If you want to become a dictator one day, be sure to keep reading.
I’m coming to you from just outside Manapouri in New Zealand. The week’s big news is that the judicial reforms being pushed by Israel’s Prime Minister, Benjamin Netanyahu, have been put on hold.
Dictatorship 101 states that the first step towards lifelong power is breaking the independence of the judicial branch. Once that is gone, nothing is preventing you from rising to power. Thankfully, Defense Minister Yoav Gallant was able to prevent this from happening in Israel…at least for now.
Attacking the judiciary is no secret, and it can be highly effective when done correctly. Two failed attempts at this are Trump and Bolsonaro. Their attempts to challenge the electoral process were laughed off because they failed to disrupt the judicial branch effectively. For all intents and purposes, that’s probably for the best.
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everyone. Peter Zeihan here coming to you from just outside of the southern New Zealand town of Manapouri. The big news that has happened in Israel today or earlier this week is that the judicial reforms that Benjamin Netanyahu, the prime minister, had been trying to push through for a few weeks now, have been, at least temporarily halted.
Now, let’s say that you’re the leader of a country in the free world, and you decide you want it to be in the not so free world so that you can rule pretty much forever regardless of what your motivation is. The first the most important thing that you need to do if you want to hang on to power is to break the independence of the judiciary. Now, you already control the executive branch, at least in part, and the legislative branch that can ebb and flow based on public opinion and elections. But the judicial branch is always the block that prevents authoritarians from rising to power. If you can break that, then you can rule forever.
So in the case of a number of situations throughout recent history, especially in Latin America, in the 1970s and 1980s, local would be dictators would be authoritarians. Breaking the judicial branch was always the first thing to do. And in more recent times, folks like Erdogan in Turkey, that was the first thing you after Viktor Orban in Hungary, that was the first thing he went after. The Kaczynski twins in Poland, that was the first thing that they went after. And in doing so, they’ve basically ensconced themselves as the only power that matters, because once you break the judiciary, it’s just a matter of having some sort of break in public opinion or an election and then the broken judiciary will interpret things your way.
In the case of Netanyahu, he was under a series of corruption investigations. You can say that they were politically charged. You can say that they were real. Doesn’t really matter. With the judiciary intact, those investigations will ultimately go forward. And the only way he can retain immunity is to continue as being prime minister. But as you might have noticed, Israel is a bit of a national security state and the judicial reforms that Netanyahu was trying to do were so damaging to the fabric of the political system that his own defense minister, defense in Israel is a big thing, stood up and said that this has to stop. Netanyahu fired the dude earlier this week, which meant that the coalition that allows Netanyahu to even be prime minister in the first place was suddenly in danger. And so he had to back down, at least for now.
Now, there are other countries that are kind of in play with the same sort of factors. The two that are the most important are Brazil and the United States. In those cases, you’ve got Jair Bolsonaro of Brazil and Donald Trump of the United States who have both attempted to subvert the electoral process in order to remain in power. But neither of them were capable or competent or whatever the word is you want to use to come up with the idea of breaking the judiciary first. So in every instance where some ally of Trump or Bolsonaro brought a legal case to court to attempt to challenge the electoral system, those cases were laughed out of court by none other than the judges, in many cases the judges appointed by these two men in the first place. So for those of you who are concerned about democracy in the United States and Brazil, I don’t mean to suggest it’s a non-issue. But as long as the courts hold firm and to this point, they seem fine. Even the courts whose judges were appointed by Donald Trump have stood firmly to a man against every single case that has been brought forward to challenge the last general election. We’re okay. And for those of you who are Trump supporters, think of it this way. We survived eight years of Obama and we’re fine. We can certainly survive four years of Donald Trump not being the president.
Despite the threat to Turkey’s national security that a Russian victory in the Ukraine War poses, the Turks are taking a far different approach to international affairs than Japan…and it makes a lot of sense when you take a broad look at Turkey’s geopolitical situation.
Unlike Japan, Turkey doesn’t need to buddy up with the US to ensure a bright future. Turkey has some of the strongest demographics in G20 — thanks to high birth rates and a young population. They are blessed geographically — a land invasion would be futile since they are located on a peninsula and they fall at the crossroads of Europe, Africa, and Asia, so trade isn’t an issue.
Turkey’s main concern with the Ukraine War is that if Russia wins, they will likely head after the Bessarabian Gap next and jeopardize the Turkish Straits — a.k.a the heartline of the Turkish economy. This is one of the main reasons Turkey has stuck with NATO, as they are patrolling these areas.
