Peter Zeihan, Author at Zeihan on Geopolitics

No Shale for Europe

The US oil industry has seen a massive boost thanks to the shale revolution, but can the Europeans replicate the success the US has seen?

Unfortunately for Europe, there are a lot of things working against them. Problem one is that Europe just doesn’t have the right geology to make this work. They are also missing the decentralized network of small companies that helped build out the shale network in the US, they lack innovation, and they don’t have a rapid regulatory approval system. Aaand there is no financial incentives for landowners due to the legal barriers in place.

In the short term, this doesn’t look very plausible for the Europeans. They would need to buildout all the infrastructure, under perfect conditions, and even then it would take a decade to MAYBE get one million barrels per day. So, oil imports from the Middle East and US will continue.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide 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, so we can be sure that 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.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey, everybody. Peter Zeihan here coming to you from a brisk Colorado. Today we’re going to take a entry from the Ask Peter forum. Specifically, what would it take for Europe to experience an American style shale revolution? The continent is a massive importer of oil and natural gas, and they don’t exactly have a lot of territory that is good for sun or wind either.

So their choices really are nuclear, which let’s just call that problematic in some places, or imported. And if you’re importing, then you’re at the mercy of whoever you’re buying the stuff from, as they discovered with the Ukraine war, when that is Russia, that’s a problem. And as I discovered in the 70s and 80s, when that’s the Middle East, that’s a problem.

And then, of course, most European countries don’t have a production base navy, so they can’t even patrol their own supply lines should someone in between decide to cut them off. So, you know, reasonable question. Well, there’s a couple things that they really can’t do much about. And then there’s a couple things that they can, but I doubt they will.

So let’s start with what they can’t fix. Geology. Yes yes, yes, 90% of known oil and natural gas is in unconventional rock formations like shale. But that doesn’t mean that all shale deposits are created equally. So if you consider the United States, we’ve got the Permian, which in some places has 20 different stacked layers, each with their own petroleum layer, little jumbled together, but for the most part, pretty easy to get to.

So you can drill down through one, do laterals go down to the next one, do laterals go down the next one? Do laterals and the whole thinking funnel up through a single point of extraction. It’s by far the best in the world of that geology, and it’s, as far as we know, the only one in the world, there are tiers.

The Marcellus, in the Pennsylvania area is still pretty good, but it’s mostly gas, whereas the Permian is mostly oil. You’ve got the Bakken in North Dakota. That’s somewhere between, and the Europeans just don’t have the type of deep sedimentary geology that the United States or that North America specifically has. So it’s not that there isn’t oil and gas to be had.

It’s just it’s probably not going to have the same bang for the buck, even if all else was equal. And of course, all else is not equal. The way the United States started its shale revolution was with hundreds, if not thousands of mom and pop companies. And so we developed the expertise as we went. But it started from kind of a baseline understanding, especially national lands in the United States.

Small mom, the pops are the wildcatters that basically drill or have rights to small chunks of acreage and drill whatever’s best in that acreage. And they’re constantly trying new things. And in doing so, eventually they crack the code on shale. In the last few years, that has evolved quite a bit. And now the super majors have taken everybody’s best practices and are now doing some really aggressive iterations using things like artificial intelligence.

And overall, since 2012, we’ve probably seen worker productivity in the area increased by 350 to 400%, which is by far the record for any subsector in any industry anywhere in the world. And that’s before you consider that, we’ve gotten much more efficient with the equipment. So we’re actually getting about two and a half times as much crude as we did ten years ago.

But with one third the number of drilling operators, if you’re going to do this in Europe, you basically have to create it from scratch. With the notable exception of the United Kingdom, there is no constellation, no environment of small and medium sized players. Get your big national players that are de facto monopolies, and that’s about it. And with the possible exception of France’s too Tall and to a lesser degree, BP and EA and I, you know, none of these guys or what I would consider at the technological edge.

So simply getting into shale in the first place would be a big leap. But at least that’s something you can do something about. The other issues are far more problematic, but luckily there is a little bit of hope here. The first one is proximity. One of the reasons why the U.S show revolution has been so successful is when the technologies were first pioneered, they were pioneered on the edges of projects that had already been in production places like the Marcellus in Pennsylvania or the Permian in Texas.

And so there was already significant takeaway capacity was just waiting to be used. All the legacy pipes from previous oil booms, we weren’t exactly dormant, but they were certainly had a lot of spare, space in the pipelines. And shale was able to flow right in there. And most of the expansion we’ve seen in the last eight years has been about expanding that takeaway capacity, because it’s all the old stuff been maxed out in Europe.

Their mature fields have been abandoned for decades. And so on the off chance that there is any infrastructure left, it’s probably going to have to be completely rehabilitated. In addition, a lot of the best geology we are aware of in Europe is directly under where people live. So, for example, we know there’s a good shale geology under the some of the lowest sections, lowest in elevation in the Netherlands.

But you know, if you get any land subsidence, you all of a sudden have lost part of your country. So the chances of drilling there are not very high. And the richest shale deposit we’re aware of is under Paris, specifically under the roof. So the idea that the jewel in the crown of French historical preservation is suddenly going to be an operating oil extraction site.

I don’t think so. This isn’t the United States where there’s still oil production on Wilshire Boulevard. They have a very different attitude towards things in Europe.

The final issue, which is arguably the single largest, obstacle is legal rights in the United States, unless something has been negotiated otherwise, under the land you live on or own our mineral rights that you also control.

So if somebody decides they want to come into your neighborhood and drill and they get your permission, you get a cut. Whereas there is no country in Europe where that is the case. So if somebody were to come in, they’d get permission of the National government, and then the national government would get not just the oil and gas, but all the money that would come from it.

And you get nothing. So you’ve set up a situation where you can guarantee very strong opposition from regional governments, local governments, landowners, renters, everybody, because they don’t see any of the immediate benefit, unlike how we have it here. Now, technically, that is a legal change that is up to the individual countries to shift, but doing so would be would be a bit of a heavy lift.

So even if in a perfect scenario, the Europeans could just wave a wand and change the legal structure without public opposition and all local landowners and adjacent interests were immediately on board. And if they started building out the infrastructure for takeaway capacity today, and if they retooled their entire educational system to generate the scads of workers, that they would need to do this at scale the soonest, that you would probably see a million barrels a day fresh output, from Europe as a whole, would probably be 8 to 10 years from now.

And to be perfectly blunt, I don’t have that kind of time. The only way that the Europeans are kind of holding things together right now is with imported oil from the Middle East, an imported natural gas from the United States, and liquefied form that is more stable than their previous import menu, which was Russia heavy. But to think that that has ten years to run, in an environment where so much geopolitically is so unstable and changing so quickly, they’re gonna have to figure out another way.

One more thing. Regulation. This is something that Europeans obviously can do something about. And I’m not talking about here about a relatively anti-business, pro-environment regulation. Obviously, if you’re going to have a robust energy sector. You have to make some compromises there. That’s not what I’m talking about. I’m talking about turnaround time. So the Texas Railroad Commission, which regulates the shale space in Texas, is famous for fast turnaround times.

They accept applications for drilling permits 24 hours a day, 365 days a year. And in Texas, people drill and Christmas and Thanksgiving and Easter and all the rest. And most of the operations at most of the wells are operating at least 16 hours a day. They just rotate crews. The two examples I can give you of countries in Europe that have attempted, to try shale are the United Kingdom, Poland, the United Kingdom basically drowned everybody in paperwork.

Very British. And as a result, getting things approved wasn’t measured in days or weeks, but months. Because there was always one more form. It was like working for the U.S. Defense Department. And when they discovered that the geology in the United Kingdom, is, the oil bearing stuff is less dense, it’s in smaller deposits and it’s more spread out, and it’s a lot deeper.

Everyone pretty much walked away. The other country that tried Poland, had a little bit better geology, but you still had a problem with just permitting. You could file for your permit between 9 and 5 Monday through Thursday. And, God forbid, it was a holiday because, you know, the Europeans have a bunch of those. And this is an a country that actually has a strong national security interest in independent energy production.

But foreign companies just couldn’t get it to work. And Exxon, you know, that dainty, demure company that never gets its way ultimately just threw up its hands and walked home? So unless you have that change in government culture, it’s really difficult to imagine this moving

While U.S. shale operations now are getting more and more oil out of each individual, well, now measured in the tens of thousands of barrels a day, often, if you’re going to start new, with a new sector, with little expertise and especially without, say, the Permian geology, you’re probably only going to be getting a few hundred barrels per day. So the barriers between you and your operation that the government puts up needs to be very low for it to be worth that effort. And right now, the incentives in the United States versus Europe are just completely flipped. Okay. Now I’m done.

