’ll try to explain what I mean by that. I see that ordinary people and small businesses are beginning to disintermediate large corporations in everyday commercial exchange. You see more and more companies from China, from India, from anywhere in the world really marketing things that once upon a time you had to go to a supermarket to buy. Now you have specialty producers that market directly – it pops up in your YouTube feed or on Facebook, and it takes nothing to order them. You click here, PayPal or Stripe, and the thing arrives. You no longer have to buy from the supermarket.

At the same time, that business that developed that sales channel at home is creating employment and new prosperity on completely new foundations that they created themselves. I see this happening everywhere.

One recent example I saw was a couple from New York. They were both bankers on Wall Street, but her parents had a farm somewhere in Virginia that was on the verge of bankruptcy. They both decided to take a sabbatical, leave their jobs and go back to the family farm to try to save it. After a year of working non-stop, they came to the realization that they could not save the farm through traditional means.

But what they did then is start their own meat packing and sell directly to consumers. They started making more than a million dollars a year in revenue because instead of going through the old channels of selling their cattle to the big corporate meat packers and getting cents on the dollar, they started selling themselves. They realized they don’t need these old corporate structures anymore – they can go straight to consumers.

Different economic foundations are being built on individual cases everywhere around the world. It’s hard to envision because we see all these old structures imploding on themselves, but we don’t see the new ones being built up. I always go back to the Confucian saying: “When a big tree falls, it falls with great noise and destruction. But seeds grow noiselessly, they grow in silence.”

What I think we’re seeing in the world is a version of that where the old obsolete economic, political, geopolitical, and social structures of society are starting to collapse. But these seeds are growing everywhere in the world.

If the new payment systems developed by the BRICS nations enable all these individual businesses to simply plug themselves in and create a very large point-to-point business environment for the whole world, we are in a completely different environment. I think it’s going to be a magnet for not only consumers, but also for entrepreneurs.

This will begin to have its own political momentum. People are going to say we want more of this. We want to be able to sell our services and goods to Chinese consumers, to American consumers, to African consumers. We’ve seen how the Chinese have been able to raise more than 800 million people out of poverty and make them global consumers with purchasing power. The Chinese are trying to do the same in the global South.

So now imagine instead of a “golden billion” in Europe and the West, you actually have 3 or 4 or 5 billion affluent consumers everywhere in the world. Whether you’re making Gibson guitars or Marshall amplifiers or cookbooks or tea or coffee or cheese – whatever you can offer to this marketplace, suddenly it becomes easy to participate in this big economic system.

I think that offers a very promising future. And I think it will come from BRICS, not from Brussels, Washington, or London. For individual European countries, as for the countries of the global South, they will be compelled to throw their lots in with BRICS. And I think the same thing will happen with the United States as well.

Reclaiming Economic Value from Rent-Seekers

GLENN DIESEN: It’s interesting that these days when you think about capitalism, it’s almost taken for granted it should be this new financialized capitalism we have today. People forget often that the main free market capitalists – Adam Smith or David Ricardo, John Stuart Mill – all of them very strongly warned against the rent-seekers, the ones who extract value from the production process without properly contributing.

It’s interesting you brought up the example of the farmers because they often get only 10 to 20% of the sales, if even that. So there’s a huge extraction of wealth there which they don’t partake in. With technological changes, it does present some opportunities to sell more directly and get a bigger share. As we now have this crackdown on farmers in Europe, but also other parts of the world, there might be some pushback, some new alternatives. The whole system breaks down, there are alternatives. It’s just hard to predict how this goes.

ALEX KRAINER: It’s very hard to predict. This is again why I like the Confucian metaphor, because it’s talking about seeds. When you see a seed, you cannot even envision what it might grow into. But I think it’s almost an organic process. In nature, usually seeds grow into something beautiful and productive, fruitful.

To the extent that this process is coming from the grassroots, from the ground up, I think it could lead us really into a new era of peace and prosperity. Of course, we have to be careful that parasitic structures don’t poison the well and drive us back into wars and conflict. But I’m very hopeful that the fact that we have social media and Internet today, at least the narrative control…

GLENN DIESEN: Will be neutralized, I guess, at this point in time. Decentralization, obviously one important solution to a lot of our problems.

Markets as the Root of Civilization

ALEX KRAINER: And not just with information, but also with producing goods and services. Markets have always been the root of civilization. Tribes used to meet in marketplaces, the trade routes used to be the defining feature of civilizations.

Now we’re talking about perhaps something emerging that is so completely different. It never existed before. We have to be careful. We have to keep our thinking hats on. We have to keep watching and listening and reading and exchanging information. But I think that the opportunity that we are given now and here today is something that no generation before us has had. So we really might be in a very good position longer term, even if today’s events are as disheartening and difficult to live through as they are.

GLENN DIESEN: During the ancient Silk Road, it was very decentralized simply because you had nomads. No one actor would control the entire transportation corridor. What’s often recognized is the beginning of the 16th century, after the breakdown of the ancient Silk Road when the Europeans took over the maritime corridors, they always had a more monopolistic bend to them because you can always control ports.

It seems as if now, be it the Chinese Belt and Road Initiative, there’s a general decentralization occurring which could also support this.

Anyways, Alex Krainer, thank you so much for your time. It’s always fascinating to speak with you.

ALEX KRAINER: Thank you for having me, Glenn. All the best. And until the next time, thank you.

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