21 May May 21, 2020 – DiversyFund Craig Cecilio and Stealth War General Robert Spalding
Craig Cecilio – CEO & Co-Founder of DiversyFund, Inc.
We use technology to accumulate small amounts from a lot of
people, putting low amounts of money together. We aggregate
that so its the same amount of capital as large investors.
Craig Cecilio, CEO and Co-Founder of DiversyFund, is on a mission to disrupt traditional alternative asset investing and empower the average investor by giving them the same wealth-building opportunities available to the 1%. Prior to founding DiversyFund, Craig worked over 20 years raising and managing over $500 Million in assets. As he watched the rich get richer, he wondered how he could include the everyday investor into these opportunities. Founded in 2014, DiversyFund is a crowdfunding platform that gives average investors access to institutional quality real estate investments from anywhere via their smartphone. DiversyFund isn’t the first crowdfunding platform for real estate investment, but it is the first to offer no-fee, fully-vetted real estate investments. The team’s extensive experience in real estate combined with their expertise in asset management, consulting, investment banking, and technology is revolutionizing the real estate industry by making the investment process simple and streamlined. Today, investors can easily start investing in a variety of real estate opportunities with as little as $5,000 via DiversyFund’s crowdfunding platform.
Brig. Gen. Robert Spalding – Special Assistant to the U.S. Air Force Vice Chief of Staff and Author of Stealth War – Read interview highlights here
We should not send our retirement funds to invest in Chinese
stocks and bonds because they are not required to have
audit and transparency.
Dr. Spalding is an Olmsted Scholar, Special Assistant to the U.S. Air Force Vice Chief of Staff, a Life Member of the Council on Foreign Relations, a Senior Fellow at the Hudson Institute, Washington, D.C., and a Senior Associate Fellow at the Henry Jackson Society, London. Spalding has served in senior positions of strategy and diplomacy within the Defense and State Departments for more than 26 years, and is an accomplished innovator in government and a national security policy strategist. He was the chief architect for the Trump Administration’s widely praised National Security Strategy (NSS), and the Senior Director for Strategy to the President at the National Security Council. Dr. Spalding has written extensively on national security matters. His book, Stealth War: How China Took Over While America’s Elite Slept, reveals China’s motives and secret attacks on the West while chronicling how elite leaders have failed to protect us over recent decades. His work has been published in The Washington Post, The Washington Times, Foreign Affairs, War on the Rocks, FedTech Magazine, Defense One, The Diplomat, and other sites and edited volumes.
Highlights from Robert’s Interview
With all the things going on in the world right now, it’s a scary time. Certainly, our relationship with China is up in the air and I think that’s what I talk about in the book. We are losing; we have lost a lot and we’re losing more. So we lost most of our factories after China under the WTO, millions of jobs. We’ve lost the ability to provide medicines for our people, masks, some PPE for our frontline responders. We’ve lost the components for our military. We’re losing the war of ideas and international order in institutions like the UN and World Health Organizations. We’re losing in terms of our influence around the world because of this incredible, powerful Chinese Communist Party, who use economics and finance and everything else to undermine and suppress democratic principles and essentially erode the democratic order.
So we’ve been in a couple of decade decline because we haven’t been fighting back in the way that the Chinese Communist Party goes to war. It’s really about using globalization and the Internet to undermine and erode us and our allies and partners. It used to be that we could take those $2 gidget widgets from Walmart and when we were done with them, throw them away, and then the empty cargo containers that were going back to China, we would put our recyclables and trash. Of course, they decided a couple years ago to no longer start taking that. So now the trash is just starting to pile up here in the United States. Our focus on consumerism over the health and welfare of our society, the fact that we had people that were in jobs for decades and had healthcare and retirement benefits, that they no longer have and instead they’re driving for Uber or maybe renting out a room to Airbnb as part of this gig economy. That’s what we’ve lost, we’ve lost the ability to provide for ourselves, but also the dignity of work.
One interesting distinction that I make in the book is that China is different from the Chinese Communist Party (CCP). I think it is a fair thing to say and it really represents my experience in China. I went there initially as an Olmstead scholar, I was a major in the Air Force that went to learn Chinese at the Defense Language Institute. Me and my family moved to Shanghai in 2002 and I studied at a university. The Chinese people are wonderful. We traveled all over the country. The history, the culture, the geography, the people themselves are incredible, and in many ways think about family in their lives, much like Americans do. Of course, it wasn’t until later when I became the defense attaché and the senior defense official in China almost 14 years later that I realized, the regime itself, the Chinese Communist Party, the authoritarian totalitarian regime who were suppressing the great Chinese people. I think this is the part that people don’t understand. It’s a society not like ours at all in terms of the citizens actually being citizens, rather they are subjects of the Chinese Communist Party; subject to their oppression, much like Americans before the Revolutionary War were subjects of the King of England and he suppressed them. That’s essentially the lives of the Chinese people today. Essentially, the contract that the Chinese Communist Party gave them said, “We will give you continuous economic growth, we will rob from the west to build these factories to employ you, you just have to give us all the rights to repress you in whatever means we need to in order to do that.”
