The U.S. Can’t Break the (Arctic) Ice

Ice floating in the Arctic Circle

Despite the growing importance of the Arctic, the U.S. continues to move further away from a sustainable operating plan.

The USCGC Healy broke down during sea trials, and the Polar Star is undergoing its own refit, which leaves the U.S. with one operational icebreaker. Clearly there is a hole in U.S. Arctic strategy, and attempting to plug it with the goodwill of Canada and Finland (given strained relations) might leave the U.S without a long-term solution.

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Transcript

Hey, everybody. Good morning from Colorado. This is Peter Zeihan. Today we’re going to talk about how the American Arctic strategy collapsed over the weekend. The United States only has a small Icebreaker fleet. And the biggest of them, the Healy, was undergoing high speed trials after a repair cycle, and the engines crapped out. The crankshaft broke. 

There was a bit of a fire and it basically stalled out and had to be towed back to port. We don’t know how long it’s going to take to get it back into operation, but it will be at least the remainder of this year. And this is after a series of other mishaps that involved an engine room fire and a transformer fire. 

The ship has not been doing well since it came on line 20 years ago. Second, you got the Polar Star, which is over 50 years old, and its only job is to run supply runs to Antarctica to supply Fort McMurdo, McMurdo base, if you prefer. That’s it’s only job and it is now completed that most recent cycle and has begun its own refit. 

That just leaves a ship called The Stories. Now, Coast Guard vessels are in that gray area there. It’s a middle branch of the military, but the ships are kind of a civilian military hybrid, oftentimes not for the stores. The stores is a flat out civilian vessel in construction. It’s an oil tug that’s been converted. And it is now the only ship the United States has. It’s an icebreaker. Whether you’re looking at global warming and new routes, whether you’re looking at competition with the Russians or the Chinese, this is basically bad because the United States no longer even has a ship in the game. And the backup plan, while wise under normal circumstances, probably isn’t going to work out. You see, under the Biden and later Trump administration’s Trump to the United States basically signed a series of agreements with the Canadians of the Finns to build icebreakers for. 

You see, we don’t even have a shipyard that can build them anymore. And that would be great, especially now that Finland and NATO. But the two countries that the Trump administration has threatened most directly and most repeatedly are Canada. Canada is not going to help us build an icebreaker fleet that could then circumvent Canadian power in the Arctic. 

And then there’s Denmark. You know, the whole Greenland thing. Finland is a very tight ally of Denmark. And if the United States seizes Greenland, we can basically kiss the entire Scandinavian block a goodbye. So basically, we are looking at a period for at least the next 30 years. We, the United States, does not have a military presence on the waters in the Arctic. 

Whenever there’s ice, we can still sail up there. In the summer, we can still use air power, which is of limited use on the water. But other than that, we’re looking at the United States not even having a tool in the box. And at a time where the world is in churn, to not even be able to play is a real problem. 

And this is something that will resonate well, well throughout the remainder of this century. So, you know. UGG.

South Africa’s Immigration Problem

Flag of South Africa behind a jungle landscape

While the U.S. and South Africa similarly attract migrants from poorer neighboring countries because they are the strongest economies on their respective continents, that’s where the similarities stop.

South Africa’s post-apartheid arrangement means that illegal immigration affects groups very differently. Migrants taking low-skill jobs disproportionately impact black South Africans trying to escape the townships and move up the economic ladder, because they compete directly for these opportunities.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from southern Yosemite. I am just to the north of Red Devil Lake. And below me is the Red Peak Fork of the Merced River. And in the background there you can see the start of Merced Canyon. That is the canyon that ultimately leads to Yosemite Valley, Half Dome and El Capitan. And over this way we have Red peak and the High Range. 

Anyway, today we’re taking a question from the Patreon page about South Africa. It seems like they’re having a little bit of illegal immigrant snafu that is reminiscent of politics in the United States. Let’s talk about where it’s similar and where it’s not. Let’s start with where it is similar. Proof. There are not a lot of South Africans that want to do certain jobs, and it is the bright spot economically on its continent. 

And there are a whole lot of countries in sub-Saharan Africa that are not doing very well and haven’t been doing very well for more than 50 years, so it’s natural that there is a pull pulling, especially unskilled labor to south into South Africa and all of the politics and the populism of the conservative or liberal trade unions versus people who don’t want outsiders in their neighborhoods. 

All of that stands to a degree. It’s all very similar, but where it’s not, we are now nearly 30 years, 1992. Yeah, we’re pushing 35 years since apartheid ended. When it did, the white leaders of South Africa had some sit down, serious conversations with the black leaders of South Africa and decided how post-apartheid South Africa was going to work. 

In the past, all the blacks and the coloured, as the term that they use, lived in something called townships, which were basically fenced off. They had a centralized water system, but no real sanitation system. So they’re kind of ringed by porta potties, and then they’re barbed wired off from the white communities that basically live in something that looks a lot like an American suburban environment. 

So when you have three quarters, 80% of the population that basically lives in isolation, what happens when you suddenly give them the right to, for example, vote? They’re going to want different things in whatever they’ve had. And all of the wealth in South Africa was controlled by the whites. So what happens there? We’ve had political evolution since, where populist groups among the blacks have risen. 

A group called the Economic Freedom Fighters basically wants to nationalize almost everything because from their point of view, the whites very small minority hold all the money. And if we give to the state and then redistribute it, that would be more fair. Anyway, regardless of what you think about that, the decision that was made back in the early 90s was very simple. 

The whites could keep everything that they had, and in exchange the blacks would have free housing and electricity and water forever. What that has economically done is locked the most of the black population into the townships. There is more education, there are more opportunities. There are possibilities for the blacks to leave the townships and earn a normal living and then go on and move up the economic ladder. 

