Peter Zeihan, Author at Zeihan on Geopolitics

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 Geopolitics of…Gaming

Photo of a gamer in front of a personal computer

PC or console? Yes, I’m talking about gaming preferences…and if you answered PC, then we all owe you a big thank you. Today’s episode is all about the geopolitics of gaming (specifically, the advancements its caused in computing capabilities).

If the terms ping or lag mean anything to you, then you have likely experienced the frustration that has plagued gamers for ages. That very frustration is what helped to advance processing power and high performance chips (GPUs, aka graphics processing units) when most others’ computer needs were satiated. Since gamers needed top-tier graphics and a very responsive system, GPUs were developed to handle multiple processes simultaneously. And guess what those chips were also pretty damn good at? Running AI models.

Without those gamers pushing the boundaries and driving technological progress in this sphere, we would be at a loss for how to handle the AI buildout. Which require being able to handle massive amounts of data simultaneously. So, a tip of the hat and raise of the glass to all the nerds out there.

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 Colorado, where we just got our first nine inches, and there’s another 13 inches on the way. Boy howdy. Today, we are going to take an entry from the Patreon page’s Ask Peter Forum. The question is the GOP politics of video games, which I know, I know, I know some of you are like, “What?” Now, this is actually quite planned to become one of the most important economic sectors in the world in the last five years.

I’m not sure whether or not it’s going to continue, but let me kind of lay it out for you. For the period of roughly 2010 to 2021—roughly that window—we had everything we needed for computing power. I mean, yeah, yeah, yeah, you’d upgrade your laptop every 2 or 3 years to get the newest chip.

But we had digitized most things that could be digitized. We’d moved into logistics and communication and information, and all the low-hanging fruit had already been computerized. The question was, “Why do you need ever faster processors and ever more memory if you really don’t have a need for it?” And yeah, yeah, we got Starlink coming up and running, so satellite communications can be an issue. We wanted to build a smart grid. You know, these are all reasonable things, but you only need so good of a chip for that.

As chips got better and better and better and better and better, the number of people who were willing to cash for them got lower and lower and lower and lower and lower. Then the gamers came in because they were solid demand. They always wanted the fastest possible chips with the best graphics processing capacity so they could join larger and larger multiplayer forums and never have drag or lag. It got to the point that they basically kicked off people who didn’t have good enough hardware because they would slow down the process for everybody.

The chip that is at the heart of that, where you had the largest drag and so the highest demand among the gamers for improvement, is something called a GPU—a graphics processing unit.

And they are definitely the most advanced chips in the world today. But a bunch of gamers sitting at home are not exactly what you would call the bellwether of global economic patterns, even in technology. So there was only so much money that could go behind this sort of effort. And then we developed this little thing called large language models and artificial intelligence.

It turns out that the function of the GPU, which is designed to run multiple processes at the same time so that graphics don’t lag, is exactly what you need to run an efficient large language model. And if you put 10,000 or 20,000 of these things running at the same time in the same place, all of a sudden, AI applications become a very real thing.

We would not have AI applications if not for those people who sit at home in the basement and play role-playing games all day. So thanks to the geeks and the nerds and the dorks because it wouldn’t have happened without you. The question is, What happens now? You see, GPUs, because they were designed by dorks for dorks, have some very dork restrictions.

Normally, you only have one GPU in a gamer console, and you have several fans blowing on it because when it runs in parallel, it’s going to generate a lot more heat and use a lot more energy than any other chip within your rig. Well, you put 10,000 of those in the same room, and everything will catch on fire.

So the primary source of electricity demand for data centers isn’t so much running the chips themselves. It’s running the coolant system to keep these banks of GPUs from burning the whole place down.

Now for artificial intelligence, it’s not that the GPUs are perfect—they’re just the best hardware we have. There are a number of companies, including Nvidia, of course, that are now generating designs for an AI-specific sort of chip.

Instead of a GPU, which is like the size of a postage stamp, you would instead have something where there are multiple nodes on the chip. So basically, it’s the size of a dinner plate or even bigger so that you can run billions, trillions—lots of processes simultaneously.

