Peter Zeihan, Author at Zeihan on Geopolitics

China After Xi

TECHNOVATION INTERVIEW

Here is a link to my interview with Peter High on Technovation. We covered topics intersecting demography, economics, energy, politics, technology, and security.

I get a lot of “what if…” and “what happens next…” style questions and most of them suck, but today’s question takes us down a fairly interesting rabbit hole – what happens to China if Chairman Xi Jinping dies or steps down?

Remember, I didn’t say that this rabbit hole was going to be a happy one, just that it was interesting. So instead of the headlines reading “China Flourishes Following the Death of Xi Jinping”, I would expect something more along the lines of “China Moves One Step Closer to Collapse”.

Between the gutted political system that Xi would leave in his wake and a faltering economy, China wouldn’t exactly be set up for success. The Chinese would likely have to scrap their current state structure and develop an entirely new system.

The bottom line is that Xi Jinping has caused plenty of problems during his time leading the country, but removing him from the picture isn’t going to magically solve those problems overnight.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everybody. Peter Zeihan here coming to you from Colorado’s lost wilderness. This is a lost canyon. A little bit of a bushwhack, but it’s been a good day. anyway, I’ve started my backpacking season, so we’re going to be taking a lot of entries from the ask Peter Files. I’ll try to do some current event ones, but, you know, I’m not going to be able to upload every day, so, you know, it is what it is.

Anyway, today’s entry is what happens to China when Xi dies. So, you know, that’s a great question. a couple things to keep in mind. A number one has, imprisoned and executed his way into being a cult of personality. There is no successor. There is no potential successor. There is no up and coming cadre of people with talent.

He is basically purge the entire system of any within of ambition or competence. And so it is just him and the bureaucracy now is going after things like patents and college dissertations, so that no one who is under age 25 can even get into the system in the first place. So it is just Xi, it is Xi alone, and he will ride the system into the ground.

It’s so much worse than that sounds because China is not a normal country. So there are different sorts of governing systems. confederal federal and unitary, confederal. Your regions have more power than the center. So think Switzerland or Canada. In a federal system, there’s a shared competence, among the national government, the regional government and the local governments think Germany or maybe the United States.

And then there are unitary systems where, the national government basically sets all policy and everyone just has to go along with it. that’s Russia, that is France, that is Argentina. technically,

China’s federal, but because of the purges and because of the control of the Communist Party, it is basically become super unitary, where everything that happens in Beijing is the only thing that matters, because she is purged all of the regional local governments of anyone who has any capacity.

There’s additional problem here. and that’s just the geography of China itself. it is not an easy place to rule. You have a lot of varied geographies that look to different parts of the world, much less different parts of the country for leadership and economic growth. So, for example, if you’re in the series of cities on the southern coast, roughly from Fujian to Gwangju, you don’t have an interior, you don’t have access to local agricultural product, and you don’t have access to one another.

What infrastructure exists in this area has been built just in the last 30 years, and I don’t mean to suggest it’s not impressive by any standards it is, but it’s nothing like, say, being in the Midwest or in northern Germany, where the land is flat and infrastructure is easy. And so all these cities have their own individual identities.

And historically speaking, all of them have gotten the majority of their calories going back 1500 years from somewhere not on the Asian mainland. Then you got the center section from Shanghai up to,

Chongqing. There we go. Oh, the one province. this is kind of the. This is the area of the Yangtze River. This kind of the Mississippi of China.

Think of it. It is Detroit and Minneapolis and Saint Louis and New Orleans and Houston all in one. definitely a discrete economic unit with discrete political and cultural identity. And then you’ve got the North, the north China playing around, the yellow River. This is an area that is pretty flat. And the problem is, is it’s just it’s been too big, historically speaking, to be all under one power until the industrial era.

And so you would generally have warlords trying to take over individual chunks of the territory. And because this is also a flood and drought prone area, the waterworks were necessary to maintain the population. So when a warlord thought he was going to lose or wanted to launch an attack on a neighbor, he’d go after the waterworks anyway. So you get this nationalistic, militaristic north.

You get kind of a corporatist industrial financial center. And then what has traditionally been a secession of South and keeping these all under the same rubric, under the same governing system is hard. And so you have to basically look at Chinese history from this point of view and that there’s kind of two models. Model number one is each region has as much autonomy as it can stomach.

And the whole thing spins apart. In the north in particular falls into civil war. There’s a reason why all of China’s dynasties never last very long. It’s hard to hold this all together, or you overcompensate the other direction and hyper concentrate authority in Beijing under the Emperor, or now under the Communist Party general secretary, and hold everything as tight as possible.

Neither of them last for long, and unfortunately, there’s nothing in between that works really well either. Kind of a confederal system would just lead to friction and eventually conflict among the various sections. Well, at the moment we are clearly having a hyper centralized system. So we have a hyper centralized system in a geography that is difficult to govern.

But now everything is being all the decisions being made in Beijing, we have a unitary system because the party is eliminated. Everyone who isn’t Xi and Xi himself is not a spring chicken. I mean, he’s not like Biden or Trump old, but the dude can’t be around for much longer and there’s no one in the wings waiting to take over. So when this breaks, you take the most hyper centralized

Iteration of China we have ever had? And you cut off the head at a time when the country is facing financial overextension and a demographic collapse. So when Xi dies, however, that happens, there will not be another government of China.

We will be facing state dissolution because the demographic situation is so bad, it’s entirely feasible that we have a collapse in the country’s ability to generate any economic activity. Of note, before such time as something can theoretically rise on the other side of this. So we could we probably are looking at the end of the Han ethnicity as a player in international affairs, because by the time we get to the end of the century, there aren’t going to be a lot of them left. So when Xi goes, that’s it, the party’s over. All right, so you guys from the next canyon.

Photo by © European Union, 2024, CC BY 4.0, via Wikimedia Commons

Why Genoa Is Graying: Italy’s Demographic Decline

While the Italians may have mastered the arts of pasta, wine and gelato, they should have been spending less time in the kitchen and more in…another room. That’s right, we’re looking at the demographic problems facing Italy, and Genoa will be our example.

The population of Genoa in 1972 was 950,000. Today, it is under 680,000. The scary part is that Genoa isn’t an isolated instance. Italy’s birth rate has been below replacement level for over 75 years, leading to an aging population and a shrinking tax base. The scarier part is that Italy is just one example of a country facing demographic collapse, as places like Germany, Romania, and Spain are all in the same boat.

Unfortunately, there’s really no practical solutions for these countries to remedy this issue. Sustaining their economies and state functions without a younger generation won’t be easy, but at least we’ll see how nations can adapt to these demographic challenges.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey everybody. Peter Zeihan here. Coming to you from Genoa, Italy. And I’m going to do something a little bit different today. I am going to show you the world through my eyes. Let’s turn this around. We’re over the business district in the central Genoa, and it’s not the buildings in the foreground I want you to see. It’s the ones in the background.

