Insulating the President with Loyalists

Bill Pulte, New Director of National Intelligence official portrait

It looks like we have a new acting Director of National Intelligence, Bill Pulte. You may know his name as he’s both a housing executive and the current head of the Federal Housing Finance Agency.

So, we’ve got a new Director with at least two full-time jobs and no meaningful experience in intelligence…yeah, that sounds about par for the Trump Administration’s nominations. But at least Gabbard is out of the office.

Anyways, this move will likely result in the intelligence agencies losing influence in presidential decision-making and reinforces the trend of Trump isolating himself from anyone smarter than him.

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Transcript

Hey everybody, Peter Zeihan here, coming to you from Vegas. Had to find a quiet corner for this one was a little hard with all the people running around anyhow. Today we’re talking about the new acting Director of National Intelligence. Guy by the name of Bill Pulte. If you’re familiar with homebuilding, Pulte homes that Bill Pulte. He already has a position in the government. 

He’s a Trump loyalist. And he’s appointed to the civic of this right FH for the Federal Housing and Financing Agency, which is responsible for, among other things, back stopping about 70% of American mortgages. So big job. And most of the insurance agencies under FHFA, most notably Fannie Mae and Freddie Mac, are in conservatorship and have been since the financial crisis. 

So it’s a big, important full time job. The fact that he comes from housing and is now managing the mortgaging system suggests a conflict of interest. When he was going through confirmation hearing year, several senators piped up about that, most notably Elizabeth Warren. But you know, she hates everybody, so it’s hard to take that too seriously. 

Anyway, he has now been deputized as the acting head of national intelligence, and his job there is to coordinate the dozen plus federal agencies that have intelligence arms, everybody from the NSA and the CIA to law enforcement. Anyway, that is a full time job as well. And what it really tells us is President Trump, doesn’t really care about the national security agencies at all, and he certainly doesn’t want them talking to him about what’s going on in the world. 

Trump feels the need to be the smartest person in the room. And if somebody from the intelligence agency is there talking about Moldova or Kyrgyzstan or Bolivia, they will obviously know them more than the president about that topic. And so they’re just not allowed into the room. Now, the outgoing director of national intelligence was Tulsi Gabbard, who had some foreign leanings and so seen her gone as great, but now replacing her with somebody who is completely unskilled and there’s no background in intelligence or military affairs or project management is really not great either. 

About the only good news I can say is at least this guy is not beholden to foreign interests like Tulsi Gabbard was. He’s a loyalist, so he’s unlikely to tell Trump anything that he doesn’t want to hear. Which probably means that all of the intelligence’s basically now have a ceiling above them, between them and the president. So Trump is continuing to go down this path of being the least informed leader that we have had in modern history. 

The only other one that is even remotely in the same bucket would be Barack Obama, who was famous for not wanting anyone in the room at all. This is just the other side of that coin. So good news. Not really. But considering that Donald Trump doesn’t have anyone in his circle with real foreign policy experience except for Marco Rubio, who has similarly been banished and now heads two agencies State Department, for the similar purposes of keeping him in arm’s length from the president, keeping those institutions away from the president. It’s kind of par for the course.

The Future of Drone Tech: Naval Launch Platforms

Photo of a US Naval Carrier

Naval drone warfare is nothing new, but the Ukrainians are now finding ways to spice up the Sea Babies and MAGURA drones.

Ukraine is using these naval drones as mobile launch platforms for smaller aerial drones. Since the naval drones can travel farther and are harder to disrupt, they can take canisters full of FPV aerial drones closer to targets and deploy them. This gives Ukraine better operational reach around Crimea and along the Dnieper River.

This opens up a whole new strategic envelope for Ukraine, allowing it to carry out surprise attacks without pre-positioning troops or drone teams.

