The Problem with the U.S. Power Grid

Satellite view of north american lights and energy

Expanding the U.S. electrical grid is one of the great problems of today. Reindustrialization necessitates at least 50% growth, and that’s before factoring in the new data centers.

Transferring power between the three U.S. grids requires expensive high-voltage DC infrastructure, but there’s geography, transmission capacity, and regulatory authority in the way. A more fruitful pursuit would likely be creating greater cooperation between local facilities and expanding regional generation.

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Transcript

Hey, everybody. Peter Zeihan here, coming to you from Colorado. And today we’re going to talk about electricity and why the United States is facing real problems in building out its system in anticipation of deglobalization. 

First, state the problem. We need to expand the grid by at least half in order to build out the industrial infrastructure that we need for a post globalized world that assumes no data centers. If you want data centers to, now you’re talking about a 75 to 100% build out. So you know a lot. 

Now let’s talk about the nature of the obstacles. Electricity. Think of it as a wave. Highs and lows. 60Hz is the frequency that most of the US power grid is on. And the problem is, is maintaining that wobble basically requires a lot of work. And doing it over larger and larger chunks of territory makes it even more work. So the United States system is split into three grids. You’ve got the Western Interconnection, the Eastern Interconnection, and then the Texas grid, and they split roughly along the eastern flank of the Rocky Mountains. And then in the areas around Texas. So, you know, Louisiana, Oklahoma, New Mexico borders roughly; it’s not quite that clean, but that’s roughly what it is. The more territory you can have in the same grid, you know, the more efficient it can be, the more you can back up. And when you get countries like Germany or France like, oh, you should unify your grid like we did. You can’t really do that in the United States because you can’t fit the entire United States in your back pocket. So three grids, other large states do something similar. So I think the Russians have like 7 or 11 grids. If you want to link these together you need an HVDC station, high voltage DC, where you take the alternating current that is in one grid, convert it to direct current, and then reconvert it into another alternating current that matches the wobble of the receiving grid. And of course, you want these to go both ways. So the infrastructure is immense. But even if everyone agreed we wanted to link things together, there’s a couple other problems. 

Number one, we don’t have a lot of long range, high voltage transmission systems in the individual grids, much less connecting them. And the further you transmit the power, the more you’re going to lose, no matter how efficient your carrier is. So unless somebody magics up a really low cost room temperature superconductor system, you’re talking about having to ship power halfway around the country to take advantage of any of these interconnections. In addition, where these interconnections are, like I said, the east side of the Rockies or in the areas around Texas, you’re dealing with areas with low population density. So you’re having to go through these zones to get to any population centers. I mean, Chicago is really the largest city that’s close to one of these connections or Houston. It’s a long way from everywhere else. There’s another problem. While we have those three grids, it’s not like those are three coalesced unified electricity systems. Most of the electricity that people use is produced less than 50 miles from where they live. So you’ve got this raft. Hundreds of local power producers, whether it’s co-ops in rural areas or independent power companies like, say, Austin Energy in Austin, Texas. There aren’t a lot of bigger ones. And those that there are say, say, Southern Company in the Deep South have worked very hard to consolidate their zone. And the idea that they’re just going to suddenly allow power to transmit through their system is kind of a bit of a reach. And so if you’re talking about building these HVDC systems on the connectors between the grids, you have to go through huge amounts of empty territory where there’s no good transmission yet in order to go to a population center. And that means you’re crossing multiple jurisdictions on your way, everyone’s going to have their own regulatory structure. So, I mean, yes, politics is part of that, but it’s politics as formed by geography. 

So the bottom line is don’t expect to see this anytime soon. Step one is you’d have to break down some of the barriers among all of these various authorities. Step two you then would have to build in long range transmission into the sub grid or the main grids. Only then three, can you talk about building enough high voltage DC converter systems on the edges of those grids in order to meaningfully move power among them. So this is a problem that will last until there’s been a significant change in how Americans view local authority versus federal authority or, and or, until there’s a significant change in how you can move electricity writ large. It’s not that it can’t be done, but this is not the low hanging fruit in the American power system. That comes from new technologies like combined cycle natural gas. Maybe, maybe, maybe if it works, small modular nuclear reactors. But really a decision for jurisdictions that are adjacent to one another to share resources, do that first. Then we can start talking about the hard stuff.

China’s Power Vacuum Worsens

Photo of Xi Jiping

Xi Jinping has made it clear he plans to ride this ship all the way down.

At the latest CCP Congress, more leaders were removed, but one official was elevated: Zhang Shengmin. Zhang oversees military purges, and his promotion signals that more purges are coming soon.

As Xi intensifies the power vacuum in China, it will inevitably lead to major policy failures and make it increasingly difficult for the outside world to peek behind the curtain.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from Colorado. Over this past week and into the weekend, the Chinese Communist Party had their party congress, which is, you know, really very little more than a rubber stamp of the leaders policy prerogatives, leader being Xi Jinping. Xi Jinping has basically evolved into a dictator in the mold of some of his predecessors. And to understand where we are right now and what’s about to happen, I think it’s best to take a big step back. 