The ones that are in more residential. You’ll notice that not a lot of them have a lot of lights on it. And over here we’re starting to go a the old town similar situation. And as we move over here you can see the train station kind of Grand Central if you will, and then up on the hill is mostly residential spots.

But you’ll notice that even though it’s 10:00 at night, which is, you know, when everyone’s getting home from dinner in Italy, most of the buildings are less than one third lit up. Some of them, well, less than a quarter. the issue is that for the entirety of my life, Genoa one has been shrinking in population terms.

And I turned 50 this year. 1972 was the last year that the city saw it increase in population. And that is pretty typical for Italian cities writ large. Unfortunately, Italy is going through a population crash and it’s well past the point of no return. the birth rate has been below two, births per woman for in excess of three quarters of a century.

And over the next five years, the population bulge that exists in many countries exists here, too, but they move into mass retirement now, I’ve been traveling through Italy for about ten days now, and I’ve begun to a lot of small towns and, you know, they’re they’re full of old people and not a lot of them. and everyone has the same refrains, like all the young people were picked up to move to the cities.

But now that I’m in one of the major cities, I can see that’s not the case. It’s just people haven’t been born here for a very long time, and now we’re looking at the dissolution of the tax base that is necessary to maintain a modern, civilized location. the the smart play here would be to turn back time and go back to the 1970s and figure out a way to make it easier for young people to have children.

but at this point, the only theoretical solution would be to bring in Canadian style levels of immigration and a sudden wave that never ends. simply in order to stabilize the Italian population in its current structure, which is already the oldest demographic and the fastest aging demographic in Europe, would be to bring in somewhere between 1.5 and 2 million people under age 35 every year from now on, which, of course, would end Italy in its current form.

Some version of this problem exists in huge portions of the world. Europe, of course, is where I’m thinking right now, because this is where I am. The Germans are only a few years, no more than five behind the Italians. And then there are a number of other countries that are a little bit younger but are actually aging faster.

Whether it’s Romania or Spain. Poland still has a chance for demographic reconstitution, but only if they get on it right now. the Russians are in a position. The Ukrainians are in a worse position. And, East Asia, Taiwan is kind of where Poland is right now, whereas Japan and Italy are very, very similar. and the Koreans are about where the Germans are.

So we’re seeing this over and over and over throughout the world. accelerated urbanization over the last 50 to 75 years has generated a population structure that is so old and aging so quickly, the reconstitution is no longer possible. And a number of the advanced states Italy, Germany, Korea, Japan, the next decade is going to provide a new model for us, populations in countries that are no longer capable of mass consumption or mass investment or max tax generation.

At the same time their populations move into mass retirement. something’s going to have to give, whether it will be state coherence or the finances or the economic model. First, everyone’s got to figure that out for themselves.

The Federal Reserve and Its Inflation Target

For all the hungover Americans out there, I heard the best cure after a long day of drinking is to talk about inflation. Well, maybe it will just make your head hurt more, but you still have the weekend ahead of you to relax…

The Federal Reserve has been juggling lots of different things over the past few years, and attempting to keep our system balanced is no easy feat; however, the Fed’s job is just getting started. With the need for a massive industrial buildout coming down the pipe, raising rates could hinder this expansion and cause a huge swatch of problems. Then the Fed will have to factor in the decline in population growth which is creating a low-demand environment, necessitating an entirely new economic model.

So yeah, the Federal Reserve has their work cut out for them, but don’t worry too much. The Fed’s actions should remain effective and US economic growth should remain strong…if anything (like inflation) does run awry, we might see some “legislative intervention”.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey everybody, Peter Zeihan here. Coming to you from the lost wilderness in Colorado. This is Lost Canyon, which I found myself in and turned out to be a little bit more than I bargained for. Anyway, we’re taking questions from the Ask Peter Forum today. One question is about my prediction of facing several years of inflation at 10% or higher and whether the Federal Reserve should revise its policy on interest rates.

For those of you who are not financial aficionados, the prime rate is what the Fed sets. The idea is to keep it low enough to generate economic activity by making credit cheaper, but high enough that demand doesn’t get out of control and generate runaway inflation. If we’re looking at a 10% inflation rate, that’s a bit of a problem because the Federal Reserve targets a 2% inflation rate.

So, big difference. And, a little bit of rain. We’ll continue this in a minute.

During the financial crisis into Covid, we were basically at a 0% prime rate. We’ve been ticking up ever since. The Fed recently met and it’s around, let’s call it 5.5%, 6%, somewhere in there.

Anyway, the question is whether they should go higher.

Yes and no. First and foremost, the Fed is going to be wrestling with things that I can’t even imagine. So I’m not the kind of guy who says the Fed should do this or that. I would just say that the Fed has a lot of tools. As we saw during Covid and the decade before, they can use them in ever more creative ways. However, the key thing to keep in mind is that the reason we’re going to be having these high inflation rates is not necessarily because of growth per se, although that will be part of it, but also because we’re going to be doing a historically unprecedented industrial buildout. We basically need to double the size of the industrial plant and probably increase the amount of processing capacity we have for raw materials by a factor of ten. That’s going to use a lot of electricity, a fair amount of labor, and a huge amount of land. Normally, if the Federal Reserve was looking to get inflation under control, they would raise interest rates to make borrowing more expensive.

But if you do that now, you’re going to choke off that industrial expansion. We’re not engaging in this industrial expansion because we think it’s just a peachy keen idea. This is not normal economic activity. No, no, no. We’re anticipating the collapse of the Chinese and, to a lesser degree, the European industrial systems. So if we still want manufactured goods, we have to build the manufacturing plant.

If you were to raise rates in that environment, you would choke it off, and we would be left with higher costs of living because of a lack of goods rather than because of inflation. So basically, we get the worst of all worlds. There’s another reason why I’m not going to be needling the Federal Reserve to do anything specific.

That’s because the rules, as we understand them, are changing. Going back to the dawn of the first era of globalization that Columbus kicked off in 1500, economic activity on this earth has been based on more interaction, larger populations, more interconnections, greater financial penetration, more markets, and more technology. The core of all of that is more people. Well, that’s not happening anymore.

Countries as diverse as Japan, Korea, China, Taiwan, Thailand, Germany, Spain, Poland, and Russia—they’ve all aged out. It’s not that they’re going to die in the next year, although some of them are getting close, but they will never have larger populations again unless something really weird happens with migration. So if you remove that component—larger and larger populations—that has undergirded economic activity for the last 500 years, we need a new model. Because if it’s not based on population expansion and the market expansion that comes from that, what is it based on? Well, we don’t know. Any guide that we have is literally futile—500 years ago or more. So we’re going to have to figure out something new. We’re going to figure it out as we go.