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Transcript

Hey, everybody. Good morning. From Rome, where the building that I’m staying in is. If you can see this curve here at the converted interior, that 2200 year old Roman bathhouse. The bathhouse has gone. But they recycle everything here over the years. Anyway, today we’re continuing on with the drone series, new military technologies that are in the process being unveiled and used right now. And today we’re going to talk about naval drones. Naval drones aren’t new. The Ukrainians have been using them against the Russians, really, since the start of the war, especially the second year. The sea baby is the primary variant. There’s also something called the Megara that has a pretty good track record. The idea is you basically take a small boat or a jet ski or something like that. Hook it up to an automated system pilot it remotely. The advantage of a sea drone, of course, is wait. You can put a bomb that waste several hundred pounds in it and then center on its way. 

And because most vessels don’t have the ability to shoot down at things that are in the water, they’re designed to shoot at other ships. Really, all they can do is put some people on the deck with machine guns or RPGs or something like that, and try to take shots as they come in. And so the Ukrainians have had immense success with these. 

The problem is simply range. And you can solve that with more fuel tanks to a certain degree. So we’ve seen a number of attacks that have gone quite a distance, even going as far as Novorossiysk, which is the major Russian port on the Black Sea and has made the Russian Navy’s position at places several completely untenable. And so the Russian Navy has actually had to evacuate Crimea. 

That’s all old stuff. What’s new, what’s happened in just the last month is that the Ukrainians have now regularized the installment of aerial drones on naval drones. See, one of the fun things about naval drones is because they’re on the water. They’re really hard to interrupt with electronic warfare and jamming. So you can basically right up to your target, whether it’s a port or a ship, before there’s any danger of it being interrupted. 

Whereas an aerial drone, if it’s flying in, sometimes it gets within a kilometer or a couple hundred meters of a target. And the ECM that the Russians use will then interrupt the signal and the thing will crash. That’s one of the reasons why these new memory drones are so important, because they get around that by giving decision making to the drone and the terminal phase. 

With naval drones, there’s really no chance of them being intercepted along the way. So what the Ukrainians have done is have built canisters that are incorporated into these sea drones. And when they get to a certain point, maybe ten, 20km away, they then eject aerial drones that are technically first person drones controlled by a pilot. And those fly into target things, which means that if you put it on a fiber optic tether, which they are, you get somewhere between a ten and a 50 kilometer range where you can send smaller drones out by about a half a dozen at a time. 

A couple of things that have already happened. Number one, they’ve got these canisters to launch them. So this isn’t an experimental technology already. It’s already in full deployment. The Ukrainians just kind of sprung it on everybody just a few weeks ago, which is causing a lot of havoc. Number two, you’re limited in terms of payload because those FPV drones typically can only carry a payload of 10 pounds or less. 

So they’re great for anti-personnel or maybe even anti vehicle, but you’re not going to use them to blow up say a battleship. But if you know what you’re doing you can target strategic pieces of ship, strategic pieces of refineries or ports and cause a lot of havoc in a way that the Russians haven’t yet to invent a technology to cope with, except for maybe a net that only gets you so far. 

Third, and for the war, the moment. Most importantly, there’s a lot of naval frontage in play. If you remember from the early phases of the war, the Russians invaded from the east and the south, with about 100,000 people moving north from Crimea to the Kherson area and east from the territories that the Russians had captured in the last war back in 2014, all the way to the Dnieper River. 

And that whole southern and eastern front is in place to a certain degree. Well, with these naval drones, the Ukrainians can now do whatever they want around Crimea and can go up the Dnieper River and hit the Russians in any number of spots without having to first preposition forces, much less drone pilots that can use long range transmission or even satellite communications to control the naval drone and then tether that through the existing telemetry out through the fiber optic cables to the first person drones. 

So the degree to which the Ukrainians just surprise assault really, anything at this point is only limited by the number of drones that they can have on the water. Now, this does change the nature of the sea babies and things like them, because now they’re becoming drone carriers as opposed to just suicide drones. That will probably trigger a new evolution in the manufacture, because right now they’re designed to be one way and that’s it. 

