Myanmar’s Bleak Future: Civil War and Ethnic Strife

Myanmar doesn’t often catch my attention, but with the ongoing civil war, I figured it was time to throw it into the mix. After years of civil unrest, is there a clear path to stability?

A quick look back at Myanmar’s history will show a fractured population divided by demography and ethnic lines. The majority is made up of the Burmese people, which comprises two-thirds of the population. The Burmese live in the most favorable location and have the best infrastructure.

The Burman majority currently also makes up the vast majority of the military, which is the backbone of the ruling junta. In addition to stymying domestic democracy movements and mismanaging the country (and its resources, and its economy), the pro-Burman regime has a long history of abuses against various minority groups. These groups have increased their violent confrontation with the junta in recent years, and the military has struggled to retain control.

So, after 15 years of civil unrest and conflict, can they see the light on the other side? Unfortunately, the future remains bleak until there is some form of political resolution to regain control of the country and the disconnected population.

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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.

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Transcript

Hey everybody, Peter Zeihan here, coming to you from Colorado. We are in the first full week of August, and today we’re going to talk about a place called Myanmar. We’ve had a lot of military activity there in the region—there’s basically a civil war going on. The rebels have captured a major military facility in one of the regional capitals.

First of all, what is Myanmar? Myanmar is a country that used to be called Burma. It is sandwiched between the Indian subcontinent and Southeast Asia. It’s primarily mountainous, primarily jungle, but cutting through the middle of it is the Irrawaddy River, which is actually a navigable riverway, much like the Mississippi or the Rhine. And so it’s a huge push for commerce right there.

The population, of course, as you would expect from jungles and mountains, is fractured. The core population, the Burman or the Burmese, is based on what your ethnicity is and runs right along the river, right in the lowlands. This is the most economically viable area, where most activity happens, where most agriculture happens. They make up about two-thirds of the population, and they are large and in charge.

They have also had a succession of governments under military and civilian rule that are kind of pricks and treat everyone else as disposable. Before you even consider that mountainous people and jungle-living people are a little ornery, there’s plenty of reason for all the other ethnicities in Myanmar, or Burma, to be at odds with the Burmans. And so we have basically been in an increasing state of civil breakdown, and now civil war, for the last 15 years.

There are over 100 other ethnicities—none of them make up more than 10% of the population—but all of them have their little areas that they’ve carved out, big into smuggling, big into heroin, because these are things that you can do when the center cannot hold. I phrased that wrong. The center can hold—the center can hold the center—but it has a real hard time pushing power into the provinces and the edges, where everybody else is.

The problem is that all the borders are porous, development is limited, and what infrastructure exists is largely limited to the Burman areas in the lowlands around the Irrawaddy. This, unfortunately, is becoming the new state of affairs. The Burmans have mismanaged their affairs under civilian and military rule—it’s currently military rule—to the point that relations with pretty much all of the ethnicities have broken down.

And while there’s a civil war on one hand, there is also, because of military rule, a pro-democracy push across the country that is weakening the government from within. So if the center holds but nothing else, you’re basically looking at this giant U of territory in the northwest and east becoming stateless in the traditional sense. This is how it’s going to remain until such time as someone is able to consolidate power.

That could be a change of government among the Burmans, who could maybe do some sort of national reconciliation. But I don’t see anyone alive in the political system right now who is capable of that. Or it could be a third party coming in and knocking some heads together. The only country in the region that has that capacity would be China. And while the Chinese are okay with Myanmar being weak, they are not okay with being the power that has to come in and take over the security situation, because it would be just as hard for them as it has been for the Burmans.

So unfortunately, despite a reasonably favorable geography in the core, this is a country whose time has not yet come and will not until we can have some sort of political resolution, which does not, unfortunately, appear to be on the horizon. All right, that’s it. Bye.

Tensions Rise in the Middle East, But Don’t Expect War

There’s no shortage of news coming out of the Middle East, but today we’re going to look at the rising tensions between Israel and Iran and Iranian proxy Hezbollah.

While we’ve seen multiple attacks between Iran and Israel (and Hezbollah is poking around as well), a broader war is unlikely. Each of these players is preoccupied and has bigger fish to fry. Israel with Gaza, Hezbollah integrating with the Lebanese government, and Iran having to manage an increasingly complex domestic political environment.

The big news is obviously Israel’s assassination of a Hamas leader in Tehran, but there’s been a handful of back-and-forth attacks between the two countries. While Israel isn’t likely to topple the Islamic Republic via its targeted assassination campaigns their successes have resulted in rising domestic criticism of Iran’s Revolutionary Guards.

Tensions—and attacks—between Israel and Iran/Hezbollah will almost certainly continue, but in terms of a major conflict or significant policy change…I wouldn’t expect much.

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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.

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Transcript

Hey everybody, Peter Zeihan here. Coming to you from Colorado today to popular acclaim, we are going to talk a little bit about what’s going on in the Middle East of late. There has been a lot of tit-for-tat attacks across the region, with the Iranians broadly on one side and the Israelis on the other, Hezbollah somewhere in the middle.

And the question really comes down to whether or not we’re going to be seeing a broader war here. Punchline? Probably not. Israel has its hands full in Gaza. It really doesn’t want a wider conflict. Hezbollah, which is the militant group that, from certain points of view, facto runs Lebanon, definitely does not want its position overthrown because it’s no longer a pure terror group.

It actually is more or less the government, and that means it has exposures that are a lot easier to be exploited in a direct war, as opposed to a terror group, which can just go to ground. They’re much more vulnerable because they’re much more powerful. And then third, in Iran, they’re trying to go through a political transition. They’ve got a new president, and the Supreme Leader who makes all the real decisions is older than Biden.

And we know that he doesn’t have much time left either, so they don’t want the disruption that a major war would cause as well. The problem, of course, is that the Middle East, to put it in Western terms, is basically like a barroom argument and that everybody wants to have the last word. So in the last few days, the Israelis have assassinated Ismael Haniya, who is a Hamas political leader who was in Tehran, and they assassinated him in Tehran.