In the aftermath of World War Two, hell during World War Two, there was a civil war in China that was finally resolved in favor of the communists in the 1950s, and a guy by the name of Mao Zedong became the winner and the first leader of China. He was a genocidal dictator of his own people. And over the course of the Thousand Flowers Blooming and the Great leap Forward in the Cultural Revolution, tens of millions of his own people were killed, some for seditious information, like knowing how to work a lawnmower. Basically, if you know how to do something, you were a real problem. Echoes of Trumpism in there, by the way. Anyway, put that to the side anyway. Eventually he died, thankfully, and a guy by the name of Deng Xiaoping took over. And Deng was of the opinion that Mao was a disaster and started to unwind a lot of the horrible things that he had done and set China on the track that it has been on ever since to become a unified, industrialized country, and he’s broadly successful in that.  But he also knew that he couldn’t predict what was going to happen ten, 20, 30 years after he was gone. So he forced all of the party committee members to come together, and he picked the next two successors, Jiang Zemin of southern China and Hu Jintao of northern China, because he knew that the country would need the economic and financial acumen of the South…Shanghai, combined with the national zeal of the North around Beijing, in order to form a country that would stick. But he smart enough, know he didn’t know what the country would need next. And so the idea was 20 years later. The North and the South would come together and pick a compromise candidate. Well, they did that about 15 years ago. And that candidate is the guy who’s in charge now. Xi Jinping. 

And Xi Jinping didn’t have a big following, and he wasn’t a big institutional powerbroker. So the North and the South thought that they could control them. They were wrong. And ever since then, Xi Jinping has been purging every aspect of Chinese society of anyone who is capable of independent thought whatsoever. And I would argue that he’s pretty much completed that. And now he’s a one man government ruling from a black box, and he’s not giving up power at all. So during the Communist Congress that we just had more people were purged. The purges that were high level from the last year were codified into law. And the body itself is now about one quarter empty because he’s really literally running out of people who can do the job, or who are so brain dead, they’ll just do whatever they were told. This is a real problem in the Republican Party, too, because Trump has destroyed the recruitment arm anyway. One name that was elevated was a guy by the name of Zhang Shengmin, I think is how it’s pronounced. Anyway, this is a guy who has been rolling around the top of the power structure for the last few years as an Inquisitor, and it’s been his job to basically purge the Chinese military, which he has done to the point that I would argue it’s made the Chinese military largely nonfunctional. Regardless of what you think about corruption in the Chinese military, which is very real, there is now only two people on the equivalent of the Chinese joint chiefs, Xi Jinping, the leader, and Zhang, who’s the inquisitor. That’s it. Well, now, Zhang has been elevated to the Politburo. And the only reason you would put an Inquisitor on the Politburo is if you’re planning on doing more purges. 

The Politburo is roughly analogous to the US cabinet, and next year Xi will be up for his fourth five year term. You’re only supposed to have two. And so he’s basically already declared that he’s going to be a dictator for life. And now he’s declared that Zhang is going to purge the top of Chinese society for him. And really, all that is going to be left in a few months here is Xi and nothing else. Now that will allow technically decisions to be made very, very quickly. But we’ve already seen the Chinese bureaucracy hollow out because if any information makes it to Xi that he doesn’t want to hear, that he has so punished the bureaucracy that it’s not that they stop transmitting the information, they stop collecting the information at all. So China has become a bit of a black box that is basically driven by a nationalist fuhrer and nothing else. And the Communist Party Congress that we’ve just had now makes sure that that cannot be undone. So Xi will ride this country into the ground with Zhang at his right hand, whipping everybody along the way. The problem that the rest of us have is it’s really hard to get an accurate view of what’s going on inside the country now, because everyone who used to collect that information has now been purged, and anyone who might say something intelligent is now being punished. 

So, buckle up.

Polish Politics Get Persnickety

Flag of Poland

Poland’s political landscape is in the midst of a constitutional crisis over the issue of judicial appointments, reigniting a similar dispute from 2015. Prime Minister Tusk’s Civic Coalition is clashing with the hard-right Law and Justice Party (PiS), which controls the presidency despite being the opposition party in parliament. The European courts have sided with Tusk’s Civic Coalition for now, but Poles will ultimately have to decide for themselves which party is in the right.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from Colorado. Today we’re going to talk about Poland. Specifically, we’ve got both the Prime Minister and the president pointing fingers at one another saying they’re trying to throw a coup and they’re all right. What we’ve got going on is two major rightist parties in Poland. The one that controls the government at the moment is called Civic Platform. It is run by Donald Tusk, who is also a former EU president. The other one is called PiS, which in Polish stands for Law and Justice, which is a more populist group, a little bit more kind of like, well, I mean, the Civic Platform is kind of like the Republicans were 20 years ago, and PiS – Law and Justice is more or less like what the Republican Party under Trump is now. Those aren’t perfect comparisons, but it’s a good kind of stake in the ground. Anyway, Civic Platform controls the presidency guy by the name of Nawrocki and Nawrocki basically came back from a big government overseas trip and from some points of view, broke into the Constitutional Court in order to prevent some judges from switching positions. What’s going on is back in 2015, which is when the Civic Platform ran the government and then lost an election and PiS took over for eight years. There were some judges in the Constitutional Tribunal, which is kind of like the Supreme Court whose positions were expiring. That’s an eight year term. And so the sitting government, the Civic Platform, appointed new ones. Then they lost the election before they could be confirmed. And so the PiS came through and invalidated those appointments and put in their own. Back then Civic Platform said that what piss did was unconstitutional, which is correct according to the constitution. And back then PiS said that it was their prerogative as controlling the government to be able to do whatever they wanted, which is also correct according to the constitution. Remember that Poland was run by the Soviet Union until 1989, so when all of their founding documents got put into place, they haven’t really been through the wringer yet. This is really the first time. And so both sides are right in. Both sides are wrong. The European Union’s courts sided with Civic Platform, but the PiS said we don’t care what they say because we just don’t recognize the European courts as having supremacy here, which the European Court of course said no, of course we do have supremacy and they’re right to. 