When the Missile Is the Message

A missile being fired against a blue sky

Following the United States’ approval for Ukraine to use its weapons systems inside of Russia, Putin decided to launch an intermediate-range missile called the Oreshnik into Ukraine.

This was initially mistaken for a nuclear capable ICBM, but that was cleared up rather quickly. Turns out it is a missile the Russians developed illegally while pretending to abide by an arms control agreement. The important detail in all of this is that the Russians completely misread the room. They thought by flexing their missile capabilities that NATO unity might be fractured, and they could assert some dominance, but that backfired.

Many EU nations are increasingly arming Ukraine and taking a firmer stance against Russia, and some other factors are also increasing European solidarity. With regional security in question, European countries are locking arms and uniting against the Russians.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide 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, so we can be sure that 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.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Greetings from Colorado. I just got off a plane, got back home for the weekend. It’s 22nd November, and the news regards a missile attack that the Russians launched against Ukraine earlier this week.

As you probably remember from a video a couple of days ago, the United States government has given the Ukrainians authority to use their weapons systems on Russian territory. Specifically, in the Kursk province, the Ukrainians have already started to use them to target command and control nodes and a few depots. They’re certainly going to be going after things like rail logistics in the not-too-distant future.

This is something where a lot of Russian politicos have been saying that this is a red line that will trigger nuclear war.

And that was obviously crap because that’s the wrong message coming from the wrong people. The Russians have yet to engage in the sort of meaningful conversation about the war that would allow the return of some sort of deterrence doctrine.

Anyway, in order to try to press their case that there would be consequences, the Russians launched a weapon from down near the Caspian Sea—well, further away than it needed to be to hit someplace in Ukraine.

At first, everybody thought it was an ICBM. That’s an intercontinental ballistic missile. And the only reason those exist is to have nuclear warheads on them. The idea was that it was supposed to be a threat to the United States.

Turns out it was not an ICBM, not an intercontinental ballistic missile. It was a new type of weapon called an “Organic,” which is an intermediate-range weapon.

Now, intermediate-range weapons in Europe—well, between the United States, the Soviet Union, and the Europeans—they were banned under a 1988 treaty called the Intermediate Range Forces Treaty, the INF.

The idea, and this was at the end of the Cold War when Reagan was in charge, was if we remove the shorter-range missiles that could be used in the European theater, then we move off of hair-trigger alert. We could start negotiating some sort of post-Cold War pact, which would eventually culminate in things like strategic arms limitations that would take all of the city-flatteners out of the equation.

Well, about 15 years ago, the Russians started violating the terms of that treaty and started developing weapons systems like the Organic, which now have hit the battlefield.

It’s not so much that this is a warning to the United States because the United States isn’t a target of intermediate-range forces—it’s too far away. This is about the Europeans.

And the question in Russian foreign policy and strategic policy has always been divide and conquer. They don’t like NATO because it allows everyone to band together, and it brings the United States and the Canadians into the party. They want a system where it’s every man for themselves. From a military point of view in the European space, that makes the Russians the most powerful player.

So the whole point of developing an intermediate-range missile and now launching it at Ukraine is a demonstration to the Europeans that we are back to the Cold War in terms of the Russians’ capacity to nuke before anyone can do anything.

Or at least that was the intent. It is definitely not working.

The British and the French have already allowed their weapons systems—most notably the Storm Shadow and the Scalp missile systems—to be used by the Ukrainians to target the Russians directly.

In addition, in Germany, we have a chancellor who’s on his way out, Olaf Scholz, who has been very hesitant to allow German weapons to be used. He is most likely going to lead his party, the Social Democrats, into a trouncing in elections that will happen within 2 or 3 months.

At that point, the new incoming chancellor of the opposition party, the Christian Democrats, has already said the first thing he’s going to do is call Putin, threaten him, and then free the German equivalent system—which is called a Taurus—for use by the Ukrainians.

Third, we have Finland and Sweden commenting about the sabotage by Russian and Chinese interests of internet cables and telecommunication cables in the Baltic Sea. They’re already talking about activating Article Five, which is the mutual defense clause of the NATO treaty.

So the Russians are misreading the situation. They’re misreading how the Europeans are standing. They’re misreading what the European nerve is.

The question is whether or not the Europeans can stick to it.

We’re now in this weird situation where the Europeans are doing a lot more for Ukrainian defense than the Americans because they know, at the end of the day—now, with or without the Trump administration—that they’re the ones who are going to have to live with whatever the security situation evolves into.

So we’re seeing a lot more interest in all of them to step up.

My personal favorite is an eight-party commission that involves all of the Scandinavian countries, all of the Baltic countries, Poland, and Germany, to start investing in defense industry manufacturing in Ukraine proper, so that the Ukrainians have a better chance of standing on their own.

Will it be enough? We’ll see. But what we know for sure is that the Russian effort has had absolutely the opposite effect.

¡Viva Chihuahua!

Photo of the cityscape of Chihuahua, Mexico

I’m overlooking the city of Chihuahua, Mexico as I record today’s video. This city is just one of many that is preparing for a post-China world, and you can probably hear all that preparation going on in the background…

Since China – aka the world’s manufacturer – is vacating its throne, the US is on the lookout for alternatives. Chihuahua is well-positioned to step into a prominent role. That’s all thanks to integration with the US economy, an industrial focus, and being landlocked.

The city has become specialized in industries like aerospace and mid-tier semiconductors, making Chihuahua highly productive and affordable. As industrial expansion continues, expect to see this city come up a whole lot more…

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide 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, so we can be sure that 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.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey, everybody. Peter Zeihan here, coming to you from Chihuahua City in central Chihuahua in Mexico. I just finished a community development presentation, which are some of my favorite because it allows me to kind of crawl inside of an economy and look at it from the inside.

I thought this would be a great backdrop to talk about the future of American industrial development, specifically in terms of what we’re going to do as the Chinese system breaks down.

Right now, the Chinese produce about half of all manufactured goods by value in the world. And as the Chinese demographic bomb collapses and implodes the entire economic system, we’re going to have to find alternatives. Places like Chihuahua City, which are under massive construction right now to help compensate for the coming shortage, are one of the few places that actually are a good fit for the United States.

Not only do we have NAFTA and NAFTA 2, which was negotiated by former president, now future president Trump—so we know it’s something he’s broadly okay with—there’s a proximity issue. Also, a lot of this hard work has already been done.

The northern Mexican states already trade more with the United States than they do with the rest of Mexico.

In many ways, they’ve already become integrated into our economic system, but each of them has their own story. Places like Monterrey, Tijuana, or Juarez are directly across the border from places like the Texas Triangle, San Diego, or El Paso, and so have a more traditional integration story where products go back and forth, and back and forth, and back and forth, doing whatever finishing work needs to be done.

Here in Chihuahua City, it’s a little different.

It’s always been a landlocked state, and Chihuahua City is right in the middle of it. It’s a four-hour drive just to connect to a city of size, and then like a 12-hour drive from there to get anywhere else.

So this is not a city that can integrate in the traditional sense.

They have to do most of the work themselves, which means they go to different industries. Normally, when you have a place like Monterrey or Juarez, you’re going to bring in a degree of American managers and especially American technology in order to plug in labor in the local Mexican community to whatever is across the border in the United States.

Here, that’s not the case. They have to move up the value-added chain to do more value-added themselves and send more finished products and more finished components to whoever the final finisher in the manufacturing chain or final consumer happens to be.

So while they do things like automotive—which, of course, the Mexicans are great at—they also do a lot of aerospace.

And I’d argue that the facilities here are, in many ways, more technologically advanced than what Airbus uses in most of Europe. They also design mid-tier semiconductors, meaning this is one of the few places in Mexico that actually has a knowledge economy.

When it comes to things like semiconductors, they don’t have the population to have a fab plant for themselves, but they take the semi-finished semiconductors that come from a place like, say, Phoenix, and they do the testing and the packaging and incorporate them into intermediate products, which is a much higher value-added process than a mere fab facility.

Put it all together, and Chihuahua City not only has the highest productivity output per hour of input of labor in Mexico, but it’s above that of about a third of the American states, and it’s above that of every single Canadian province.

So while we prepare for a post-China world, places like Chihuahua aren’t only hitting the ground running—they already have a lot of the infrastructure in place.

And the construction you’re hearing is new industrial parks going up left and right.

Things I (Don’t) Worry About – Chinese Investment in Mexico

If you’re getting worried about Chinese investments into infrastructure in Mexico, it might be time to switch the TV off and take a walk…because that narrative is a complete fabrication.