Because the chip is going to be bigger and designed specifically for AI, cooling technologies will be included. It won’t be the power suck per computation—or at least that’s the theory. The problem is the timing. Assuming for the moment that the first designs are perfect (they never are), we don’t get our first prototype until the end of calendar year 2025. It will then be 18 to 24 months before the first fab facility can be retrofitted to run and build these new chips, and we get our first batch.

Now we’re talking about the end of 2027. And if all of that goes off without a hitch (it won’t), we’re not talking about having enough to outfit sufficient server farms to feel the difference until probably 2029 or 2030.

So the gamers have taken it this far. The question is whether the rest of us can take it the rest of the way in an industry with a supply chain that, just to say, has some complications.

So gamers, salute to you. We wouldn’t be in this pickle without you, but we also wouldn’t be able to imagine the future without you.

Election Postmortem…

Well, that didn’t go the way I expected. Here’s what happened…

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 hotel room. I forgot my microphone today. I was planning on doing this from the beach, but there’s a hurricane out there anyway, so it wouldn’t have worked. So, the federal elections did not go the way I was anticipating, so I thought it was worth doing a postmortem. I’m going to remind you how I got to my conclusion, and then we can pick apart what changed.

In the last 30 years, most elections, especially at the presidential level, have been decided by a group of Americans who self-identify as independents. It’s a much smaller set than the people who self-identify, though roughly 30% of the American population self-identifies as Democrats, roughly 30% as Republicans, and the 40% in the middle call themselves independents.

But over three-quarters of that group will vote for one party or the other almost all the time, more than 90% of the time. So it’s really only a thin little sliver of 5 to 10% that has been the balance of power within the American political system for decades. They put in Obama twice, they put in Trump twice, they put in Biden, and they kicked Trump out.

When I looked at what was happening with the American political system, I thought, okay, this is the nut. This is what matters. Watch that group. Focus your predictions on that group.

When we got to the 2022 midterms, Donald Trump had spent the last two years telling independents that their votes didn’t matter and that everything should be decided at the primary level rather than the general election level. The collective response of America’s true independents was, “Hold my beer.” All but one of the races that Donald Trump put his finger on, the Democrats won. What was supposed to be a red wave in the midterms turned into, at best, a red fizzle.

My thinking was: independents are fickle. They tend to switch sides every two or three elections. They get buyer’s remorse, and it took Donald Trump really pissing them off to their core to show up twice and vote the same way twice in a row. Since he didn’t change his rhetoric, my anticipation was that the independents would do what they had done in 2020 and 2022 again in 2024.

Look at these two maps.

This first one shows what happens if the independents split 50/50. You can see how, while it is an advantage to the Democrats, there are plenty of possible ways that the Republicans can pull it out of the fire. But if you get something like what happened in 2022 when the independents break very, very strongly, the second map shows a very different scenario—one that is very, very difficult for the Republicans to have any chance of success.

Some version of the second map is what I anticipated happening in 2024.

Now, we are not going to have final, comprehensive exit polling or political identification polling data until the Pew Research Group finishes their assessment. They started the day the election ended, and I doubt we’re going to get the full results of that study until probably the end of the first quarter of 2025.

But we do have expert-polled data, and we now have the final results from pretty much all of the states. Arizona and Nevada just reported, so we have some pretty good data to work with. At the onset, it appears that my prediction for the independents basically proved true. For three elections in a row, they broke very strongly against Trump.

The problem was that everyone else voted differently.

It’s like we’ve been in this lockstep for, especially the last 12 years, where you’ve got a hard-core group that’s MAGA leading a hard-core group that’s more elite-led. There hasn’t been a lot of movement in those groups. But what we saw in this federal election is a lot of bleed-over as the elite-led group just lost support over to Trump.

To give you an idea of how extreme it was:

The Democratic Alliance, as we understand it today, is based on three pillars of support. You’ve got coastal, primarily white, primarily college-educated elites; you’ve got minorities of all flavors; and then you have organized labor. What happened this time is that a lot of those pillars broke.

Women, especially unmarried women, are a big part of that alliance, but they switched to Trump by five points. Eighteen- to twenty-nine-year-olds—the youth, which almost always work for the Democrats—broke toward Trump by 6%. Black men went to Trump by 7% more than before. Nonwhite college graduates shifted by 9%. Asians shifted by 11%.