But when your basics are almost free, it is a huge disincentive and people stay where they are. So as a result, based on who’s numbers you’re using, South Africa today has an unemployment rate somewhere between 35% and 55%. And it’s been like that since the 90s. They also have some of the highest crime rates in the world, because people will steal to buy the basic necessities they need and then go back to their free housing, which is honestly not a whole lot more than a shack. 

Introduce illegal migration into this environment. There are a lot of jobs in South Africa that really do need to be done. The whites are too skilled for most of them and a lot of the blacks are. I don’t want to use the word complacent. That’s not quite right, but they feel stuck with where they are right now. So bringing in illegal migrants to do the work doesn’t bother either of those groups who it bothers the blacks who are trying to leave the township and make a career of themselves and get a house that has internal plumbing and move up the ladder, because those are the people who are being undermined by the illegal migrants. 

Now, how South Africa deals with this. We’ve basically had a series of majority governments by one of the most corrupt groups in modern history, the African National Congress, and more recently in coalition with the White Party, Who which is basically based out of Cape Town, which is a more white heavy city, as opposed to Johannesburg, which is more black heavy. 

None of this is a clean mix. None of it perfectly aligns to anyone else’s political milieu, because it is such a unique situation from so many different points of view. Anyway, it is a real issue. But before you layer that onto anyone else’s political agenda, just keep in mind it is very, very, very specific to South Africa. 

There is no other country on the planet has anything like this or has in the modern era. Okay, that was a lot to say at high elevation. That’s it for me today by.

Ukraine’s Military Reshuffling Highlights Resource Problems

A Ukrainian soldier in the trenches

Ukrainian President Zelensky has now dismissed two of the most senior military leaders, Defense Minister Fedorov and Commander-in-Chief Syrskyi. Beyond the speculation of internal power struggles, these dismissals highlight Ukraine’s glaring issues with resource allocation.

This is a multi-vectored war that is constantly evolving, which means the new drone tech is just as essential as the infantry and artillery, and vice versa. So, Ukraine can’t win without either capability. But with limited resources at its disposal, Ukraine has an allocation problem.

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Transcript

Peter Zeihan here, coming to you from Colorado.  Today is the 23rd of July, and I’m going to attempt to untangle what has been happening in Ukrainian political circles, specifically around the Defense Ministry and the Army. 

We’ve had a number of personnel changes over the last several culminating in the last several days of the dismissal of the defense minister, a guy by the name of Fedorov who is a techno guy. He’s in his 30s, big on drones. And Syrskyi who is the commander in chief of the army, a big infantry and artillery guy. This is being spun a lot of ways by a lot of people. Some are saying that it’s a debate between whether drones are the future of Ukrainian military versus the backbone that is currently artillery and infantry. Some are saying it’s personal and it’s really kind of all of the above. The very, very short version is that we’re going through a hot war and battlefield success versus failure generates a lot of changes in personnel, both from mortality and from political decisions that didn’t do enough or you did too much, or you are rising star versus you’re 

But really, the core issue is this doctrinal shift between drones and artillery. And what neither side admits is that they can’t fight the war without it. 

So in charge of the artillery has very successfully, I might add, held the line in a number of major battles where we expected the Russians just mow over the Ukrainians. But Fedorov with the drones, obviously has remade the face of warfare and given Ukraine not just a fighting chance, but the advantage in many battlefield situations. And to think that one of these will work without the other is very silly. 

The problem is, both sets work, both sets are necessary, and both sets require their own procurement chain and manufacturing capability. And it’s not clear that Ukraine has the full capacity to do both of those at the same time with the resources that have. And that’s before you consider the complexity of all of the weapons donations that have come in from the Europeans primarily, and the political complications that come from relationships with the Trump administration right now. So basically, we have our old system led more or less by Syrskyi that is infantry and artillery, and the new system that is led by Fedorov, that is drones and fiber optic cables and computer chips, and each of them requires a huge pipeline of resources, whether that is people or finance or manufacturing capacity. 

And the two don’t overlap very much. So when Fedorov became defense minister a few months ago, he’s tried to start switching all of the resources over to his preferred method of war fighting. And Syrskyi kind of had a coronary because there was no way that he could defend the 1000 mile long front without ongoing investments into artillery and artillery shells. 

Both of them are right. Both of them are wrong. And now both of them have been fired. So what’s going on now is Zelensky, the president of Ukraine, is attempting to juggle these two factions so that both of them can function because they both need to function. And the reason that the protests in Ukraine in favor of Fedorov are continuing is because they’ve looked at the personnel that Zelensky has put in place of Syrskyi and Fedorov and said that so far there’s been no change. 

And that’s true. There’s been no change because Zelensky is trying to balance the interests of two things he absolutely has to have, and the leaders of those two factions hate each other. And the only way they could work together if Zelensky was there personally hand-holding. And this is before you consider the problems with, say, corruption or consider the problems with Russian assassination, or consider competition with other branches of the Ukrainian services. 

It’s a really tough situation to be in for everybody. It’s a post-Soviet society. So the pillars of civil society that normally you would rely upon to kind of bulwark the sort of institutional discussion just don’t exist in the same way that they exist in, say, say, Germany or the United States. It’s an ugly situation. I have no idea how it’s going to go, and I am not even going to bother talking about the personalities that are replacing the two principals, because I bet they’re mostly going to be gone within a week or two. 

But at the moment we’re more or less in the same position now that we were six months ago. You’ve got these two parallel procurement and warfighting, doctrinally defined institutions, both of which are essential but really just can’t get along and don’t complement each other very well.

Spain’s Former Empire Might Just Save Them

Flag of Spain waving in the wind in front of a building

First Spain won the European Championship, then the World Cup, and now they’ve figured out how to address their demographic problem.

Spain has a similar story to most of the modern world: they urbanized quickly, and their birth rate collapsed. To offset that, they’ve become one of the world’s most pro-immigration countries. But Spain has a leg up on most other nations, they have a large pool of culturally compatible immigrants from its former empire in Latin America.