Now, the advantage that the Federal Reserve has in this is that the United States is the first world country that does not face the same degree of demographic degradation as everyone else. Yes, the American birthrate has recently dropped by quite a bit. Millennials have more kids. But if we keep dropping at our current rate, we’re not going to be in the same situation as China, Germany, Korea, or Italy for another probably 40 to 60 years.

So we will get to see what everyone else does with monetary policy in an environment where there’s no demand to regulate. Because, let’s be honest here, interest rates going up and down—all that is designed to do is to regulate the amount of demand in the economy. And if your populations are declining, there’s no demand left.

So the Federal Reserve has more tools, its tools work better, and it’s a growth story. So regardless of what happens with policy, this is still a pretty positive outcome. The only way that I can see that the Federal Reserve might be forced to do something different is if inflation gets to the point that it becomes a political problem. Then the executive and legislative branches of the US government might work together to pass a law to tell the Federal Reserve what its goals are and how to achieve them.

We’re nowhere near that yet, but I would argue that’s the thing to look for—not this year, not next year, but thereafter. Alright, let’s see if I can get out of this canyon. Take care.

The Senior Home Showdown: Delusional Biden vs. Demented Trump

If you watched the presidential debate last week, I’m sure you’re really, really excited for the election this year! Since so many of you wanted me to talk about this fever dream we’re living in, I figured we’d do it on Independence Day.

For those that didn’t catch the debate, you can just head to your local retirement home and get the same experience from a couple of relics living there. The gist is that neither of these candidates are fit for office and a vote for either of them is a threat to national stability. Great Grandpa Biden – I mean President Biden – revealed how much his cognitive abilities have declined, slipping deeper into his deluded state. Trump was off in his demented-fairyland-state where lies are currency and angry tantrums are the status-quo.

At the end of the day, not much has changed since my first prediction.

The “true” independents will play a critical role in deciding the outcome of this election. Biden still has the upper hand, but Trump isn’t going down without a fight – and his cult followers will be sure of that. There is an opportunity for Biden to step down and have a more qualified candidate step up at an open convention, as long as its not someone like Elizabeth Warren or Bernie Sanders. And let’s be realistic, no other Republican candidates can challenge Trump’s grip on the party.

So, in all likelihood we’re looking at a 2020 rematch, with candidates who are four years older, less capable, and more embarrassing than before. Would someone be able to pinch me?

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everybody. Peter Zeihan here. Coming to you from the lost wilderness in Colorado. I’m just outside of Devil’s Playground.

I was backpacking in New Mexico last week when the presidential debate happened on purpose. Because I didn’t want to watch it live. Because I still have a hangover from one four years ago. anyway, I’ve since watched it, and I have.

How should I put this? Received a river of requests, for an update. And what this means to my forecast for the election. Some of you have been really, really rude about it, and you guys can stuff it. But for everybody else, Joe Biden obviously did not have a good day. he appeared confused, a little lost.

It wasn’t clear that he knew exactly where he was. And a lot of his responses, especially in the early half of the, debate, were just almost nonsensical. The term for what is happening to Joe Biden is that his mind is diluting. He’s losing control of the contact between the context of his memories and his life and the reality about him.

And this makes him slow and confused. And for anyone who has been watching him for the last year, you’ll notice that this is not a new thing. This has been happened with greater rapidity.

it’s been happening in press conferences and the Oval Office and briefings. it’s it’s getting bad.

now, I’m sure there are a lot of us out there who have parents or grandparents who are diluting, and it’s painful and it’s awkward, and eventually you get forgot. And it’s there are good days and there are bad days, but that’s not what you need for a president, because as you get older and Joe Biden is already 81, the number of bad days eventually tends to overwhelm the number of good days.

And he is no longer fit for office. He shouldn’t be running for president. He shouldn’t be president. And a vote for him is a vote against national stability in the United States. Let’s talk about the other guy now in the debate. I’d argue that 75 to 80% of everything that came out of Donald Trump’s mouth was boldfaced lies.

Most of those lies have been proven wrong in court on multiple occasions. he did have a few new ones that he brought out. Most of those were from Vidic River. if you remember, back to the Republican primaries earlier this year. Romsami, he was clearly the candidate who was most detached from reality.

The term for what’s going on with Donald Trump is that his mind is demented. he’s very sure of where he is because he just made it up. he lives in a bubble of his own mental creation. And when you’re like that and somebody pokes into your bubble, you get very, very, very angry. this is something we’ve seen out of Donald Trump for some time, but it’s really accelerated since he lost the presidential reelection me, three years ago.And he definitely doubled and tripled down on that in the debate. We all know someone who’s going through this either themselves or caring for them. caring for somebody with dementia is awful because you get yelled at a lot and it’s difficult to reconcile, you know, a loved one’s broken view of the world with who they used to be.

There are good days and there are bad days. But I think we all agree that as you get older and Donald Trump is now 79, significantly older than Hillary Clinton was when he said that she was too old to run for president. As you get older, eventually the bad days outnumber the good days, and Donald Trump is no longer fit to be president.

And a vote for him is a vote against national stability in the United States. And these are our choices. And so in the next part, I’m going to tell you how this is going to go. But we’ll do that from a different vista.

So where does this take us? I see two paths forward. The first is the path I identified a year and a half ago now. And we will include a link to that original video, in this one and in the written supporting materials. all of the things that I pointed out at that point still remain true.

I will pull out one that is even more relevant now, and that’s independents. Now, when I say independents, I’m not talking about the roughly 30 to 40% of Americans who are not registered as a Republican or a Democrat. No, no, no. of that 30 to 40%, almost all of them, vote with one party or the other 90% of the time.

They’re not independents. I’m talking about the true vote splitters, the 10% in the middle that have decided every American election in modern history. they don’t like either candidate. I’m one of those independents. Makes me a little sick to my stomach myself. Biden may have gotten a decent start, but he’s clearly not there anymore. He may have an okay team, but that’s not enough.

you need the person at the top. Top to be capable and conscious and cognizant. That’s not Biden anymore. however, on the other side, we have Donald Trump, who, part of his dementia is that his insistence that he the election was stolen from him, despite the fact that members of his own administration who were in charge of election integrity, say that it was the cleanest election ever.

his particular dementia threatens independence because he’s telling people that the general election doesn’t matter and everything should be decided in primaries where he does well. And of course, he does well in primaries, because the MAGA crowd will do whatever he says and they will show up in force to the primaries even when he’s not campaigning for them.

His ability to sweep the primaries without lifting a finger this time around, that was actually really impressive. But if you’re an independent, it means that your vote goes away. so it’s a choice between someone who’s deluded or someone who’s

Dementia will destroy your ability to vote from the future. And, you know, that’s a no contest. also, never forget that there are more Democrats than Republicans.

So Joe Biden does not need to capture the independent vote to win if the independents just don’t show up because they’re disgusted with both, that’s a victory for Biden. And so my general assessment that this is Biden’s election, no matter what happens, as long as he remains alive, stands a little sick to my stomach. This is an ugly choice, but it’s not a particularly difficult one.