Fast forward to today. And the Civic Platform once again runs the government, and they are once again trying to put their judges in, and they’re now trying to remove some of the old ones that were put in by PiS in a way that the Civic Platform says was unconstitutional. And again, everybody is right and everybody is wrong. The problem is that the institution that would decide who is right here is the Constitutional Court. So we have a true constitutional crisis between the two largest factions in Polish society, which collectively make up the vast majority of voters. The Europeans have gotten involved at the supernational level, and there’s no clear route forward without having yet another fresh election. Basically what the problem here is, is one group did something that the other group said is illegal. And now the second group is trying to fix what the first group did by doing things that the first group says is illegal and everyone is right. So there is no easy way out of this. And the two parties really aren’t very good at speaking with one another. They haven’t been for 20 years, so expect this to be the new norm in Polish politics for at least several weeks, probably several months, with the European Union basically playing cheerleader for one side. 

Okay, that’s all I got bye.

A New Explosive Threat in the Persian Gulf

An Iranian Limpet Mine | Photo by Wikimedia Commons: https://upload.wikimedia.org/wikipedia/commons/3/3e/Chitgar_Naval_Exhibition_-_Iranian_limpet_mine.jpg?utm_source=en.wikipedia.org&utm_campaign=imageinfo&utm_content=original

For the first time in the 2026 conflict, the Iranians have placed limpet mines on ships. This represents a fundamentally different sort of sabotage that is functionally impossible for the US Navy to prevent.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from Colorado. It is the 30th of December of Friday. And today we’re going to talk about what’s going on in the Persian Gulf, because we have a new type of attack that is really going to complicate things for everybody. The backstory, of course, is that using hooks and crooks and a little bit of misdirection, there is now a sizable volume of crude coming out of the Persian Gulf on a semi reliable basis. By most reports were above 80% of levels. What’s happening is the major powers in the Arab side of the Persian Gulf, Kuwait, United Arab Emirates, Saudi Arabia are using their own crude carriers to transfer crude outside of the Persian golf. And then they do a sea to sea transfer. And then it goes to another tanker that takes it on to East Asia. That costs anywhere from 20 to $40 a barrel, which is not represented in the price of global crude. So someone’s paying for that. The people who are importing the crude, but it doesn’t show up in the financial markets. That’s piece one. That’s the background. What’s happened today is the Iranians used a speedboat to pull up aside a ship and place what’s called a limpet mine on the side of it and blew a hole in it. The United Kingdom confirmed that. Showed some photos and everything. 

Limpet mines are, by naval standards, a relatively new weapon were first developed in Italy in World War One, really came into their own in World War two and the Cold War. And the idea is you send in a boat or a small subsea device like, say, a modified torpedo with a person in it, a frogman, and then they attach limpet mines below the surface of the water. It’s largely deniable. It’s cheap, it’s effective. It can cause a huge amount of damage. That’s not quite what the Iranians did. The Iranians did something that’s a lot more like what happened during the Iran-Iraq war, back in the 1980s, with the whole motorboat thing. And then you attach it above the waterline, because obviously you would die if you tried to attach it below the water when the ship is underway. Anyway, what does this mean? Iran doesn’t have a navy. Iran, even before the war, didn’t have a navy. What it had was dozens, hundreds, maybe a thousand speedboats and not like militarized speedboats. I mean, sometimes these were just zodiacs, you know, things that you could buy at the aquatic version of Home Depot, whatever that’s called marine stores. Anyway, bottom line is that they have a harassing tactic strategy that lots of people like to be stressed about. You know, I don’t know if they come at us with 50 motorboats. What’s a destroyer going to do? Destroyer is going to shoot the shit out of them. That’s what’s going to happen. But what would never work against a U.S. military asset works really well against a civilian commercial ship with no defenses. 

So there’s kind of three things you need to have in your mind as the Iranians are starting to tap into this toolbox. Number one, conventional commercial shipping in the Persian Gulf. It’s probably going to collapse if they do this at all in the next week. Anyone who is not state owned is probably just going to avoid the region completely, because there’s just no real defense against this, unless you’re going to go through a significant change in how you operate. Which brings us to two, a significant change in how you operate. If you’re going to operate in zones like this, you have to have on board and answer to tactics like this. And that means some sort of quasi militarization of commercial shipping. The Ukraine war has shown us that for relatively low cost, you can have a drone network both for detection and for attack, first person drones specifically. So that’s a possibility. But really, at a minimum, you’re going to have to have people on the deck with weapons watching. And since this happened at night at 10:15 p.m. local, that means a degree of equipment that these ships are just not typically going to carry. Keep in mind that global shipping these days, most of the nationals that are running the ships are, say, Filipinos. They’re seafaring people. When it comes to commercial shipping, they are about one third of the total cruise on all commercial shipping globally. These are not people who come with military training. So you’re talking about an added expense for everything, on top of the insurance expense that is going to make a lot of zones very, very, very difficult. And that assumes that countries like Iran don’t. The anti to do more aggressive tactics. Which brings us to number three. There’s nobody there’s nobody nobody no nobody who has the ability to patrol the Persian Gulf in a way that can stop this in any meaningful way. The Strait of Hormuz is not far cross. You can make it there and back on a jet ski with a backpack of these limpet mines. The only way a few pounds each. You don’t even need a speedboat. The United States is spending right now about a half $1 billion a day to kind of keep the ceiling open for one specific sea lane. And that’s when the Iranians are not crossing left and right with speedboats put in on limpet mines. Preventing this is probably beyond the capacity of the United States. Because, remember, we’re not they’re not talking military targets here. They’re talking commercial shipping. It’s also well within the Iranians capabilities to go a little bit further across the Gulf and say, hit ships that are at anchor, and then you can put your limpet mine below the water level. 