But from an engineering point of view, that is actually a very, very simple problem. Taking a suicide drone, taking the explosive off of giving it more fuel, more range capacity, and then ultimately more of these canisters. That’s something we’re probably going to see within a month or two. I could almost do that in my garage, and I’m kind of a technical invalid when it comes to things like that. 

Big shifts in that space. That’s it for now.

The Future of Drone Tech: Mid-Range Drones

Photo of a military drone

The battlefield of the Ukraine War continues to be transformed by drone innovations. The latest is the (affordable and scalable) modification of existing drones to travel farther and independently identify and strike moving targets.

This has eliminated the notion of a safe rear area, as these drones can strike anywhere and anything. This makes moving troops, fuel, and ammunition much riskier for the Russians. If Ukraine can continue to produce these modified drones at this rate, we’re looking at a much different battlefield in just a few months.

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Transcript

Hey all, Peter Zeihan here, coming to you from Italy, Rome. This is the let’s try column there. And we are in the forno de, which I again doubtfully mispronounced. Anyway, continuing with our open ended drone series, there’s a couple of things that are going on in Ukraine that are fundamental breaks with previous military technology in the mid-range drone category, so that’s things that are free flowing roughly 10km to 200km. 

So not quite mid-range, not quite short range somewhere in between. Basically you’ve got a two step process. Step one is you have a pilot that kind of directs a drone to an area. And step two, the drone has the capacity with just a little bit of memory and a little bit of optics to kind of look around and pick a target and zoom in on it. 

This is already a significant step up from just what the Ukrainians were using two months ago, because it can actually target moving targets now, speed, which this is unraveling and shifting is really crazy. Anyway, what this means is that the concept of a front line from a logistical point of view, is basically collapsed. Used to be that the front line was a real danger zone, where if you were within 20km of it, then the fiber optic drones and the first person drones could target anything and do so in the hundreds of drones per day. 

Further back, you’d have things like the American app cams or advanced artillery that maybe came from the French. That would push back the Russians to force logistical support into an area that was more than a couple hundred kilometers from the front, so they’d be out of range, because we all remember from two years ago when the cams arrived in Ukraine. 

Then all of a sudden, all of these ammo dumps and airfields started blowing up. So the Russians just moved everything back. Well, with these new pieces of equipment, it’s not individual strikes, it’s not dozens of strikes. It’s hundreds of strikes every day. And they’re targeting everything from individual troops to trucks, which means that the entire logistical tail, not just the depots, the entire logistical tail going all the way back from the front line to wherever the supplies are, is now under threat every day from every angle. 

And we’re seeing a de facto collapse and the Russians capacity to even man the area. And so what we’ve seen in the last is 3 or 4 weeks is significant Ukrainian gains in any number of parts of the front, because the Russians can’t bring troops forward, they can’t bring fuel for they can’t bring ammo forward. And if they try, the Ukrainians just dice them up. 

So nobody has superiority in this area. But instead of having this shadow zone of 10 to 20km around the front, it’s now stretching halfway to Moscow. And in that sort of environment, the Russians don’t have a strategy, can’t have a strategy, because they’ve always relied on strategic depth to protect them. But that doesn’t work when you can have a free ranging weapon system that’s in the hundreds and very soon in the thousands that’s going over this entire zone, and anything that’s on a road or train is suddenly a target. 

This single point advantage isn’t going to last forever. Eventually, countermeasures will be developed, but it’s much more difficult for the Russians to do that than for the Ukrainians. But we’re going to save that topic for another day. Oh, one more thing. It raises the question of how financially viable this is long term for the Ukrainians. And the short answer is extremely. 

These are not fundamentally new drones. These are modifications made to existing proven models like the Seth or the dart, for example. Really, all you need to do is plug in a small processor and a moderately sized memory chip, nothing that was considered cutting edge in the last 15 years, so nothing’s under export control are really inexpensive. Total modifications, probably top out, about $100 per drone and in some models no more than 15. 