People who are in the lower income bracket, ages 30 to 49—people who you’d like to think of as “welfare queens” or whatever—broke 12% for Trump. But Latinos? Latinos shifted by 17%, with Latino men shifting 22%.

So, we saw a lot of these groups that we’ve always associated with being fairly tightly linked to the Democratic grouping break. That changes a lot.

For those of you who are on the left and are going through a lot of kicking yourself and soul-searching, I’ve seen a lot of hot takes in the last week. Just keep in mind that the voters are always right, especially when they don’t show up.

We’ve got three things going on here now that we need to keep an eye on.

Number One

We are in a period of political realignment, and party loyalties are obviously shifting. It’s very much in play. How much in play, unfortunately, is still unclear. The biggest difference we had—aside from the demographic breakdowns between 2020 and 2024—is that voter participation dropped by over 10%. Trump just doesn’t have the pull, for or against, that he once did. That makes drawing any conclusion a little fuzzy.

Number Two

With political factions in motion, a new party is being born. I can’t say right now if the current alignment that brought Trump to power for his second term is a permanent feature of MAGA—it is MAGA. This is not the Republican Alliance; it’s something new. But what I can say is that it is the end of what we think of as the Democratic Party.

Remember the Democratic pillars: minorities, organized labor, and educated white coastal elites. Well, organized labor is now, at best, a swing vote. Over half of them voted for Trump. But minorities are really where it’s at.

The fastest-growing demographic in the country, largely due to immigration, is Hispanics. People always seem to forget this: Hispanics are the group in the United States most opposed to migration in really any form. When Donald Trump made a lot of his pitch about the southern border, that really resonated with the people who, at one point, crossed. Losing those two legs—Hispanics and organized labor—out of the Democratic Alliance means that any places where those two pieces matter for local politics are, at best, up for grabs.

Without some significant soul-searching—and, more importantly, some significant alignment shifts—white, coastal, educated elites? That’s not a party. That’s a book club. It can’t win federal elections.

Number Three

We’re going to have a constitutional crisis in the next couple of years.

If you can put your personal political preferences and passions to the side for a moment and go back and look at pretty much any interview or rally speech that Donald Trump gave in the last three months, I think if you’re honest with yourself, you will see that the guy is failing.

Even if you can’t be honest with yourself, you have to admit that he is older now than Joe Biden was when Joe Biden became president four years ago. The chance of Donald Trump serving an entire term without losing his mind is vanishingly small.

Unlike Joe Biden, who has a group of peers, friends, and confidants who can tell him the truth and nudge him to make decisions—Donald Trump has no one like that. Donald Trump’s MAGA party is a cult of personality. He has purged it completely of anyone who might be able to challenge him.

What we know so far about his new cabinet is that there are going to be no members of his old cabinet who ever told him “no” or “yes, but.” That includes people like Mike Pompeo or Nikki Haley.

So, how do you get rid of a president who has lost his mind? Do you have to wait for him to die?

This is a constitutional crisis for the country because we’ve never been in this situation before. It’s also a leadership crisis for MAGA because Trump is MAGA.

How we shake out of these general trends—a little degree of voter apathy, the demise of the Democratic coalition with no clear replacement, and the coming demise of Donald Trump with no clear replacement—it’s going to be a lively time.

I’m sure I’m going to have a lot to say in the next four years. So, stay tuned.

Can Immigration Solve China’s People Problem?

Photo of Chinese men and women in a town square

China is facing a demographic crisis, but can immigration be used to counter it?

Countries like Canada and Germany have used immigration to bolster their shrinking workforces…with mixed success. China’s demographic problem is a degree of magnitude worse; the rapid industrialization, urban migration and one-child policy all led them down this path (and that birthrate is getting scary low). Immigration isn’t going to save the Chinese…unless they find a way to bring in 30 million young people annually.

So, China can expect a collapse in their workforce and societal coherence within a decade. Everyone else should get out their pen and paper and take notes on how this plays out, and start to prepare for what is to come.

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 snowy Colorado where we’re in the calm between the storms. Two feet behind us, one foot in front of us. Lots of shoveling yet to be done. Today we’re taking an entry from the Patreon forum. The question specifically is: can China use immigration to solve some of its problems?