So how fast this all unravels is really up to the Iranians, because they’re the ones who are introducing the tactic. But there really isn’t a good defense against this at all. And the cost for the civilian shipping sector to try to cope with it is immense and will absolutely change the cost structure of how shipping happens, not just in this part of the world, but in any part of the world where there is a degree of violence, which should be something that you’re at least quietly getting ready for all ready, because we’ve been going in this way, going in this direction for quite some time now. All right. Hopefully it doesn’t all fall apart over the weekend, but until then, see you guys next time.

Bolsonaro Flees Brazil Following Election Loss

Bolsonaro with President Donald Trump in May 2026 | Photo by wikimedia commons: https://en.wikipedia.org/wiki/Fl%C3%A1vio_Bolsonaro#/media/File:Donald_Trump,_Eduardo_Bolsonaro,_Fl%C3%A1vio_Bolsonaro,_and_Paulo_Figueiredo.jpg

Brazil just wrapped up its elections with a presidential victory for Lula over Bolsonaro. And if those names sound familiar, it’s because we’ve seen Lula and the Bolsonaro family duke it out for decades.

The latest matchup has escalated the rivalry, with members of the Bolsonaro family seeking refuge in the United States. Brazil, a relatively young democracy, is showing signs of institutional fragmentation. Given its importance as a global supplier of food, energy, and raw materials, these political vulnerabilities extend far beyond Brazil’s borders.

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Transcript

Hey everybody, Peter Zeihan here, coming to you from Colorado. And today we’re gonna talk about what’s going on in Brazil. They’ve recently had a new election, and the guy who lost immediately fled the country, which is generally not a good look. There’s a lot of drama here. It’s Latin America. So let me try to outline what’s going on. 

First things first. The guy who won Lula, this is his fourth term as president. In the past, he’s been in jail for corruption. In fact, in one of his recent election campaigns, he campaigned from jail. So, you know, we’ve got that going on for the clean side. On the other side, we’ve got the Bolsonaro clan, which is where most of the drama is today. Jair Bolsonaro is the guy who has been president. And when he lost to Lula, who was campaigning from jail, he moved to the United States and tried to arrange for a January 6th style overthrow of the government. This is honestly not very controversial, even in Brazil, that he did this. Keep in mind that Brazil is a democracy that only dates back to the 90s, so a lot of their institutions are relatively fragile compared to some of the more advanced countries out there. Anyway, when he returned home, he was convicted and he’s in jail now. The next generation down. His three sons have basically used a lot of their political heft to try to take over the government and free their father. One of them Eduardo, went so far as to go to other governments and get them to put sanctions on specific members of Brazilian courts, as well as general economic sanctions in an attempt to put pressure on the Brazilian government. And if you happen to like the Bolsonaros, you can understand why he would do that. But if you’re willing to take a more broader view, can you imagine what happened if that was in the United States? Like, let’s imagine for the moment that Joe Biden was in jail for something and Hunter Biden went to, I don’t know, China to lobby the Chinese to put sanctions on specific court justice of the Supreme Court and then economic sanctions on the United States, and then touted that they won’t be coming off until such time as his father is released. That’s basically what went down with Brazil, just that the country on the other side was the United States, which means it’s been wrapped up in MAGA drama in the United States. Anyway, the case against him is very strong, although I can’t say that he’s 100% guilty because the court systems in Brazil work differently from the United States. There’s kind of this merger between attorneys general and the court, so the judges actually can lead investigations. Anyway, he is now living in self-imposed exile in the United States, and if he returns, he’d probably be arrested pretty quickly. The next son down is Flavio. That is the one who ran for president this most recent time. His corruption allegations are a little bit more pedantic. They involve corruption, money laundering and private business issues. Again, the case is under a degree of judicial lock and key, so all the information isn’t there. But he clearly felt that he needed to flee the country within hours of losing the election. And he is now in the United States as well. Let’s see, who does that leave us with, Eduardo, Flavio, Carlos. Carlos Bolsonaro. Still in the United States. He’s an elected senator in the Brazilian government. And his supposed charge is that during his father’s administration, he used and directed the intelligence systems in Brazil to actively monitor the personal communications of a lot of opposition lawmakers. There is no argument on either side that that happened. The argument is the degree to which Carlos directed it personally, because, you know, this is a public institution. So the records are there. They know it was done. Carlos is just saying, oh, it just happened to happen. It wasn’t me, you know, bullshit. But anyway, bottom line is we’ve got this family of people who was trying to manipulate the system for their own political needs, which doesn’t absolve the other side at all. I just have to underline that if this had been flipped and Lula had three kids that were doing this, we’d probably be just doing the same video with different names. 