So yeah, they can do this in the tens of thousands per month. No problem at all. 

The Future of Drone Tech: Long-Range Strikes

Drone firing a missile

Ukraine has ramped up its long-range drone program, allowing it to strike targets up to 1,800 kilometers away. So, what does this mean for Russia and its oil?

With Ukraine able to strike targets well into Western Russia, energy infrastructure is increasingly vulnerable. Thanks to the recent surge of foreign financial support rushing into Ukraine, drone production has ramped up. Russia might be able to shut down and restart the southern oil fields, but any fields shut down in the permafrost would take years or even decades to repair and restart.

So, expect Russian transport and export capacity to continue to drop, especially if these longer-range strikes continue throughout the summer months.

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Transcript

Hey, all. Peter here still in Rome, approaching all the forums, continuing our open ended series about the changes of military technology. Now we’re going to deal with longer range drone system things with an excess of 300km. The Ukrainians have launched a series of systems over the course of the last roughly ten weeks that have increased their range upwards of 1800 kilometers total. 

So for those of you in metric, that’s roughly 900 to 1000 miles. And Moscow was only about 300, 350 miles from the front line. This means that Ukrainians can relatively reliably strike anything that is west of the Urals at this point, and even a few things opposite the URLs, if they really push it. These things are carrying warheads that are typically in excess of 100 pounds. 

They’re using them to heavily target not so much military assets directly, but infrastructure related to energy production and transport, pumping stations, refineries, ports, that sort of thing. Now, pre-war, the Russians exported about, oh, 2.5 million barrels per day of oil and about another million and a half barrels per day of refined product that is now facing some sphere problems. 

It’s really hard to give you accurate numbers because everything is changing day by day, and the Russians aren’t just sitting there. They’re repairing things as they go. So let’s talk about the technology and then talk about the impact. So first the technology, unlike the modified short to medium range drones where it’s just a matter, you know, just a matter of putting a couple new pieces of semiconductor to give it a limited decision making capability. 

This is a range issue. And so with the range issue, Ukrainians are limited by their industrial base, which they’re rapidly building out. We’ve had the number of drones per day in use, roughly Quinn Tipple over the course of the last ten weeks, and there’s no reason to expect that to slow. If anything, it’s probably going to accelerate. One of the things to keep in mind is because of the Iraq war and America’s inability to provide adequate air defense and missile defense to the Arab states, as we now have a cavalcade of countries in the Middle East and Europe that are providing funding for the Ukrainians to expand their industrial plant all over the place, and that’s giving them cash that is necessary to expand industrial plant and build out at home. Keep in mind that there are so many startups in Ukraine that are providing drone technology now that the Ukrainians actually ran out of money to fund them all. That’s not a problem anymore. So everybody is in the process of spinning up, and by the time we get to mid-summer, we’re probably going to be seeing daily strikes in dozens, if not hundreds of these things across the length and breadth of Russia regularly, every single day, most likely in terms of impact. 

It’s hard to get firm numbers on this because everything is a moving target. But oh yeah, fun little fact. The Romans had so much marble they used it for like, dust boards. Anyway, what this means is that we’ve had over 80 discrete energy targets across Russia come under sustained attack, sometimes getting hit three and four times a week. 

Major ports have gone offline and back. Online tanks are gone, pumping stations getting damaged. Even direct pipe strikes probably. There’s really no average here. But I would say on average, we’re looking at an overall reduction of somewhere between 1.5 and 2.5 million barrels per day of a combined transport and pumping and port capacity, and that gets well into the danger zone for the Russian system. 

The Russian oil complex kind of has two big phases down in the southern provinces. You can have some older fields that are basically supplied by water injection, and those you can run on reduced capacity or even shut them down safely and bring them back later. But collectively, that’s only about one to maybe 1.2 million barrels per day. Everything else is in permafrost territory, and because of heating and cooling problems, you can’t maintain a steady temperature at the production site at the bottom of the wellbore. 