The scale of the challenge, of course, is huge. And what China has done isn’t really technically immigration. They send their people out to attend universities and pick up technical skills that they can’t get within China, and then they try to bring them back. That has been at least moderately successful. I’d say probably a third to half of the students they send abroad come back. And considering that’s better than zero, you know, take the win where you can get it.

But moving the demographic pendulum is really hard and takes decades, even with immigration. So let me give you a quick three examples.

Canada decided about 15–17 years ago that they were facing a European-style demographic collapse. And so they opened up the doors and, over the course of the next 15 or 17 years, brought in about 4 million people, mostly under age 40. That did stabilize their tax base and their workforce, but it generated 4 million people who needed a place to live. And if you need a place to live, you’re not very price-sensitive. So it caused a housing shortage across the system in the places where there was actually work.

They’re now dealing with the political outcomes of that, which is part of the reason why the Justin Trudeau government is likely to fall in elections next year.

The second example would be Germany, where the birth rate has been dropping for 130 years, ever since industrialization began. But it really fell off the cliff after reunification in 1990.

Now, you would think that you’d have a big optimistic moment like reunification, and the birth rate would go up. The problem is that the East German territories, former East Germany, were economic basket cases, and the Germans collectively spent over €1 trillion trying to rehabilitate the industrial plant and infrastructure. And it was just a waste of money.

So if you’re in the East German system, you saw all this money coming in to try to make your system better, and it all failed. In the meantime, all your young people left, and so your birth rate almost went to zero.

In the West German system, you were paying and paying and paying and paying and paying, and you basically had a 12-year period with negligible economic growth because you were shoveling money into the furnace. So the birth rate dropped there, too.

Of course, it’s a heavily industrialized, urbanized country. When you live in condos, there’s no room for the kids, as opposed to when you live on a farm where there’s all kinds of room for them—not to mention their free labor. So the economic case went away, the emotional case went away, and the birth rate in Germany kept falling.

Probably within the next 7–8 years, we’re looking at about a one-third reduction in the size of the German workforce, and it will only shrink thereafter, with all the implications it has for consumption, tax base, and state coherence.

A few years ago, the Germans let in about a million people from Syria—refugees. And people are like, oh, sorry, demographics? No, they just did that because they were trying to do the morally correct thing. Of the million people, something like 850,000 of them were men. That really doesn’t help the demographic situation in the long run, and that’s before you consider things like language, cultural, and skills barriers.

If the Germans really wanted to solve their demographic problem with immigration, they would need to bring in about 2 million people a year under age 25, every year from now on, just to hold the line. After 20 years, it’s not Germany anymore.

If you’re going to use immigration to stave off a demographic problem, you need to do two things. One, you need to start early before you have much of a problem. And two, you have to have some assimilative capacity so you don’t generate big culture clashes. You want it to be a trickle, not a flood.

Which brings us to China.

Chinese data is getting updated bit by bit by bit. They’re trying to get a grip on their demographic problem. With a population of what they thought was 1.3 billion now looking like it’s closer to 1.1 billion, it may even be less than 1 billion. The scale of what they would need to do is immense.

Also, the trajectory of the Chinese is far worse than the Germans. The Germans industrialized over 130 years. The Chinese did it in about 45.

If you just go back to like 1960, the Chinese birth rate was so high that each woman was having 4–6 kids. Mao was concerned that the young generation was going to eat the country alive—perhaps literally.

So they instituted a two-child policy, which shortly thereafter became a one-child policy. Then the country went through the fastest industrialization process ever. So everyone moved off the farm and into condos and stopped having kids.

We’re now in a situation where officially the birth rate is about 1.2 children per woman. The reality is probably below 1. We already know by official data that in most of the major cities, places like Shanghai or Beijing, it’s already below 0.4 or 0.5.

So you’re talking about one-fourth or one-fifth replacement levels. That means we’re looking at a complete demographic collapse of the Chinese system within ten years. The Germans are practically a slow fade-out compared to what’s happening in China.

Numerically, if you wanted to use immigration, you’d probably be talking about needing to get 30 million people under age 25 every year just to sustain the numbers where they are today. I’m not sure there are that many potential migrants in the world at any given time.

We’re looking at a workforce collapse, a financial collapse, and a state coherence collapse in the not-too-distant future.

The real challenge isn’t how do you save China? It’s gone. We’re just basically marking time.

The challenge in the short term is preparing for its fall because when that industrial plant goes away, we’re going to feel it.