The reason I wanted to bring this all up is two things. Number one, this is wrapped up in the Trump administration right now. Trump has had a long, brutal series of domestic and foreign policy defeats, and he’s scrambling for anything that makes him feel good. We’re really at that stage now. And because Trump has been manipulating Brazil on and off for the last couple of years with help from the Bolsonaros, this is now rising to the level of front page news in the United States as well. Second issue. As I mentioned, Brazil’s political system as a democracy is relatively new, only goes back to the 90s. They have done a pretty good job until about ten years ago of finding their way forward as a young democracy. But now this blood feud between Lula and the Bolsonaros has basically become a Hatfield-McCoys sort of situation. And it’s brought in the courts and it’s brought in the intelligence system, its broad and foreign affairs, and we are looking at a top to bottom fissure in the capacity of the Brazilian state to function in an in a nonpolitical manner. That’s a real problem because Brazil is the second largest country in population in the Western Hemisphere. It is right up there with Mexico in terms of its overall economic heft, and it is a global producer of pretty much everything that the world needs right now, whether it’s food or energy derivative products or mining products, you know, the sort of things that you really need if you need to expand industrialization because we’re going to lose globalization. What happens here really matters to a great number of people. And right now, because of this blood feud, it looks like the whole system is starting to crack. I don’t want to say they’re going to fail. We’re nowhere near that. And they had a really strong track record until 10-15 years ago. But Brazil has absolutely entered the danger zone of states that are fracturing under pressures, internal and external. And no matter how that goes, it’s going to matter to a great number of people, including us.

Attacks on Russian Data Centers: It’s Not About Bots

A bunch of blue wires connected to a server

If you thought some Ukrainian strikes on data centers could stop the Russians from interfering with the U.S. midterms, you are sorely mistaken. These strikes pose a much greater threat to the Russian economy than to its online disinformation apparatus.

Bots on social media platforms require very little computing power, which means posts can be rerouted through other systems. The real concern is about impacts on essential digital services. Since Russia only has around 200 facilities, it wouldn’t take much to disrupt everyday business operations like transactions, telecommunications, and logistics.

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Transcript

Hey all, Peter Zeihan here, coming to you from Colorado. Today I wanted to clear up some confusion about what’s going on in the Ukraine War, specifically with Russian attacks on data centers. Most coverage is about the amount of spam and hate bots that have kind of vanished from the system. And people aren’t really talking about the real issue here. 

So first of all, there has not been a meaningful decline in hate bots by the Russians. We all know that the Russians do a lot, a lot, a lot, a lot with disinformation. And with the US midterms coming active, they’re certainly pulling out all the stops to support or more likely, denigrate the candidates they don’t want. But we haven’t seen any meaningful restriction in that. The way internet traffic moves is automated things like that can just go to the next node and they get sent out. And the amount of data processing that that is required to do a social media post is minimal. So yes, seven of the largest data centers that Russia has have been hit and probably will not reopen anytime soon, months at a minimum. But that hasn’t affected their ability to tinker with the political space. 

What it does, however, is for things that require more processing and especially are more important for time on target. So, for example, when you swipe your credit card, you want it to go through in a second, maybe five seconds if you’re really slow. But all of that gets processed through data centers. The same with cell phone calls. It requires a live connection, second by second by second. And so when you start burning through data center capacity, a lot of these things that we just associate as background information in our everyday lives, start to fail. And unlike the United States, which literally has like 20,000 data centers, the Russians only have 200 and only about a dozen are bigger than about 50MW, which from an American point of view, is not a particularly large one. And seven of those have now been hit, which means it doesn’t take a very big campaign by the Ukrainians against the digital infrastructure in Russia to cause some catastrophic changes to every day normal life. 

We’re going to link back to a video here of all the things that data centers are used for, and obviously anything on your computer, anything that requires communications, things like ordering food for grocery stores, maintaining logistics, you know, these are all critical things. And what people forget about the Russian situation is that the Russians jumped over a couple of stages of development. If you go back to the 1980s Russia, they were basically using 1960s American technology that even have a fax, because the fax were illegal. And then in the 1990s, and going into the financial crisis of 2008, the Russians just got hammered, hammered, hammered, hammered, hammered. After 2008, they started importing large amounts of semiconductors and building their first data centers. And that has accelerated in the 15 years since. Because, remember, most of the technology that goes into most data centers is not restricted in any way. So even when the Russians have been under sanctions, they’ve been able to get in what they need. They can’t make any of it themselves, but they can certainly maintain a data center that other people provide the equipment for, which means that if their data center sector goes away for whatever reason, they don’t slip back to where they were in the 2000s, because where they were in the 2000s was basically the 1960s. So if you were to wave a magic wand and all the American data centers went away, it would it would suck. We’d have to be doing everything by fax again, and we’d have to go back to landline phones, which a lot of houses don’t even have any more. But if you’re in Russia, that intervening technology that the Americans, that the West was using in the 1970s and 80s 90s and 2000s 2010s. That doesn’t exist. So you’re talking about them going back to, from an American point of view, relatively early industrial communications technologies, and then you’re talking about something that, at a minimum, would probably result in the economic equivalent of a depression. Not to mention that the political effect of that sort of massive step backwards would be horrendous, because in the United States, if we went back to faxes, it would be it would suck. We would we would be angry, there would be protests, but we could function. It’s not clear that the Russian system could, because, remember, the Russians don’t have a lot of skilled labor left. Their demographic bomb went off in the 70s, and they stopped collecting meaningful data in the 2000s. So they don’t even really know how bad the situation is. But as a rule, skilled labor, especially in things like it, costs more in Russia than it does in the United States because there’s just so little supply. So if you pull the plug on that, send them back 40 years or more, you get some catastrophic outcomes. That’s what’s going on in Russia right now with Ukraine war.

What’s Behind the French Protests

Men in the streets rioting and lighting fires

It seems that everyone is dead set on banging their drum about the French protests, but here’s what is actually happening.

Sure, the French have longstanding challenges with integrating immigrants from former colonies, but these protests are largely separate from that issue. The main driver is government cuts caused by France’s growing budget deficit and an aging population. And of course, when day turns night, these protests take on a different form, but that happens everywhere.