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Transcript

Hey all, Peter Zeihan here, coming to you from Colorado. Spain has just won the World Cup. So I thought I would take this as an opportunity to discuss the thing about Spain that sets it apart from really every other country in the modern world. It’s pro-immigration to a huge degree, even more so than Canada. If you can believe that the Canadians have actually clamped down immigration quite a bit in the last three years, but in Spain the doors are wide open and if anything, becoming wider. 

Spain is a country that was facing demographic collapse in the aftermath of the dictatorships of the 60s, 70s and 80s. Spain opened up to the world, became a democracy and started to industrializing and joined the European Union. And in doing so, we saw one of the fastest moves of people from rural areas to urban areas. And as is normal when you do that, your birth rate collapses. 

So it went from having something significantly higher than the global average to one of the lowest in the world and under a decade. And then it has stayed there ever since. Which means it’s not just a country that is aging. It’s aging very, very, very, very rapidly. And because when people moved into the cities, they moved into tight, constrained conditions, even though the wealth level of the average Spaniard has gone up quite a bit in the last 40 years, the amount of room that they have has not. 

And so people are not having kids. The only solution that Spain has found is immigration. And in doing so, Spain has seen its population increase by about 5 million to roughly 47 million today. And its average age has kind of stabilized in the mid 40s. It’s about a 44 right now. They have brought in in that population about 2.25 million people as new citizens. 

And they’ve had two rounds of amnesties to take illegal migrants and make them naturalized so that they’re legal. The first round a few years ago was a half a million people. They’re doing another round right now that will probably be at least as large, which makes Spain among the Western countries today by far the most pro-immigration and arguably the most pro-immigration by the numbers in the world now. 

Is this solving the problem? It’s dressing a lot of it. Labor costs have really calmed down, and as the population starts to age, they really need those people to help with things like health care and construction. But just because Spain has been able to do it doesn’t mean that everyone else can. The reason is really simple. Spain used to have an empire, and that empire is packed full of young people. 

So when you look at the Spanish speaking world, which is basically the entirety of the Western Hemisphere, minus the United States and Canada, you’ve got a huge pool of people who, from a cultural point of view, already speak the language, even if it’s a different accent and some different pronunciations, and that are willing to move across the world in order to move into what is now, honestly, a second or third world country. 

That is something that cannot be replicated for most countries in the world. I mean, look at Poland, for example, which came in from the cold and industrialized about a decade after Spain, Poland used to have an empire as well, but it dates back almost a thousand years, whereas Spain’s is much more recent. And the countries that it’s settled are actually settled with people who used to be Spaniards. 

So the cultural gulf that immigrants have to cross in order to move to Spain is not nearly as big, and it’s not nearly perceived as big by the Spaniards themselves either. Anyway, bottom line is, among all of the European Union countries, among all of the Western countries, Spain is the country that has become the poster child for how you can take integration and immigration and turn it into a national expansion and survival strategy. 

Whether or not anyone else can follow in their footsteps. Well, that’s a different question.

Houthis Declare Open Season on Saudi Arabia

Photo of Houthi rebels in Yemen

The Houthis are threatening Saudi oil infrastructure, but are they all bark or is there real bite behind the threats?

The Houthis largely depend upon Iranian weapons, but if Iran were able to replenish drone and missile stockpiles, they still have to get them into Yemen, evading Saudi border controls and U.S. naval monitoring. If the weapons did make their way into Houthis’ hands, the question then becomes about scale.

Potshots and isolated strikes won’t move the needle, but sustained strikes could overwhelm Saudi defenses. The largest concern is the Petroline, which has helped stave off the energy crisis throughout the Iran war. We’ll find out soon enough what the Houthis have up their sleeves.

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Transcript

Hey y’all. Peter Zeihan here. Coming to you from Colorado. Today is the 21st of July. We’re talking about something that went down yesterday on the 20th, on Monday. The Houthis, which are an ethnic group in western Yemen, basically declared open season on all things Saudi, including oil flows. Now, Yemen is in the southwest corner of the Arabian Peninsula, and most of the Saudi population lives on the west side of the peninsula. 

And so using weapons systems, mostly drones and missiles supplied by the Iranians. Everything that matters is within range of the Yemeni. Now, a few things to keep in mind at the point of this recording. There have been no attacks, just the threat. Number two, in the first phase of the Iran war that happened a couple of months back, the Yemeni did fire quite a few things, and then it appeared that they ran out, which means that the question is whether that they have been replenished by the Iranians in the time since. 

Yemen has arguably the worst industrial base on the planet and cannot make things like styrofoam or even plywood, which by volume make up the majority of, say, a had drone. They certainly can’t make semiconductors and electronics, so any equipment that they have isn’t simply guided by the IRGC. IRGC is the militant faction that now runs Iran. Since the Trump administration killed everyone who might qualify as moderate. 

But the GC also does the supply. So guidance and supply and targeting. So don’t think of this as a separate actor. This is just an arm of Iran for this purpose. Which brings us to the third problem. Iran had more than enough time in the way the Trump administration handled the cease fire to earn money, in fact, earn US dollars and for supplies to be rerouted from China. 

Most of the equipment that is used to make the Shahid drones and the missiles comes from China. It used to come by water, but there was a blockade. So now it comes often by rail and that is something the US can’t interdict. So in the two three months that we’ve had since the blockade started, that should have been more than enough time for Iran to completely replenish all of their stocks. 

And with the way the United States ended the blockade by allowing Iran access to the US dollar market, they probably have more than the currency to pay for all of it. But getting the equipment from Iran to Yemen is a different thing. The rail option or road option is not a good one, because you have to go through Iraq and Saudi Arabia and the Saudis have a de facto blockade at the Yemeni border. 

You might theoretically be able to go through Oman, but the Houthis are on the other side of the country, so it’s probably not gonna work either. So it has to go by water. And while the US Navy has had a hard time asserting control over the Strait of Hormuz just because of the mechanics of the new weapon systems, being able to monitor what goes in and out of Yemen is child’s play in comparison. 