This should help ease your mind: China doesn’t even crack the top ten list of foreign investors in Mexico, there are regulations for the origins of goods outlined in NAFTA 2 that China can’t bypass (and the person who negotiated these rules will likely be in Trump’s cabinet), and any major investments by China would be outed by business leaders in Mexico (so we don’t need to stress about stuff happening beneath our noses).

And if that wasn’t enough, the Chinese system is in decline, and so is their global influence. If they do somehow manage to make investments in the region, it’s only going to help the North American industrial base prepare for the collapse of China. At least this is a good thought experiment to remind us that the US needs to focus on building out its own industrial capacity.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide 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, so we can be sure that 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.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey everybody, Peter Zeihan here, coming to you from Massey Draw above the Denver metroplex. Today we’re gonna talk about something that has been on a lot of people’s minds during my work trips the last couple of weeks.

Two weeks ago, I was in Mexico, and one of the first questions that everybody asked me was what I thought about the Chinese effort to build industrial plants in Mexico to get around NAFTA regulations and ship stuff into the United States.

Last week, I was in Canada, and that same question popped up. I decided to turn on the television for 15 seconds for the first time in a year and wow, wow, wow. It doesn’t matter who you are—left, right, center, economics, socialist, whatever. Whatever you’re watching, this is a hot topic. It pleases me to say, as somebody who just looks at the data, it’s a complete fabrication.

China doesn’t even make the top ten list for foreign direct investment—that’s investment in physical plants—in Mexico. In fact, it doesn’t even show up in government statistics; it’s so low down the scale.

And, you know, honestly, folks, let’s be honest here. The soul-searching… this kind of stuff is really hard to hide. I mean, an industrial plant that’s going to be big enough to process—even if it’s just to stamp “Made in Mexico” onto a previously made Chinese product and ship it to the United States—

That’s not small. That’s not quiet. We don’t have stealth fields, and there isn’t a single facility doing this anywhere in the northern Mexican states. The infrastructure into central Mexican states is insufficient for the task anyway.

This is something that we have dreamed up ourselves in our post-truth environment that just happens to have taken on a life of its own.

It reminds me a little bit of when everyone was panicking a couple of years ago about the Chinese purchasing farmland. And again, the Chinese weren’t even in the top ten list. Now, that doesn’t mean there aren’t foreign entities looking to do something like this, but it’s not China—it’s Canada.

Canada is the number one owner of farmland in the United States outside of Americans. It’s also the number one investor into Mexico after the United States. And yes, yes, we should be concerned about Canada, though with the rule of law, their politeness, and their heavy coats… I mean, Canada, I’m watching you.

Anyway, should things change—should this become a real thing—three things to keep in mind.

Number one: NAFTA 2, which was renegotiated by Donald Trump in his first term, has very clear rules of origin laws that say a certain percentage of goods have to be made in the NAFTA states. This hypothetical scenario where the Chinese are trying to get around that is already covered by US law, and the US already has tools within the NAFTA system to deal with it economically, politically, and to block the products should it become a problem.

That authority already exists.

In addition, the most likely person to take over trade policy in a second Trump term is Robert Lighthizer, who is the guy who wrote these clauses and negotiated NAFTA 2 in the first Trump situation. So I have no doubt that if there’s any inkling this is going to go down, Lighthizer will take personal responsibility for this. And he is by far the most competent person who was on Trump’s first team.

And if he accepts Trump’s offer, he’ll be the most competent and capable person on Trump’s team. So put that to the side.

Second concern: If something like this does go up, it will not be quiet. When the Chinese build industrial plants in third countries, they bring in their own workers. They house them on-site, and it generally generates a lot of labor protests for the host country to deal with.

And Mexico now has a healthier press environment than the United States does. Mexican workers will not be shy. Mexican business leaders will not be shy about shining a light on something like this should it go down. Keep in mind that most of the business leaders in northern Mexico are relatively oligarchic—a little bit Elon Musk—and they really don’t like it when things don’t go their way. They’re not going to be quiet.

So we have a really good alarm system built in should this happen.

Third, and finally: The Chinese system is failing due to demographic collapse. Before you consider trade tensions, before you consider the possibility of a conflict in the world that would interrupt raw material supplies, energy supplies, or merchandise exports, we need to prepare for a post-Chinese world.

Which means here in North America, we need to roughly double the size of the industrial plant.

And if the Chinese do decide to come in to build industrial plants in North America, think about what that means. They are spending some of their limited capital resources, technology, and labor in order to help us get ready for a world without them.

So even in the worst-case scenario, where I’m completely wrong and this is about to happen at scale, the worst-case scenario is still pretty good.

British Agriculture Is About To Suck Even More

Listen, I’m not one to scoff at a nice serving of fish ‘n’ chips, but when you’re serving baked beans for breakfast…that’s where I draw the line. You guessed it, we’re talking about the decline of British agriculture today.

Protests by farmers broke out on Tuesday, which highlight the growing issues with British agriculture. The Brits have been relying on imported food for quite some time (which opened their eyes to what real food tastes like), but that’s all going away.

Brexit has worsened the already declining agricultural industry by severing access to EU imports (to say nothing of EU subsidies) without an alternative source in place. Since local farming struggles with high costs and low quality, Britain will likely remain uncompetitive or be forced into an unsavory deal with new imports.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide 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, so we can be sure that 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.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey everybody. It’s Tuesday the 19th here, coming to you from a blustery Colorado. And today we’re talking about food in the United Kingdom. And I know, I know, I know, your first instinct is blehhh.

But I think it’s important to understand why. The issue today is that we had protests in London, right outside of Westminster, by about 10,000 farmers who were technically protesting a change in inheritance tax.

So the details of that really don’t matter too much, but we’re seeing a lot more aggravation among folks in British agriculture for very good reason. The sector is being phased out. Now, this has been, to be perfectly blunt, a long time coming. Britain was the first country to really apply deep water navigation to a value-added economic system.

So as the Brits got access to the wider world, their diet changed, their agricultural system changed. As a rule, oversimplifying, the more variety you have in climate zones, cultures, and soil types, the wider variety of food products you get. And to be perfectly blunt, England is all white. People in the Scottish are also very white, and the Irish are still more white people.

And they all are in the same basic climate zone. So there’s a limited number of products that you can grow. But when the British Empire got access to India and the Americas and Southeast Asia and all the rest, all of a sudden, they could import food products from the world over that could be grown at a lower cost and in greater variety than what they’re going to have at home.

So a greater and greater percentage of the British diet became sourced abroad at the same time that the value of those crops went up and the variety of those crops got more interesting.

If you fast forward to the world wars, the Brits were importing the majority of their calories on any given day. And so, when the Germans started their U-boat campaigns, you can understand how things got kind of lively very, very quickly.

Fast forward to the 70s, when the Empire was dying and the Brits joined the European Union. They lost access to a lot of the stuff around the world but gained access to all the stuff on the continent. And while the European system is definitely white people, there’s a lot of different varieties of white people in a lot of different climate zones, cultures, and soil types.

So they were basically able to displace what they lost from the Empire with what they could get from the European Union.

Well, seven years ago, the Brits voted for Brexit and have yet to put a replacement system in place.

So they’re losing access to the European stuff and falling back onto what the island of Great Britain can produce itself for the first time in about three centuries. And their discovery kind of sucks.

The future for agriculture in Britain falls into one of two categories. Either the Brits will seek a free trade zone with the European Union or re-membership, or they’ll seek something with North America, which will give them access to that greater variety at a lower cost.

The problem here is that they’re not entering into either of these sets of negotiations as equals. They’re entering as a country that has basically shot themselves in the foot diplomatically, strategically, and economically. They’ll have to take whatever is on offer. And if there’s one thing that the Americans and the Europeans agree on in agriculture, it’s theirs first.

So if the Brits want to join either system, they’re going to basically have to sign off their agricultural sector and import pretty much all their products from whoever their partner ends up being.

In the case of the European Union, that’ll be of higher quality, which is something their domestic agricultural industry can’t compete with. And in the case of the United States, it’ll be lower cost, which will also be something their sector can’t compete with.

So, regardless of how you look at this, the future of British agriculture is one of two things: purely domestic, high-cost, low-quality—or gone, because they’re importing food from somewhere else.

The protests we saw today are just the very, very beginning of what is likely to be a painful and disorienting destruction of the entire sector for the entire country for the entire rest of history.

Ukraine Can Now Strike Russia Direct

The Biden administration just gave Ukraine the greenlight to use American weaponry inside of Russian territory. So, what does this mean for the future of the Ukraine War?

The biggest change will be Ukraine’s usage of long-range ballistic missiles (mainly the Army Tactical Missile Systems, or ATACMS) to target military infrastructure within the Russian border. While there will be some impacts to Russian logistics, this likely won’t lead to any significant breakthroughs. And it doesn’t look the Russians are too worried about this either…otherwise someone important would have been doing the press conference.