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Transcript

Good morning from Colorado, where it’s, of course, sunny and a little foggy because mountains. Today we’re talking about what’s going down in France. We’ve had a lot of people write in with a lot of theories, and I just kind of wanted to give you an idea of what’s actually going on. One of the dominant theories is that all of the violence, and we’ve seen a lot of violence in the last couple of weeks, complete with billions of dollars of property damage, is caused by illegal migrants. That’s the preferred story among the US administration and people on the hard right in the United States. That is not correct. To be perfectly blunt. France really doesn’t have an illegal migration issue at all because it’s fairly easy to get citizenship in France if you are coming from a former French colony. So France’s problem is not an illegal migration problem. It’s a legal migration problem. 

Because while the French like to think that they’re very open minded, I dare say that most of them are a lot more racist than Americans. And so they’ve basically created a system where they can bring in black Africans and Arabs, and a lot of them live as second class citizens, most notably the Arabs from Algeria. See, part of the problem is legal and structural. When the First Republic was formed in the aftermath of the revolutions of the 1700s. There was a lot of ethnic bloodshed. And so the people who came together to form the First Republic said, no more. We are going to enshrine in the Constitution that legally, everyone who is in the territory of what we recognize as France is French, regardless of your ethnic background. And for the thousand plus years before that, that is definitely not how things worked. We think of France as being populated by the French, and that is true. But it’s also full of Alsatians and Basques and Britons and so many others. So this decision was made that we are all culturally French, nationally French, regardless of what our ethnic background happens to be. And if you play that forward to the 20th century, you have to admit it’s been wildly successful. But it wasn’t updated. The strategy was not updated for the colonial era, where all of a sudden the French have far flung colonies around the world. And now all of those people are legally entitled to citizenship. So you get a huge amount of racial diversity in France that is enshrined in the Constitution is fully legal, but they’re definitely falling into the class of second class citizens if the roots of their ethnicity are not from metropolitan France. That’s problem one. 

Problem two is that the French constitution actually makes it illegal to ask what your ethnic background is, because we’re all the same. So the French government doesn’t really know what the ethnic breakdown of the country is overall, or province by province or city by city. There’s a lot of educated guesses out there, probably that 15% of the population are not from ethnicities that were born in the metropolitan zone, but it’s really just a guess. Okay, so that’s two. 

Third, what’s actually gone on with this protest, because it really has very little to do with any of that. I mean, there are areas in France where crime is higher. There are areas where ethnicities of various flavors are more concentrated. But that’s not what this was. There is a two part play to these protests and this violence. The first part was that the French government is now running one of the biggest budget deficits in the world as its population ages, pension costs are going through the roof, and as a rule, people who are older are more reliable voters than people who are younger. And so the state has made the decision time after time after time, to cut programs that benefited the young as opposed to the old. It’s a lot more going on than that, but that’s kind of the nut. And so young people are far more likely to protest than older people. So people who were raised on this idea that the French system has a generous social welfare model, cradle to grave, are seeing some of the earlier benefits of that cut. And they’re upset. And so whether it’s public safety or education, you have protests in the hundreds of thousands, sometimes in the millions, that from the point of view of most governments, France included, is completely legitimate as long as it’s peaceful. And then the sun goes down. And just as we’ve seen with protests in the United States, when the sun goes down, the people with kids and strollers go home and a different crowd comes up. 

When you see people dressed in black with face masks, those are not illegal migrants protesting. Those are people who are going to cause some political damage and some physical damage and ransack and attack the police, as we’ve seen now multiple times, if this was in the United States, you would probably point to groups like Antifa. But this is France, and it’s not that Antifa is an alien ideology or anything like that, but that’s really not the form it takes in France. It’s anarchism which has been part of the French political order, pre-dating the time of the First Republic and the revolutions in the 1700s. Now, antifa and the anarchists do have some commonalities when it comes to rejecting state authority, but ultimately their stated games are somewhat different. Antifa says it’s anti-fascist and in their mind, justifies violence. Anarchists are opposed to government on principle. Basically, they’re libertarians. All caps, if you want to think that way. And so the concept to an anarchist that a shop owner owns, what’s in the shop is something that they ideologically reject, whereas Antifa is just kind of more thuggish. 

Anyway, that’s the cause of most of the violence. These two movements have a lot in common. They certainly exchange techniques, and they certainly plan their attacks for maximum effectiveness, but they’re not quite the same. And then, of course, against that backdrop, once you have civil breakdown because of these protests, then you just get plain old looters and they can be of any flavor.  

Anyway, hope that is of some use. Everyone out there is trying to beat their own ideological drum and point at France and say see, see, see, see. But for most of them the facts don’t match the ideology. But you know what’s new?

France and the UK Choose the Nuclear Option

Black and white sign against a brick wall reading "Fallout shelter"

The United Kingdom and France are conducting joint nuclear weapons delivery exercises, but they’re not the only countries eyeing nukes. Faced with Russian threats and dwindling American support, Europe needs to figure out how to protect itself. Conventional forces aren’t the right tool for the job, so they’re going nuclear.

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Transcript

Hello, everybody from a breezy Colorado. I think I found a place out of the wind. Today we’re talking about something that happened on the 20th of October, although it wasn’t revealed until 3 or 4 days later. The Brits have confirmed that they have already completed nuclear weapon delivery drills with the French. France and the United Kingdom are the only two countries in Europe that have nuclear weapons, although that is probably going to change very soon and go, why they did this. 