Outside of the protections offered by NATO, Turkey is broadly self-sufficient. Even if they left NATO, they still have a massive army to protect themselves. Thanks to recent industrialization efforts, they are a high-value-add society, they produce much of the necessary foodstuffs to feed their population, and their energy needs can be imported from several different places.
While the Turks don’t want to see the Russians win, they know the value of keeping them around. Until recently, Turkey was profiting off Russia by providing them with a number of materials on the secondary markets and access to the US/EU financial markets. NATO has recently cracked down on this issue, but it shows that Turkey is navigating this situation with one goal in mind: to position itself as a significant world player for years to come.
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everybody. Peter Zeihan here coming to you from the tail end of the Routeburn Track on the way to the divide. Sorry, no scenic highway. It started raining last night and hasn’t let up and the view is well….white and trees. Anyway, yesterday we talked a little bit about how the Japanese have realized that they’re never going to be a singular great power again and so have found a way to partner up with the country that is most likely to either encourage them or dislodge them and that’s the United States. And today we’re going to talk about Turkey in kind of the same context.
Now, unlike the Japanese, who have admitted that they will never be the dominant naval power in the Pacific and never the economic power of the Pacific again. The Turks are nowhere near that stage and with good reason. Their geography is different. Their economic structure is different. Their demographics are different. Demographically, they are the youngest of the G20 countries. With the exception of Argentina. And they’ve got the highest birthrate again, aside from Argentina, which gives them a lot of opportunities moving forward. Meaning that if current aging and urbanization trends continue, they’re not going to face a German style situation within the next 50 years. So you know, they’ve got the most valuable of commodities…time. Second, they’re on a peninsula, so it is relatively difficult to attack the Turkish space by land and to make sure that no one tries. Turkey today maintains the second largest army in NATO. So unlike the Japanese, who were overwhelmed back in the forties by American naval power, there’s really no one even on the horizon who could potentially challenge the Turks at home. As to their neighborhood, Turkish interests are a lot more varied and there are a lot more questionable calls. I mean, the Japanese, they’re a series of islands with very few resources, so they have to go out and there’s certain things that they have to achieve in terms of security and economic control or at least influence in the Korean Peninsula and Taiwan, and the Chinese mainland and Southeast Asia and all the sea lanes going across the Pacific. They really have to have it all if they’re going to succeed, and they know they can only get that all hand-in-glove with the United States. Well, the Turkish situation requires a lot more thought, not because there’s “a” right answer, but because there’s many potential opportunities. They have interests in the Caucuses with Armenia, Azerbaijan and Georgia. They have interests in northern Iraq and the Levant, which involves the Israelis, the eastern Mediterranean, which of course involves the Egyptians, the Aegean Sea with the Greeks, and most importantly, in my opinion, in the Eastern Balkans, with Bulgaria and Romania. And that’s where today’s conversation kind of takes us.
There are plenty of hot takes out there, including for myself, on how this war may or may not roll out. We’re talking about Ukraine now. But if the Russians are successful and honestly, still by the numbers, this is still Russia’s war to lose. Ukraine will in time fall. And the place that the Russians are most likely to turn to next is a zone of territory called the Bessarabian Gap, which makes up what is today’s Moldova and a northeastern slice of Romania. Roughly 20% of Romania’s territory. Because the Russians see the Bessarabian Gap as one of the primary invasion zones that access the Russian interior and they want to concentrate a military footprint in that zone to make sure that no one can try. Well, the Turks see it basically the same way just from the other side. A number of assaults that have come for Istanbul over the millennia have gone through that same gap. Right now, the Turks kind of have the best of both worlds. It’s NATO’s territory. And so it has NATO’s security guarantee, especially the Romanian chunk. But the Turks don’t have to plug it themselves. So they’re a big beneficiary, almost incidentally, from the current security order. But if the Russians were to take that, then the Turkish heartland, the Turkish capital, the Turkish Straits, would all be directly vulnerable to Russian power. And the Turks cannot tolerate that. So the primary reason that the Turks are still remaining engaged in the NATO alliance, at least for the moment, is because of that promise of a security block in that zone. And if, for whatever reason, the Americans back away from Ukraine, the Turks would have no choice but to step in directly and partner with Romania. And forward position military forces in the gap to make sure that the Russians can’t try anything cute.