Without too much concern for immediate escalation, this greenlight allows Ukraine to soften Russian positions and supply lines along the frontlines. But perhaps the biggest thing to watch, is that Trump now has another card up his sleeve once he gets into office and begins his negotiations with Russia.

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Hey everybody. Peter Zeihan here, coming to you from chilly Colorado. It is Monday, November 18th, and yesterday, on the 17th, the Biden administration lifted restrictions on the use of American weapons by the Ukrainian government. They can now launch wherever they want in Russian space. The weapon system that is of the most importance are the outcomes, which are kind of a rocket ballistic missile that has a range of about 200 miles.

It’s broadly expected that within the next day or three, the Ukrainians will be using them to target things like ammo dumps, air assets, and especially rail bridges—basically anything to snarl the logistics on the Russian side of the equation.

The two areas you’re going to see the most activity are in the vicinity of Kursk, where the Ukrainians have a foothold in Russian territory, and an area in the Donbas near where the Russians have been focusing strongly on capturing the city of Picross, given that it’s a rail hub.

The whole idea is to disrupt the ability of the Russians to get military assets to those theaters. There’s probably not going to be too much of an impact on things like air power on the Russian side because already 90% of the jets that the Russians have been using to operate in Ukraine are beyond that 200-mile range.

You might push a few more back, so this is concentrating the fight on those two main salients. But it’s probably not going to generate any sort of meaningful breakthrough in either direction, though it will certainly help the Ukrainians hold out.

There are three big things that we do need to consider now that we’ve had this kind of upgraded military capacity.

First of all, I don’t see this as a meaningful escalation in the war. I don’t think it’s going to generate any sort of significant response by the Russians. That’s not just because the Russians have, by my count, had over 200 “red lines” that the West has eventually skipped across.

You can always tell if the Russians are serious or not by who does the speaking. In this case, the Russian that came out and condemned the American action, saying this was an escalation, was a guy by the name of Dmitry Peskov, who is basically their press attaché. It didn’t even come from a policymaker. So, you know, it’s not serious.

I don’t expect the Russians to do anything significantly more. Keep in mind, the Russians have been crossing a lot of what the West would consider red lines—with spies, sabotage, and even bringing in North Koreans to fight in the war. There have been a lot of steps here, and that was probably ultimately what drove the Biden administration to take this action. But I don’t think this is an escalation in the traditional sense.

Second, if the Russians want to rebuild their credibility when it comes to red lines, they have to talk. The way you establish red lines and mutual deterrence is through a direct face-to-face summit. Putin, however, has refused to pick up the phone and call any leaders who are decision-makers because he knows that if he does, everything is on the table.

He would then have to give something up. Since the Russians have been pushing broad-spectrum interference in Western affairs—whether politically, economically, or strategically—for three years now, he’d have to give up a lot of that to get anything he wants. So it’s simpler to just avoid communication altogether.

We’ve been here before. When the Soviet Union developed its first atomic weapon back in 1949, that was the height of the Cold War. Things were really sketchy, and we didn’t get our first real bilateral summit after that weapons test until 1955, after Stalin had died. I’m not saying we have to wait for Putin to die or anything like that, but we’re not in a position in Russia politically where it’s feasible to have that conversation.

As long as the Russians feel they’re making incremental gains in Ukraine, which they have for about a year now, there’s no need for a broader renegotiation of the relationship. Always keep in mind that Ukraine was never a one-off; it’s the ninth post-Soviet conflict the Russians have either instigated or been involved in, and it won’t be the last.

Regardless of how Ukraine gets settled, one way or another, there will be another series of wars further west that will involve NATO countries until we get to that point. Putin feels that negotiations are better carried out on the battlefield rather than by phone or in person.

Which brings us to the third thing: this is really interesting timing for this step by the Biden administration. Obviously, Biden’s not going to be president after January 20th, and there’s going to be no succession within the Democratic structures.

Donald Trump is coming back, and here we have a very clear step forward that puts a fascinating chip on the table for potential negotiations down the road. If there’s anything we understand about Donald Trump, it’s that he sees everything differently. Putting this card into his hand to play with Putin at a later time is kind of fascinating.

What Trump will do with this is entirely up to him, but Biden appears to be setting the stage for Trump to have whatever he needs to force the Russians to the table in whatever way he wants to. This is a really interesting approach to bipartisan foreign policy that we used to see all the time during transition periods but really haven’t seen in the last eight years.

All right, that’s it for me. Everyone take care.

Photo by Wikimedia Commons

Trump’s Cabinet Picks: Loyalty Over Experience

Photo of Congresswoman Tulsi Gabbard at a podium

Donald Trump’s cabinet appointees are rolling in and let’s just say they’re not the A-team, but what did we expect?

Trump’s choices aren’t exactly the pick of the litter, but they all fall into one category: they’re yes-men. As long as these people will keep Trump’s echo chamber intact, he’ll keep handing out nominations like Oprah gives away cars. And if anyone does decide they know better than him, they’ll get a swift kick to the street.

Trump’s cabinet is another example of the erosion of the Republican party. As the business leaders, fiscal conservatives and national security experts get marginalized, the party shifts more and more under Trump’s cult of personality. The Senate remains the only real stronghold of the “old” Republican party, but if Trump’s push for recess appointments goes through, then that will be gone too.

There are some standouts to these appointees though. Lighthizer is one of the stronger ones and Gabbard is one of the scarier ones. There’s a lot to unpack here, so today’s video is a bit longer…

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For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey everybody. Peter Zeihan here coming to you from the home office in Colorado. I’ve received a small flood of requests for me to do a video on what I think of Trump’s, cabinet appointees and who some of these guys are doozies. I mean, we’ve got a guy who’s supposed to be the top health authority in the country who thinks that WiFi causes cancer.

The person who’s supposed to manage the military is a culture warrior, and the guy who is supposed to lead up national law enforcement. While his only past experience with law enforcement is being the subject of an investigation into sex trafficking of minors. So, you know, we got some real winners here. But rather than go on a blow by blow, I think it’s better for use of everybody’s time to talk about the Trump relationship with the government, especially at the top people he picks and how that is kind of taken in an interesting direction.

So first off, the nature of the cabinet secretaries that Trump is selecting here, the primary job of the people who lead the departments in the US government is not necessarily to implement policy. I mean, that’s obviously on their to do list, but it’s mostly to generate a degree of awareness for the president. The US is a big place.

The world is a bigger place, and there’s a lot going on, and no one can be aware of any of everything. And no one can be an expert in everything. So it’s primarily the job of the cabinet secretaries to become experts on their topic and use their departments to generate a series of briefings on context and awareness, to present to the president so that the president always has the best information available and can always make decisions in an informed manner.

A couple problems here. When it comes to Donald Trump, number one, he insists on believing that not only his is he always the smartest person in the room, but he’s always the smartest person in the room on any given topic. So from his point of view, the cabinet secretaries are not there to generate awareness because that’s not necessary.

The cabinet secretaries are there to be servile, to basically rubberstamp and congratulate him on everything that he does. If you remember back to for his Trump term, most of the cabinet meetings opened with everyone talking about how wonderful Trump was. It was almost like a cult meeting. Now, when you insist that you live in an echo chamber and you get to choose your own people, an echo chamber tends to be what you get.

So I urge you to not pontificate over what this person or that person’s appointments are, that this or that department happens to be, because that’s not really the point of what Trump is doing here. He’s building an inner circle that will not be entrusted with leadership, but are simply designed to tell him that his leadership is really what everybody needs.

If you’re interested in policy, for whatever reason, you’re better bet. Rather than looking at tweets appointing is to look at his appointment schedule, because Trump tends to do whatever the last person to flatter him once. That was a much better guide in his first term, and I see no reason for that to be different in this.

True. So it’s really hard for me to get excited over this or that Trump appointee, whether it’s somebody I like or someone I despise because they’re really not there to do the normal job, they’re there to be toadies. And if they were competent at doing their job and telling the president what he needs to hear. Well, as we saw in his first term, he just fires them.

And so they don’t have to tell him. No, they just have to tell him. Yes, but could you can also consider and that’s enough. Remember that Trump went through more cabinet level appointees than any U.S. president in history, because anyone who tried to do their job got axed. So second, a far more illuminating thing to ruminate on is to find out just how far gone the Republican Party really is.

And we’re going to get an answer to that question before the end of January. The Republican Party used to be known as the party of adults. There were three factions at the core of it the national security community, the fiscal conservatives who wanted to balance the budget and the business community. And if there’s one thing that these three factions agreed upon, it’s it’s successful leadership required a degree of organization or delegation, two words that are not ones that Trump uses a whole lot.