So unless there’s been a gross collapse of strategic planning in the Trump administration, which I cannot rule out, the odds of unrestricted access for the IRGC to Yemen to replenish their military supplies is pretty low. So at the moment, the fact that 24 hours has gone by and there hasn’t been an attack, I am not exactly calling bullshit, but I am dubious of the Yemeni are going to be able to do anything. 

But let’s assume let’s assume that this is wrong and that supplies have made it to Yemen, and the IRGC is preparing attacks on Saudi infrastructure. A couple things to watch for. Number one is volume. If they cook off a drone or a missile a day, going after a ship or a highway or a refinery or whatever it happens to be, that’s not a big deal. 

Mostly because there’s just not a huge I mean, it’s a target rich environment, but the Saudis have been dealing with some form of attacks from Yemen for almost a decade now, and that sort of volume isn’t going to really move the needle very much. Second, if we do get more attacks a dozen a day or more, then we’re in a different field. 

And then we need to consider a couple of things, because first of all, while the Iranians have mid-range drones that are perfectly capable of hitting the western side of Saudi Arabia, flying over the Persian Gulf over the entirety of the Arabian Peninsula, hitting the far side of the country. They’ve done that. They’ve demonstrated they can do that with accuracy. 

Doing so requires the weapon system flying a bit of a gantlet, because you have to get over American naval forces in the Gulf. You have to get over the oil fields of Saudi Arabia and Gutter and Kuwait, all of which have air defense. And you have to get there over the entirety of this Arabian Peninsula. There’s plenty of chances for fighter jets, for example, to shoot down drones. 

And then, of course, there’s missile defense on the western side of the peninsula. Two or if you fire it from Yemen, you spend most of the time over the water. And under the earlier Trump administration, we had a 30 day war between the United States and the Yemeni. And the United States learned very, very quickly that it really couldn’t root out the launchers in a place that as is as mountainous and as rural as Yemenis. 

So if your weapons systems spend most of their flight time over the water, most of them are going to get through and they’re going to hit the Saudi coast, coming from the west instead of the south. And in doing so, the air defenses will be out of position. So you could do some very real damage very quickly. And then third most important thing. 

One of the reasons why the loss of crude out of the Persian Gulf has not led to a catastrophic energy induced depression to this point is that the Saudis have something called a Petro line that ships about 7 million barrels per day from their fields in the east, across the length of the peninsula. Going west, it hits Yanbu primarily, which is one of their primary ports on the western coast. 

And that one pipe has made up for about a third of the disruption that we would have felt, and has done wonders for keeping prices from going stratospheric. Well, it’s an easy range of anything from Yemen, so I’m not calling that the Yemeni can’t do this, although I have my doubts. But we will find out in the next few days, maybe a couple of weeks. 

Whether or not a the Iranians have actually moved hardware successfully to Yemen, and b whether the hardware that is moved has significantly accurate targeting in order to damage the facilities that are necessary to prevent that energy induced depression. A lot of moving pieces, a few if things in that statement, but we’re going to pretty soon whether the hardware and the equipment is there because we know the advisors are already 

and the Houthis really have no problem sticking it to the Saudis at every opportunity. So time will tell. And it won’t take that much time.

Ukraine Closes the Sea of Azov

NASA satellite image of the Sea of Azov | Photo by NASA and creative commons licsense

Ukrainian drone attacks have effectively shut down Russia’s use of the Sea of Azov, which is a critical export route for southern Russia.

The sea connects the Volga River canal system to the Black Sea, allowing agricultural goods, coal, iron, and more to reach global markets. And with Russia’s rail network already overburdened, losing this waterway is devastating.

If Ukraine expands these drone attacks into the eastern Black Sea, the shadow fleet will face even further disruptions. With no quick solutions on the table, the Russian economy and war effort will be on its back foot for quite some time.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from just below Cupid Peak, above Loveland Pass. And over here we have Grays and Tories and Grizzly Mountain. Not going to be able to do those today because we got lightning moving in. Boo. But I’m still going to do a video for you guys. I just got back from Yosemite and still catching up on everything that happened. 

But one of the big things that happened in the Ukraine war is that the Sea of Azov is now offline. The Sea of Azov is a body of water to the east of the Crimean peninsula, that’s Russian occupied Crimean peninsula, and to the south of Russian occupied lands in southeastern Ukraine. It’s a waterway that freezes sometimes in the winter. 

But the real important thing is that is the outlet for a huge amount of cargo. The Russian system is not well set up for shipping cargo. A lot of stuff has to go by rail, but the Russians are literally running out of ball bearings, so they’re hitting the max of what they can do, and they can’t replace the cars and the speed that they need to. 

So they’re seeing reductions in throughput. That makes it much more important to ship things by water. The problem is, is that the Russian coast of the Black Sea doesn’t have any navigable river outlets. It’s somewhat rough and mountainous. And so what happens is you’ve got an inland waterway, the Volga, that goes near Moscow and snakes through Russia and empties into the Caspian Sea. 

The problem is the Caspian Sea is a landlocked body of water. So what the Soviets did is they engineered a series of canals and locks that go from the lower Volga near the Caspian over some low ridges, and get into the Don River system. And the Don empties into the Sea of Azov. So, in essence, if you’re shipping coal or iron or especially agricultural products, you get it onto the Volga. 

You go through a series of locks until you get to that connection. You take the canal over to the Don, to Rostov on Don, and then you get into the Sea of Azov, and from there you get into the Black Sea in the wider world. Well, while I was gone, the Ukrainians hit over 200 ships in like a week in their first big push and basically shut off the sea of his off completely. 

So any of the cargo that used to use this waterborne export, which was one of Russia’s main ones, the primary one for southern Russia, suddenly has nowhere to go. They go onto the rails, but the rail system already overloaded and honestly starting to fall back. So a couple of things from this. Number one, we’ve got a lot of Russian cargo that is now just trapped. 