So the Iranians are furious, obviously, and feel that any idea that you can provide security for your own allies in the region, but not you can’t even do it at home, makes them look incredibly weak. So they feel they need to strike back, so they probably will. But remember, what preceded this was Iran leaning on Hezbollah to fire a bunch of rockets into Israel.

And so before that, the Israelis killed a Hezbollah commander in Beirut. And it’s just it’s been back and forth, back and forth, back and forth. Everyone wants the last word. Nobody wants a war, but everybody wants the last word. It’s not the most perfect picture for strategic stability, but I have to remind you that this is what the Middle East looks like on a good day.

And of late, the Middle East has had a lot of good days as long as the major players, Hezbollah, Israel, and Iran in the situation don’t feel that they would benefit from a wider conflict. All we get are these sort of high-profile blam back-and-forths. Everyone is seeking to close the argument. It’ll never close, but it also means the violence is unlikely to rise to a certain level above what is basically, for the rest of the world, a degree of background noise.

Okay, so the other thing to keep in mind on this is now there is a discussion going on internally in Iran. As I mentioned before, a new president, the Supreme Leader is failing. One of the things that we have seen since the Iraq war back in 2003 is that Iran has more and more and more given a free rein to the IRGC, which is basically their paramilitary arm, who controls large chunks of the economy at home and is basically in charge of shooting people abroad.

And as they’ve been given a longer and longer reach, they’ve basically indulged in every little fantasy they possibly could, when it comes to revenge and picked fights with everyone. Well, that’s coming home to roost now. That’s one of the reasons why the Israelis have dropped the hammer on Iranian interests here and there of late. Well, there’s a discussion now going on in Iran about whether or not they’ve gone too far, whether they’re causing more problems than benefits, whether they’ve become too important of a power player on their own, whether they’re breaking away from the clerical establishment and starting to set policy.

Now, these are all reasonable conversations. And in a normal country, these conversations would be front and center. In a place like Iran, where democracy is a, how shall we say, limited, it’s interesting that it’s finally boiled up. And it took the humiliation of the Haniya assassination on their home turf to kind of underline it to Iran about how bad the IRGC has gotten.

Now, you shouldn’t expect a singular decision here to suddenly change the math. The person who matters in Iranian politics is the Supreme Leader. And if he feels that the IRGC has gone too far and needs to be reined in, he will have to do something about that. But like I said, he is failing. So we are probably going to see a cosmetic continuation of the tit-for-tat with Iran.

It’s their turn. But back at home, we’re probably going to see a significant amount of instability and shifting as the various players and most notably the Supreme Leader actually have to make some really hard decisions about the future of the country. And for the Supreme Leader, this is also about legacy. And he probably doesn’t want his last legacy to be like taking a hammer to the IRGC. Anyway, exciting times, but probably not a war.

Protests Cause a Mass Exodus of Bangladesh

This is a follow-up video to the one I sent out on July 23 – linked below.

Major Protests Break Out in Bangladesh

The situation in Bangladesh has worsened, forcing the Prime Minister to flee the country. Let’s recap what led us to this point and look at what the future might hold for Bangladesh and India.

The youth in Bangladesh began protesting the lack of job opportunities, since government jobs were reserved for those who fought in the revolution and their descendants. The alternative jobs available are working in the textile industry for pennies or risking their lives ship breaking. Not a ton of solid opportunities…

A history of corruption and political incompetence has led the Bangladeshi people to this point, and taking a page out of the Prime Minister’s book wouldn’t be the worst idea for many. That means millions of refugees could be fleeing Bangladesh and most of them would likely be heading to India. But is Modi’s government ready to handle this kind of international crisis?

India hasn’t had to to deal with many international incidents in recent years, so they lack the infrastructure and resources to effectively manage a major crisis like this. When millions of people come knocking on the border door, it will definitely be cause for concern for the Modi government.

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

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Transcript

Hey, everybody. Peter Zeihan here. It is August 5th. And the Prime Minister of Bangladesh, Sheikh Hasina, has fled the country after nationwide riots which have killed a few dozen people. This started out as a group of young people who were basically desperate for jobs. Government jobs are basically guaranteed to people who fought in the revolution or their descendants.

And if you’re not one of those people, you’re kind of out of luck because all that’s left in the economy is becoming a wage slave for the textile industry. And when I say wage slave, I literally mean wage slave and horrible, horrible conditions. Basically, we’ve decided to get rid of sweatshops, and so everything just went to Bangladesh, or to do an incredibly dangerous job, which is called shipbreaking, which takes old vessels, physically breaks them down, and then recycles the steel.

Very easy to get maimed doing that job. Anyway, that’s it. That’s the entire Bangladeshi economy. And, anyway, what started out as protests about jobs basically spread to include concerns about corruption and incompetence. And, if you’re looking for corruption and incompetence, Bangladesh is the place for you. You basically have a couple of political parties that have switched back and forth, back and forth, back and forth over the course of the entire existence of the country since the 70s, turning everything into a patronage network.

So we had a period, you know, 15, 20, 25 years ago where most services for most of the population were not provided by the government because that was all corrupt. You basically had foreign NGOs coming in to do social services. Well, over the last 20 years, those NGOs have basically been brought into the patronage network.

And so most of them stopped operations, and the ones that remain are not exactly doing a lot of great work. So there’s nothing going on here from a positive point of view, from a community point of view, except for generating most of the world’s ready-to-wear knitwear. So, for example, if you’re into fast fashion, you are taking advantage of the near-slave conditions in Bangladesh and massive corruption.

So congratulations to you. Anyway, where does this bring us? Well, this is a country of 100-odd million people, and it’s on a very small footprint of land with very few economic opportunities and almost no resources. Agriculture is largely subsistence, and the government has now failed. Neither of the political parties are in a position to take up governance.

I mean, the ruling party just lost the Prime Minister. They don’t know anyone who’s less corrupt in the ranks. And the opposition is fractured, to say the least. They do have a history of having military coups and military rule from time to time. But one of the positive—if that’s the right word—things the most recent government has done is gutted the military to make military coups less capable.