But on the broader issue of power, Turkey is just in a better position than the Japanese are. We’ve already talked about demographics in terms of geography. It’s not like they’re kind of dangling at the end of Asia. So they need a globe spanning Navy to access raw materials and resources markets. They’re at the crossroads of Europe and Africa and Asia. So as long as there is trade, whether it is by water or by land, the Turks have some cards to play. In addition, whereas the Japanese have bit by bit deindustrialized and moved into services and high tech. Over the last 30 years, the Turks have been rapidly industrializing, in part to serve as a kind of a supply depot and a middle manufacturing zone for the Europeans, much in the way that Mexico does with the United States. And in terms of value add, if you compare the cost of the stuff that goes in versus the cost of the stuff that comes out, Turkey is one of the most high value added economies in the world already. Turkey is broadly self-sufficient in all the foodstuffs that it produces for itself and never kind of got into this craze that a lot of countries have, that they have to have organic avocados that are out of season. So even if global trade shut down tomorrow, the trade system would be broadly okay. And for energy, they may be a significant importer of everything but coal. But the places that they have the options of importing from are many. Today, they’re getting a lot of their natural gas and oil from Russia, but tomorrow could very easily be northern Iraq or Azerbaijan. In fact, several of those pipelines are already in place, and it’s only been some political squabbling that has kept them from running at full capacity. So nothing like a blackout to motivate.
And so what we’re seeing in terms of how the Turks versus the Japanese are dealing with the Ukraine war, the Japanese have signed on to the American led system. And so they are going in up to their armpits with helping out the Ukrainians. However, is appropriate for their own cultural MAU. The Turks have been a lot more circumspect. They definitely, definitely, definitely don’t want the Russians to win, but they see the advantage of not having this blow up and have the Russians just disappear altogether, especially if you think, like I do, that ultimately this is Russia’s war to win. Now, to that end, the Turks have been very active in not so much bypassing the sanctions that are on Russia, but providing the Russians with ways to get around them. So there are a lot of things that are under secondary sanction restriction like semiconductors that the Turks have been importing four or five times as much as they normally do, and then they’re just selling them on to the Russians. There’s a very strong mercantile culture in Turkey. If you’re familiar with Star Trek, this is basically a nation of Ferengi when it comes to trade. There’s also been a number of banks within the Turkish space that have helped the Russians access the dollar and the euro market because the Russians discovered early on in the conflict that Yuan aren’t worth the paper that they were printed on. Basically, if you buy Yuan assets, you’re stuck with Yuan because the Chinese don’t want it back. They find their own currency borderline useless. So that little mistake cost the Russians a few hundred billion dollars.
Anyway what’s changed in the last couple of weeks is that the two things, number one, pressure from Europe and the United States on the Turks to push stricter compliance with the secondary sanctions regime has been fairly successful and the Turkish government is now shutting down a lot of these middlemen that allow banned goods into the Russian space. We’ve already seen semiconductors from things like washing machines end up in Russian cruise missiles. So it’s clear that the Russians have been working to establish an alternate supply system, and anything that chokes that off is going to force them to start over. Second, the banking issue, the federal government in the United States has specifically warned the Turks, if they don’t cut that out, that they risk pulling under the sanctions themselves. And that didn’t require a lot of prodding from the Turkish government to the Turkish banks were like okay, message sent, you’re serious about this and they kind of shut down that window as it was.
The bottom line here is that the Turks have a little bit more wiggle room, despite the fact that they are more exposed to the security issues that are going on in Ukraine. And because they see themselves in the long run as having options to great power hood, which is an accurate assessment, they don’t want to just follow blindly in the way that the Japanese are willing to. This is a country that in the long term is unlikely to be part of the American Alliance Network because it’s going to lead its own. And who all gets involved in that will in many ways be dependent upon how the war in Ukraine proceeds from this point forward. Because if the Russians do prove to be successful, well, then Bulgaria and Romania are going to be the first countries to sign up willingly for a Turkish centric defense system.
Alright. That’s it for me. I’ll see you guys in drier weather.
As Japan prepares for the G7 Summit, the topic on everyone’s mind is the Ukraine War. By providing aid to the Ukrainians, the Japanese have given us a glimpse into how far the country has come and how they strategically positioned themselves for the years to come.
To appreciate how significant this is, we must look back on the overwhelmingly nationalistic history of Japan. The geographic separation of the country has always necessitated a robust naval presence, which naturally lent itself to rapid technological advancement and the development of a superiority complex. Conquering China and Taiwan and the attack on Pearl Harbor are just a few examples of this in practice.