In the pipelines and the pumping stations, everything cracks apart. Or in the case of some things, wax congealed in it. And then you have to replace the infrastructure completely. We’re now on the point where that has to be shut down, at least in part, and that stuff cannot be restarted on anything less than a multi year time frame. 

The last time this stuff all got shut down, it was in the aftermath of the Soviet collapse, and it took the Russians 20 years to bring it back up to snuff like they had it during the Soviet period. So we are now already today at the beginning of the end of Russia, as a country that can even export petroleum or petroleum products at all to its west. 

And if you keep up this crescendo of attacks throughout the summer, by the end of the year, the Russians really won’t be an oil power in the western provinces at all. And that includes most of the western and northwestern Siberian fields as well. That’ll just leave what is out on the east side of the Urals, which is a separate infrastructure. 

But at the rate the Ukrainians are going as entirely possible, that that may be in range by the end of summer anyway. So from a war point of view, this is how Russia pays for everything. All is the single largest inflow point for the Russian state budget, which funds. Of course, the military natural gas is kind of like the kicker on the side, but most of the natural gas, a lot of the natural gas has already been shut in because it can’t be redirected in the way that liquid oil can be. 

So the Ukrainians haven’t felt the need to go after it. They’ll probably find some reasons in the next few months, as energy targets become harder to find, because there just won’t be all that many left. And that’s Palatine Hill behind me. That’s one of the original seven cities of Roman, where most of the rich folk lived during the High Imperial period. 

One more detail. We already have reports from several Russian oil officials talking about shut ins in places like Tatar, Saturn and Bashkir stand, which is where the water recovery basically pumped down. Water increased well pressure, and the oil comes up and you skim the oil off the top, where that’s already been shut down by a significant margin, at least in the high hundreds of thousands of barrels. 

But we’re also getting that’s the stuff you can turn back on. We’re also getting some reports of things further north, where we were getting some panicked reports about wells that will never come back on at all. So we’re already well into this, and the Ukrainians aren’t letting up, if anything. Intensification over the summer.

The Future of Drone Tech: Israel’s Iron Dome

Photo of Iron Dome missile defense system firing

Fiber-optic-controlled first-person drones are the star of the conflict between Israel and Hezbollah. As Hezbollah deploys more of these drones, holes in Israel’s Iron Dome defense network are beginning to appear.

Iron Dome was designed to intercept rockets and missiles traveling in visible ballistic arcs. These drones use completely different attack approaches; they fly low and are connected via fiber-optic cables, so jamming won’t work either. You couple that with widely available components, and it becomes clear that Israel can’t defend against these drones on its own.

The other major player in drone-tech and defense is Ukraine, so I wouldn’t be surprised if we saw closer cooperation between these two countries soon. We’ll continue this discussion on the future of drone tech tomorrow.

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Transcript

Peter Zeihan here, coming to you from Saint Peter’s. Feels weird to do a video in here. So we’re just going to do the opener. I’m obviously in Vatican City, and today we’re going to talk about some new things in the world of military technology. All right. Continuing. Oh yeah Swiss Guard back there. Anyway, the news is over the course of the last month, we’ve seen some significant shifts in terms of the technologies used in the Lebanon War. 

Now, for those of you who have forgotten, Israel launched an invasion of Lebanon at the same time that the Iraq war started with the airstrikes by Israel and the United States against Iran. And it’s been continuing, it’s turned into a long term occupation, with the Israelis indicating they really never planned to leave at all anyway. What’s changed in the last few weeks is that we’ve started to see first person drone. 