There is one other way that this could go. friends and families and colleagues of Joe Biden are now advising that he consider stepping down and let a more capable candidate, run, which I think would be a great idea. Now, there’ve been people on both sides, maintain the Democrats and old school Republicans, people who are Republicans.

Before Trump took over the party, who insist that if either side were able to float a better candidate, that they would just sweep because these two candidates are so broken and I understand where they’re coming from. The problem is the process of getting to that. the primaries are functionally over. and on the Democratic side, it’s very weird for you get to get a meaningful challenger, for the nomination.

when you have somebody who’s already in office and that this is no exception. the difference this time around is that Biden might willingly step down. And if he does that, we will have what’s called an open convention. But that is not a slam dunk. and for this, I blame Barack Obama. one of the reasons why I think Barack Obama will go down in history is one of the bottom 10% of presidents we’ve ever had.

One of the many reasons is he functionally destroyed the Democratic Party’s ability to generate talent. when he ran for president, he formed his own organization and ran in parallel. And then when he got enough momentum, he basically co-opted the Democratic Party institution for his own purposes, something similar to what, Donald Trump did. in doing so, he made it all about him.

And then for the next eight years, he sucked all the oxygen out of the room and prevented a new generation of political leaders from rising up within the party. And so that’s why we have folks like Schumer and Pelosi who are almost as old as Biden, who are the powerbrokers in Congress. And a new generation is really having a hard time getting going now.

they’ve started, but it’s probably too late, certainly too late for the cycle. And that means that the only people who are willing to run for president in the primary system are those ideological idiots like, Elizabeth Warren or Bernie Sanders, who can draw national support and kind of like Trump with MAGA, get people to show up in numbers to the primaries, even if people would normally not consider themselves Democrats.

if you have an open convention, those ideological idiots will be there. But the advantage of an open convention is you might get normal politicians, God forbid, there. So I have always been a fan in the American political system of the governors, because they have to deal with day in, day out issues and actually make the trains run on time and they have to govern across the aisle.

And we haven’t had a meaningful governor run on the Democratic side for a bit. And on the Republican side, it’s just been overwhelmed, by Donald Trump

So for an open convention, we might actually because it’s just going to be for like a few weeks instead of this endless campaigning system that we seem to have normally, a governor could throw his or her hat in the ring, not have to deal with all the shit of all the ideological wars, and actually get a good candidate.

And that is a way that the Democrats could have a complete blowout of the system of the election. It is possible, but it’s also possible you could get Elizabeth Warren, who was like one of three people on this planet that Donald Trump could beat. This can’t happen on the Republican side. Donald Trump has destroyed the Republican Party. He’s purged of anyone who was against him.

And the real, breakpoint was back in March when he took over the Republican National Committee. And the first thing he did was purge anyone who had anything to do with polling or candidate selection or basically fact gathering. Anyone who had any experience in politics, and basically replaced them all with his flunkies. So Trump, even if he dies tomorrow, will probably still be the Republican nominee this round.

His grip on what’s left of the Republican Party is that firm.

Okay. That’s it for me today. I hope you enjoyed today’s episode of delusion versus Dementia and its After Effects. as always, with all of my domestic political, videos, I invite you to send outraged messages to the collection email spot, which is [email protected] that’s [email protected]. And I promise I will put personally review and respond to each and every None of them. Until next time.

Joe Biden: Gage Skidmore from Peoria, AZ, United States of America (source: Joe Biden); User:TDKR Chicago 101 (clipping)Donald Trump: Shealah Craighead (source: White House)Сombination: krassotkin, CC BY-SA 2.0, via Wikimedia Commons

Why We Can’t Quit Russian Oil: The 10% That Holds the West Hostage

Despite most countries in the West wanting to rid themselves of any involvement with the Russians, the oil revenues continue to flow into Russian pockets. So why haven’t Western countries dropped the hammer on Russian oil exports?

Russian oil accounts for roughly 10% of the global energy supply. If you take that away, everyone in the world is going to feel the heat (or lack thereof). No leader, especially a US President, is willing to bite that inflation causing bullet.

This boils down to one thing, is the fallout worth it? If the US severs ties to global energy markets, that could cause a global crisis or depression, and even fracture the Western alliance. Not ideal. Enforcing a Russian oil ban could lead to escalation and military involvement…also, not ideal.

In a perfect world, ties to Russian oil would have been cut long ago. But we’re not learning our ABCs here, these are major decisions that could drastically change the trajectory of the world as we know it.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey everyone. Peter Zeihan here coming to you from the French-Italian border on the Mediterranean. And today we’re going to take an entry from the Ask Peter forum, specifically, if the goal of the West in Ukraine is to ultimately, break the Russian military, then wouldn’t it make sense to simply go after the what are currently the legal oil revenues, put them under full sanction, actually interrupt the flows?

right now, the official policy of the Western nations is to keep the oil flowing from Russia, but do so in a way that prevents the Russians from overly profiting from it. there are two ways that the Russians get their crude to market. Number one is in compliance with the sanctions, where other people provide insurance, other fraud shipping on the second is via something called the shadow fleet, which may be as many as 20% of the tankers that are out there now that are no longer registered to anyone.

they simply shovel crude back and forth doing CTC transfers, taking them from Russian ports direct to third parties who don’t care about the sanctions very much, and allowing the Russians to circumvent things like price caps. it’s a reasonable question. And if, if, if this war is ever going to end in a way that actually breaks Russian power, Russian income has to be destroyed as part of that process.

But to make that happen, there’s going to be a lot of collateral damage along the way. So a couple things to keep in mind. first of all, if you’re going to take this stuff offline, there’s a lot of it to go. Russia exports roughly 5.3 million barrels of crude per day and about 2.6 million barrels per day of refined product.

Of that, only about 1 million barrels of crude is exported by pipe to China Direct, and maybe 300 to 400,000 barrels a day of refined product. Israel. That’s China. The rest of it has to hit a port somewhere and then be part of this shadow fleet or the sanctions regime system. So you’re talking about a disruption of at least 6 million barrels per day of oil and oil products.

That’s huge. that is well over 10% of globally traded, energy product by volume. And for those of you guys who’ve forgotten your basic economics, oil demand and fuel oil demand is inelastic. So if you only have a disruption of, say, 5 to 10% in terms of output and production, you can get a price increase of 50 to 100% or more.

Because if you don’t have the crude, if you don’t have the gasoline, you just can’t carry out normal economic activity. So your pay whatever you have to. That’s one of the reasons why the recessions in the 70s and the 80s were so severe, because everyone was dependent on this stuff, and when some of it not even very much went away, well, shit hit the fan.