The second challenge, a few years from now, is how do you manage a post-China Asia, where China is in degradation and civilization is in chaos?

Then the longer-term challenge for the latter half of this century will be: what do you do when what was the world’s largest ethnic group vanishes from this world?

When you break down the industrial base—and we’re already in a country where there’s more people over age 50 than under age 50—and they age out to the point that they can’t even maintain their infrastructure, we have a sort of international crisis that we have never seen before.

The Chinese are leading the way. Hopefully, in their fall and dissolution, we can find some lessons that will help us manage other parts of the world that are experiencing extreme demographic decline because they’re not alone.

Remember When…

I’m sure this isn’t a shock, but a lot of folks have asked what I think of the incoming trump administrations cabinet nominations. Before I delve in Monday’s video into the simple and forgiving world of American domestic politics, I think it would be best to review where this all began. In this special weekend edition we reach into the way-back machine and go back to New Year’s 2021 when the world seemed so different, and so similar.

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 Future of Naval Tech & War on the Seas

Photo of a US aircraft carrier on the water

The nature of naval warfare is evolving – with advancing drone tech leading the charge – but not all of the world’s navies and regions will be impacted the same.

Drones are all the rage right now, and they come in all shapes, types, payloads, and ranges. But which countries will struggle with these drones the most? The isolated nature of Russia’s fleets leaves them open to attacks, while the US Navy tends to operate away from coastlines and can unite its fleets if needed. The Persian Gulf and parts of the Mediterranean might be hotter than others, but the US has enough regional allies to keep a strategic advantage. The Chinese navy will face geographical bottlenecks (like the first island chain) that will limit their naval reach and projection power.

The US is stuffing another ace up their sleeve with its Replicator Initiative, which would allow US ships to be converted into drone manufacturing platforms. So again, drones are changing the way in which naval battles are fought, but there will be some obvious winners and losers.

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 everyone. Good morning from Colorful Colorado. Today, we’re going to take an entry from the Ask Peter forum. Specifically, do I worry about the primacy of the U.S. Navy in a situation where the drone technology being developed for the Ukraine war becomes more widespread? Well, let’s start by saying they’re going to become widespread. We’re only seeing something that’s barely out of the prototype stage right now.

And it is proven that in close quarters, relatively speaking, it is already more than capable of defeating an old-style surface navy. Now, I don’t want to overplay this because the Russian Navy is not great under normal circumstances, and that’s if they could all sail together into a single mailed fist. And they can’t—look at the Black Sea, the Baltic Sea, the Arctic Sea, and the Pacific Fleet—all of them independent, all of them having to operate under constrained circumstances.

Now, something to keep in mind about the drones. You’ve got two types: air and naval. Your air-launched drones, at the moment, can’t really carry warheads that are more than 100 pounds. And while that can certainly ruin your day or take out a tank or a building, against a ship, it’s going to be more limited in its ability to be successful.

Keep in mind that ships can move, and if you don’t have over-the-horizon visual capability, just getting the drones to where they need to go is going to be a bit of a problem. So most of the assaults that Ukraine has been launching against Russia’s Black Sea Fleet have been naval. Naval drones don’t have as much range, typically, but they can carry a lot bigger payload.

And since they’re in the water, once they get closer, there’s not a lot that the ships can do about it because they’re used to shooting up at air assets, not down at sea-level assets that are well below the angle that they can fire. So the Russians have to basically counter with small arms. And that would be true for any naval asset.

But keep in mind, there’s this geography issue. Not only are Russia’s navies sequestered from one another, but they’re also in relatively limited bodies of water that are highly contested. So, the Black Sea is obviously the issue of the moment, where the Ukrainians obviously have an outlet on the ocean that is adjacent to where the Russians would like their ships to operate.

But you also have NATO members—Turkey, Bulgaria, and Romania—which have significantly more frontage on that body of water than the Russians. So if you marry these new technologies to the assets of NATO and the industrial plants of a country like, say, Turkey, then the Russians simply can’t have anything floating on that body of water at all.

The same holds true to an even greater degree for the Baltic Sea Fleet, where you’ve got NATO members Estonia, Latvia, Lithuania, Germany, Denmark, Sweden, and Finland, basically countering potential naval power. So if we ever get into a situation where there is a fight on the Baltic Sea, every ship that the Russians have will be sunk, probably within the first 72 hours.