So Trump purged those factions, all of them. He relied upon them heavily in his first term because he was new to the field. But when they didn’t match his personality, then fired him pretty quick. So he purged them from the entire system, starting with his administration, then moving on to the Republican Party as an institution, and then even going after their champions in Congress.

Then he spent most of his time in the political wilderness ensuring that these three factions could never come back, leading us with an institution of the Republican Party that has basically been gutted, of what used to make it the Republican Party and reducing it to what it is today, which is a Trump echo chamber. Or if you want to use that technical term, a cult of personality.

Now, what is wrong with Trump’s cabinet picks is not going to be a secret. Normally the process goes like this. The president elect selects his people. He submits them for security checks to groups like the CIA and the FBI and all that good stuff. And they come back to him with a report of what kind of skeletons are in their closets.

And considering that one of these nominees, likes to drop off dead bears in Central Park or chop off whale heads on beaches, we can imagine. And, we cracked the skeletons. We’re going to fight anyway. Once he has his report in hand, he can change his mind about whether this is the person he really wants to be in his administration.

But if he decides it’s all okay, the report isn’t squashed. It’s handed over to the Senate. Who has to do the ratification. And even if the Senate decides to confirm an appointment, that might be a little. Whoops. Some version of that report will ultimately be released to the public. So we’re going to find out everything there is to know about some of these people.

And some of these people are seriously sketchy, but it’s the Senate that’s the key factor in all of this, because while Trump has basically co-opted the Republican Party, the Senate’s kind of like the last cluster of holdouts, if that’s the right term. You see, in, in the Republican Party itself, it’s a non-elected institution. So Trump and Trump’s people can basically go through there and bit by bit, use, advocates and party activists and his real core supporters to just basically flood through the whole system and kick out the people they don’t want.

And that has been done in spades. And then the House of Representatives has elections every two years. So again, it’s very vulnerable to the political whims of the moment, especially if your party leader wants something done. But the Senate’s different. Only one third of those seats are up for election every two years. So it takes six years to get your first flush, if that’s the right term.

And so while Donald Trump has now been at the top of the American conservative pile for the last eight years, and so he has just been through his fifth consecutive period of being able to shape the House to his own norms. She hasn’t even been through two full cycles for the Senate. So there’s a number of senators still ascribe to the old Republican ideals of the business community, national security issues and fiscal jurisprudence.

And so if there are people who are going to oppose Trump, that is where they’re going to be clustered at the moment. And it’s the Senate that confirms presidential appointees. And so Trump is attempting to get the Senate to do something called a recess appointment. In the Constitution, there’s a clause that says that if the Senate is not sitting for an extended period of time, then the president can just appoint people he wants and they don’t have to go through the confirmation process at all.

Well, the time limit established by the Supreme Court is ten days. So Trump is basically asking the Senate to not even do their job, not even short to work for the first two weeks so that all of his appointments could just flow right through. Now, normally, I wouldn’t give this any credence at all, because it would be an unprecedented surrender of congressional power and would basically gut the Senate as an institution.

But there’s a lot about Trump that is unprecedented, and he has already made the request. And so the question is whether it will be acceded to agreement. And if the Senate does meekly accede to Trump’s demands, then the Republican Party, as we once knew it, is well and truly dead. We might as well just take down all the bunting and the labels and the bumper stickers and label it MAGA, because that’s that would be what it is that.

Third, there are two Trump appointments that don’t kind of match this pattern. And they are worth of a deeper look. The first one is Robert Lighthizer. Now, Robert Lighthizer served as the US Trade Representative under the first Trump term. And he was one of the very, very few people that any policy autonomy and actually served the entirety of his four year term.

Now, Trump has already approached him about taking his old job back, and apparently Lighthizer and Trump were in negotiations over the specifics of what this role would look like, whether or not it’s just the US, a TR position, or more of an oversight position, that would all be over the office of the Trade Representative as well as the Commerce Department, in order to have more overarching authority over trade policy.

Now, Lighthizer is somebody who has earned repeatedly the respect of the business community. He’s been in and out of trade law and in the administration level ever since Reagan. And he’s very, very good at what he does and the trade deals that were negotiated under the Trump administration, NAFTA to Korea, Japan, all of these were done by Lighthizer personally and their deals that greatly increased, America’s authority over trade law on a global basis.

He’s a solid choice, and he is definitely worthy of the position. If Trump will have him back, the only question at this point seems to be the details over the level of authority that he would have. We should have an answer to that within days. And if he was appointed, I have no doubt that he would sail through the Senate.

The second person is on the other side of the equation. That’s Tulsi Gabbard. She used to be a, representative in the House of Representatives from Hawaii. She was a Democrat. She, switched teams to MAGA. Not too long ago. And, who, the job she’s been nominated for is the director of national intelligence. Now, there are over a dozen arms of the US government that have some sort of intelligence capability or central intelligence.

Obviously, the FBI, the DEA, Homeland Security, the Defense Department, and the DNI, whose job is to basically ride herd over all of them and collaborate and manage all of the agency so that no one is working across purposes and that in a single person, you can have somebody that is so wired and so aware that the president has a one stop shop when they need information.

Now, Tulsi Gabbard has never been in a managerial position ever. Not even a fast food restaurant. She’s never run an agency. She’s never managed people. She’s never managed multiple agencies. She has no background in intelligence, as an operative, as an analyst, as a manager. And that’s before I start saying the bad things about her. She’s an active cult member, not the mega cult.

She has her own culture. You. Can you be a member of two cults? I’m really not sure. She’s a conspiracy theorist. She’s a friend of the Syrian government. And it’s the general opinion of most of the American intelligence community that she’s been an active Russian agent for years. All of this will come up in her vetting document. Gabbard is the singularly least qualified person who has ever been nominated for any cabinet position, and we have had some real bozos in years past, being pushed into big chairs.

She couldn’t pass a security check to work in a daycare center, and DNI has to pass the most rigorous security check of any American ever, because they are literally the nerve center for all secret information that the United States captures and manages. Now, unfortunately for all of us, Trump’s cabinet picks really don’t matter much. Because he’s not picking people for competence or to help him govern.

They just don’t have much authority over him day to day policy. And in doing so, it means that they just aren’t going to have much of an impact, for better or for worse. So whether you love him or hate him, whether you love or hate the picks, I. I’m afraid to say that it really doesn’t matter too much.

The one exception, of course, is Gabbard. In that position, this person could do an immense amount of damage, and I know for certain that the Russians are sour, waiting at the possibility of having their girl at the heart of the US intelligence system.

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Nov. 22, 2024 – Daily News Digest

US President John F. Kennedy is assassinated in Dallas on this day in 1963; Vice-President Lyndon B. Johnson is sworn in as president later that day.

Quote of the Day: “We have already explored every possible avenue in negotiating with the U.S.,” [Kim Jong Un] was quoted as saying during a speech at a defense expo in the capital Pyongyang on Thursday. What has become clear, he added, is the U.S.’s “unchanging aggressive and hostile policy” toward North Korea.

Photo of the Day: This is a favorite from one of our researchers, Quinn – https://www.lbjlibrary.org/object/photo/swearing-lyndon-b-johnson-president

HUNGARY/ISRAEL/ICC – Orban invites Netanyahu to Hungary as ICC warrant divides Europeans
https://www.reuters.com/world/europe/pm-orban-says-he-will-invite-israeli-pm-netanyahu-hungary-after-icc-move-2024-11-22/

BUDAPEST, Nov 22 (Reuters) – Prime Minister Viktor Orban invited Israel’s Benjamin Netanyahu on Friday to visit Hungary but several other European nations said the Israeli premier would be detained if he set foot on their soil, following the issuing of an arrest warrant for him.

The International Criminal Court issued arrest warrants on Thursday for Netanyahu, his former defence chief Yoav Gallant, and for a Hamas leader, Ibrahim Al-Masri, for alleged war crimes and crimes against humanity in the Gaza conflict.

UKRAINE/RUSSIA/MIL/POL – Ukraine Cancels Parliament Session, Citing a Warning Over a Missile Attack
https://www.nytimes.com/2024/11/22/world/europe/ukraine-parliament-canceled-missile.html

Ukraine’s Parliament canceled a session on Friday over a warning that Russia could target the building in an attack with a missile that Ukraine’s air defenses cannot shoot down, lawmakers said.

Although they did not say which type of missile they were worried about, the decision to cancel the session came a day after Russia fired what it described as a new, intermediate-range missile. Ukraine has no radars capable of detecting those missiles in flight through the upper atmosphere, nor air defense systems capable of shooting them down, Ukrainian experts have said.