Fast forward to the 90s and a financial crisis struck Japan, amplified by urbanization-induced demographic decline. Those nationalistic tendencies began to fade, and by the late 2010s, a new Japan was born.
The Japanese now realized how important it was to develop a strong relationship with the United States. By signing a (rather humiliating) trade deal while Trump was in office, they signaled to everyone that they understood where the world was headed. As other countries began to back away from their trade deals once Biden entered office, the Japanese doubled down.
Ten years ago, we would likely have seen the Japanese remain neutral in conflicts similar to the Ukraine War. Today, Japan’s support for Ukraine is just one example of how vital it is to understand deglobalization and the increase in global conflict.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Russia has long operated under the guise of “strategic partnerships” to keep its enemies within striking distance. Putin and Xi’s partnership is no different. However, only time will tell who will end up with the knife in their back.
For both sides, this is an alliance of convenience enabling them to get around some sanctions brought on by the war in Ukraine. But the Chinese might be looking to gain a little more from this relationship. Xi’s recent meeting with the leaders from Uzbekistan, Tajikistan, Kyrgyzstan, and Kazakhstan is indicative that a move on the Russian space could be in the cards.
One of Putin’s motivations for the war in Ukraine is to take control of the geographic access points used to launch assaults against the Russians. Can you guess where one of those access points just so happens to be? The Altai Gap…which connects Russia, Kazakhstan, and you guessed it, China.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
We’re starting the day off with a bit of optimism thanks to the demographic outlook of Southeast Asia. This region of the world is primed and ready to boom; all it needs is a bit of money and tech to get the party started.
Why am I so bullish on SE Asia? It’s one thing to have a single country with solid demographics, but throw a whole bunch together, and their strength amplifies. Myanmar, Cambodia, and Laos are child-heavy and can handle the low-skill jobs for years to come. Vietnam and Indonesia are a bit older, have fewer kids, and have the time and ability for the medium-skill jobs. Singapore and Thailand are the oldest of the bunch but have developed the technical skills to handle the high-skill jobs.
Southeast Asia is like the neighborhood we all want to live in. No animosity between neighbors (since geographical barriers prevent wars). Everyone brings something unique and valuable to the table (differentiated workforces). What more could you ask for?
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey, everybody. Peter Zeihan here. Coming to you from Ojai, California. And as promised today, I wanted to talk about demographics in Southeast Asia. A portion of the world that I think is going to do very well in the decades to come.
Now, if you remember correctly, when I did the first issue of this series, we talked about how different population structures make for different economic structures. So if you have a lot of people age 20 to 40, you tend to have a really strong workforce and a good consumption base because those are the people who are building their homes and raising kids. If you have a lot of people aged roughly 45 to 65, you tend to have a very productive worker base because these are people with decades of experience behind them. And if they don’t have a lot of kids, all the income of the society, all the taxes generated can be focused on infrastructure and on the job training making for a very, very, very skilled workforce. One of the reasons I’m so bullish on Southeast Asia is because it’s got both of these in balance.
So on the bottom you’ve got countries like Myanmar and Cambodia and Loas who are very child heavy and they can be a workforce not just now but decades into the future. So if the money is made available, if the regional demand for the services is there, you have a very large, low skilled workforce. In the middle you’ve got a lot of countries like say Vietnam particularly, but also Indonesia and to a lesser degree Malaysia, who are a little bit older, don’t have a lot of kids relative to the overall population structure, but a lot of people who are age 20 to 45. And these are countries that, as a rule, are kind of having their day right now. The more problems that the Chinese have with keeping investment, the more diversified folks are looking to make their supply chains globally, the better these countries look. Vietnam in particular, is getting in on this in a very big way with education. And about 40% of their college graduates are in STEM. You know, that’s like four times the global average. And then at the top, you’ve got a number of societies like Singapore and Thailand, which are aging pretty quickly. They had their day as a low cost wage destination a couple decades ago. And now you’ve got a lot of people who are in their forties, fifties and even early sixties. They’re aging quickly. Looks a lot more like Northeast Asia than the rest of their neighborhood. But the accrued technical skills in these populations is huge. And plus, especially in a place like Singapore and Thailand, punches well above its weight as a mid-range destination. And having these all in the same neighborhood really helps with manufacturing.