This place is pretty cool. We’ve seen first person drone attacks. Now those are the ones where you have a pilot with a unit who’s controlling a specific drone, and they’ve got a live telemetry feed that allows them to make decisions in real time. The drone itself has no intelligence or strike capability independent of the pilot. What’s unique about what we’ve seen recently is that we’ve seen now at least a dozen situations where Hezbollah has used these first person drones, but has used them with fiber optic cables, with at least one of them confirmed it would be at least ten kilometers long. 

So with some hints indicating there’s been a couple with fiber optic cables that are about 20km long. Now, a few things to keep in mind about this. Number one, Israel arguably has the absolute best theater missile defense in the world with its Iron Dome system. And lots of folks think that the United States should at least partially copy it. 

And there’s something to be said for that. But keep in mind that Israel is a very small place. So the missile defense you’re going to do in a place like Israel is very different for what you do in the United States. Second, the nature of Iron Dome is primarily designed to intercept short term rockets and maybe some short to mid-term missiles. 

Every time Israel comes under attack, you get some really dramatic visuals, different kind from here, where you can see ballistic arcs that are pretty clean on one side of the photo, and on the other side, you’ll have a swirl of intersecting and spiraling threads, and then they meet. The swirling and intersecting ones are the Iron Dome system. Basically, they fire interceptors into the air. 

They don’t know how many things are going to come in, and then the interceptors lock on to those ballistic arcs and take them out. That really doesn’t work for low level drones at all, because you’ve got a fiber optic around this just flying a few feet to, or maybe a few hundred feet off the ground. They don’t get high enough to be registered by radar, even if they had the components to be detected by a radar. 

A lot of these things are plastic or carbon fiber. That’s real problem, because it means that the entire Iron Dome system has been designed now for a weapon system that is starting to be used against Israel, and there’s very little of the technology that goes into these things that is restricted at all when it comes to suppliers. You really have to. 

You then have the Russians who have contacts with militant groups throughout the Middle East. Hezbollah is no exception. And when you come to the fiber optic spooling, most of that is made in China. So we’re having this really fun intersection of technical overlap, skill overlap, and increasingly geopolitical overlap among countries and forces that have been general been anti a lot of things American for a very, very, very long time. 

There’s not a lot that Israel can do in the short term to counter the sort of activity. Their radars and their interceptors right now are woefully ill designed to deal with this sort of threat. And because of the fiber optics, jamming doesn’t work either. So really, all you can do is kinetic intervention. And at the moment, the Israelis don’t have enough skills in that set to make a meaningful difference. 

The one exception, the one thing that might be coming, is partnership with Ukrainians, who have been developing a lot of models to intercept exactly this sort of drone and have had a fair amount of success. But that also means stationing things at dozens, hundreds of points in order to get it wherever it happens to be launched from. So it’s changing the nature of what it means for Israel to be in a war. 

And it’s dramatically shifting the power balance between the Israeli military, which is one of the best in the world, and Hezbollah, which we thought had largely been shattered as of just a year ago. One more thing. A high end fiber optic spool that a drone can carry today has a range of up to 50km. So with something half that just a mid-range quality, somebody launching a drone from the Hezbollah Lebanese side of the Israeli Lebanon border could strike anywhere in Haifa and with a significant margin. 

So you can go after anything you can see can’t be jammed with a that’s physical infrastructure, vehicles, soldiers or the components that allow the Iron Dome to do Iron Dome things. So big game changer. All right. That’s it by.

Should Alberta Secede from Canada?

Cityscape of Alberta, Canada

Apologies for the wind on this video, one of the downfalls of recording with a view…

Enough signatures have been gathered to force an independence referendum and vote in Alberta. Just a reminder that secession is legally possible in Canada following a successful referendum.

The economic case for independence centers on Alberta’s youth and energy sector. With stronger demographics and a booming oil industry, some Albertans feel they disproportionately contribute without the respective influence in government decisions.

While some of this is true, an independent Alberta would still face major economic problems. We’re talking rapid inflation and labor shortages, necessitating a trade agreement with Canada or integration with the U.S. Bottom line is that the grass ain’t always greener on the other side.