So the military probably doesn’t have the skill set that’s necessary to take over. So barring some sort of surprise breakthrough and an internal knight in shining armor, which I have a hard time envisioning, we’re probably going to see a lot of economic destitution and civil breakdown, which means we’re probably going to see millions of refugees and immigrants leaving Bangladesh for some other place.

Here’s the thing: the only land border that Bangladesh has is with India. So in India, we’ve got a government under Modi who has been in control now for well over a decade. But he hasn’t faced an international crisis at all. There are really only two countries that matter in terms of nearby relations. One is Pakistan—a nuclear threat—a few wars in the past, but relations there have been pretty calm. Most of the drama has been on the Pakistani side of the equation, which has kind of kept Pakistan bottled up in its own juices and allowed the Indians to relax a little bit. And the other one is Bangladesh, which has also been calm until now.

So the Modi government, unfortunately, doesn’t have a lot of experience in dealing with crises because there hasn’t been one in the last ten years. And now you’re talking about an economic one where you’re talking about a surge of people potentially coming into India, that India simply doesn’t have the facilities, the infrastructure, the capital, or the jobs in order to absorb these people competently.

There’s also the issue that the Modi government has very few connections to the Bangladeshi government. Yes, in past years, there have been reasonably strong connections between Indian governments and the Bangladeshi parties. But most of that was under Congress, which is now in opposition. So we get kind of a double crisis here, with Bangladesh potentially falling apart and with India not really having the traction it needs to deal with the situation in a meaningful way.

So a lot of moving pieces in this, and none of them are really moving in the right direction, but we’re going to find out real soon what the Modi government is made of when it comes to an international issue that actually matters to it right on its own border, as opposed to dealing with some sort of nonaligned movement issue that has broader political connotations around the world but is mostly about atmospherics.

I mean, this is where the rubber is going to hit the road, and we’re going to find out real soon.

Did the Russians Really Not See This Ukrainian Advance Coming?

A Ukrainian soldier advances with an AK 47

Peter’s currently hiking beyond the reach of standard comms, so no video, but he’s still keeping abreast of recent developments in Russia and Ukraine.

Ukrainian forces are currently involved in a push into Russian territory, centered on advancing toward and beyond the border town of Sudzha. No apologies necessary if you’ve never heard of Sudzha—a town of less than 7,000 people—but Ukrainian forces likely did not choose it at random.

While the situation is still murky, Ukraine’s forces seem to have basically seized the town of Sudzha overnight on August 5th and 6th,and are moving toward Lgov (a town of less than 25,000 people). There are some logistical gains here and pressure points for the Russians: a significant natural gas metering station near Sudzha, some road access across the border to Ukraine. But the real goal here is likely securing Sudzha and Lgov and securing both sides of the Seym River.

Sudzha and Lgov also afford the Ukrainians excellent access to highway systems to regionally significant and import logistical hubs in Kursk and Belgorod. An ability to take the fight from eastern Ukraine to places like Belgorod would mean that Russia’s invasion has a second front not only within its own territory, but defending the logistical supply hubs vital toward supporting its efforts within Ukraine.

The Russians seems to have been surprised with the speed and success of Ukraine’s efforts, but long-time subscribers will note that we have highlighted Russian vulnerability vis-a-vis Belgorod and supplying the war effort more than once. We are including links to previous coverage and analysis on this issue below.

MAY 11, 2023
Ukraine War Updates Part 3: What’s Next for Russia

 

When a country views a conflict as existential, putting a timeline on it is nearly impossible. So no matter how well (or bad) this Ukrainian counter-offensive plays out, we are only at the beginning of a long, drawn-out war.

For the Russians, war doesn’t stop in Ukraine; it stops once they have captured enough land or territory deemed critical to their survival. So we’re no longer talking about Kyiv or Crimea…we’re talking about Russia moving west and trying to occupy former strategic positions the Soviets held, like Warsaw.

So what does that mean for the Ukrainians? If they are going to stop the Russians from waging war again, not only do they need to take back all of their lands…they need to take the fight to the Russians.

No matter how the Ukraine War plays out, we are looking at an extreme breakdown of the security order. Either Russia emerges victorious, and a confrontation with NATO is in the cards – OR – Ukraine comes out on top and sends the Russian State down a path of disintegration.

Map showing Russian Transportation lines

 

MAY 16, 2023
Ukraine War Q&A Series: Why Does Russia Have Oil Supply Issues?

 

The second question of the Q&A series is…if Russia is such a massive producer of oil and oil products, why are we wasting time discussing supply issues?

The Russian oil problems are best understood when compared to the American system. If you compare California and New York gas prices to those in Texas or Alabama…you might have a heart attack. Outside of the crazy taxes in CA and NY, this boils down to transportation.

Like CA or NY, most Russian oil is produced in one area, refined in another, and then needs to be shipped to its final destination. For the Russians, thousands of miles separate each of those steps. To complicate this supply chain even further, most of this stuff must be trucked into Ukraine since the Kerch Strait Bridge rail capabilities are gone.

The Ukrainians are fully aware of this shortcoming and are now focusing much of their firepower on oil transportation and infrastructure. Destroying refineries is easier said than done, so I would expect the main targets to be fuel tanks, fuel trains, and the occasional pipeline.

 
MAY 26, 2023
Russian Partisans Attacked the City of Belgorod

 

A group of ethnic Russians opposed to Putin’s government joined forces with Ukraine and launched an assault across the border into the city of Belgorod. There are three main takeaways from this cross-border attack.

Russia didn’t bother garrisoning its logistical centers along the Ukrainian border. While this assault was quickly put to rest, this will be crucial as Ukraine launches more attacks in the coming weeks and months.

We’re going to hear a lot more about Belgorod in the future. It’s one of the critical points the Russians use to launch assaults into Ukraine. For Ukraine to “win“ this war, Belgorod will need to be neutralized, one way or the other.

The final component is that these are ethnic Russians…fighting against Russia…in Russia. So this little hiccup might throw a wrench into some of those “for the Russian people” propaganda pieces that Putin is pushing.