It has nowhere to go and there’s really no quick fix here. The Russians have withdrawn a lot of their air defenses from places even like Crimea, to put it around Moscow, because Ukrainians have shown that any target that’s within roughly a thousand miles of the front is something they can in force. And that’s forcing the Russians to the air defenses that they have in places where they will serve political purposes. 

Because of Moscow, came under heavy drone attack every single night for a month that might shatter the political coalition that holds the Russian system together. Right now. That’s one. Number two, Rostov on Don. This is one of the city’s one of the two cities in Belgorod that serves as nodes for transporting military gear to the front, and it has now lost all of its economic wherewithal. 

It’s now just a military outpost, in effect. This is something that’s going to have a huge impact on the Russian economy and ultimately crimp Russia’s ability to get stuff to the front, because if that river is no longer available, if the canal system is no longer available, if the receipt of is of is no longer available, then one of the more wealthy cities in Russia just lost everything that made it work except for being a military depot. 

And you should expect more tax there over and over and over again in the not too distant future. Third, now that the Sea of Azov is offline, next up is the Black Sea. It’s not that much further. The Ukrainians have loads of drones that are capable of taking the war now just across the Crimean Peninsula and into the ocean, and we’ve already seen dozens of attacks on things like tankers and Borchers, everything that’s in the shadow fleet. 

So look for the Ukrainians over the next couple of months to repeat what they did in the Sea of Azov in the eastern side of the Black Sea, because no ships go there, really, unless they’re part of the Shadow Fleet. No one else wants to dock directly. And it’s not like they haven’t been warned if they decide they want to try. 

The only real solution here that the Russians have, because air defense isn’t going to cut it, is to up their attacks on the Ukrainians to the point that it attracts the Ukrainians ability to do this. But since it’s from mobile launch sites with ever evolving drones and drones at the moment, the Russians haven’t figured out sorry about the wind drones. 

At the moment, the Russians haven’t figured out how to replicate. That’s something that undoubtedly can’t happen this summer. This is going to be a problem for a year from now, or a potential solution for a year from now. And now we’re getting to India and I’ve got to stop so by.

Chinese Marriage Data Confirms Demographic Crisis

A chinese woman in a bridal dress walking down the aisle with her father and onlookers taking photos

Most of the data coming out of China isn’t worth the paper it’s printed on, but there are a handful of metrics that aren’t based on estimates. Today, we’ll be looking at marriage registrations and what the 6% decline from last year means.

This echoes a decades-long decline in marriage registrations and reflects the broader demographic decline facing China. Since an overwhelming number of Chinese births occur within marriage, the population decline may be even worse than previously forecasted.

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Transcript

Hey all, Peter Zeihan here coming to you from…where am I? Termoli In Italy? And today we’re going to talk about some Chinese statistics that just popped out in the last couple of weeks that look really bad even by Chinese standards. So backdrop that you need to know this way is that Chinese data is awful. Part of that is just the nature of the beast. 

China really only started its industrialization process in 1978, and so the techniques that a lot of Western countries have been using for the better part of a century are new. And computerization really is only the last 20 years. And it’s a huge place. So getting the locals and the center to agree on what is normal statistics is a little hit and miss at times, and part of it is unfortunately by a degree of design, the central government sense quotas for everything and so lo and behold, the locals meet the quotas or maybe expand upon them. 

And then on top of that, you’ve got punishment issues. And where if a data point comes out, the Chairman Jinping doesn’t like the person who presents it to them, may have their job and or life forfeit. And so the people who do the data collection just stop collecting that data point, whatever it happens to be. So we have really poor data on Chinese demographics and financial issues and bonds and all these other things these days, especially health anyway. 

But there are some that are seen as not politicized. And so data for those is good. And the one we’re going to talk about today is marriage registrations. According to the new data that’s come out in the first half of the year. Those are down by roughly 6% in just the last 12 months. And that is on top of year and year declines that go back the better part of 30 years. 

This is data that has been collected since 1978. And it’s not an estimate like a lot of data. It’s actual registrations. People have actually gone to the equivalent of city hall and registered the marriages. So it’s something we relate to or it’s something that we can relatively rely upon. Now, the reason why this matters is if family formation is down, the birth rate is down, and if the birth rate is down, China’s hollowing out. 

Now, this is something we’ve been looking at at any number of angles for quite some time. What is interesting here, from my point of view, is that the marriage rate drop has been dropping much, much, much faster, two and three times faster than the. Suppose it had declined in the number of 20 and 30 somethings, where usually the people get married. 

So it gives us a little bit more accurate view of just how bad the demographic crisis is. And it was already really, really bad. Basically, we no longer have enough people under age 50 in China to even theoretically repopulate a country of 400 million people, much less supposedly the 1.2 billion that China says it has. And in internal conversations, the Shanghai Academy of Sciences is now debating how many hundred million people under age 40 they’ve over counted. 

They know it’s at least 100 million. And this year, the number 500 million popped up for the first time as a possibility. They just don’t know. And they don’t believe they have the capacity to go out and do get the information, because too many people are concerned with getting the wrong ancer anyway. It’s a tiny little window into the crisis that the Chinese are facing these days, and to be perfectly blunt, there’s no coming back from this without marriages. 

There are no children or very few. But more importantly, there are now no longer enough people to even theoretically get married in order to attempt repopulation. So it’s just a question of timing, whether it’s in single or double digits of years, of course, matters to all of us because we’re all living in the now. 

But it looks pretty rough and this isn’t going to last much longer. All right. That’s it for me for today. Till next time.

The Demographics of Central Europe

A satellite map of central Europe and terrain

Central and Eastern Europe are undergoing major demographic decline. We’re talking low birth rates, aging populations, and decades of youth emigration to Western Europe. So, what does this all mean?