So first the strategic backdrop. Then we’ll talk about the specific situation. With the Russians literally on the warpath and regularly threatening nuclear armageddon against the European capitals. We are in the midst of a broad scale rearmament throughout Europe. And that is before you consider that the Trump administration has basically backed away from supporting Ukraine and the Europeans in general. So whether it’s because of the Russians doing what they’re doing or the Trump administration not doing what the Trump administration is not doing, a lot of European countries feel they have no choice but to build significant military deterrent capabilities. This takes two forms. The first is to build a conventional weapon system that includes fighters and tanks and all the rest. But that can take literally decades to establish the industrial capacity and then build it out and then train the people and all that good stuff. They don’t have that kind of time. They’re thinking that they need to have meaningful results in months to single digits of years. Drones help fill that gap. But to be perfectly blunt, nukes are better. Doing it this way, which is really their only option. Also means that the American Alliance is, for all practical purposes, already over. Because in the time that it’s going to take them to use or to build out these new capabilities, whether they are nukes or drones, is they’re going to be building a hybrid military that is very, very different from what the United States has used and is very, very different from what NATO has been in the past, which means that the Europeans are going to have to develop their own doctrine. And even if post-Trump, the United States decides to merge again with the allies, their military structures will be radically different, and they might be able to go in the same direction, but certainly not in lockstep. That’s kind of collectively piece one. 

Piece two is just the scale of this. When you’re talking about nukes, you’re talking about technology that dates back to the 40s, so 80 years old. It’s not that hard from a technical point of view. And so the countries that are actively considering going nuclear. Sweden, Finland, Poland and Romania have the capacity have the technical capacity to do all of it. And with the exception of Poland, all of them even already have the nuclear materials, because all you need is a power reactor. A power reactor generates plutonium under normal operations as a waste product, and the chemical process of separating that plutonium is not particularly complicated. And these countries can all easily do it. But there’s another country that, of course, the Brits and the French are eyeing warily, and that is Germany, because there is no way in a world with a resurgent Russia and absent America and a nuclear Sweden, Finland, Poland and Romania, that the Germans are going to feel secure without their own nuclear deterrent. And that changes the math in London and Paris a very, very great deal. 

So what the French and the Brits are thinking here is if they can convince the rest of Europe that there already is a European deterrent handled by a country within the European Union and one not in the European Union, then maybe, maybe they can put enough of a lid on this proliferation issue that the Germans don’t feel the need to act and build out their own deterrent, because if you get a Germany that is economically in trouble and militarily under pressure and feels that it has to rearm and as they say, build the largest army in Europe and have nukes, then all of a sudden we’re back in the bit of a pressure cooker that defined Europe through the 1800s, right up until the end of World War Two. And if you’re a Brit or a Frenchman, that is something you’re trying to avoid at all costs.

The Paris Accords Can’t Stop Climate Change

satellite view of Earth in a ring of fire

The climate thresholds established in the Paris Accords are looking less and less achievable. While developed economies are reducing emissions, the rest of the industrializing world still depends upon fossil fuels to keep things moving.

Given the current state of renewable technologies, rising energy insecurity, and deglobalization, climate targets are growing increasingly difficult to achieve. Without far more extensive basic research measures, global temperatures will rise faster than previously believed.

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Transcript

Good morning, everybody. Peter Zeihan here, coming to you from a chilly Colorado morning. And today we’re going to talk about a new report that’s come out from the UN Environmental Program, basically talking about the status of the world and complying with the Paris Accords, which was an agreement that was signed. Geez. It’s been ten years ago now under the Obama administration, to reduce global carbon emissions so that the world never slides past two degrees centigrade temperature increase. Basically, we just hit about 1.5, or we’re going to hit 1.5 in the next few years. A couple of things here. 

Number one, I would argue that the Paris Accord was never going to work. Anytime you bring together countries as varied as the United States and Malawi, it’s going to be really hard to find a common ground and if you can find a common ground, you’re never going to find a matched industrial policy that achieve something like that. We have seen significant carbon reductions in a lot of the advanced world, most notably Europe and Japan. But everyone who’s trying to industrialize needs energy, and energy requires carbon. Lots of people like to talk about solar and wind, but solar in particular requires so many inputs that its mid-term carbon imprint is actually higher than what you would do with things like natural gas. Longer term it might work, but only in places where the sun is really bright. And as the Europeans have proven over and over and over and over again, most of Europe just isn’t very sunny. So getting all the transmission systems in place to bring the solar energy from where it’s sunny to where it’s not, is yet another cost and yet another delay. And ten years on, the effort to do that has been pretty low. The bigger problem, of course, is that if you want the developing world that is industrializing to have low carbon energy. You got to pay for it. And really, you need to develop a new technology first. That is lower carbon in the first place. And that still hasn’t been done so anything like the Paris Accords. That doesn’t come with a couple trillion dollars for basic research. I’ve always been dubious. So that’s kind of collectively piece one. We just don’t have the technology that’s necessary in most places to make this work. And places where it does work in Europe are because they’re deindustrializing, which means they’re just using less energy anyway. Okay. Lots of caveats in that, obviously. 