As I’ve said before, the Russians will continue pushing this war until they can’t, and if Ukraine wants to win, they’ll eventually have to cross the border. These partisans may have just answered how that might be carried out.

 
JUNE 3, 2024
Ukraine Opens Up on Belgorod

 

From the beginning of the Ukraine War, the Western nations have placed restrictions on how their weapons donations to Ukraine can be used. Specifically, Western nations have been concerned that if Ukraine targets Russian forces within Russia, escalation may be unavoidable. But recent events have forced a change of calculus in the West.

Less than 48 hours after NATO gave Ukraine the right to use those donated weapons against Russian targets within Russia, Ukrainians opened up on Russian military assets in and around the Russian city of Belgorod.

It’s too soon to assess damage, but the lack of Russian counterattack suggests Ukraine will soon be able to attack Russian forces wherever they can be reached. Regardless of the weapon systems Ukrainians are using.

 
JUNE 17, 2024
Why Did Russia Choose Invasion Over Nukes? || Ask Peter

 

For years I’ve warned that a war between Russia and Ukraine was inevitable, but why didn’t Putin just play the nuke card? As an add-on, we’ll also be touching on some new Russian alliances that could rub the US the wrong way.

The Russians are no strangers to wars and territorial expansions, so despite having nukes, they still prefer their tried and true method of occupation. This may seem foolish given their nuclear capabilities, but the Russian goal is to establish a buffer they control easily, not a zone they have to patrol wearing hazmat gear.

The Ukraine War has also brought up conversations of Russian alliances with some unsavory characters, i.e. North Korea, Iran, and China. I’m really not too worried about these alliances either. The logistics alone make them all deal breakers.

The conversation about the American-led global order being disrupted is less about Russia’s moves and more about how the Americans decide to proceed with their global strategies.

 
JUNE 18, 2024
Ukraine: F-16s, Offensives, and Abject Humiliation

 

Ukraine is gearing up for one of its most important offensives to date, but what makes this one so different from the rest?

The main driver of this offensive is a delivery of F-16s from NATO, which was preceded by some large arms packages from Europe and the US. Now this is all very exciting, but we’re still a little ways out from this going down. In the meantime, Ukraine will be laying down the groundwork to help ensure that this offensive can successfully break through the stalemate that has defined much of the battlefield this year.

So what does that groundwork look like? You can expect to see Ukraine ramp up its strikes on Russian air defenses all throughout the occupied territory and even deep into Russia and Crimea. This will (hopefully) allow the Ukrainians to establish regional air superiority and use those F-16s to their full capabilities.

It doesn’t mean Ukraine will be flying into Moscow tomorrow and ending the war, but cutting off Russian logistics in Crimea and other areas could cause significant losses to Russia – and Putin’s ego. Expect further updates once all of this kicks off.

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.

Support medshare's ukraine fund
Support medshare's global efforts

US Border Crossings: Is Mexico the Solution?

It’s time that we discuss the situation at the US – Mexico border. What’s going on and how is it all going to shake out?

Over 2 million people crossed the border illegally last year. Crossings appear to have been decreasing over the past six months thanks to executive orders by President Biden (although, they were first part of a Republican proposal). While these crossings might be happening via Mexico, the majority of those entering the US illegally are not Mexican.

These migrants are coming from Central American countries like Honduras and Nicaragua, as well as countries like India, Russia and China. While some of these people used to enter legally, policy changes have forced them to cross via more illicit means. Physical barriers can only do so much in preventing these crossings, so it may be time to explore political solutions.

Since most of these migrants are entering through Mexico, that should be the first line of defense. Discussions between Mexican President Andrés Manuel López Obrador (Amlo) and President Biden have led to positive trends in managing border crossings. However, this issue is constantly evolving and will require much more than a big wall and soft handshakes to sort out.

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

Support medshare's ukraine fund
Support medshare's global efforts

Transcript

Hey everybody, Peter Zeihan here, coming to you from hot and smoky Colorado, where we’re finally getting some much, much, much needed rain to put out the forest fires that are way, way, way too close. Anyway, I’m back for a couple of days, so I want to give you an update on what’s going on at the border.

Now, as we all know, over 2 million people crossed illegally last year. Whether that’s good, bad, or indifferent depends on your politics. From a rule of law point of view, it’s questionable at best. Politically, it’s untenable. But economically, if it hadn’t happened, we’d probably have 10% inflation because of labor shortages. So, pick your poison—what problem do you want to embrace, and which one do you want to work against?

Now that we’re into August, there are two big things going on. First of all, the number of apprehensions at the border has been steadily dropping for the last six months. This is largely due to a package of executive orders that Joe Biden enacted a few months ago. These include summary expulsions and much stricter rules on asylum. These measures were part of a Republican-sponsored project earlier this year to remake the border. The Democrats were forced into it, but then Donald Trump thought this would be a victory for Biden, so he told his allies in Congress to scuttle the deal. In response, Biden went ahead and imposed the Republican ultimatum as a series of executive orders. I don’t want to say it’s working—it’s too soon to know for sure—but tensions at the border have dropped by roughly a third during this time. We’re well below the high levels of detentions and crossings from last year, and preliminary data for July and August suggests that trend is continuing.

The second thing is that folks from beyond Central America are now making up a larger and growing group of those crossing the U.S. border. Remember, the majority of people crossing were from the failed or nearly failed states of Honduras, Nicaragua, and El Salvador. But now, there’s a significant number coming from other places, especially India, Russia, and China. These are people who used to come to the United States legally, but due to the lack of immigration reform through the Obama, Trump, and now Biden years, most legal pathways for immigrants have been closed. So now, people are just coming illegally, which means different tools are being used to regulate the flow.

Specifically, Biden has had a series of deep conversations with his counterpart in Mexico, President López Obrador (AMLO). Behind the scenes, they’ve quietly cut a deal where Mexico acts as the first line of defense. This makes it more difficult for people from those failed states to travel north. Once they get to the northern border, they’re put on buses and shipped back to the southern border. Secondly, Mexico is no longer accepting third-party visas for would-be immigrants coming from places like China. It used to be that you could fly from China to Mexico City and then come up, but not anymore. Now, they’ve been flying to places like Ecuador and trying to connect through to Mexico, but that doesn’t work anymore either. So, they’re trying to go through Bolivia or Africa, but now the Mexicans are saying unless you have a year-long multi-entry visa for all the countries on your trip, we’re just going to ship you back. This means all the countries where they used to start, like Korea, Japan, Vietnam, or Russia, are now having to take deportees on flights from Mexico City.