So if, if, if, if this were to happen, you would deal with a major price shock in the case of a populist government like Joe Biden’s here in the United States, that means inflation. And that means that his perception is that the political floor would fall out from under him. In any chance he had a reelection would go away.

so this is something that has not been seriously considered in most Western capitals, most notably in the United States. there is one way you can get around that, and that is to use existing power that Congress has already granted the president to sever the United States from global energy markets. right now, actually for nine years now, ever since, I think it was the 2015 omnibus bill, Congress has granted the president the authority to end oil exports.

And if you did that, since the U.S. is a net exporter now, you’d have a supersaturated oil market in North America, angle America specifically, while you would also have a removal of another 3 to 5 million barrels a day of crude and refined product from the rest of the world. So basically, you double down on the elasticity problem for the rest of the world and cause a massive global depression.

At the same time, North America has a few problems with crude quality. This lady does on its own way. if if if that were to happen, you could probably kiss the Western Alliance largely goodbye, because the white House would have consciously chosen to favor its own domestic political issues and some economic issues, to be perfectly honest, against the security and economic needs in the long term, basically the entire alliance structure.

Then there’s also the issue of enforcement. You can’t just, like, wave your hand and say, no, this stuff isn’t allowed. You have to do something about it. And your options are to go in and bomb Russian ports, which would trigger, let’s just say, other issues, or to go after the shadow Fleet itself to take those ships out of circulation.

I mean, they’re all basically owned by the Russians at this point, but they’re shipping crude primarily to China and India. So if you basically declare or have an undeclared economic war against those two countries, that complicates a lot of things very, very quickly. Now, will we get there in the end? Yeah, probably. but that requires pulling out all the stops and a lot of strategic questions that, would occupy a great deal of political bandwidth for any government.

In the end, if the United States really if the goal really is to break Russia, then there needs to be changes to military policy to make sure that the Ukrainians can strike logistical hubs within Russia. And it means an end to Russian energy exports at a large enough scale to break the income flows that are necessary to keep the Russian military machine running.

We are not there yet. I’m not saying we’re not going to get there. In fact, I would argue we are. But that requires a significant change in the political and economic calculus of all the Western capitals, first and foremost, the United States. So good question. I’m not yet.

No More Military Exemption for Israeli Ultra-Orthodox

The demographic pyramids below reflect the Israeli government’s best (public) understanding of the changing profile of its population. The two fastest-growing segments are Palestinian-identifying Muslim Arabs in Gaza and the West Bank, and the ultra-Orthodox Jewish Israelis. Not only do these two groups have starkly different ideas about what the future of disputed territories look like, they have increasingly little common ground with what one might call the more secular, moderate core of Israeli society at large.

The Israeli Supreme Court just ruled that the ultra-Orthodox community will no longer get exemption from military service. This addresses a number of long-standing issues, but it could spell trouble for Netanyahu’s political career.

The ultra-Orthodox community makes up 10-20% of the population, pays less taxes relative to their share of the population than secular Israelis, receives subsidies, has low labor participation…so until now, the rest of the population has been picking up the slack. By eliminating military exemption for the ultra-Orthodox community, that extra weight can be lifted from the remaining population.

As you would expect, the ultra-Orthodox aren’t thrilled with this decision and they’ll likely be making that known politically. Since the ultra-Orthodox parties are key supporters of Netanyahu’s coalition, don’t be surprised if we see some changes soon. This will only be amplified by criticisms of Netanyahu’s handling of the Hamas conflict and strategic incompetence.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everybody. Peter Zeihan here. Coming to you from square top mountain and back behind me is Argentine Peak. Edwards. And I think Kelso. It’s the 25th of June. And today we’re to talk about what’s going down in Israel. the Supreme Court just ruled that the country’s ultra-Orthodox, who have been granted exemptions from serving in the military for decades, can no longer give exemptions because it’s a discriminatory long term issue, is that, the ultra-Orthodox are somewhere between 10 and 20% of, Israel’s population, based on where you draw the number.

And since they pay very low taxes and qualify for all kinds of subsidies and don’t serve, most of them don’t work. And so they have high, very, very, very, very high birth rates, very, very low labor participation rates. And they don’t serve in the military. so there is an issue that has to become a larger and larger percentage of the population, just the the sheer weight of what, is then dropped on the shoulders of everybody else becomes almost insurmountable.

Keep in mind that there is an Arab minority in Israel that, secular, not like they’re protesting or throwing bombs or anything, but it’s a very real issue from a national identity and a social management point of view. there’s also a short term issue that has to do with the Netanyahu government. most of the parties that subscribe to ultra-Orthodox are part of Netanyahu, Prime Minister Netanyahu’s governing coalition, and have been for quite some time.

Israel’s had a lot of government the last 20 years when since Netanyahu kind of came into the burst on the field, he’s definitely their longest running prime minister overall. Anyway, what’s the best way I can put this into American terms? Think of Matt Gates. You know, the guy from Florida with really good hair, talks a lot of shit about the military, but thinks that the military is a solution to everything.

We should bomb this country and invade that country. But he’s never served. so take blowhards who don’t really contribute to the system, thinking that they know best about how to use military power. strip away the good hair and, the child sex trafficking charges and the drug charges or allegations. Excuse me. And basically, from a political point of view, you just described most of the ultra-Orthodox parties, in Netanyahu’s coalition.

So they talk a big game, but they don’t really contribute to the solution financially or in terms of, people with boots. there’s another issue, of course, and the whirlwind export havoc. And there’s also a very short term issue. After the Hamas assault on Israel back in October, Netanyahu was able to convince most of the parties in parliament, to form a unity government, because the feeling was the attack had been on everyone.

So everyone should have a say in how things unfold. since then, Netanyahu has not shared power with unity government all that much. And so party after party has left, accusing Netanyahu of not having a plan for the war, accusing Netanyahu of prolonging the war for his own political purposes in order to solidify his position as prime minister.

and, accusing him and the ultra-Orthodox overall of just general strategic incompetence because this attack shouldn’t have happened. Hamas is like the one thing that the Israelis are watching every single day. It’s there shouldn’t have been no surprise attack. And here we are eight months later, and there’s no sign that the war is going to conclude.

And in a number of places where Israel has supposedly already cleansed the area of Hamas fighters, they’ve popped up again. So, the international condemnation from the point of view of people who have left the Israeli government is now for nothing, because the Israelis have basically paid the price of launching a major war and, being at least indirectly complicit, a lot of unpleasantness.

But there’s still no sign that the war’s end is in sight. that means that, that Yahoo really, really needs the Orthodox to hold onto power while other parties in Parliament are actively agitating for fresh elections. We only take one significant coalition partner in, in India, whose coalition to force new elections in which, I would probably not do very well.

And you had throw the Supreme Court today into that mix, and you’re undoubtedly going to have at least some or ultra-Orthodox who think they might get a better deal with a different government, as opposed to having to serve in the military or actually be actively involved in changing the law so that their own people have to serve in the military, since they’re sitting in the government right now, when the case has been made.