Since the start of the war, Parliament has continued meeting in its chambers, even in the first months of the conflict, when Russian forces were just 12 miles from the center of the capital. But on Friday, Parliament decided not to take the risk.

“They canceled it late last night, citing the danger of a missile strike,” Oleksiy Honcharenko, an opposition member of Parliament, said of the planned session.

IRAN/IAEA/NUKES/NEGATIVE ATTENTION – Iran says activating ‘advanced’ centrifuges after IAEA censure
https://www.aljazeera.com/news/2024/11/22/iran-says-activating-advanced-centrifuges-after-iaea-censure

Iran has said it will activate “new and advanced” centrifuges in response to a resolution adopted by the International Atomic Energy Agency (IAEA) board censuring it for lack of cooperation.

The motion was put forward by France, Germany, the United Kingdom and the United States at the 35-nation board of the United Nations nuclear watchdog and follows a similar one in June, criticised then by Iran as “hasty and unwise”.

BRAZIL/POL/SEC – Brazilian police indict Bolsonaro for alleged attempted coup, threatening his political career
https://apnews.com/article/brazil-bolsonaro-indictment-coup-election-83440d5a5dda43dc23bbcd58a2e52fde

SAO PAULO (AP) — Police indicted Brazil’s former president Jair Bolsonaro and 36 others for allegedly attempting a coup to keep the right-wing leader in office after his defeat in the 2022 election. Already barred from running again in 2026 for a different case, he could now land in jail and see his influence further diminished.

Brazil’s federal police said the sealed findings in Thursday’s indictment were being delivered to Brazil’s Supreme Court, which will refer them to Prosecutor-General Paulo Gonet, who will decide whether to formally charge Bolsonaro and put him on trial, or toss the investigation.

Gonet is already under pressure from his legal peers to move forward with the various investigations related to the ex-president, local media have reported. And politicians say if Bolsonaro does stand trial at the Supreme Court there will be a race among his allies and rivals to seize his influence with voters.

SOUTH KOREA/DPRK/RUSSIA/UKRAINE/MIL/TECH – South Korea official says Russia provided anti-air missile to North Korea
https://www.reuters.com/world/south-korea-official-says-russia-provided-anti-air-missile-north-korea-yonhap-2024-11-22/

SEOUL, Nov 22 (Reuters) – South Korea’s national security adviser Shin Won-sik said Russia has provided North Korea with anti-air missiles and air defence equipment in return for sending troops to support Moscow in its war against Ukraine.

In an interview with South Korean broadcaster SBS aired on Friday, Shin said Russia had given North Korea economic and military technology support, when asked what Pyongyang stood to gain from dispatching its troops to Russia.

DPRK/USA/MIL/DIPLOMACY – Kim Jong Un’s Message to Trump: We’re Not Interested
https://www.wsj.com/world/asia/kim-jong-uns-message-to-trump-were-not-interested-243210c1

SEOUL—North Korean leader Kim Jong Un appeared to rebuff the prospect of reviving his nuclear diplomacy with President-elect Donald Trump, according to his first public remarks about disarmament talks since the election.

North Korea’s state media reported Friday that the 40-year-old dictator called the U.S. a superpower that operated by force rather than a will to coexist and belittled the value that previous talks had for his cash-strapped regime.

DENMARK/SWEDEN/CHINA/THE BALTS/DANISH SUPERIORITY OVER SKAGERRAK, THE CROWN JEWEL OF EUROPE’S OLDEST MONARCHY – Danish military monitors a Chinese-flagged bulk carrier after undersea data cables were ruptured
https://apnews.com/article/denmark-sweden-finland-germany-lithuania-china-yi-peng-undersea-cables-d3af1bf7e68ff060bb6e669f24425fd0

COPENHAGEN, Denmark (AP) — The Danish military confirmed Thursday it was monitoring a Chinese bulk carrier that was reportedly in the area where two undersea data cables ruptured in recent days in the Baltic Sea.

Finnish, Swedish and German authorities have launched investigations into the rupture earlier this week of two undersea cables — one between Finland and Germany, the other between Lithuania and Sweden. All are member countries of the NATO alliance.

News reports said a Chinese-flagged vessel, the Yi Peng 3, had been in the area at the time of the ruptures.

VesselFinder.com, which tracks marine ship movements, located the Danish patrol boat P525 at about one nautical mile away from the Chinese-flagged ship between Denmark and Sweden on Thursday morning Europe time.

“The Danish Defence can confirm that we are present in the area near the Chinese ship Yi Peng 3,” said Henrik Hall Mortensen, a Danish military spokesman, in an email.

EU/US/SANCTIONS/RUSSIA/ENERGY – New U.S. sanctions probably spell end of EU energy payments through Russia’s Gazprombank
https://www.reuters.com/business/energy/new-us-sanctions-probably-spell-end-eu-energy-payments-through-russias-2024-11-22/

MOSCOW, Nov 22 (Reuters) – New U.S. sanctions on Moscow may shut down the only way European customers can pay for Russian gas, increase volatility on Russia’s FX market and push Moscow closer to Beijing’s orbit, Russian economists said on Friday.

Washington imposed new sanctions on Russia’s Gazprombank on Thursday that prevent the state-controlled lender from handling any new energy-related transactions that touch the U.S. financial system. The U.S. also targeted around 50 other Russian banks and the Bank of Russia’s System for Transfer of Financial Messages (SPFS).

GAZA/ISRAEL/SEC – In Gaza Organized Gangs Make a Bad Situation Even Worse [AUDIO]

https://www.npr.org/2024/11/21/1214380339/in-gaza-organized-gangs-make-a-bad-situation-even-worse

Israel has been accused of using starvation in Gaza as a weapon of war. It’s a charge the government denies, however aid groups say too little food is being allowed into Gaza. And making the problem even worse, armed gangs are looting much of the aid that is coming in. We hear more about the issue and what Israel is doing about it.

[This is a short pod-cast, but we’ve seen Hamas’ ability/interest in maintaining law and order {such as it can} deteriorate in recent weeks, especially as aid flows to northern Gaza have slowed. -mnno]

INDIA/GUYANA/ENERGY – India’s Modi seeks energy security from Guyana and its vast oil deposits

https://apnews.com/article/guyana-india-oil-summit-modi-d36f8d4ff0327a8221f7f7e1ed1b203b

GEORGETOWN, Guyana (AP) — Indian Prime Minister Narendra Modi said Thursday during a visit to Guyana that his government views the South American country as key to its energy security.

Modi spoke a day after his foreign minister said India is interested in buying up to two million barrels of crude from the oil-producing nation where vast deposits of oil and gas were found offshore nearly a decade ago.

Addressing a special sitting of Parliament at the end of his two-day trip, Modi said he views Guyana as an important energy source and that he plans to encourage large Indian businesses to invest in the country.

Guyana produces about 650,000 barrels a day of sweet, light crude oil from three oil fields, with production expected to ramp up to more than one million barrels daily, with production at three more oilfields slated to start in the next three years.

MEXICO/ECON – Slowing Mexico Inflation and Growth Open Door to Larger Cut
https://www.bloomberg.com/news/articles/2024-11-22/mexico-inflation-and-economic-growth-slow-to-keep-cut-in-play

Mexico’s inflation decelerated in early November while the economy continues to lose momentum, giving the central bank room to cut interest rates for a fourth straight meeting next month.

Official data published Friday showed consumer prices rose 4.56% in the first two weeks of November from the same period a year earlier, below the 4.65% median estimate of analysts surveyed by Bloomberg. The print was under the 4.83% reading in the previous two-week period.

In separate economic reports Friday, the statistics agency revised year-on-year third-quarter output to 1.6%, up from the 1.5% print in the third-quarter flash reading reported Oct. 30. Underscoring the loss of momentum at the end of the third quarter, GDP-proxy data for September fell to 0.29% from the same month a year earlier, below the 0.45% median estimate of economists surveyed by Bloomberg.

MEXICO/CANADA/CHINA – Mexico acknowledges Canada’s concerns about a Chinese auto plant, but says none exists

https://apnews.com/article/mexico-canada-trade-china-autos-818cd6332cae35d2d7b7eed2975daa20

MEXICO CITY (AP) — Mexico’s president acknowledged Thursday that Canada is concerned about reports of a Chinese company’s plan to build an auto plant in Mexico, but she said it does not currently exist.

President Claudia Sheinbaum said she talked recently to Canadian Prime Minister Justin Trudeau and that he assured her he did not support excluding Mexico from the U.S.-Mexico-Canada trade agreement.

But Trudeau said later Thursday that while having Mexico in the agreement “is my first choice,” he is “leaving all doors open” on the future of the trilateral trade pact.

“Pending decisions and choices that Mexico has made, we may have to look at other options,” Trudeau said at an appearance in Canada.

