https://youtu.be/HiFk9ipQki8
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the people and legislators of Iowa need
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to understand that the Iowa Public
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Employees Retirement System and route
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and similar public pension systems
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throughout America are holding a number
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of malevolent Russian and Chinese
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enterprises in their portfolios for
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state employees this has come about
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because the interest is in return on
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investment and the position that Russia
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and China enjoy in the emerging markets
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in the case of China the lead player in
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the emerging markets but that’s no
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excuse for choosing into to having your
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portfolio’s serious egregious human
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rights abusers and country and and
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activities that have contravened the
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vital security interests of the United
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States we have for example in the I
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purse Iowa Public Employees Retirement
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System eight Russian sanctioned
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companies sanctioned by the United
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States that you’re not allowed to do
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business with them by law but you’re
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able to invest in them you’re able to
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fund them you’re able to give them all
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the prestige of being in the world’s
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most voluminous and deepest markets
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something they take to the bank every
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day around the world is the Good
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Housekeeping Seal of Approval far from
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sanctions these are rewards in the case
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of China it’s a much bigger problem by
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orders of magnitude there might be 25
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Russian companies in the US capital
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markets compare that to probably over a
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thousand in the case of China there are
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reports that estimates that as much as
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three trillion dollars of Americans
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savings and investment funds have been
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extracted from the US markets in the
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form of equity and debt offering stocks
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and bonds that they have put in our
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marketplace and move that money into
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China
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or their seemingly unlimited checking
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account to move around the world
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compromising countries capturing nations
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capturing regions and continents like if
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you take Africa in other words the
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malevolent use of those funds the reason
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that there appear can your competitor
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with the United States militarily are
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striving to do so and are trying to do
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the same in the technology field is
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because we’re picking up that tab I mean
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this is the sad truth of the matter the
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US capital markets it’s important to
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remember I have over sixty percent of
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the world’s liquidity all of the capital
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markets of the world’s combined are not
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the size of ours so it’s not as though
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China has some place else to go when the
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21st century rolled around we had all
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the money it’s one of the great
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monopolist monopolies of the United
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States in the sense that we have this
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absolute dominance in this financial
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domain on this planet China knows this
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they’re in desperate need of dollar
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liquidity they are not tapping that
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three trillion in reserves they need
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that there to ward off actual diligence
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being performed by the people that want
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to do business with them so they don’t
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touch that and I can tell you that they
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don’t have all kinds of walking-around
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money that seems to be limitless when
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you look at their activities so the
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state public pension systems are a
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wonderful boon to the Chinese economy to
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its military to its intelligence
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services and to their effort to
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undermine our vital interests to put
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them in a position where they could
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actually defeat the United States and
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put at risk if not destroy all that we
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hold dear the stakes couldn’t be higher
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I mean we’re talking about again trey is
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a dollars not hundreds of billions or
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certainly not tens of billions so when
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we look at each of the public pension
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funds and I don’t mean to single out
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Iowa as having been particularly
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egregious or malfeasant this is true
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of your 49 other state counterparts so
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you have lots of company but the point
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is that you need to look at this because
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there’s been no screening mechanism set
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up in your state or the other states to
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look at the material risks to share
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value in corporate reputation to these
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Chinese and Russian enterprises that are
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associated with human rights and
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national security abuses of this kind
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that’s what puts American investors at
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risk is material risk is this isn’t just
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an ideological conversation I’m having
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it’s a market oriented sensible risk
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related conversation and that is
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something that any fiduciary should care
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about this is not politicizing your
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pension system this is not contracting
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your investable universe
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this isn’t jeopardizing the free flow of
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capital around the world all of the
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arguments that Wall Street wants you to
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believe that’s just not the way this is
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this is about risk and more importantly
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it’s also about callousness I mean for
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example Iowa pers holds hikvision
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Technologies now what do they do for a
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living well one of the things they do is
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if you look at the concentration camps
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in chin John that are holding over a
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million Weaver’s you’re gonna find at
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the top of these walls along with Bob
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wire every few meters are hikvision
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surveillance cameras if you talk about
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facial recognition technology at train
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stations and Tibet rounding Tibetans up
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you’ll find the company as well is this
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something that the people of Iowa had in
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mind with their retirement dollars to
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support concentration camps another of
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your companies is av China
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it’s short for Avik is the whether I
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should say the short form name China
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aviation and technology something like
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that but nevertheless the point is what
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do they do for a living well they make
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the DF 41 ICBM that
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half a half an hour flying time to
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American cities and American families
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you have fighter aircraft I / I mean
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Iowa pers also holds China shipbuilding
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they make nuclear ballistic missile
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submarines they make nuclear aircraft
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carriers for a living now where do we
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think that these kinds of advanced
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weapon systems are going to be directed
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they’re directed at us so this is more
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than just a again a purely financial
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argument but the whole thing can be
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justified I think in market practices
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and what should be SEC regulations that
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are enforced on ensuring the disclosure
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of these material risks at minimum to
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the people of Iowa and for that matter
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to the people of the United States I
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mean how many people do we have on the
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markets today in our country 150 180
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million Americans something of this kind
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you know China is racing to extract and
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or to make us more dependent on their
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stocks and bonds they’re flooding if you
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will our market with dollar denominated
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bonds as well as new equity offerings
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again at the end of the day this is fund
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raising if they were to attract as they
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want to two to three trillion dollars
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more in the next say twenty four thirty
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six months you could have a day where
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Americans wake up a hundred and fifty
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hundred eighty million of us and find
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that 17 percent 22 percent 25 percent of
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our retirement portfolios of our
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investment portfolios are all in Chinese
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securities a number of them bad actors
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now just imagine that day when the China
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Lobby as is famously called has scores
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of millions of Americans joining in the
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because of their vested financial
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interest in opposing future sanctions or
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penalties against China independent of
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the severity of the offense why because
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they’re worried about the damage to the
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value of their investment portfolios do
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we really think that China’s not alert
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to this stealthy effort to make us
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beholden to them do we really believe
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that they won’t use that kind of
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leverage if they have it I mean you see
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the way they they save a rattle about
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withdrawing in one fell swoop they’re
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1.1 trillion dollars in in Treasury
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bills for example of course it wouldn’t
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have that draconian effect as they’d
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like us to believe but nevertheless they
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are all about using whatever leverage
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they have to ensure that they maintain
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unfettered access to dollar liquidity
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and the vast capital markets that we
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have in our country that are again
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second to none and where they have
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nowhere else to go so I would think that
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during this period when presidential
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candidates are rolling through the
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states they should be asked how what was
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their position on the fact that we have
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hundreds if not you know over a thousand
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Chinese companies some of them again bad
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actors by any measures human rights
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abusers national security abusers what
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are we doing about the fact that we’ve
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never screened them out even though they
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represent an asymmetric material risk to
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share value and corporate reputation
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these companies in China don’t disclose
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their financials they’re regarded as
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state secrets how do you performance
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diligence on them they don’t adhere to
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the piece PCAOB audits which all of our
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American corporate counter
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arts have to be part of or subject to if
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they’re going to participate in the u.s.