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Transcript

Hey everybody. Peter Zeihan here coming to you from Rocca Calascio which was in Ladyhawke. If you haven’t seen it, add it to your list. The news today is that we are going to have a referendum on independence in Alberta. They, the people who are in favor of independence, got the 10% of the provincial citizenry to sign the petition. 

So later this year, probably at the end of the summer, we’re going to have the vote. The premier that’s kind of the governor of Alberta has already signed off on it, and away we are for the races. I’m not going to predict how it’s going to go. It is up to the people of Alberta and no one else. 

But I want to outline three things. Number one, the Supreme Court of Canada ruled decades ago in the case that if there is a plebiscite and they vote for a referendum, you’ve got to let them go. So this this is legal by Canadian law. Technically, something like this would not be legal in the case of the United States. The Constitution forbids secession. We fought a little war over it. But Canada is different. So that’s piece 1. Piece 2. The economic argument for independence is basically the idea that Canada is aging very, very rapidly and Alberta is not. And Alberta has a dynamic energy sector that has been growing for some time. And as the rest of Canada gets older and Alberta does not. The financial transfers from Alberta to Canada have been getting bigger and bigger and bigger, and the Canadians don’t really give the Albertans much say in how that money is spent, so you can see why they’re a little agro’d. I want to point out a couple of things that have changed in the relationship, though. Over the last 20 years, Canada has really brought in a surge of migrants that have partially addressed some of the demographic issues. So the financial transfer issue is not as horrible in relative terms as it used to be. In fact, at this moment, in relevant terms, Alberta is actually in decent position financially versus the rest of Canada. It’s still by far in net providers the richest province by far. But the imbalance is not as bad as it looked like it was going to be when I first started talking about this issue 15 years ago. 

And then finally, should this pass and Alberta become independent, it would be screwed. Alberta is landlocked and their primary exports are oil and grain, and those are US dollar denominated commodities. And so if you have an independent Alberta exporting for hard currency, you have a very inflationary environment very, very, very quickly. That it would be difficult to survive in a country that now has a very, very limited labor pool. So the cost of an independent Alberta would be immense, which means that independent Alberta would need to do one of two things. Number one, negotiate some sort of extensive free trade pact with Canada that would be worse for Alberta than provincehood is right now. It’s kind of like the situation that Brits are dealing with as they talk about going back on Brexit and reentering the EU. 

Or number two, apply for US statehood and join the United States, in which case Alberta is still the richest province, would still be a net donator to the national budget, but it wouldn’t be nearly the same. The stretch, the delta between an Alberta state in the United States would not be nearly as large. Anyway, these are the decisions in front of them. How they play out? That’s entirely up to them. The campaign this summer is going to be wild.

Magyar Tries to Rebuild the Visegrád Group

Budapest, Margit híd, Margaret Bridge, Jászai Mari tér, Hungary

Hungary’s new Prime Minister, Peter Magyar, made his first foreign trip to Poland. This trip is not a reflection of ideological unity, but rather a rebuilding of regional cooperation within the Visegrád Group.

This group had fractured over the past decade thanks to Viktor Orbán, but with him out of the picture and a common enemy in Russia, Hungary and the rest of the Visegrád Group can begin rebuilding.

If the Visegrád Group can reestablish itself, this bloc of countries can wield significant voting power within the EU, rivaling major states like France or Italy and bringing a stronger voice to Central Europe as a whole.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from Italy. It’s a monastery that was built around a hermit hole, probably in the eighth century. Then it was remodeled in the 11th, and then in the 14th. You get the idea. Reused. Lots of things in Italy are like that. Anyway, that reminds me of what’s going on right now in Poland. The Hungarian prime Minister, Peter Magyar. 

Peter, good name, made his first foreign trip to Warsaw to meet with the Prime Minister of Poland, Donald Tusk. Now let’s talk about what this isn’t and then talk about what it is. So what it isn’t is a political alliance that has to do with how the elections went. No no no no no no. Peter Magyar is center right, strongly right. 