Second problem that is significantly worse is that in any world where hyper globalization is not a factor, you’re looking at the world kicking out more carbon. Because if you start breaking down normal trade lines, then people have to make do with what is local. For supply chains, for things like solar and wind and batteries, that means you just can’t make them, because solar specifically is the second most complicated supply chain in the world after high end semiconductors, with thousands of steps that touches dozens of countries. You just can’t make them at all in a world that is not fully integrated. But a bigger problem is that when you have conflicts like what’s going on with Ukraine, like what’s going on with Iran, you disrupt the flow of the low carbon fossil fuels like oil and natural gas. The Greens like to talk about oil and natural gas as the big boogeyman, but they’re really nowhere near the worst. Because once a country gets a taste of electricity, they will do pretty much anything in order to keep that electricity. And if and natural gas become interrupted, they will use other sources of energy in order to get the power. And oil and natural gas are generally traded internationally. But lots of countries have deposits of things like coal at home or very close. And not just any coal, lignite, which is about 20% water by weight and is the highest carbon output fossil fuel. Or even worse, wood, which kicks out more carbon than even lignite. So what we have seen in calendar year 2026 is a lot of countries, for energy security reasons, stopping to import oil or liquefied natural gas from, say, the Persian Gulf or wherever else has gotten so expensive, and turning to local fuel supplies. And so of course, the carbon output has gone up. 

So at the time that I looked at this for the first time in a really, really deep way, it was when I wrote the book, the End of the World Is Just the Beginning. That book came out in 2022. At that point, the global civilization had already gone up 1.1 degrees from the baseline at the beginning of the industrial age, 1.1°C. We’re now around 1.2-1.3, and we’re probably going to hit 1.5, assuming no significant changes in 2030 to 2035. That was an assessment, that was before the events of calendar year 2026. We’re probably now going to hit that at least a couple of years early. And as you break down globalization moving forward, we’re going to skid right by that two degree number that the Paris Accords wanted to hold it at. And we’re going to go and skid right by three and four as well. And by the end of the century, we need to be starting to consider things like five and maybe even six. So whatever your views are on climate change, I don’t much care. It’s real. And a lot of the things that we have to deal with it just don’t work yet. And the mitigation that we’re going to have to do in 10, 20, 30 years is really going to be extreme. So, you know, buckle up.

India Has Three Major Problems (At The Moment)

Flag of India

France isn’t the only one with a protest problem; India is joining in on the fun, too. With fertilizer shortages, voting reforms, and the educated youth frustrated with limited opportunities, Modi and the government have their hands full.

Typically, India could absorb the shock of any one of these challenges, but with all three happening at once, we could be looking at a big shake-up for the Indians.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from Colorado. Well, it’s a little windy. We’re going to go down. We’re going to talk today about India. Specifically, we’ve been seeing mounting protests throughout the country that in times have involved millions of people. It’s a big deal even for India. Now India has a very robust ability to absorb huge protest, prolonged protests. But we might be hitting a breaking point here. 

We’ve got three things going on. First, let’s start with the big picture long term. We’ve got a war in the Persian Gulf. And even though from time to time, crude is getting out of the region. Finished products aren’t. Because the stability that is required to operate the facilities in the Persian Gulf to process natural gas and to make fertilizer. They just can’t come online unless the security situation is completely addressed. And that has not happened. We’re not even starting to turn those things on yet. Well, India isn’t simply a major consumer of Middle Eastern crude. It absolutely requires the nitrogen and the urea and the other inputs that are necessary to make fertilizer. And it is easily the single largest consumer of fertilizer inputs and finished fertilizer from the Persian Gulf. Remember, we’re talking here about a country of about 1.5 billion people. So they need every little bit of productivity they can to feed their population. And that’s before you consider the inefficiency of the Indian transport system. A lot of food rots before it gets to where it needs to go. So they need to grow even more. Second, we kind of have a spy versus spy thing, if you remember Mad Magazine. The way voting works in India is you’ve got your normal middle class or upper class or even lower class voters that go to the polls and do their thing. But there is a class of people in India that people might have at one point called untouchable. Primarily urban. Primarily desperately poor, uneducated, illiterate. But they can still vote. And there are basically bankers or vote brokers who go out and gather these people together and give them a little bit of money and tell them who to vote for. Well, there is now a voting reform going on at the national level to remove about 15% of the registered voters from the voting rolls. And I guarantee you, not all of those people are dead. Basically, we’ve got two forms of corruption clashing: the vote brokers on one side and the government led by the BJP and Prime Minister Modi on the other side. And the argument from the BJP seems to be something like, hey, when you were corrupt, for us it was okay. But now if you were to be in corrupt for other people it’s a problem. So we’re going to be corrupt and change the voting system. Needless to say, when people who are corrupt start to argue with people who are corrupt, anyone who gets caught in the crossfire is collateral damage. And so these protests have gotten a lot bigger. So we’ve got rural protests over fertilizer issues and urban protests with the desperately urban poor. 

On top of that, something that you may have heard of called the cockroach protests. Loved names like that. Anyway, here we’ve got urban educated people who basically want things from the government as regards services and educational opportunities and job opportunities. And so they’re protesting. And in the last few months, they’ve managed to get a number of concessions out of the government. And the government was under the opinion that if we give them these things, it will go away. Well, it just emboldened them. So we’ve got young-educated people, young-desperately poor people, and farmers all causing havoc at the same time. And under normal circumstances, India would probably be able to deal with any one of these without too much of a problem. Two’s a bit of a challenge. Three all of a sudden we’re talking about a regime shaking event. 

So how’s it going to shake it out? This is India. India is politically very loud. Louder than I would say the entire Western Hemisphere put together. So I can’t offer an opinion for you. I can just say that the normal things that produce stability in India at the moment are offline, and have actually inverted to cause instability. So you should expect this to get significantly worse before it gets better. About the only thing I can tell you that might calm things down is we don’t have a major election this week.