We’re seeing a broad emptying zone with shrinking labor forces and weakening state capacity. In the past, this brought about systemic change or uneven regional power shifts. And we’ll likely see some version of the latter, as control over the region begins to fragment.

Since most European powers won’t be able to project power eastward, Turkey is really the only viable option to become a dominant regional actor.

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Transcript

Hey, all Peter Zeihan here coming  to you from Colorado. Today we’re going to do another demographic talk this time about kind of what’s next. From a state survival point of view, regional stability point of view. the data is pretty clear has been for, I would argue, a half century. People are living longer. That’s a subset of technology. 

People are having fewer kids, which is a subset of urbanization. When you’re in the country, kids are free labor. You have a bunch when you’re in town. Kids are an expense. You have fewer. But there’s more going on than that in every part of the world. And the story changes based on where you are. 

So today we’re going to talk about the area where Europe bleeds into Eurasia. So the Inter Mariam block of Estonia, through the Baltics, down into Central Europe, down into the Balkans. This is arguably the part of the planet outside of China that has been hit hardest by the demographic. Halloween out. We have three reinforcing trends. Number one, these were all former Soviet states or satellites. 

And so they benefited from the Soviet industrial experience, which was harsh, which crowded people into small living conditions, drastically reduced the desire for kids, and in general gave you infrastructure that wasn’t up to what we considered normal standards, generating the lower standard of living that could not be alleviated by having kids could only be alleviated by having fewer kids. 

Second, in the post Cold War environment, with NATO and especially the European Union, all of these countries eventually ended up joining both institutions. That meant that from a security point of view, they started getting assistance against the Russians. And from an economic point of view, we had a tug of war between two forces. Number one is the economic modernization and expansion that could occur when they were part of what was the world’s second largest economic block. 

And number two is the free movement of people. And these two forces oftentimes found themselves at odds, because if you’re in your 20s and you’re skilled and you’re not nailed down to a family or property, then it makes a lot of sense for you to pack a suitcase and go to Germany or France or wherever, and work in a job that might be below your skill set, but would earn you a wage that is far better than your skill set would have earned you back home. 

As a result, people under age 40 really flowed out of all of these places. On the flip side, as the Europeans integrated their supply chains further east into the former Soviet bloc, they discovered skilled workforce, decent, if not great infrastructure and lower costs. So in many ways, this whole area became a kind of like Mexico was to the United States. 

The Central Europeans would do the stuff that was more labor intensive, more industrial, whereas the Western countries would do things that were more technological and higher value added. So you’ve got this ebb and flow and this integration. The problem is building that infrastructure, training the workforce is integrating the supply chains took time, and the only country in the West that truly took advantage of it was Germany because it bordered Poland, Slovakia, Hungary, and so within that core Germany, Poland, Slovakia and Hungary, the personnel drain wasn’t as extreme, whereas the countries that didn’t directly border a major industrial economy. 

Estonia. Latvia. Lithuania. Slovenia Bulgaria. Romania. Tended to lag because for them, the pull of the people leaving was more powerful than the retention capability by industrialization. Both trends happen in all the states, but the imbalance between those in core central Europe was very different from those that are on the periphery. As a result, we have already seen the populations of Estonia, Latvia, Lithuania, Romania and Bulgaria dropped by over a fifth, about a quarter, actually, since the post-Cold War era began. 

And they’re probably going to drop by that much again over the next 10 to 15 years, because the problem is when the young people left and only the old people remained. The birth rate functionally went almost a zero, and repopulation became technically impossible. Also within this band of countries are Ukraine, Belarus and Russia. Now Belarus we can’t talk about because they’ve never done a census. 

We really don’t know what it looks like. Ukraine has done a census and it’s God, it’s bad. Their population outflows reflected basically what was going on in the Baltics and the Balkans before the war. And then with the war, anyone who was a single woman or who had kids generally tried to get out. And so we’ve seen a 15% drop in Ukraine’s population just since the war began four years ago. 

There’s very little reason to expect this war to be over soon. War, if it ends in Russian victory. You know, none of these people are going to come back. In fact, the outflow will be even bigger. Russia, Russia’s statistics. The last time they honestly updated them, which was in the early 2000, they showed having a demographic picture that was the worst in the world in terms of death rates and birth rates. 

Since then, they’ve gone out of their way to manufacture some data. Looks pretty good and we just don’t know how bad it is. But the idea that it has gotten significantly better is a bit of a stretch. They may may have managed to get some other causes of mortality down. Things like alcoholism, accidents, drug abuse. Those may well have moderated and that will make the numbers nudge up a little bit. 

But it’s difficult to imagine that the birth rate has recovered at all. Anyway, you pull all this together and we’ve got this wider region that is basically depopulating. So the question is what happens next? There aren’t a lot of historical examples. Let me put out two just to kind of frame this. Not that they’re predictions, but number one is that we all go down together. 

During the dark Ages we had the Black Death Black Plague, which killed third to half of most populations across Europe. But because it killed everyone across international borders, everyone was kind of in the same boat, and the demographic picture had more economic and cultural outcomes than it did military or strategic. Because if you all of a sudden have a labor shortage, then labor starts to get paid more and you start developing the technologies that are necessary to operate with less labor. 

And that led directly to the Renaissance. You know, I don’t want to say that can’t happen this time around. Just keep in mind that last time, it took a century and a half before that really manifested. So if you’re looking for the silver lining in the dark cloud, I guess there it is. But you won’t live to see it. 

Second option we don’t all fall together. Some places fall faster. That’s definitely the story of this region. And the last time we had something like this at this scale, it actually was in this region. We had the Mongols who came through and disrupted systems and killed lots of people and basically depopulated large portions of the territory that we now identify as northern Ukraine and southwestern Russia. 

That’s the part of Russia that’s closest to, say, Belarus. And then, of course, Belarus itself. These areas experienced depopulation and well in excess of three quarters in a very short period of time. And if you go just a little further to the west, you get out of the steps and planes of the Russian space and you hit the forests of Europe. 