None of this would have been possible without having a conversation with AMLO. And AMLO is a difficult guy to have a conversation with—just ask Donald Trump. He banged his head against the Mexican administration for a couple of years early in AMLO’s reign. It hasn’t been any easier for Joe Biden, but after a fashion, we have the beginnings of a deal.

Will it work? For the moment, things are trending in a positive direction if you want to keep the border closed. But keep in mind, this border is 2,000 miles long. Even if the United States were to deploy its entire military to the border, that’s only enough people for one dude every 50 feet, assuming no one ever takes a break or sleeps. So, there has to be a political angle to any sort of border management. Simply building a wall won’t work because, as we found out in the early years of the Trump administration, if you can quadruple your income by using a ladder, well, you’re going to use the ladder. The wall hasn’t done much to inhibit people from crossing illegally.

However, a political deal, like the one we saw between Trump and AMLO and now between Biden and AMLO, which turns all of Mexico into a kind of a wall—that works a lot better.

Alright, that’s it for me. Take care.

Can Ukraine Claim the Skies and Destroy Russian Air Defenses?

A fighter jet flying through a cloudy sky

A forest fire near my home cut my backpacking trip short, but it did allow me to record some new videos. So, today we’ll be looking at some recent developments in Ukraine.

Ukraine is figuring out how to maximize the effectiveness of its weapons (both NATO-supplied and domestic), allowing them to strike deep within Russian territory. Some notable “hits” include destroying a strategic bomber and refinery, sinking a sub, and taking out numerous air defense systems.

These attacks will continue to weaken the Russians’ ability to defend against air assaults, making the arrival of F-16s from European allies all that more interesting. The goal is to achieve air superiority in key areas, even if it’s only temporary, and allow for more effective combined warfare.

This shift in tactics could lead to significant breakthroughs on the front lines, as Russia will be forced to pull back from their current positions. Whether the Ukrainians will be able to capitalize is a question that will have to wait…

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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.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from Colorado. I was out backpacking, but there was a forest fire near my house, so I had to run back in. Anyway, it looks like it’s under control. We have some thunderstorms moving in, so I guess that’s a silver lining. Anyway, it gives you an opportunity to hear me talk about a couple of things that have happened in the few days since I’ve been back.

The first thing I’m going to talk about today is what’s going on in Ukraine. As you know, the Ukrainians have become more and more creative at using imported weapons from the NATO alliance, as well as some of their own homegrown stuff, to strike Russian targets further and further away. In the week around the 1st of August, just before and just after, a series of attacks took out a strategic bomber in Russia. Specifically, they hit a refinery deep within Russia, over a thousand miles from the coast, which started a really big fire. They also sank a Kilo-class submarine. You know, that’s a $300 million price tag that the Russians just lost. But the most interesting thing I’ve seen is that a series of attacks took out at least five S-400 air defense systems.

Now, the S-400 is supposedly the most sophisticated anti-aircraft system in the world, capable of shooting down missiles and all that good stuff. However, its reputation has definitely been tarnished in this war. And these aren’t the first ones that the Ukrainians have taken out. They’ve taken out at least another six, to my knowledge. The Russians only started the war with 50 to 56 of these systems, so we’re looking at somewhere along the lines of 20% of them being taken out, with probably a few more damaged as well. Using around 50 of these systems to provide full air defense coverage for the entire Russian mainland is already a stretch, and now they’ve lost 20%. This has escalated from being a tactical theater issue to a full strategic threat, as they’re losing the ability to maintain a periphery for air and missile defense across the entire space.

The Ukrainian goal here is very, very clear. If they can take out enough of these systems, especially in Crimea and to a lesser degree in the Donetsk region, then when the F-16s arrive—which are coming in from Denmark, the Netherlands, and a number of other European countries—the Ukrainians will be able to use their air power without the immediate fear of everything getting shot down.

One of the big problems they had last year when they attempted their counteroffensives was trying to do combined warfare using artillery, rocket systems, drones, men, tanks, and aircraft, which they didn’t have. Attempting a combined warfare project without the air component was a bit of a problem. The Russians were able to call in airstrikes and artillery support and cut up the Ukrainians as they were trying to advance. If enough anti-aircraft systems can be taken out of the equation on the Russian side, then even if the Ukrainians cannot achieve general air superiority, they can certainly achieve temporary air superiority over specific zones where it’s important.

This creates a very different sort of conflict where NATO trainers will prove immensely useful because that’s how NATO operates. Anyway, the first F-16s have been repainted with Ukrainian livery. They are in Ukraine now, and probably over the course of the next few weeks while I’m gone again, we’re going to see the first efforts by the Ukrainians to actually leverage their new air power in league with their ground power. We might see a crack in the line, specifically in the direction of Crimea.

In just the last week, the destruction of the S-400 systems has induced the Russians to evacuate a couple of their airbases, pulling all of the aircraft out because they can’t defend them. Obviously, in the short term, that’s great for Ukraine because it means these aircraft are now going to be flying from Russia proper, much further away. Moving forward, if the Russians lose the ability to do quick turnaround launches when the Ukrainians are operating, then the Ukrainians have that much more leeway in everything else.

Okay, that’s it. Take care.

The Garbage Time of History: China’s Economic Decline

*This video was recorded before Peter’s backpacking trip in mid-July.

Lesson of the day: if the Chinese government starts censoring a topic, it’s probably time to start looking into that. Today, we’ll be examining China’s economy heading into ‘garbage time’.

For the non-athletes that follow me, garbage time is a sports term that refers to the final minutes of a play when there is no chance for the losing team to recover, yet play must continue. So, if we apply that to the Chinese economy, it would suggest that China has crossed the point of no return.