Anyway, so significant decision changes things on the domestic and the international fronts. And that’s all I’ve got. All right. I got to cross this.

How France, Germany and Poland Can Strengthen the Weimar Triangle

In the post-Cold War world, France, Germany and Poland concocted the Weimar Triangle as a way to foster cooperation amongst the three countries. The trio has weakened over the years – due to differing national priorities – but Russia’s invasion of Ukraine might necessitate getting the gang back together.

Thanks to their renewed military collaboration, the Weimar Triangle will be working to develop long-range weapons to enhance their defensive capabilities; the aim is to prevent Russia from falling back into its old ways. While these three countries have a good thing going, Henry Kissinger argued that a Weimar Quartet might be even better – if not necessary.

Ukraine would strengthen the triangles’ ability to ensure regional stability and effectively counter Russian threats. The bottom line is that when (or if since we’re feeling optimistic) the Russians come knocking, these countries sure as hell want all the tools and partners necessary to stop them in their tracks…

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey everybody, Peter Zeihan here. Coming to you from the base of the serious part of West Spanish Peak in New Mexico, adjacent to southern Colorado. I’m waiting for a storm to pass before I get out on the ridge line. Being 6.5 feet tall and a Thunder Boomer isn’t really the best call. Anyway, on the topic of things that have been mehhhh, but very soon may be incredible.

Today, 27th of June, there was a summit with a group called the Weimar Triangle, which includes the leadership of France, Poland, and Germany, the three critical countries of the Northern European Plain. The Weimar Triangle was envisioned in the aftermath of the Cold War when Poland was no longer a Soviet satellite country and was on the way to joining the European Union and NATO organizations that Poland has since joined. The idea was that in the long swath of bloody European history, France, Germany, and Poland tended to find themselves on different sides of most major issues, leading to many of the major wars.

Anyway, the idea was that if you get them all on the same side, then the Northern European Plain, instead of being the most blood-soaked part of the planet, can become something better—a path of trade and cooperation.

And you could argue that the idea of the Weimar Triangle has been realized, but it’s not because of the triangle. This is how it all started in the 1990s, but by the time we got to the 2010s, the three countries drifted apart. France tried to be an independent pole in international affairs, which is always a mixed bag. Germany tried to forego the politics and security talks and simply focused on trade by exploiting labor and infrastructure in Central Europe, taking a completely amoral position on everything that mattered. And Poland was in and out, in and out, with every possible interpretation of what it means to be Polish. Remember that Poland had its first democratic elections in the early 1990s.

So here we are, really only one generation later. There are a lot of deep divisions within Polish society about the role of government and where Poland fits within Europe and the wider world, and it’s not going to reach equilibrium anytime soon. By the time we got to about 2002, especially with the Iraq war in 2003, the Weimar Triangle had basically fallen apart until Russia invaded Ukraine in 2022.

Now, the three states are starting to talk a lot. Instead of collaborating on economic issues, they have decided to start working on joint military acquisitions and development, specifically for long-range cruise missiles with a range in excess of 2000 km. The reason is simple: as the Germans will tell you, if you go to war with the Russians and take a defensive position, the entire wealth and resources of the Russian Federation, Soviet Union, or Tsarist Imperial Russia, whatever it happens to be, can be collected into a single fist and punch at you wherever it wants. If you are left playing defense against that, you are going to lose. You have to have a deep strike capacity that shatters the infrastructure and logistical capability of the Russians far from the front. Throughout the Cold War, this is basically what NATO did by practicing things like the North Cape exercises, which weren’t necessarily designed to plug the Fulda Gap but instead to prevent the Russians from reaching the gap in the first place.

Now, where to go with this? It’s a realization, especially in Germany, where the defense minister is heading up this effort, that we are in a fundamentally different world. The foreign policies of the French and the Germans in recent years simply don’t work anymore. Getting that sort of weapons capacity in Europe gives the Europeans the ability to forestall a Russian invasion if Ukraine falls. The Poles know they’re next, and the Germans are fearful they’re after the Poles. So it makes sense to do this as soon as possible.

The question, of course, is whether it’s going to work as well as my hike. The answer is probably not, because even if the triangle can come up with the perfect weapon system, launching from the eastern half of Poland, you’re still a long way from huge parts of the Russian industrial base. Remember, during World War II, with the German invasion of the Soviet Union, Stalin built a lot of industrial plants on the other side of the Urals. We’re talking about a big place here, which is why that greenie peacenik Henry Kissinger always said in the post-Cold War era that no matter what your goal is vis-à-vis Moscow, it can’t be achieved by the Weimar Triangle alone—it has to be a Weimar Quartet. Ukraine has to be involved. If Russia is hostile, then you get a civil war among the Slavs, and you can launch an assault from 1500 miles further east, throwing a huge amount of Russian territory open.

Remember, from the Ukrainian border to Moscow is only about 350 miles. That’s not that far. More importantly, Ukraine is not technically part of the Northern European Plain; it’s actually in the Eurasian heartlands itself. So you split that territory between Russia and Ukraine, and instead of Russia being able to focus all of its attention on the Polish Gap, it suddenly has this massive frontier to worry about.

That’s in part why Putin launched the war in the first place. But second, the better option, as Kissinger put forward, is to assume that Russia gives up its genocidal irredentist ways and decides to join the family of nations. Splitting the territory ensures that you can never have a retrenchment that would be sustainable. If there is a way forward where Moscow is a decent place and Russia becomes a normal country, it will do so with Ukraine on its side. The only way to ensure that works is to have the Weimar Quartet fortify Ukraine, not just economically but also militarily, so there can’t be any backsliding.

Of course, the question then is: will that work? Well, that’s why we call it making history. All right, see you on the next mountain.

Photo in header by Občanská demokratická strana | Civic Democratic Party in the Czech Republic | Wikimedia Commons

The Future of Manufacturing: Where and Why?

China has been the global manufacturing hub for decades, but what happens if that goes away? If and when China experiences a significant collapse, someone will have some big shoes to fill, but who can do it?

There’s a few requirements that help narrow down our list – proximity to a consumer base, a young workforce, and existing infrastructure. Argentina shows promise, but political instability limits the country from realizing its potential. North America – specifically the US and Mexico – have the opportunity to claim a piece of this pie. However, the region that is most likely to benefit most from a shift in global manufacturing is Southeast Asia.

Countries like Vietnam and Indonesia are particularly noteworthy, thanks to their large, youthful populations, expanding infrastructure, and ability to handle manufacturing along the entirety of the value-added scale.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everybody. Peter Zeihan here. Coming to you from the Gulf Shores. Today I’m taking an inquiry from the Ask Peter Forum. And it’s if my estimation for the mass collapse of China comes true, where is the manufacturing going to go? Well, first things first. If you remove a billion people from the global pool, you people are stopped. So yes, we’re still talking about tens of trillions of dollars of capital investment that needs to happen, but maybe not quite as much as we think.