On Wednesday, provincial leaders in Canada called on Trudeau to negotiate a bilateral trade deal with the United States that would exclude Mexico.

MEXICO/CHINA/TRADE – Mexico not a backdoor for Chinese products, president Sheinbaum says

https://www.reuters.com/world/americas/mexico-not-backdoor-chinese-products-president-sheinbaum-says-2024-11-22/

MEXICO CITY, Nov 22 (Reuters) – Chinese products are not entering the United States and Canada through Mexico, the president of the Latin American nation said on Friday, and the government will make that clear in upcoming trade meetings.

“In the meetings we have with Canada and (U.S. President-elect) Trump, we’ll show that the idea that (Chinese) products are entering through Mexico is false,” Mexican President Claudia Sheinbaum said in her morning press conference.

RUSSIA/MIL/TECH – What do we know about Russia’s new ballistic missile, Oreshnik?
https://www.aljazeera.com/news/2024/11/22/what-do-we-know-about-russias-new-ballistic-missile-oreshnik

President Vladimir Putin has confirmed that Russia tested a hypersonic intermediate-range missile in an assault on the Ukrainian city of Dnipro, Ukraine.

The Kremlin said the attack was in response to Ukraine’s recent use of US- and UK-supplied missiles to target Russian territory.

RUSSIA/US/POLAND/NATO/MIL – Russia says new US base in Poland raises overall nuclear danger
https://www.reuters.com/world/europe/russia-says-new-us-base-poland-raises-overall-nuclear-danger-2024-11-21/

MOSCOW/WARSAW, Nov 21 (Reuters) – Russia said on Thursday that a new U.S. ballistic missile defence base in northern Poland will lead to an increase in the overall level of nuclear danger, but Warsaw said “threats” from Moscow only strengthened the argument for NATO defences.

The air defence base, situated in the town of Redzikowo near the Baltic coast, part of a broader NATO missile shield, was opened on Nov. 13.

“This is another frankly provocative step in a series of deeply destabilising actions by the Americans and their allies in the North Atlantic Alliance in the strategic sphere,” Russian Foreign Ministry spokesperson Maria Zakharova said.

EUROPE/ECON – European Economies Slow as Tariff Threats Compound Political Turmoil

https://www.wsj.com/world/europe/eurozone-economy-slows-as-trade-concerns-compound-political-turmoil-surveys-show-5a836c7c?mod=world_lead_pos1

Eurozone business activity declined this month as the threat of higher duties on exports to the U.S. added to political uncertainties at home, according to surveys released Friday.

With businesses cutting payrolls for a fourth straight month, the European Central Bank is likely to extend its series of rate cuts and may accelerate their pace. The euro fell to a near two-year low against the U.S. dollar following the release of the surveys, a sign that investors see an increased likelihood of faster rate cuts.

The eurozone Composite Purchasing Managers’ Index published Friday by Hamburg Commercial Bank and S&P Global declined to 48.1, its lowest level since the beginning of the year. A reading below 50 points to economic contraction. The index had been expected to drop less sharply, according to economists surveyed by The Wall Street Journal.

Similar surveys for Japan pointed to a stagnation of activity, while those for Australia indicated a small decline. India’s private sector continued to expand at a rapid pace. The U.S. survey to be released later Friday is expected to point to robust growth.

IRELAND/USA/TRADE/ECON – The Irish Government Is Unbelievably Rich. It’s Largely Thanks to Uncle Sam.

https://www.wsj.com/world/europe/the-irish-government-is-unbelievably-rich-its-largely-thanks-to-uncle-sam-92494310?mod=world_lead_pos3

DUBLIN—The Irish government is rolling in clover like never before.

The country currently has so much money it pumps cash into not one but two sovereign-wealth funds. It is so flush that the budget watchdog doesn’t warn about not having enough money but rather that the government is spending so much that it could overheat the economy.

In Dublin, authorities are building what might become the world’s most expensive children’s hospital. There are plans for a motorway to link Cork and Limerick, new flood defenses in Shannon and floating wind farms off the south coast. Outside the parliament sits a new bike shed that cost half a million dollars, houses 36 bikes and doesn’t keep out the rain. The state is spending $10 million to get children off their phones at school, including mass-buying magnetic pouches to lock the devices away so they don’t get distracted.

“The good times are back,” says Pat Woods, as he stretches his arms out over the red leather banquette of his pub the Dame Tavern in central Dublin. “Everything is flying.” Standing in a nearby street sucking on a vape, a local hairdresser marvels at what is unfolding. “The spending is wild,” he says.

UK/USA/SEC – Police conduct controlled explosion near US Embassy, London

https://www.dw.com/en/police-conduct-controlled-explosion-near-us-embassy-london/a-70857199

Following a loud noise near the US Embassy in London and police cordoning off the area on Friday morning, officers have urged for public calm.

They said that the noise was a controlled explosion carried out by officers. “Enquiries are still ongoing and cordons will remain in place for the time being,” the Metropolitian Police wrote on social media site X.

Earlier, the police said they were investigating a suspicious package and had cordoned off a road “out of an abundance of caution.”

Later on Friday, the embassy announced that it had resumed business as usual. Police have said it was possible they were dealing with a “hoax device.”

“An investigation into the hoax will now follow,” officers said.

GERMANY/ECON – German economy grows slower than expected in third quarter
https://www.dw.com/en/german-economy-grows-slower-than-expected-in-third-quarter/a-70854993

The Federal Statistical Office, or Destatis, reported on Friday that the German economy grew less than analysts expected in the third quarter of 2024.

Gross domestic product grew by only 0.1% compared to the second quarter, less than the preliminary estimate of 0.2%.

This year, Germany has only narrowly avoided a recession, defined by two consecutive quarters of shrinkage.

Household consumption rose by a modest 0.3% compared to the previous quarter, and government spending rose by about 0.4%.

Exports of goods, a key factor in Germany’s economy, fell by about 2.4%.

GERMANY/LABOR/AUTOS – Germany: Bosch to cut 5,000 jobs with car industry in crisis
https://www.dw.com/en/germany-bosch-to-cut-5000-jobs-with-car-industry-in-crisis/a-70862628

German automotive supplier Bosch plans to lay off 5,000 employees, a spokeswoman said on Friday.

The planned job cuts come as German auto companies push to reduce costs in order to stay competitive in the international market.

What do we know about the job cuts at Bosch?

Bosch’s spokeswoman said that some 3,800 of the job cuts are to be made in Germany.

She added that the exact number of layoffs will be negotiated in talks with workers’ representatives.

In a separate statement, Bosch said it was having to make significant investments in new technologies.

“We must adapt our structures to the changing market environment and reduce costs sustainably to strengthen our competitiveness,” Bosch manager Stephan Hölzl said.

The firm also pointed to overall stagnation in the market.

“Global vehicle production will stagnate this year at around 93 million units, if not decline slightly compared to the previous year,” Bosch said.

US/FINANCE/IRAN/SEC – US Probes JPMorgan’s Ties to Iranian Oil Kingpin’s Hedge Fund
https://www.bloomberg.com/news/articles/2024-11-22/us-probes-jpmorgan-s-ties-to-iranian-oil-kingpin-s-hedge-fund?srnd=homepage-americas

The US Treasury Department is examining JPMorgan Chase & Co.’s relationship with a hedge fund that’s said to be part of a network overseen by Iranian oil trader Hossein Shamkhani.

The probe is at an early stage as the agency scrutinizes whether the New York-based bank complied with all rules and regulations when it took on Ocean Leonid Investments Ltd. as a client, according to people familiar with the matter, who requested anonymity as the information isn’t public. The entity was recently suspended by Dubai’s financial free zone.

Bloomberg News reported on Oct. 24 about Ocean Leonid’s role as a hedge fund with offices in London, Dubai and Geneva that’s overseen by Shamkhani. JPMorgan, ABN Amro Bank NV and Marex Group Plc were among the lenders that have offered the firm leverage, Bloomberg News reported.

US/POL/SEC – Trump Picks Pam Bondi for Attorney General After Gaetz Exit
https://www.bloomberg.com/news/articles/2024-11-21/trump-says-he-will-nominate-pam-bondi-as-us-attorney-general?srnd=homepage-americas

President-elect Donald Trump said he is nominating former Florida Attorney General Pam Bondi to run the Justice Department, elevating another longtime ally to carry out his agenda on law enforcement, immigration and hot-button social issues.

A fierce defender of the former president, Bondi, 59, has repeated Trump’s claims that the department’s investigations of his conduct have been laced with politics. If confirmed for the role by the US Senate, she’d oversee everything from defending controversial government policies in court to doling out billions of dollars in federal grants.