If you trust the data coming out of China, the economy is stagnant and the demographic picture is grim. If you take your Chinese data with a grain of salt, the economy and demography of China are in a unrecoverable nose dive. So, to say that China is ‘laying flat’ and in ‘garbage time’ is no exaggeration.

If there was anything that might help China hold on, it would be strong international trade. Unfortunately, many countries are stepping away from deals with China and removing that last sliver of hope for the Chinese.

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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.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from Lost Valley in Colorado, just above Denver. Today we’re going to talk about a bit of Chinese censorship and the general downward spiral the Chinese find themselves in. I keep an eye on what the Chinese are banning because it gives you an idea of what Xi Jinping and the CCP in China are nervous about.

A couple of new terms have popped up on the ban list that I think are worth discussing because they put a few things into context. The first term is “garbage time.” For those of you who are sports enthusiasts, you might have heard of this term. It refers to the final minutes of a game when one team is so far ahead that it’s impossible for the underdog to catch up. They still have to play out the rest of the game before officially losing. In geopolitical terms, it’s a concept that emerged in the 2000s and 1990s, referring to the period after the Soviet invasion of Afghanistan in 1979 when it became clear that the system was broken and it was just a matter of time before the inevitable end.

The Chinese government doesn’t like this term because it implies that their system is fundamentally broken and that it’s just a waiting game until the end.

The second term is “laying flat.” This idea is that things are so broken and hard work will get you nowhere in a dysfunctional system, so you might as well do the least amount of work possible because there’s no reward for anything else. Again, this term is problematic for the Chinese government because it reflects widespread disillusionment.

These terms are indicative of the economic situation in China. The Chinese recently released new data, showing annual growth once again coming in under 5%. This has been the trend since 2019. Most experts believe that China’s government overestimated their GDP growth by about five percentage points since the 2010s, suggesting that for the past five to six years, China really hasn’t grown much at all. This is reminiscent of Japanese-style stagnation but with an economy that hasn’t advanced as far.

Recent demographic data from China indicates that they’ve lost another 8 million people under age five. The data now publicly admits that there are roughly the same number of people aged 50 to 70 as there are aged 0 to 25. This is significant because, ideally, the younger age group should be two to three times as large as the older group.

Independent demographers argue that China has overstated its population by 100 to 250 million people, particularly under age 40. This suggests that the 0 to 25 age group may be overstated by at least 80 million people, possibly closer to 150 or even 200 million. Most consumption in an economy is driven by people under age 40, who are the ones buying homes and raising children. If this next generation doesn’t exist in significant numbers, China can never achieve consumption-led growth again.

This makes China increasingly dependent on international trade, which is in the process of cutting China out of the global system. This started with Donald Trump in the United States and has now expanded with recent sanctions on things like electric vehicles to Europe, Turkey, India, Indonesia, and Brazil. The effort is going global. So, the last best hope the Chinese had for recovery is now over six years old, and it looks like there won’t be another one. People are beginning to notice.

Could a Russian Revolution End the Ukraine War?

*This video was recorded in May of 2024.

We’ve all stared at the stars thinking about the different ways the Ukraine War could end, but could a coup or revolution in Russia be the way it goes down? It sounds great, but there’s quite a few obstacles in the way.

The first option is a palace coup. Given that all the top Russian political figures are part of Putin’s cabal and have been thoroughly vetted for lack of ambition, this is fairly unlikely. What about a revolution? Despite the standard of living decreasing and economic challenges, public uprisings are unlikely given the nature of Russian culture. Historically speaking, revolutions in Russia have only occurred when military strength weakens significantly – and very suddenly.

So, even if a revolution did happen (and it likely will in the future), we probably wouldn’t know about it until that day. But once that first domino falls, it could lead to a complete restructuring of Russia as we know it.

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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.

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Transcript

Hey, everyone. Peter Zeihan here, coming to you from the south of France and the National Park. One of the questions I’ve been getting repeatedly in Europe is, “Isn’t Russia due for a coup or a revolution or something?” People are looking for a way to end the Ukraine war quickly. Well, there are three problems with that.

Number one, I don’t think we’re going to see a palace coup anytime soon. Most of the people at the top of the Russian political heap are folks that Putin has known or trained for the last 30 years. One of the many characteristics of the Soviet system is that the intelligence folks tended to be in charge, especially after they threw an internal coup back in the early ’80s. That’s when the Andropov, Chernenko, Gorbachev trio came to power, all former intelligence officers. Putin is an heir to that legacy. Remember, he used to be stationed in East Germany to steal industrial secrets from the West. After that coup, everyone else in the communist hierarchy was basically purged. So, those were the people who took over the post-Soviet Russian system.

There are only about 120 of them left at this point, but all of them are personally loyal to Putin from their days in the KGB or are former interns of people like Putin. Take Alexey Miller at Gazprom, literally a former intern. They all see the world through the same lens, and they all owe their positions partly to Putin. Putin has spent the last 30 years purging this group of anyone who might be disloyal. So, number one, they see the world the same way. If something were to happen to Putin, they would probably have a really interesting conversation about who’s in charge next and then just prosecute the war more or less as it’s been going.

Number two, they’re personally loyal. About the only one of the 120 who might have the guts to try something a little scrappy would be Igor Sechin, a former gunrunner who now runs Rosneft, the state oil monopoly. He probably has the guts to kill Putin. But the other 119, if there’s anything they agree on, aside from seeing the world through the same lens, it’s that they all hate Igor Sechin. So, if Sechin did try something, he would probably be dead the next day. So, an internal palace coup is probably not going to happen.

That leaves the option of revolution. The standard of living in Russia is dropping. They can’t access Western goods or Western travel destinations. The economic elite, such as it is, is having a rough time of it. Inflation is an ongoing issue in many parts of the world, Russia included, because now the Russian industrial complex is being retooled to make tanks and refurbish military equipment. So, it’s not available for what paltry commercial goods it was capable of producing in the first place.