Now, once you’ve gotten past that, you’re basically looking at three factors that shape where the stuff is going to go. Number one, a place that is either has itself or is proximate to a significant consumer base to justify the infrastructure development in the first place. Number two solution number of people under 50, not just to consume, but actually to do the work that is necessary.

And then third, you would prefer somewhere where they’re not starting from scratch. there’s $35 trillion of leased and industrial plant in China. And even if we only need to relocate half of that, which would be overly optimistic, I would argue, having to do that in a place that doesn’t have a road and rail system would be a much heavier carrier than a place that does.

So this rules out any number of locations. Africa doesn’t look too good because it doesn’t have the infrastructure, and it’s too dependent on numerous oil imports to make it system function. Europe doesn’t look that good because it all has the infrastructure. It doesn’t have the consumption base. Japan kind of falls into the same category. So when I think of this, I think of three regions.

So in ascending order at the bottom is Argentina. good infrastructure, great educational system, positive demographics, probably. They’re arguably the best one in the world for a country at its point of economic development. Of course, the downside is that it’s full of, Argentina foreign policy and. Yes, yes, yes, Malay, the new president is, doing reasonably well, but one president does not make a pattern.

So we will see. But if if Argentina is successful at reinventing itself, it will easily become the manufacturing hub and player, not just for itself, but for the broader Southern Cone region. Brazil can’t compete in this. The infrastructure isn’t there, the education system is there and the country is aging rapidly. So you can see a world evolving where Argentina gets a lot of these pieces and then just treats Brazil as a captive market.

Okay, that’s number one. number two is North America. the United States obviously has the consumption base, but so too does Mexico. It’s a pretty young country, demographically speaking, and, well, most of North America has already been absorbed into the NAFTA system. Central and southern Mexico really haven’t. So there’s a lot of low hanging fruit there, not just from a consumption point of view, but more worker point of view.

And then, of course, the United States is the world’s largest consumer market with top rate infrastructure. so we’ll grab some chunks to, the third section. And the part that I think in relative terms is going to do the best is Southeast Asia. Here you’ve got a cluster of countries that have partially integrate. We partially globalized and partially industrialized, but almost all of them still have significant, reserves.

They can grow up under labor. And as the place does better and better and better, the consumption situation is going to look better. the two countries that I’m arguably most, interested in, in relative terms are Vietnam and Indonesia. Both have large populations who are at a beach. Both have large populations in excess of 100 million people.

High almost quarter billion in the case of Indonesia. Their infrastructure is okay, not great, but it’s rapidly expanding. And there’s some very clear population centers where this is all really serving as nodes for greater regional distribution. They’re also proximate to China. So this is a place where Chinese companies are already investing. These are countries who get along with the United States.

They’re places where the Americans are invested. These are places, the people of Japan. So the Japanese are investing. And most importantly, they’re all at different stages of production. So it’s easy to imagine a supply chain system where the Vietnamese do the really high end stuff, then come down the Thais and Malaysians for the middle manufacturing and then lower end stuff in places like Indonesia.

Vietnam is the one I’m most interested in because they’re trying to jump stages of production, and already 40% of the college grads are Stem graduates. So it’s easy to see them becoming the next Malaysia. But with a population that’s roughly four times as large. that becomes significant very, very quickly. So. So I get everything. Yeah, I think that’s everything.

All right. I wanna have a good one.

The Europeans Are Having Some Gas Problems

Europe has been taking a beating lately, from economic issues to demographic problems, but there’s a new one on the horizon. When the Ukraine War wraps up, what will the European energy situation look like?

Prior to the war, Russia was the energy powerhouse of Europe, providing crude and natural gas to practically everyone. Now, countries are seeking a layer of insulation from Russia and fulfilling their energy needs elsewhere; some are looking to the US or the Persian Gulf for LNG and others are turning to exports from North Africa.

Regardless, there’s plenty to sort out amongst the Europeans, with no clear path to a successful energy mix and sourcing.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everybody. Peter Zeihan here. Coming to you from Italy against the backdrop of olive trees, jasmine and bougainvillea. So, you know, just get much more Italian than that. I’m on the Ligurian coast and it is easy at this moment to forget about great power politics. But even here in Italy, they’re finding a way to punch through. the issue is energy.

unsurprisingly, before the Ukraine war began, Russia was the world’s largest exporter of natural gas, mostly in pipe form, mostly to Europe. And while there has been a lot of talk on all sides, especially the Russian side, but also among pundits in the West that the Russians are just going to redirect natural gas exports somewhere else.

Most notably, China is the one that keeps coming up. but natural gas is not like oil. So what is a liquid? you can put it on to a tanker and then send that tanker anywhere in the world but natural gas to get put on a tanker has to be frozen down to 300 odd degrees. Negative. and the infrastructure to do that is involved.

And the Russians lack the capacity to do it themselves. I’d also argue that the Chinese lack the capacity to do it themselves. so your only other option is to go by pipe. And almost all of the natural gas that Russia has exported historically has gone to Europe. There are some pipelines that go to China, but they tap fields that are on the eastern side of Russia, far on the other side of the Urals.

And the two networks are completely separate. And there’s a couple thousand in some places, 5000 miles of open virgin terrain between them. So linking them together is not something that’s simple. And even if you link them together, that’s not enough, because the existing pipelines are already at maximum capacity. So you would have to run new infrastructure from the existing fields in northwest Siberia, all the way across central Siberia into southeastern Siberia, and then cross into China and make it all the way to the coast.

So you’re talking about a series of pipelines that would be the largest in human history, that are over three times the length of the that we’re currently the longest ones in existence. This is conservatively a $100 billion project. And it would take even if the Chinese were in charge, all of it over a decade to build. It’s just a physics issue.

now that’s assuming, of course, that you’ve got the money for it. The Russians, as they always do when they talk about new projects, just assume that the other side is going to pay for the whole thing, which is usually how it doesn’t work. And the Chinese are like, no, not only do you need to pay for it, we’re not going to pay any more for the natural gas that is coming through this most expensive infrastructure project in history than what we’re paying for other natural gas.

So the Russians think that they should be able to charge 300 to $1000 per thousand cubic meters. Where’s the charge? Like, you know, maybe 80, maybe 150 on a big day. So that’s not this, this deal of the century as it’s been referred to. But hasn’t been agreed to. No one’s putting money down. No one started construction. And we’re two and a half years in the Ukraine war.

It is not going to happen unless our understanding of transport, physics, construction and energy change significantly. And that doesn’t seem to be on the table at the moment. And so let’s put that to the side. the Europeans, the Europeans are looking for more and more ways to cut off income to the Russians. They’ve been whittling down their exposure to direct oil transfers from the Russians, almost to zero at this point.

that doesn’t mean to suggest that they’re completely immune to anything that happens. What they’ve done is they’ve stopped bringing in the crude directly. The crude bypasses Europe now makes a much longer sale to places like India, where it’s refined into a fuel, and then that fuel is sent back to, Europe. So they’ve achieved a degree of market insulation, but they’re certainly not out of the woods.

natural gas is a little bit more straightforward, because those pipelines are basically turned off now, and the last of them will be going off by the end of this year. the Europeans have largely supplemented their natural gas from other sources. And since natural gas cannot be easily rerouted, by pipe, this Russian stuff really has just gone off the market.