It’s a little bit better on the Arctic, but then you’ve got the ice pack. So for a submarine, if you get below the ice pack, you’re probably okay. But Norway’s right there, and anything that’s going to stay on the North Atlantic has to go right by it, and it’s going to get sunk. And then, probably almost as bad as the Baltic, is the Pacific Fleet, which is completely bracketed by Japan.

Anything that’s going to leave from the Vladivostok area—that just leaves one base at a place called Petropavlovsk—but still, in here, which is a sub base where the subs can kind of go off and drop into a trench and hopefully evade detection. That base, which has no road and no rail connection to it whatsoever, could still operate, but that’s just one spot.

And everything basically has to be flown in to support it. So maybe, like, Russia’s—it’s just absolutely hosed. Compare that to the extreme on the other side with the U.S. Navy. We’ve got an Atlantic and Pacific Fleet that can sail through either the canal or around the Americas to unite into a single force if they want to. It tends to also be long-range-based: supercarriers, missile frigates, that sort of thing.

And so they very, very rarely engage a foe that they can see. You’re talking over-the-horizon hundreds of miles away. Well, that pretty much obviates any capability of the air- or sea-based drones in our current imagination of hitting them. Also, they tend to operate in the deep sea. They never go within sight of the coast if they don’t have to.

So there might be some bodies of water that are constrained, where operating there would be heavily restricted, where there are potential foes who could field a drone force. Places that are probably going to be a bit of a problem include, of course, the Persian Gulf. The days of having a carrier there without, you know, having to worry about it are probably gone now.

The Mediterranean could be a little constrained. But keep in mind, the entire northern coast of the Mediterranean are NATO countries, and the entire southern coast are countries that, for the most part, are favorable to the United States: Egypt, Algeria, Morocco, Tunisia. The one holdout is Libya, and it’s not that Libya’s hostile; it’s that Libya has basically fallen into civil war and is falling apart as a government. Everywhere else that I can already see as a possibility.

Not necessarily because there’s a lot of governments there that are hostile, but it’s becoming a stateless zone in its own way. And the Houthis are probably the best example of that. Just keep in mind that the Houthis of Yemen don’t have an industrial plant. So any weapons they fire are something they’ve brought in from somewhere else. Closer to home, the only thing to really worry about would be the Gulf of Mexico and the Caribbean.

And because there are hostile countries there, most notably Venezuela and Cuba. But if, if, if, if, if we ever get to the situation where that is a problem, a couple of things to keep in mind: Number one, most U.S. naval assets aren’t in the Gulf of Mexico, so you don’t have to worry about a base getting closed in.

And second, in the very, very unlikely situation where we have a military conflict in that area, there will be a land invasion of Cuba in a very short period of time. This is not me recommending—let me make this very clear—I think there are much easier ways to get Cuba on our side, if that’s the goal.

But a country with the population and the industrial plant of Cuba could not survive in the face of an American onslaught should it come to it. And really, that’s the only other spot where there’s a constraint. Between geography and allies, the U.S. looks pretty good. That just begs the question of what is the situation for maybe some other countries that have navies.

In the case of the United Kingdom, yes, it’s close to other land borders—the North Sea, the English Channel—they’re not that big of a barrier. But again, Norway, Denmark, France—you know, these are friendly countries, not hostile ones. And in the case of East Asia, things get really dicey. Japan’s okay because all of its ports are on the east side of the island, so they sail out and then come back to wherever they want to.

So they’re pretty much immune to this. But China—China’s got the first island chain, and any vessel that leaves China has to get by Japan or Taiwan or the Philippines or Indonesia or Singapore. Assuming the United States isn’t playing at all, that’s going to be really hard. And one of the things that the U.S. Navy is working on right now is something called the Replicator Initiative, which will turn its ships into not just combat platforms, but manufacturing platforms to produce exactly the sorts of drones that would be needed to sink everything that the Chinese have in a short period of time.

In the case of a war. Hopefully it’ll never come to that, but Replicator is supposed to be operational by the end of calendar year 2027. That’s not that far away.

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

Nov. 22, 2024 – Daily News Digest

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Number One

Number Two

Number Three

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