Well, at that point, what we discovered is that cavalry charges like the Mongols were famous for really didn’t do anything against a castle wall or in a forest. If they entered the forest, they had to dismount and all of a sudden it’s just a one soldier against lots of peasants with pitchforks. And so the Mongol invasion just kind of broke at that point. 

And then the Mongols had internal political problems, and everybody went home. And so the Lithuanians were the first ones to kind of peek out from the forest like, hey, where everybody go? And they went out a mile and then two miles and then ten miles, like, there’s nobody here. And so Lithuania steadily expanded over the next century to become one of the most powerful countries in Europe. 

They merged with Poland eventually, which was another country that benefited from the the shift into force and fortresses and the Polish-Lithuanian Commonwealth became the most powerful country in the world at the time, didn’t last because eventually the few people that were left across these vast sweeps had kids. The population rose and eventually pushed the Poles and Lithuanians out. But not before the Polish-Lithuanian Commonwealth conquered Moscow, among other things. Some version of that seems to be the more likely outcome here. The problem is, is that all of the countries that are bordering these zones are also in demographic decline. France looks pretty good, but it’s on the wrong side of Europe. You have to go through Germany. Germany’s demographics are not as bad as, say, Estonia’s or Bulgaria’s, but they are awful. 

And regardless of what the German government, under whatever iteration it happens to be in five, ten, 15, 20 years happens to be just won’t have the manpower to go out and hold the land. There’s one exception and obviously Russia to similar situation. It’s just it’s crumbling from within demographically. The one exception is Turkey. Here’s a country that is still relatively early on, the aging process, the raging rapidly, kind of like the Mexicans or the Brazilians, but they have a minimum of another 40 years before that hits any sort of break point. 

And that assumes that there’s no slowing of recovery. So the last time the Turks went on an expansionist period, they went north through the eastern Balkans into what is today Bulgaria and Romania. They punched through into the Pannonian plain, which was now Hungary, and they went up into what is today Crimea and Ukraine until they’ve hit resistance from the Russians. 

But if we’re fast forwarding 20 years, there’s probably not going to be much of a Russia, and there’s probably not going to be much of a NATO or a Germany. And in that scenario, really, the Turks can go until they hit a country that has some density to it, and they won’t hit that until they hit Poland. That doesn’t mean that a war with Poland is guaranteed. 

We’re talking about an inference on an inference and inference here, but the idea that there is a northern limit to what the Turks can do in this sort of demographic scenario, which is kind of hard locked in at this point. It’s pretty far north. So we’re looking at a broad rewriting of what is possible and this part of the world. 

And considering the time frame, a lot of us, whether we’re watching from the outside or the inside, are going to live to see it, because that’s not that far from now.

Russian Sleeper Cells Don’t Scare Me

A man in sunglasses with Russian glyphs behind him on a red cyber background

The idea of sleeper agents being embedded in the U.S. is largely unrealistic. In contrast, the far more realistic threats that should concern you are short-term operatives carrying out intelligence-gathering or financial activities.

The Hollywood special “sleeper cells” are only worth the investment for major assassinations or mass-casualty events, not routine sabotage or espionage. Whereas, planting foreign intelligence operatives through legal means and for shorter periods makes much more sense. However, the U.S. can typically detect this kind of thing through its vast and interconnected signal detection network.

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Transcript

Hey all. Peter Zeihan here coming to you from Colorado. Today we’re taking a question from the Patreon page. Specifically, what with everything that’s going on in the world today, with all the changes the United States involved in the Middle East, the Russians literally on the warpath, the Iranians now having ample reason to hate the United States for fresh reasons. And the Chinese, of course, always pushing, pushing, pushing. 

Do I worry at all about things like sleeper agents? Let’s clarify what most people mean by sleeper agents before I answer that. So the idea is you have some highly trained operatives that go into an enemy state, establish themselves as locals, get jobs, raise families, buy homes, and live among the target population for years while they do research towards a specific end tax to justify the investment. 

The reason I don’t worry about sleeper cells is that specific thing towards an end task to justify the investment. Having somebody with a deep skill set in Intel is one of the most expensive things that you can do. It’s like astronauts, F-35 pilots and then the high end spies. So if you’re going to put them somewhere where for years you’re not going to get a payback, you’re talking about having to have a payback on the backside. 

That is on the scale of assassinating somebody like the president or causing mass casualties, simply getting in and stealing a piece of technology or blowing up a pipeline or something is not going to cut it. So no, this is not something I worry about. Does that mean I’m not worried about us, the United States being penetrated by foreign intelligence? 

Totally different topic. The United States is a free society. The United States allows people to fly in with limited background checks. And if you’re going to have an Intel system that wants to flood your country with foreign operatives, you know, student visas, for example, is a very easy to get way to get in. That’s how some of the nine over 11 attackers got in, for example. 

But that’s a very different sort of operation. Those are operators that would be in the United States, people who are operational who have specific tasks. So, for example, in the past, the Russians, both during the Cold War and more recently in the post-Cold War era, have sent dozens of people into the United States to gather information from wherever they can. 

It’s not a sleeper unit. That’s somebody who’s actively reporting. And it’s that sort of act of reporting that U.S. Intel signals intelligence in particular, is very, very good at rooting out. And ultimately, we did Hezbollah. You know, the group in Lebanon has sent people here primarily to love this, buy cigarettes. They bought them in one state. They sold them in another state, set up a little smuggling system within the United States to take advantage of the difference excise taxes. then sent the money home. They also accrued equipment that they were going to send home. But that sort of activity do it in bulk enough to generate money. That is the sort of thing that also tends to pop up on the radar of law enforcement, right down to the local level. The bottom line is, while we may have a free society, we’re still an information society. 