So, what about a revolution? Well, the problem is that this is not the West. These are not democratic societies. These are despotisms. As a result, you usually don’t get public uprisings in a place like Russia unless and until the standard of living tanks and the sense of nationhood itself is thrown into question. Russia has had popular uprisings in the past, but the Cold War wasn’t one. Basically, you have to see the Russian army disintegrate in a military campaign to the point that people know the strongmen are gone and broken. We’re not there yet, and there’s nothing on the short-term horizon in the Ukraine war that suggests we’re anywhere close.

For those thinking this is still perhaps the path forward, I don’t want to say you’re wrong because we do have a lot of similarities right now between what’s going on in Russia and what went on in the 1980s: similar economic dislocation, similar failure of state institutions. The best parallel I can draw is the Wagner rebellion of last year. We had a rogue paramilitary commander who marched on Moscow for a thousand miles. Much to Putin’s delight, not a single military officer joined him. But much to Putin’s despair, not a single military officer stood against Wagner either. No one loves Russia, just like no one loved the Soviet Union.

When this does go, and the odds are it will in time, the whole thing goes—the whole regime, the whole governing structure—just like it did in 1992. Because aside from the corrupt, there is no vested interest in maintaining this system. It just has to have some sort of short, sharp shock, like an extreme military defeat, for us to get from here to there.

So, are we going to see a revolution in Russia? Almost certainly. But there aren’t going to be any warning signs until the day it happens. And as soon as it’s over, that’s it for the Russian state. They don’t have enough time, demographically speaking, to try something new. So, when this is over, it’s over.

China’s Tariff Wars: The EU Opens a New Front

*This video was recorded in June of 2024.

We’re talking about a different kind of war today – Trade Wars. Specifically, we’ll be looking at attempts by the US and EU to limit Chinese involvement in their electric vehicle markets.

With 100% tariffs from the US and around 50% from the EU, the Chinese EV industry is being backed into a corner…and its only going to get worse. China’s retaliatory measures are limited by their dependence upon foreign imports and attempts to restrict exports of other materials like gallium have backfired. Heck, the Chinese even tried to slap some tariffs on bacon.

China’s myriad of other issues (demographics, post-COVID decline, low value add, etc.) have only exacerbated the problems brought about by these tariffs. The semiconductor industry is a good example of the inefficiencies in the Chinese system and how reliant on foreign expertise it is.

Don’t get me wrong, China is the world’s manufacturer and that’s no small thing, but its dominance will be challenged by these ever-growing wars on trade.

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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.

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Transcript

Hey, everybody. Peter Zeihan here, coming to you from the top of Frazier Peak in New Mexico. Back behind me, you can see Mount Walter and just a little bit of Wheeler.

Today, we’re going to talk about trade wars shaping up with the Chinese and why the Chinese don’t have too much leverage. The issue is that the United States and the European Union have both put heavy tariffs on Chinese electric vehicles—100% in the United States, about 50% in the case of Europe.

This is just the first round. Expect these tariffs to at least double over the next couple of years. The goal is to keep everything that involves any part of a Chinese EV out of the system, starting with the finished vehicles. This will extend to parts and especially batteries in the near future.

This is the beginning of the process, not the end. Regardless of what you think about electric vehicles, there’s a belief in the governing systems of both the U.S. and the EU that this is the future, and they don’t want another country or economic bloc to dominate it. Obviously, there’s a lot of subtext there, but that’s the core of the issue.

The Chinese are looking for things to retaliate against. The problem is, when you’re a major manufacturing country that imports all of your raw materials and relies upon foreign markets for all of your sales, there’s not a lot you can do. If you impede trade, you’re destroying the trade system you rely on for your economic model.

The demographic situation in China has gone from bad to horrific. Since the beginning of Covid, we’ve discovered that not only did they overcount their population by well over 100 million people, but people have aged out of the block that does most of the consumption.

We only got our first decent look at Chinese demographics a little under a year ago. The Chinese are now starting to understand why retail sales have not rebounded post-Covid—they’re not going to rebound because they no longer have enough people to generate a rebound. So, foreign sales are all they have. China is also not the technological leader, which means it can’t withhold technology from its trading partners to get market access.

So, the question is, what can they reach for? In the United States’ case, if you retaliate with tariffs on anything, it immediately triggers a second round of tariffs on you, which hurts you more. Even with things where the Chinese might seem to have an advantage, like gallium and germanium (two rare metals they dominate in production), they restricted access to Japan and the U.S. after previous sanctions rounds. The problem is, these metals are just byproducts of aluminum manufacturing. The U.S. is getting back into aluminum smelting, solving that problem, and leaving China without leverage.

In Europe, this is the first significant trade dispute between the EU and China, and it’s not likely to be the last. Europe is known as Fortress Europe for a reason, and China is ripe to be cut out of the European market. Right now, however, the Chinese don’t feel the same danger in doing retaliatory tariffs against Europe as they do with the U.S. The problem again is finding leverage, and they’ve gone after pork.

Back before Covid, China was hit by a massive outbreak of African swine fever, decimating their herds. America and other swine exporters stepped in to fill the gap. Then, the Trump administration cheesed off the Chinese government, leading China to decide to never buy American foodstuffs again unless there was no other option. They switched to European supplies for pork, mainly from Denmark, Spain, and to a lesser extent, Italy.

Fast forward a few years, and China’s swineherd has recovered, creating overproduction. Now, they’re sticking it to the Europeans on pork. It’s not nearly as impactful as targeting semiconductors, but the Chinese don’t have much leverage there either.

No one makes high-end semiconductors by themselves. Making chips better than 28 nanometers involves over 9,000 firms globally. China can make chips of about 90 nanometers, suitable for smart light bulbs, but anything more sophisticated requires significant outside help. The idea that having a fab plant means you can run with it is false. It takes a village for specialty chemicals, design work, and lithography.

If the Chinese ever find something to retaliate with, the EU and U.S. can hit back in ways that impact core Chinese interests very quickly. This leaves the Chinese with limited options, like going after pork. Unless you’re raising pigs in Spain, this isn’t a big deal yet. Sooner or later, Chinese demographics will cause their system to collapse, revealing how much of the lower-end manufacturing the rest of the world can do without. China is the workshop of the world for mid to low-quality products and the king of assembly, but that’s not the tool you use to fight a trade war.