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capital markets what about the fact that
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China is not complying with dodd-frank
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and sarbanes-oxley u.s. securities laws
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do you think that our companies can get
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away with that think again no way so
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China is receiving preferential
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treatment presidential candidates should
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be asked why this this this conversation
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is more important than the trade
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portfolio
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I know trades getting all the attention
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it’s but it’s the shiny object that
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China wants us concentrating on because
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they can have that conversation and
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whether tariffs all day long all year
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long as they’ve proved they don’t like
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the technology restrictions as we’re
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waking up to the fact that we’re being
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they’re stealing us blind on the
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technology front and they’re using it
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right into their advanced weapons
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systems and other malevolent purposes so
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they don’t like that but the one issue
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that they’re most concerned about I
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would argue that the one that they can
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least afford to ever see the light of
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day is the money is the money and it was
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the same case with the Soviet Union I
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mean why did we really think the Soviet
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Union went down they were bankrupted in
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large part by the Reagan administration
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and that story hasn’t been fully told
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but believe me the Chinese have a
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voracious appetite for America for
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dollars their currency is not
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convertible so I would only say that we
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have to be vigilant and disciplined in
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the way we do business with China just
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as we are in the trade front at least it
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has the Committee on Foreign Investment
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in the United States that’s trying to
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screen and monitor what kind of
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investments they can have that don’t
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compromise our security interest well
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where is that screening mechanism on the
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cap markets non-existent where is the
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intelligence community looking at who is
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coming into our market
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and profiling them to find out who are
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they really what kind of abuses have
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they been involved in what about their
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subsidiaries
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Avik that I was mentioning to you
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earlier has been sanctioned by the
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United States on five previous occasions
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for reasons of proliferation of weapon
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systems as ete is the same China Unicom
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is owned by Iowa pers and they’re
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responsible for telecommunications and
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and air defense communications in the
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South China Sea they’re the only
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internet provider for North Korea is
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that a company that Iowans feel
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comfortable holding in their portfolios
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so there’s a lot of data available here
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I mean there’s stocks there’s bonds
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there’s exchange-traded funds they’re
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ones that you hold actively in the sense
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that you choose those individual stocks
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and they’re ones that appear in index
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funds so we have this information we’re
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happy to share it with you and plan to
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but the people of Iowa need to go to
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their state legislatures and the state
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legislators themselves need to become
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activists on this and maybe put on a
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leading position of caring about this
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issue I mean we have to care about you
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know where our money is going and how
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it’s being used I mean this is just
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rudimentary and yet it’s never seen the
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light of day you’ve never had heard a
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conversation about it I daresay you’ve
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never seen a state legislature debate
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you’ve never seen it on TV you’ve never
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seen it in one interagency meeting in
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Washington you’ve never seen it in one
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congressional hearing and before March
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of this year when we started to to go
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public with our research findings you
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didn’t find it in any article or any
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media outlet so again we’re in new
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territory here but this is the mother
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lode this is the most coveted China
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dream to quote President Xi that they
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have
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is to load us up with their stocks and
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bonds so that we in effect we’re
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beholden to them and at the same time
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they get the kind of vast funding that
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they need to maintain this seemingly
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invincible juggernaut that’s appeared on
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the horizon to challenge us in every
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sphere and to put at risk our primacy in
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the world and to defeat our way of life
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let’s face it I mean this is a
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totalitarian or authoritarian to be sure
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police state and it’s not pretty and
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even on the those that don’t care about
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national security should darn right care
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about human freedom what about the
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surveillance state that’s being funded
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here what about those concentration
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camps so this is on a bipartisan issue
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this is an American issue and I urge you
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all of you to take it seriously and
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those journalists to write about this
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and let’s get these statistics and these
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facts out there because they’re not my
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opinion they’re empirical that’s the
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beauty of Finance they you can write
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them down and there they are and then
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you can just choose what you’re going to
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do and I certainly hope that the
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audience’s that are going to view this
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today will take this seriously and
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understand that we’re in this together
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and we need to be vigilant thank you
[/expander_maker]