And because we have local law enforcement, state law enforcement, federal law enforcement, and then regulators at every level for everything means it’s really hard to establish some sort of like deep root into the American system to carry out some hypothetical attack. So while we have a lot of operational folks and there are spies in the United States and have been spies, we’ve never had anything that kind of fits the generic term of sleeper cell. 

So for sleeper cells is really tends to be restricted to to low end and really not particularly realistic fiction. This is not something I lose any sleep about. Which isn’t to say that I don’t lose sleep.

Why Space and Data Centers Don’t Go Together

Nebulas and stars in space

We’ve all seen the headlines lately talking about the proposed data centers across the U.S. While nobody wants these things in their backyard, putting them in space isn’t going to solve our problems.

With just a quick look into some basic physics and logistics of putting a data center in space, the idea becomes comical. First, you have to put massive amounts of hardware, cooling systems, and power into space. Then you have to completely reengineer the data center for space. Then you have to think about maintenance. Oh, and cooling these things down in a vacuum is no easy task.

To put it simply: no, we won’t be putting any large AI data centers in orbit.

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Transcript

Hey, everybody. Peter Zeihan here, coming to you from Colorado. Today we are taking a question from the Patreon crowd. So it’s a question that I have resisted answering because I don’t like it, but so many people have asked, I figure, what the hell? So it’s on space based data centers. Is that the future? Will this solve some problems? 

How much is it? It’s just a little bitty snake. Is this something we should take seriously? Let’s explain what a data center is. You have dozens, hundreds, thousands of racks that contain modules that are packed with things like graphics processing units, Dram and Rand memory, and then threading through it all, some sort of coolant. 

You see, most data centers are based on crunching data, the GPU part, and that generates a lot of heat. So you incorporate the cooling system into the modules and if you can, into the gypsum cells, although that’s really cutting edge and no one’s really doing that at scale just yet. Soon, hopefully. Anyway, those racks have weight, the GPUs have weight, the Nand has weight, the Dram has weight. You need a lot of electricity. You need a lot of coolant. 

You need a liquid system. You need a pumping system. And if you’re going to take a one gigawatt system and move it into space, the theory is that because space is cold, cooling is cheap, and because solar power in space generates at least five times what it does on the surface, power is cheap. No, no. Let’s start with getting this stuff up there. 

So just the computational stuff, the racks and the things in them, not counting the cooling system. That’s for something of this size, roughly 20 million pounds of weight. Then you need another 10 million pounds of weight for the liquid coolant. Then you need another 5 to 8 million pounds of weight for all of the assorted things that keep it alive the pumps, the power cables and such. 

Okay, that by itself is about 250. Starship launches. Starship is the vessel that Elon Musk and SpaceX hope is going to revolutionary space travel. It’s currently in the prototype stage. It has not been going particularly great, but let’s just hand wave that away and say that it works 250 of those to get the equipment up. You’re not done. 

Now you need a construction facility in orbit, which means you need a habitat in orbit. You also need a habitat at the data center, because a typical data center has 100 people working at any given time. Now, the ES International Space Station has never had more than 13 people in at a time. And really it’s only rated for seven. 

So you’re talking about the equivalent of 20 to 40 ES equivalents attached to this data center in order to carry out the work. And that assumes that the work is possible, which are probably isn’t GPU’s really. All the high end chips are not rated for vibration, for cold, for heat, for humidity, and certainly not for radiation. And you’re in space so you don’t have the planet’s magnetic field and atmosphere protecting you. 

So now you need to clad the whole thing in radiation proofing, which is at least another 20 million pounds. There’s another 200 Starship trips. Also, a data center is a living thing. Chips burn out, you have to remove them and replace them. So now you need a space based launch system just to maintain your one data center. Oh, and the biggest thing heat. 

Yes, space is cold. But what people forget is that space is a vacuum, and a vacuum is the most effective insulator we have ever discovered. So yes, you can use radiator fins, but their area of effect has to be an order of magnitude bigger than what they would be on Earth, and a very different configuration because they need to extend significant distance. 

You’re talking about literally tens if not hundreds of kilometers square kilometers of radiator surface in order to radiate the heat. Yeah, it’s cold out there, but it’s also insulating. So you’re now talking about a system that needs a pumping system to get the liquid out to the radiator fins, and you are in zero g. So you don’t only need more pumps to cover more territory. 

Pumps don’t work as well in space because you don’t have gravity doing some of the work. So now we’re basically conservatively up to 500 space a star. 500 star. What’s it called? Starship. Yeah, 500 Starship launches and a note on the radiators. This sort of design, we don’t build on Earth because, you know, we’ve got gravity. So not only are you talking about having to invent a fundamentally new system here for the cooling system, but just the cost of the radiators alone is probably about the same as the GDP of New Zealand, about $250 billion, and that is by itself 20 times the cost of a one gigawatt facility all in on Earth. 

There’s so many levels of dumb to this that I forgot. One that’s really kind of critical. The radiators. Not only are there big and expensive, but remember spaces and insulator. So if you’re radiator fins are flat on to sunlight, they’ll actually absorb heat rather than get rid of heat. So you have to make sure they’re always point in to the sun, which means that your space based data center has to do something that no Earth based data center has to do. 

It has to be able to move. So you got to put engines in maneuvering thrusters on this thing, complete with the fuel. So yeah, so much dumb. So anyone who tells you that data centers in space are coming because we don’t have room is lying to you. Anyone who is telling you it’s the only way that AI is going to work is lying to you. And anyone who’s trying to raise funds off of a story like this is just thinks you’re stupid and is going to get your money. 

Don’t fall for it. Does this mean there can’t be computing in space? Of course not. You can have small, small emphasis on small like a rack systems attached to some sort of orbital platform. But all of these rules apply. Massive radiator fins, atypical cooling system, huge cost to install. And unless you’re going to permanently station people up there when something fails, it’s broken for good. 

So no, this is not revolutionary. But if the rules of physics change, I reserve the right to change my mind.