A Crack in the North American Drug War

An image depicting cocaine in lines, a card credit, and bill rolled up

I’m back home from Yosemite on a brief intermission to my summer backpacking trips, and wanted to issue an update on the Mexican Cartels. Specifically, we’re talking about the arrest of Sinaloa leader, El Mayo.

El Mayo is one of the heavy hitters in the Sinaloa cartel, known for being the logistics and money guy under El Chapo. This past week, he was mislead by one of El Chapo’s sons to enter the US, where he was immediately arrested.

This shakes things up for the Sinaloa cartel, but what will the fallout be? Well, you can expect lots of violence as different factions compete in this newly developed vacuum. I wouldn’t expect any lags to your drug supply though, but don’t get too excited, as this gives the US more insight to ultimately dismantling the cartel’s operations domestically. If I was the shot caller, I probably would have gone after the leader of the Jalisco New Generation cartel – El Mencho – but hey, I’m not complaining.

Oh yeah, if you we’re hoping for an update on the US political situation…nothing has really changed in my book. Just a different name on the ticket.

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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.

Support medshare's ukraine fund
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Transcript

Hey, everybody. Peter Zeihan here, coming to you from smoky Colorado. We’re definitely in the depths of fire season here; in fact, there’s a forest fire about five miles that way. No stress. Anyway, I’ve been gone backpacking for a couple of weeks, and I’m about to disappear again, so I figured I’d take this opportunity to update you on what has gone down while I’ve been out.

I’m sure lots and lots and lots of you have a long, long list of things you want me to update you on, but there’s really only one thing that I saw that happened that really requires giving you guys the lowdown. That happened in Texas and Mexico last week when a guy by the name of Ismael Zambada, also known as El Mayo, the titular head of the Sinaloa drug trafficking coalition in Mexico, got on a plane, flew to Texas under false pretenses, and was promptly arrested.

Quick background: the Sinaloa cartel is not simply the most powerful drug trafficking organization in Mexico; it’s the most powerful one here in the United States. In fact, it’s the largest organized crime group in the world. The reason it got into that position is because of its previous leader, a guy by the name of El Chapo Guzmán.

El Chapo ran the cartel like an American or Korean conglomerate. The idea was that they were all on the same side—don’t shoot at each other, don’t engage in petty larceny, things that would anger the population. Instead, they branched out into affiliated industries on the side—not just cocaine, but also marijuana, heroin, maybe a little bit of light kidnapping and human trafficking, and even local government, transport, agriculture, and tourism. Anything you could launder money with. He ran it as an institution, which kept the violence rate within his organization relatively low and minimized clashes with local governments. This allowed him to take the Sinaloa cartel to dizzying heights.

The United States named him public enemy number one, and eventually, in a series of operations, we got him. Then he escaped, and we got him again. Now he’s serving a life sentence in some dark hole in the United States. His successor is El Mayo, recently arrested. El Mayo is best known as El Chapo’s accountant. He knows where all the bodies are buried, how the institutions run, who the key players are, where the money flows, and how it’s laundered. So, big win. It’s also noteworthy how he was captured—not a DEA or FBI operation, but a setup by one of the other leaders of the Sinaloa cartel, one of El Chapo’s four sons, who tricked him into getting on the plane to the U.S. under the pretense of looking at an investment property.

El Mayo turned himself in immediately and is basically going through a plea bargain, leaving him with nowhere to turn because the evidence against him is overwhelming, and now there’s another insider involved.

The question is, what kind of operational impact will this have on the Sinaloa cartel? The cartel fractured into several dozen pieces after El Chapo’s fall, with El Mayo controlling the largest chunk. The second, third, fourth, and fifth largest chunks are controlled by those close to him, one of whom just turned him in. We already have another key player in custody in the United States, so two of the four are down, and three of the five kingpins are down.

In the short term, this means a lot of bloodshed in Mexico as these factions, without their leader, splinter and other factions try to grab pieces. Local crime groups in these areas will also try to seize opportunities. Mexico is already coming out of a three-year period that’s the most violent in the country’s history, and this situation isn’t likely to improve that.

However, now that the U.S. has some idea of where the money is flowing and the routes used, we can start dismantling the Sinaloa apparatus within the United States. Don’t expect this to have a huge or immediate impact on the flow of narcotics into the U.S. That is driven by two things: one, Americans really like their cocaine, and two, because cocaine is very expensive per unit of weight in bulk, it’s easy to smuggle. There will always be groups in Mexico and the U.S. willing to push that stuff through, but it just won’t be at the institutional level of the Sinaloa cartel.

If you wanted to make a bigger impact, the target would have been a guy named El Mencho, leader of the counter-group to Sinaloa in Mexico, known as the Jalisco New Generation Cartel. Unlike El Chapo or El Mayo, El Mencho runs his organization as a one-man show and a crime boss, ruling by fear and violence, which is the point of his operation. He just happens to make money on the side selling drugs. Removing him would likely lead to a significant impact on the cocaine flow in the midterm, but it wouldn’t end it. As long as Americans want their coke, this will continue.

But I don’t want to take away from the victory here. The bookkeeper has been brought in, and that will absolutely have significant impacts.

Now, about that other topic you want me to talk about, Biden’s withdrawal from the race. It really doesn’t change things. I made the call two years ago on how this election is going to go, and I don’t see any reason to adjust that now. I made some minor adjustments a few weeks ago during the presidential debate, which showcased the mental incompetence of both candidates. But I would just add one thing: a lot of Americans, roughly 20 to 25% of voters and the vast majority of America’s true independents, have been saying for months that they want someone else to choose from. They don’t want to choose between two people they’ve had to choose from before. Independents are fickle voters; they hate voting for the same person a second time. Well, with Biden out and Harris in, they no longer have to. So what was likely to be a lopsided contest in favor of the Democrats already is now likely to be a rout for the Republicans, unless Vice President Harris absolutely messes things up in some way in the next few months. And that doesn’t seem to be her style.

Okay, that’s all I’ve got. Take care.