USA/CHINA/TECH/SEC – Top senator calls Salt Typhoon ‘worst telecom hack in our nation’s history’
https://www.washingtonpost.com/national-security/2024/11/21/salt-typhoon-china-hack-telecom/

The Chinese government espionage campaign that has deeply penetrated more than a dozen U.S. telecommunications companies is the “worst telecom hack in our nation’s history — by far,” a senior U.S. senator told The Washington Post in an interview this week.

The hackers, part of a group dubbed Salt Typhoon, have been able to listen in on audio calls in real time and have in some cases moved from one telecom network to another, exploiting relationships of “trust,” said Sen. Mark R. Warner (D-Virginia), chairman of the Senate Intelligence Committee and a former telecom venture capitalist. Warner added that intruders are still in the networks.

Though fewer than 150 victims have been identified and notified by the FBI — most of them in the D.C. region, the records of people those individuals have called or sent text messages to run into the “millions,” he said, “and that number could go up dramatically.”

INDIA/CLIMATE/RICE – How a change in rice farming unexpectedly made India’s air so much worse
https://www.washingtonpost.com/world/2024/11/22/india-smog-haze-air-pollution/

BATHINDA, India — An Indian initiative to preserve vanishing groundwater by delaying the annual sowing of rice has led to a dramatic worsening of air pollution in New Delhi and the surrounding region, already infamous for its suffocating smog, according to farmers and researchers. And no one saw it coming.

For decades, farmers have burned the field stubble that remains after harvesting rice to prepare for the next crop.

But when government officials ordered a delay in the summer sowing of rice in part of India by a few weeks to take advantage of the coming monsoon rain, they did not consider that India’s winds would have shifted by harvest time. Now, the harvest coincides with winter weather, and the winds blow the smoke across the plains of northern India.

USA/SPENDING/REGIME CHANGE – Biden’s team pushes to get money out the door in final weeks
https://www.washingtonpost.com/politics/2024/11/22/biden-pushes-spending-before-white-house-departure/

Late on the afternoon of Nov. 13, about a week after Vice President Kamala Harris’s devastating election loss, President Joe Biden got on a phone call with about 2,000 appointees across the federal government, hoping to ensure that the final weeks of his presidency did not go to waste.

“I know it’s a difficult time. I’m sure you’re all feeling a variety of emotions,” Biden said. “But I hope there’s one emotion you don’t lose sight of: pride in all we’ve accomplished together.”

The call, according to a Biden aide, who spoke on the condition of anonymity to discuss a private meeting, was in part aimed at motivating despondent employees who worried that their work would rapidly be undone. Biden and his aides have concluded that they have few ways to block President-elect Donald Trump’s plans to upend agencies and shatter norms, but there is one big thing they can do: focus their final weeks on getting billions of dollars out the door to finish implementing Biden’s signature pieces of legislation.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide 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, so we can be sure that 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.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

TSMC Cuts China’s Access to Advanced Chips

The recent discovery of TSMC chips in Huawei devices has revealed some gaps in the US sanctions on China. As a result, TSMC has decided to no longer even accept Chinese orders for advanced semiconductors.

This move aligns with the Biden administration’s strategy of halting progress in advanced sectors like AI; the US also got some other countries on board as well: Netherlands, Taiwan, Japan, and South Korea.

Now it’ll be up to incoming US President Donald Trump to figure out how to use tech restrictions or tariffs (or some combination of the two) to define US-Chinese relations.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide 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, so we can be sure that 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.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey everybody. Peter Zeihan here. Coming to you from snowy and melty Colorado, where our first three feet of snow is rapidly going away.

Anyway, today we’re talking about something that happened last weekend, the ninth and 10th of November, and then followed up by an event on the 11th. On the ninth and 10th, the Taiwanese semiconductor company TSMC, which is the company that makes all the high-end semiconductors in the world, made a major announcement.

If basically it’s going to go into an EV, a high-end phone, a high-end computer, satellite communications, or artificial intelligence, it comes from TSMC’s foundries. Anyway, they said they are no longer going to even take orders for anything that is seven nanometers or smaller from any Chinese entity whatsoever. The instigating issue was a couple of weeks ago and a Huawei product.

Huawei is a Chinese telecommunications firm. They found some TSMC chips in one of the product lines, indicating that the sanctions, as they currently exist, are not working as well as some people thought they might. Some products are still making it to China and are incorporated into various goods. So, TSMC announced that they’re just not going to take orders from the Chinese for anything that is at seven nanometers or less.

Ten is generally considered to be the line where you get the really high-quality stuff, and all the really good stuff that goes into things like artificial intelligence tends to be four to three nanometers or even less. So, we’re not just talking about the top tier here but even the second tier.

Within 48 hours, the Biden administration announced they would lean heavily on TSMC to make sure no Chinese orders were ever even successfully placed. The Taiwanese announced compliance before the American order even came down, giving you an idea of how willing they are to cooperate on this issue. I’m sure that order was being drafted before TSMC made their decision, but TSMC beat them to the punch.

A couple of things come from this.

Foreign Policy Implications
We have our first foreign policy crisis for the incoming Trump administration. The Biden administration is setting Trump up for a pretty good success with relations with TSMC. However, we’ve had a difference in style when it comes to Trump versus Biden regarding China.
- Trump’s approach has been tariffs, tariffs, tariffs, but with little meaningful enforcement. This has allowed China to find creative ways around the tariff structure—like mislabeling, exploiting NAFTA’s rules, or rerouting products through third countries like Vietnam.
- The Biden administration, by contrast, has taken a surgical approach, identifying specific sectors and building tech walls to prevent tech transfer. This requires much more technocratic oversight to evaluate thousands of supply chain steps and ensure restricted products don’t end up where they shouldn’t.

Neither strategy is inherently “correct.” Each has strengths and weaknesses. Biden’s requires more ally cooperation and bureaucratic expertise, while Trump’s is more about making bold statements. A hybrid approach might be the best path forward. Regardless, Trump now has to decide on a course of action.

Technological Thresholds
The technological barrier TSMC is enforcing is in the seven-nanometer range. To understand why that matters, let’s break it down.
- How Semiconductors Are Made:
  - The process starts by growing a crystal about the size of a Volkswagen. This is done by placing a seed crystal into melted silicon oxide and drawing it up slowly over days to form a massive ingot.
  - The ingot is then sliced into wafers, which are doped, baked, and etched under lithography machines repeatedly until the final chip is created.
- Deep Ultraviolet (DUV) vs. Extreme Ultraviolet (EUV):
  - DUV, the older technology, uses UV radiation to etch chips. It can’t achieve atomic precision and involves manual adjustments, leading to inefficiencies and errors.
  - EUV, developed by the Dutch company ASML, uses a much tighter focus and automation to achieve sub-seven-nanometer precision. This results in fewer errors, more consistent chips, and better performance.

DUV can still produce chips between 10 and 90 nanometers, but getting below seven is a stretch. Huawei recently released a phone using a seven-nanometer chip made through brute-forcing DUV. The result was an expensive, inefficient chip with high energy consumption.

This prompted a coalition of nations—including the Dutch, Japanese, Koreans, Americans, and Taiwanese—to draw a hard line at EUV. If China can’t access EUV technology, they’ll be locked out of cutting-edge tech for years to come.

Labor and Machinery
China lacks the capability to produce or maintain DUV and EUV machines, much less develop them. EUV machines are exclusively made by ASML in the Netherlands. Without these machines or the skilled labor and software to operate them, China can’t produce high-end semiconductors.

The only way China can acquire these chips now is by hijacking shipments meant for someone else. However, doing so at the scale required to meet technological needs is improbable.

So, this situation lands squarely on Trump’s desk. How he chooses to pursue this technological blockade—and whether he combines it with tariffs or another approach—will set the tone for U.S.-China relations moving forward.

And I, for one, am curious to see how it all shakes out.

Photo from Wikimedia Commons

Can China Save Itself From the Mounting Debt Crisis?

Beijing has announced a hefty plan to help local Chinese governments refinance their debt. But is this enough to ward off the mounting debt crisis?

Local Chinese governments don’t have many revenue sources, so they’re SOL when there’s no more land to sell. Many have issued local government financing vehicles (LGFVs), but they’re essentially hiding the debt…which is over $8 trillion now….about half of China’s GDP. So, the issuance by the national government will help (maybe for 2 years), but it’s not going to solve the problem long-term.

Once the rest of the world understands what China’s debt load actually looks like, I would expect foreign investors to run for the hills. And with all the other issues China is facing, this will be another notch along the journey towards economic decline.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide 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, so we can be sure that 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.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

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Transcript

Transcript

Transcript

Transcript

Transcript

Transcript

Nov. 22, 2024 – Daily News Digest

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