I think it’s not only likely that five years from now you can buy an America-made aspirin, I’ve actually been talking to people that are working hard to bring back manufacturing of pharmaceuticals; those active ingredients of pharmaceuticals, antibiotics, masks, all of these things into the United States for manufacturing. That process was already ongoing because of the Section 301 investigation and subsequent tariffs, but now it’s going to accelerate because we see the danger and because the US government is beginning to give businesses here in the United States to incentive, that would have them move their supply chains to the United States.
It’s not that simple, like someone assassinates someone in the United States and boom, we’re at war! The reason I think the Chinese sought to use globalization and the internet as the new means of essentially undermining our society is because, war in a post-nuclear world is incredibly risky, it’s incredibly destructive, and I think no nation wants to go there. So I think the Cold War between the United States and the Soviet Union really showed that it’s more of an ideological and an economic competition. Of course, we ended up bankrupting the Soviet Union. Though, what’s happened since the end of the Cold War is the Chinese learned that lesson, took our economy and our technology, reverse-engineered it, and now we’re the ones that are facing bankruptcy and it’s the Chinese that are essentially encroaching on our liberty. So we have to really understand what kind of competition we’re in. When we’re now where the Soviet Union was, we need to understand that we’re being driven to bankruptcy and this is a Chinese goal, and we need to get out of that dangerous cycle. Hopefully, the Coronavirus will give us the foresight to do that.
Now, let me walk you through the economic issues we’re facing. If you want to sue the country, there is a body of theoretical legal interpretation of whether or not we can actually sue a foreign country. Of course, there’s Foreign Sovereign Immunities Act that prevents Americans from suing foreign countries. We did that because we didn’t want to allow for individuals in other nations to sue the United States. So I think we’re going to have to think really hard about how we get reparations. I do think that part of this is going to have to be how we readjust our economy. Even if we are successful in using our courts to seek reparations against China, I think it’s going to be limited to basically what we can seize here in the United States, because of course, they’re not going to pay. So there is definitely a potential for you to take assets of Chinese held here in the United States, but I don’t think it’s going to go much beyond that.
Well, the challenge we face is that everyone is all in for a huge economic war with China, but they need an Apple computer or a new iPhone really bad. So there’s three things actually that I would say. One, Tariff Act to be permanent because they’re a non-market economy. Number two, we should not send our retirement funds to invest in Chinese stocks and bonds because they’re not required by the SEC to have the same audit and transparency requirements. Thirdly, we should not allow US corporations to invest in China because those assets, we count them on their books, but they’re not actually allowed to be brought out strict capital controls in China in a non-convertible currency. So when you put on permanent tariffs, when you prevent our retirement funds from investing, you prevent US corporations from investing, this whole idea of ‘we’re manufacturing in China’ is going to go away. A lot of it will come back to the United States, others will go to either Mexico or Canada or some other third-party where we can be assured of a more level playing field. We should be having no problem with that because we’d love for the economy to grow globally. If they’re playing by the rules and companies are allowed to compete, and they’re in their backyard and they can compete in ours, that’s what the international order was supposed to be. It was supposed to be democratic principles and free trade and rule of law and human rights and civil liberties and self-determination. That’s not what we have today. It’s gone because we brought these authoritarian regimes into the system that don’t believe in those things. So it’s really about recreating that world with those democracies around the world that want to push for the same kind of principles and values that we do.
As for the Hong Kong protests, they’re basically leading to something now. The Chinese Communist Party said in December that they’re going to institute the same kind of measures they did after the Tiananmen massacre in the mainland. So you can expect Hong Kong as an independent part and China is gone.
Now, as far as the origin of COVID-19 is concerned, I think it’s probable that it escaped from a lab. That’s what the Defense Intelligence Agency says, that’s where the evidence is pointing to. I think in terms of what we know for certain, we know for certain that Xi Jinping, the General Secretary of the Chinese Communist Party was in charge of what was going on in Wuhan on the 7th January. Of course, they knew. We have factually known that they knew they had human-to-human transmission on the 13th of January. Of course, they waited until the 22nd or 23rd of January to close Wuhan, in which time 5 million people traveled out of Wuhan; not domestically, many of them internationally in terms of air travel. So now we have the pandemic. So we know for certain they caused the pandemic. Did the virus come from a lab? We think most likely, but there’s no way we’re ever going to be certain of that because we’re not going to get access to the lab or the researchers or their research.
This is clearly a backhand declaration of war. If you up go back and read Unrestricted Warfare, this is exactly what those two PLA colonels were talking about when they wrote in 1999 ‘the new way of war’. We have to face the reality that the Chinese Communist Party doesn’t sync to have a world where the United States citizens can be healthy and happy and thrive. They fear our democracy, they fear the ability of our people to think and feel and be what they want. Essentially, they feel the loss of power. Because the Chinese people would awaken to what our constitution really means, to what democratic principles really are. When you let people know what that is, it is incredibly powerful, and that’s what the Chinese Communist Party fears.