So one of the things you want to do for the more complex manufacturing products, whether it’s cell phones or electronics or computing, is not everything requires the same skill set. The person who does the injection molding is not the person who does the wiring harness, is not the person who does the chips, is not the person who does the assembly. Each of these has a different wage structure, and in that sort of environment, variety is everything. And proximity is everything. And this is the world’s most differentiated workforce, all within the same region. So you throw a little bit of Japanese or American technology in there, maybe some Chinese assembly on the back end. And this area is set to boom.
Best part yet because this region is made up of mountains and peninsula shores and islands and jungles. They’ve never had a history of going to war with one another because they can’t get to one another. So they don’t have the history of animosity that we see in, say, Europe or Northeast Asia. Add it all up. And this is the part of the world that I expect to grow the most rapidly in the 30 years to come with demography at its heart.
I may have ditched the “howdys” and “y’alls” for the high mountains of Colorado, but Austin remains part of one of the fastest-growing economic and urban zones in the western hemisphere. However, Austin can’t credit all of its success to the “Keep Austin Weird” bumper stickers…
The key here is in the neighborhood. It’s a blue city in a red state, so they get low taxes and a high level of city services. More importantly, Austin falls right in the middle of the Texas Triangle – a zone comprised of San Antonio, Houston, and Dallas.
Houston is an energy hub and heavy into manufacturing. Dallas is an auto and aerospace hub. Both of those are financial centers in their own way. San Antonio offers a low cost of living and low labor costs. Austin happens to be the missing piece in the Texas Triangle, high-end tech. Austin can operationalize the research the other cities need and disseminate the plans from there.
It doesn’t look like Austin’s growth will be slowing down anytime soon. As the world faces deglobalization, Texas (the triangle specifically) will play a critical role for the US.
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everybody. Peter Zeihan here coming to you from the Lamar Passenger Bridge in downtown Austin. As some of you remember, this was my home for 20 odd years. And I am proud to say that the city is still doing strong.
Austin is at the middle of what is called the Texas Triangle, which has been the fastest growing economics and urban zone in the Western Hemisphere for about 25 years now. And the story is in the neighborhood. So Texas is a red state. So the taxes are low. In fact, in the state of Texas, there is no income tax at all. But this is a relatively blue city, so it has a reasonably high level of city services. That sort of combination has really helped urban areas in a similar match, places like Lexington, Kentucky or Atlanta, Georgia.
But there’s more than that. The Texas Triangle, as you might expect, has three major urban zones of which Austin is not technically one. The big three are San Antonio, Houston and Dallas. Houston is obviously an energy and heavy manufacturing hub. Dallas is an automotive and aerospace hub. Both of them are financial centers in their own way. And then San Antonio has lower cost of living and lower labor costs, and so is great at mass manufacturing, especially in automotive.
Where Austin plugs in is on the higher end. There’s an area to the northwest of town called Silicon Hills, which, as you might guess, is kind of an echo of Silicon Valley, but where Silicon Valley focuses on the base research and being a hotbed of core tech innovation. Austin takes a lot of that research and then turns it into operationalized development plans, which are then applied throughout the rest of the Texas Triangle. So it’s not that Austin could do this by itself, but Austin, plugged into the triangle, makes it the perfect interlocutor for everything, for turning modern manufacturing into reality. And if you see kind of behind me, you know, there’s quite a skyline here. This is a city that as recently as 1985 only had about 600,000 people, and now they’re over two and a half million in the entire metro. And all of the buildings in the immediate background were not there when I moved to Austin back in 2000. And the ones a little bit further back now, maybe two thirds of those are new in the last 20 years. So Austin has been one of the top ten fastest growing urban centers in the Western Hemisphere now for almost 30 years straight. And even though it is the most expensive city in Texas, and even though the cost of living has now risen above the national average, it has a long way to grow because it can physically grow to the northwest, the north, the northeast, the east, the southeast, the south and the southwest very easily. And the land just to the west where I used to live is called the Hill Country and as you might guess, it’s hilly but not mountainous. This is an advantage that a lot of the Texas cities have. They can just physically expand with reasonably few restrictions.
The changing situation with the Ukraine Grain Deal has given me plenty to ponder while tromping through Fjordland in New Zealand. Due to the war, Ukrainian agricultural exports were reduced to a fraction of their pre-war numbers. The grain deal brokered by the UN was a glimmer of hope that perhaps exports wouldn’t entirely fall off the map…
With winter on the way out and summer just around the corner, the Russians are revaluating their strategy. Targeting power infrastructure may have worked during the winter, but it doesn’t make much sense for the warmer months…it appears the new target will likely be Ukrainian agriculture.