So Gazprom, that’s the Russian state authority, that’s in charge of all natural gas production and exported almost all of it in Russia. has actually reported its first ever loss this year, and it’s only going to get worse. Moving on, because they have relied upon those natural gas exports to Europe to generate the currency, to maintain their own fields, in their own production, in the road transport.

natural gas within Russia is very, very heavily subsidized. So their only remaining hard currency is now coming from, a couple smaller projects, that export LNG projects that someone else built and that the Chinese cannot help them maintain. And then, a singular pipeline that does start in the eastern Siberian fields. There’s maybe two pipelines now, that goes to China, but the two of those combined are less than a quarter as large as what used to go to Europe.

that means the Europeans have had had to find other sources. for most countries in Europe, the solution has been that liquefied natural gas that I mentioned earlier, with a lot of it coming from the United States and a lesser amount from the Persian Gulf, most notably cutter. but for the Italians, that’s a different solution.

the Italians, because they’re in southern Europe and because the boot of Italy, it’s so far south, they’ve been able to bring in natural gas by pipe, from North Africa. The volume of natural gas is not in question. Countries like Algeria and especially Libya have loads of the stuff. the problem is stability. the Algerians are so anti-French because of this whole colonial war thing that they went through, that the logical customer for them, France is one that they try to avoid dealing with whenever possible.

And you add in some energy nationalism and Algerian output. It has been steadily dropping for almost 20 years now. They’re probably not a reliable long term producer unless there’s a significant change in politics in Algiers. And even if that happens, Algeria has a large and growing population, a large and growing economy. They need more and more of their natural gas from themselves just to keep the lights on.

That leaves Libya, which has been in a state of on again, off again civil war ever since the death of or even preceding the death of gadhafi, 15 years ago. But that is now emerge as the single most stable supply for the Italians. And in a post Russia world where there just isn’t enough supply to go around, Libya is going to become more and more important for the Italians, keeping everything running, which means we’re in this weird little situation where the Italians have to do one of two things.

Number one, they’re going to have to send more and more money and more and more people into Libya to stabilize the situation in order to keep that energy flowing. And the last time the Italians had troops on the ground in Libya, things got decidedly weird. And it was the opening stages of World War two. the Italians would really rather not do that, but they might not have a choice.

Option number two is to find another source of energy to keep the lights on. the Italians don’t have a lot of coal on their environmental goals at the moment. Wouldn’t that allow that to happen? Hydro is pretty much tapped out for everything they can do at this point. You can only take efficiency. So far, the only remaining possibility is nuclear power, and the Italians are one of a handful of European countries that is basically dusting off their old infrastructure and looking very, very hard at what would it take in order to bring some nuclear plants back into the system.

Italy is one of those countries that got rid of pretty much everything, and now they have to start over with where they were back in the 1960s and 70s. It’s not a cheap solution. It’s not a quick solution. But if you’re alternative is invading Libya, it’s something they have to consider very, very, very closely.

Backfire: Putin’s North Korean Joyride

If there’s anything Putin’s good at, its pressing the West’s buttons…and his latest trip to North Korea is no exception. However, by signing a new defense pact with Kim Jong Un, Putin might inadvertanly gain Ukraine a new supporter.

For years, the US, China and Russia have worked together to contain North Korea’s weapons programs and illegal activities; Russia has clearly stepped away from that aggreement. In the process of antagonizing the West and partnering with North Korea, Putin likely pissed off South Korea.

The South Koreans have become one of the top five arms exporters globally, but until now they’ve limited exports to Ukraine. If South Korea’s position begins to shift – and it looks like we might be heading in that direction already – we should expect to see plenty more deals like their recent tank deal with Poland.

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Hey, everybody. Peter Zeihan here coming to you from Green Mountain, just above Boulder with the flat irons there behind me. Today we are going to talk about Vladimir Putin’s recent trip to North Korea.

Basically, he went there, talked shit about the United States and, said he would sell weapons to North Korea, signed a defense pact and talked about how they are best buds. And he and Kim Jong un, that’s the premier of North Korea. He’s a really chubby guy. basically took turns, flattered each other and driving themselves around in a Russian made limo, which is, well, let’s just say it didn’t crash.

And that’s kind of an achievement anyway. So, the purpose of this trip was basically to piss off the Western alliance, especially the United States. US diplomacy going back several presidents, at least to Clinton, have been working pretty aggressively to partner with the Chinese and the Russians to box in North Korea to tamp down their weapons program, the drug smuggling, their money laundering, all that good stuff.

And in the last year, because the Russians are now finding themselves on the opposite side of everything from pretty much everybody, the Russians have actually been vetoing resolutions in the Security Council that would continue those sanctions programs on the North Koreans. which is something that the United States is really cheesed off about because the number one target of any missile launch is going to be Los Angeles or San Francisco.

Well, let’s look at this from anyone else’s point of view for a moment. Just not Russia’s, not North Korea’s and not the United States’s, the other country that matters on the Korean peninsula is South Korea, an economy that’s roughly 15 to 20 times as large and as a technological leader, not just in things like semiconductors and manufacturing, but increasingly software and weapons technology.

In the last five years, South Korea has emerged as one of the top five arms exporters in the world, specifically excelling in things like artillery and rocket systems and tanks. And if you start looking at this from the South Korean point of view, it is clear that Vladimir Putin made a colossal mistake, because until now, the South Koreans have limited their arms exports to Ukraine because they don’t want to get involved.

But now that Putin has come to North Korea and bandied about how he and the North Koreans are best friends, the sky is the limit. And unlike German tanks or American tanks, things that are being made in limited volumes and so can’t be rushed to the Ukrainian front all that quickly, the South Koreans are the masters of making anything at quality and at scale very, very, very quickly.

I mean, this is the country that back in the 1970s built what was then the world’s largest supertanker by building it in halves in two different dry docks and then welding it together at the end. And for those of you who built supertankers in your garage, you know, don’t do this at home. This is really dangerous. Anyway. It works.

they’ve already sold 180 K-2 tanks to the poles. There’s another hundred and 80 on their way, and they’re going to be working with the poles on setting up domestic manufacturing. So it’s not just that the South Koreans can upset the balance of power in terms of the arms balance in Ukraine. By selling weapons directly, they can help various European countries establish their own production, and then they can have two, three, four different production sites basically working against the Russians.

this isn’t the dumbest thing I’ve seen any country do in the last 20 years, but it definitely makes the top ten. All right, see you guys next time.

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