About the situation of Kim Jong-un, it appears to be that he is seriously ill. One thing I will tell you is that China has been perfecting organ transplants for a long time. So if it is a heart problem, they can bring probably a prisoner of conscience or dissident. They can bring him to North Korea, they can essentially put him on a table and pull whatever organs they want out and give them to Kim. So they do have this capability. Whether or not they’re able to do this in time and to keep him alive or we have a new leader, I think it’s hard to say. That being said, the Kim regime has been very successful at these transitions. So I don’t see any change coming anytime soon in North Korea.
If someone asks me to give a grade to United States, I will say I would give us a D or even an F. But if you contrast us, not with China; so forget China, it’s a totalitarian regime, contrast us with Taiwan, which is another democracy 70 miles off the coast of China. They sent their own investigators there in December, they asked the tough questions. When they didn’t get the right answers, they came back and they instituted measures in December to protect their population. They had planned, they had the equipment ready to go, and they could manufacture more if they needed it. They essentially did everything right because they learned from SARS that took place in 2003. So the challenge that we have in this society is that we could have done the same thing and we didn’t. So I think the CDC needs to be reformed, I think the WHO needs to be reformed, I think we need to make sure that we have the ability to make the things to protect ourselves. Then we need to understand the implication of being connected to a China that’s willing to send people on airplanes that are infected, that causes a pandemic in our own society. So all of these are things that we need to really reflect on and really get better at.
Moving on to the role China plays in United States’ voting ethos decision on November 3rd this year, I can’t speak for your voting ethos, but I can tell you that it’s really about China. It’s really about the Chinese Communist Party, it’s really about restoring what it means to live in America, to have opportunities. America lost that, we lost that with globalization and the internet after the end of the Cold War. We stopped taking care of our citizens, we stopped focusing on investing in the country and our infrastructure and our manufacturing, in our science and technology and our STEM education; all of these things we were investing heavily in the 50s, 60s and 70s because of the Cold War. Then all of a sudden, we stopped and we said the government is not going to get into promoting our economic welfare, our science and technology superiority. That was a huge mistake. Instead, we built weapons, we went to drawn out wars in the Middle East that drained our coffers. We saw science and technology leave and go to China, we saw a lot of very talented scientists go and work with China to help because they were investing in research. So these are things that we have to take seriously, that we have to reinvest in ourselves and in our people, and watch this country grow again and be the kind of nation that we ought to be. That’s what 2020 is about. A big part of it is China, but a big part of it is just what kind of society we want to be.
Well, I think the private equity models and a lot of the economic models of the last 20 or 30 years has really led to a lot of wealth destruction in the United States. There’s a lot of leveraging up companies and then taking your returns selling the companies. Of course, they go bankrupt, then the people are out of work. You have this pattern behavior happens over and over again in the United States, that’s really focused on shareholder wealth and not focusing on the overall health of the US economy. It’s not just about GDP, it’s not just about this capitalization of the stock market. It’s really about the Americans that they have the ability to live the kind of lives they want. This is what’s happened in our society, that we’ve had so much consolidation of industry because of this behavior, that we’re not an innovative economy anymore. We don’t have a lot of competition going on because we have so much market concentration.
So I think it’s time to get back to the kind of country that we were, and we can do that. This is not hard, this is not rocket science, it’s really just thinking differently about how we organize our economy; promoting entrepreneurship, providing resources and capital for those companies that want to grow and do innovative things. That’s what China is doing now and they’re doing a lot of it with our own money, but we can take our own money and begin to do those things. So we’re not going to get saved by the Intel’s and AT&Ts of the world, it’s really those small companies that are going to start to grow and be innovative. We need to give them access to capital. That’s what the Chinese Communist Party did. They didn’t have market reforms, they basically created ubiquitous access to capital. Particularly, if you were doing things in ways, or technologies or industries or markets that the Chinese Communist Party wanted to be dominant in, then they would promote you and they would put in market mechanism or an anti-market mechanism to prevent competition for you. So you can grow your business. I’m not saying we need to become like them, but what I am saying is we need to provide access to capital and become the kind of innovative and explosive economy that we used to be.
I really believe that God gave us a brain to use it to consider the problems of the world, consider our own problems, and really not look for those easy answers that somebody wants to spoon-feed you. These questions, they have answers, but people tend to just think that somebody else is going to do the thinking for them. A lot of these people that are doing the thinking for them aren’t actually doers. They’ve never done anything. They have a model or they have some ideas or theories, but in terms of practice or application, that doesn’t happen. So I think we need a lot more people thinking.
The book is called Stealth War: How China Took Over While America’s Elite Slept. You can find out more about me online on “GeneralSpalding.com”. I’m on Twitter @Robert_Spalding.