We’ve already seen the Russians change the renegotiation period of the grain deal from 120 days to 60 days, and I wouldn’t be surprised if March is the last time the Russians resign. So Ukrainian exports might fall off very soon, but can the rest of the world’s (already struggling) agriculture industry pick up the slack?
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everybody. Peter Zeihan coming to you from Ruby Baby in Fjordland in New Zealand. The big news that I’ve noticed is that the Russians are throwing a bit of a fit about the grain deal they have with the Ukrainians. Now Ukraine until very recently was one of the world’s five biggest agricultural exporters for wheat, number four in corn, number one in sunflower you know all important things that help prevent a lot of countries from starving to death. Well, the problem is that most of the stuff that comes out of Ukraine is shipped by water. It’s far easier to ship things by water than it is by land. In terms of rail versus water, about a 3 to 1 cost difference. And Ukraine is perfectly set up for that because they’ve got the Dnieper River that cuts right south to north through the middle of the country. And so everything just gets on a barge, goes out, eventually hits the sea cities Kherson and Odessa, then are put on the big altars and then taken out through the Black Sea, the Turkish Straits and the rest of the world. What has happened, however, is with the Russians first capturing Kherson and then putting Odessa under assault, this is all been disrupted. So the only way to move things out of Ukraine at present is by rail. And not only does Ukraine not have a well-developed rail system. It doesn’t use the same gauge as the European ports. So it’s been very, very difficult, to get much out. Really less than about one out of six vehicles that they used to ship, they can ship now.
Now, the Turks in league with the United Nations have convinced the Russians to sign on to a grain deal. And this grain deal allows ships to come into Odessa, get searched by the Russians on the way in to make sure they’re not carrying weapons and then load up with grain and they get searched on the way out to make sure that they’re not carrying anything that the Russians don’t want to get out. This has increased the volume to about 20 to 25% of the volume that the Ukrainians could do before the war. So still not great.
Now, if you’ve been following the war, you know that throughout the winter the Russians have been bombing the power grid with drones and missiles to try to kill as many Ukrainians as possible. They’ve been doing this in the winter, thinking that if you can freeze the country to death, many tens of thousands, if not hundreds of thousands of people will be injured or killed. And that might weaken the war effort. Once we get to summer that’s going to change. So what the Russians are facing here is the grain deal is normally renegotiated every 120 days they are now insisting they only want a 60 day renewal. Well, if you fast forward from late March, 60 days, we’re getting into the beginning of summer. In the beginning of summer, the Russians won’t have a vested interest in destroying the power grid because no one’s going to freeze to death. So they’re going to go after the agricultural system, everything from fertilizer on the front end to the silos and the rail stations on the back end to try to kill as many people as possible that way.
So last year was probably the last year that Ukraine will be a significant agricultural exporter at all, and we should not expect to see the Green Deal renewed come late May. That’s just the situation we’re at. And if you throw in the problems with natural gas and nitrogen processing in Europe hitting the fertilizer market, the problems getting potash out of Belarus hitting the fertilizer market, the problems getting phosphate out of China, hitting the fertilizer market later this year is going to be really raw for a lot of places. Aright. That’s it for me. I’ll see you guys at the next spot. Take care.
I recently had the opportunity to sit down with Jordan Harbinger on “The Jordan Harbinger Show” (for the loyal followers, you’ll know this is my second appearance).
We discussed how the globalized world came to be, the factors contributing to its instability, and how the process of deglobalization is well underway. The chaos the world is about to face is nearly impossible to consolidate into an hour long podcast, but this is a good start!
Links to the podcasts, YouTube videos, and more can all be found below.
Geopolitical Strategist on China’s Upcoming Collapse JHS Ep. 781
Confronting a Geopolitical Strategist on Putin’s Big Plan Peter Zeihan Ep. 640
*This video is from my first appearance on The Jordan Harbinger Show
Did you miss out on the Global Outlook Webinar Click the link below to purchase it:
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Despite some food scares coming out of the former Soviet space, Mother Nature helped 2022 crop production look pretty solid in most of the great agriculture basins of the world. However, this could be the world’s last food-secure year for quite a while.
As Argentina transitions from summer to the harvest season, we’re getting our first glimpse at the yields…and it’s not looking promising. Between floods, droughts, pestilence, and a dash of government incompetence, it’s shaping up to be the worst year on record for Argentinian corn, soy, and wheat.
We’re not off to an auspicious start, but Argentina’s shortages were weather-induced…we haven’t even seen the impacts of fertilizer shortages yet. Additionally, the Ukrainians face a completely different set of disruptions to their agricultural industry.
As Ukraine transitions out of winter, the Russians will likely shift their strategy from targeting power infrastructure to the agricultural system. I expect Ukrainian corn, soy, wheat, and seed oil exports to drop significantly in the coming year. With the agriculture disruptions in Argentina and Ukraine, this is only the beginning of worldwide food insecurity.
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everybody. Still Peter, still Colorado, still snowy, still foggy. Yesterday we talked about the African swine fever problem in China and how it’s turning into an issue for fertilizer. I want to talk now about the weather. We’ve got a number of major agricultural basins in the world. And last year, for most of them, greater Midwest, the Brazil and Argentina systems. South Africa. Australia. New Zealand. The Eurasian Wheat Belt and Northern Europe. We had a pretty good year, pretty much everywhere and even in secondary markets that aren’t export oriented, like India and China, things were pretty good. That helped us a great deal, despite the fact that we were having a lot of scares and supplies coming out of the former Soviet space. But there’s two issues that we have already seen are going to be boiling up. The first one involves Argentina.
Now, as a southern hemispheric country,they’re exiting summer and going into harvest right now. And between floods and droughts and pestilence and basically all the horsemen playing a role here and a general dollop of government incompetence. It’s shaping up to be one of the worst records for corn, soy and wheat that we have seen in years with on average, about a 30% reduction in the foodstuffs. Now 30%, that is a weather induced reduction, not a fertilizer induced reduction. So it could have been a lot worse. But we’re already seen at the beginning of the 2023 harvest season that we’re getting off to a really bad start. Australia so far looks (mehhhh) and then of course India is harvesting things all the time. Now in the northern hemisphere we don’t get our first crops in for a couple more months and harvest will continue throughout the late spring for things like winter wheat and going into the summer and into the fall. So we have a lot of potential crops ahead of us, but to kind of kick off with Argentina, which is traditionally in the big six for wheat exports and typically in the big three for soy exports, this is not a particularly auspicious start.
The next major disruption I expect to see will be in Ukraine. Now, we’ve all been seen through the winter that the Ukrainians have been suffering missile and drone attacks from the Russians who are trying to take out the power system, working from the theory that if you can knock out the electricity across Ukraine in the winter, you’re going to kill as many Ukrainians as possible and damage the morale of the war effort in general. Because if you find out that your wife and kids back in Kyiv don’t have power, it’s really hard to stay on the front. You feel like you should go and do something. Well, as we get into May and especially June, when it becomes apparent that knocking out the power doesn’t make anyone freeze to death anymore, the Russians are going to switch targets to go after the agricultural system, especially fertilizer plants, grain silos, grain transshipment locations and rail centers, ports and the rest. Already we’re seeing the Russians backing away from a United Nations brokered deal that allows grain and corn and wheat and sunflower to get out of the system. Basically, ships can come in, the Russians will search them on the way to make sure that they’re not carrying weapons. The Ukrainians will load them up with whatever foodstuffs they can export and then they’ll be inspected by the Russians again on the way out. It used to be that this deal was being renegotiated every 120, 250 days, and the Russians want to shrink it down to 60 days, meaning that if this is renegotiated in March, it’s probably the last time it’s going to be renegotiated, because the Russian goal here is to wipe out as many of Ukrainians as possible to make sure that they can’t fight. And that means taking the war to the civilian population. Electricity doesn’t work in the summer. So you go after the food supplies, which means that calendar year 2022 was probably the final year that Ukraine will be a significant agricultural exporter. Pre-War, roughly 85 in some cases, 90% of their ag products were shipped out by water, with the rest going by rail. The problem is that the rail system in Ukraine doesn’t interface well with the rail system in Europe because they use different gauges and you can only replace that an upgrade it over the course of years and it’s really hard to do when bombs are raining down. So we’re going to get little trickles that go out of western Ukraine that can take advantage of the rail. And that’s about it. And that’s, of course, assuming that the Russians don’t achieve a breakthrough once they throw an extra 400,000 men into the fight come June.
So we know we’ve already had a bad Argentina harvest and we know that the Ukrainians are probably going to fall off the map in terms of food supply. And honestly, that’s just the beginning. More on this in later issues.
If you’ve read my latest book, The End of the World Is Just the Beginning, you know what question keeps me up at night: how long will we be able to feed the world’s population? With threats to food security increasing daily, China is a scary example of how quickly this situation could go from critical to catastrophic.
Four years ago, China faced the worst case of African Swine Fever (ASF) ever recorded. It spread through their pig population like wildfire, resulting in the killing of massive amounts of livestock. Since then, the CCP has limited reporting of outbreaks and testing for ASF. Some brave CCP reps are now reporting the actual numbers and I wouldn’t be suprised if this outbreak becomes worse than the last. So what does that mean for China’s food security?
The only other relevant foodstuff that China produces is rice. Unfortunately for them, the phosphate fertilizer that rice needs to grow is already facing massive shortages. China was once the largest exporter of phosphate, but they’ve started hoarding the stuff as the potential for food shortages increases.
Thanks to stockpiles of fertilizers (and some help from mother nature), the world was able to wiggle by last year. With increasing disruptions to the nutrients used in fertilizers and food security overall, the world is going to face severe problems in the years to come.
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey Everyone. Peter Zeihan here coming to you from foggy, snowy Colorado. It is the 16th of March on Thursday, and it’s time to start talking about food shortages. We’re going to start with this part on China.
So the Chinese, as you may have heard me discuss in the past, have a cult of personality, which means things like test for animal diseases that the government finds inconvenient tend to not just happen because the CCP reps get in the way. So there’s something called African Swine Fever, which is something that the poor community is terrified of because it’s basically Ebola for pigs. Highly communicable always ends in the death of the pig. And if one hog in your herd gets, you basically have to cull the entire thing. Now, about four years ago, China suffered through the biggest ASF epidemic in history and over the course of about 6 to 8 months killed more of its own hogs commercially than the rest of the world has commercial hogs. And that triggered a lot of paranoia within the CCP about food security for obvious reasons. This is maybe happening again.
Now the way it works in a normal place, if you’re a pig rancher or farmer and you want to find out if your hog has a disease, you get a test kit, you take certain swabs and samples, and then you send that test kit with the swabs and samples into a lab. And when the lab gets the results, they call you. That’s not how it works in China. In China, there’s an intermediate step where the lab calls the local CCP rep and then the CCP rep calls you to let you know if you’ve got a case or not. And since it’s a cult of personality and no one has been given an approval to trigger a food crisis, they just kind of let it go on in the background. Well, in the last few weeks there have been some very brave CCP reps who have decided to report the truth. And as of the news of this week, we now have more cases of ASF being reported in China in just the month to date than the entirety of the previous year. You see, ASF is not something you just get rid of. It’s not once in done. It gets into the wild boar and wild pig population and then it takes decades to get rid of. According to the Chinese, they got rid of it in six months and they haven’t had a case until recently. But all of a sudden now it’s boiling up again. There are different strains. Some are more lethal and more dangerous and more communicable than others. And officially it’s some of those less dangerous ones that are out there. But the fact that you’ve got brave officials choosing to go against the party line to report them at all, suggests that we have a much, much, much, much larger problem in store. And we should expect some significant issues throughout the food supply chain for pork throughout the Chinese system. Will it be as bad as it was four years ago? Kind of believe it will, if not worse, because they’ve been allowing this to burn in the background in order to achieve political placidity.
Now, how does that matter to you? Well, if the Chinese can’t guarantee pork supply, then the only other culturally significant food that they can produce in mass is rice. Now, rice is the most phosphate fertilizer hungry crop that humans are capable of growing. And because of that, China has historically been the world’s largest producer and exporter of phosphate, until four years ago. Starting with that epidemic, the Chinese started hoarding phosphate because they were concerned about food security and they knew they needed rice because it’s the only other socially and politically important crop that the Chinese have.
Well, since then, in the last four years, phosphate exports have been down 20 to 80% based on the season, very erratic, based on where the Chinese level fear is now that we actually have official cases of African Swine Fever, again, we should expect phosphate exports to more or less go to zero, meaning that the single largest source of one of the three main fertilizer nutrients is suddenly in dire condition. And that is going to have implications throughout the entire agricultural system of the world.
We were very fortunate in calendar year 2022 and that despite disruptions from China, from Russia and from the energy space, we had enough reserve built up in the system for all the types of fertilizers in order to kind of wiggle by. And we also had excellent weather for most of the world’s farmers. The chances of that happening twice in a row, especially when you have disruptions like ASF in China right now are almost nonexistent, which means that the next one tomorrow we’re going to talk about the weather and where in the world we are seeing, already, disruptions to the food supply system. Alright. That’s it. See you guys tomorrow.