I might underline. And the person he kicked out of power, Viktor Orban, supposedly was also sent to. Right, but was really just breathlessly corrupt and would bow down to anyone who wasn’t Brussels. And now that he’s gone, a number of his former ministers have actually fled the country because they know they’re going to be put into jail. And we’re kind of a series of parliamentary votes in Hungary that basically strips the ones that are left of any power. 

So it’s a real transition. But from corruption to conservativism, not from conservatism to liberalism. On the Polish side of the equation, Donald Tusk is an avowed pan-European list. He used to be an uppity up in European power structures before he went back home and became prime minister. He’s of the center left, and so the two of them on domestic political issues have a lot of things they argue about. 

But that’s not the point, because what this is, is more of a strategic alliance. You see, Poland and Hungary, along with the Czech Republic and Slovakia, form a group called the Visegrad Group, which is for countries that tend to coordinate their operations at the EU level. But for most of the last decade they haven’t, in part because Viktor Orban became more and more and more correct and more and more and more pro-Russian and less and less and less pro-European. 

And also because there were political evolutions in Poland where the nationalists were in power before Donald Tusk for quite some time, and they just found it difficult to get along. That’s probably behind us now. I don’t want to say it’s perfect, because we have a guy by the name of Robert Fico in Slovakia who’s a little a little odd, but not nearly as odd as some of the others have been in the last ten years. 

Why does this matter? The European Union doesn’t necessarily work on consensus. They have a weighted majority voting system among their Council of Ministers. That’s the Council of Prime ministers. That is nauseating, complicated. But the short version is to get anything past a certain number of countries have to agree, and those countries have to represent a certain percentage of the population. 

And if you take Poland and Slovakia and Hungary and Czech Republic and you bunch them together into a single voting bloc, they have actually more voting power because they’re four countries than France or Italy, two of the three big states in the EU. And they have about the same population. So this doesn’t mean that the Central Europeans are going to suddenly start getting their way on everything. 

But it does mean now that they can really duke it out with the major established advanced powers on an equal basis from a decision making point of view, plenty of things to worry about. The primary one for everyone right now is, of course, Russia and the Ukraine war. And with Orban gone, there’s a lot more room for consensus. 

And when you get past that and start talking about the nitty gritty things of day to day government like, say, budgets, now we’ve got the central Europeans who can actually stand up for themselves and get some things done. So all in all, reasonable first trip. Looks like it’s been a smashing success. Nobody stabbed anybody. And in Europe these days. That’s great.

Ebola Outbreak and Delayed Detection by the U.S.

Doctors in biohazard suits

At least 50 are dead due to a new Ebola outbreak in Central Africa, and the U.S. was the last to hear about it. This is a glaring example of the breakdown in the U.S. public health and monitoring system.

Three programs have traditionally acted as layers of defense: the Agency for International Development, the Centers for Disease Control and Prevention, and the Biomedical Advanced Research and Development Authority. All three have been gutted under the Trump administration, so early detection, disease tracking, and vaccine development have all been sidelined.

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Transcript

Hey all, Peter Zeihan here, coming to you from Roccascalegna, totally butchered the pronunciation of that one. Anyway, it’s Castle and there’s a more castle and mountains. Anywho, today I want to talk about something that hasn’t really made the news in the United States, but probably should. There’s a new Ebola outbreak in Central Africa. At least 50 people dead at this point. 

The numbers keep rising by the day, and the topic is why we really haven’t heard of it. There’s kind of a three line system of defense when it comes to new infectious diseases in the United States. The first of all things is USAID, the agency for International Development. That was basically it does development work in countries to help them get on their feet, deal with disaster relief, that sort of thing. 

Recovery in conflict zones. All that good stuff. Normally, this means that we’ve got thousands of American citizens working for the government all around the world, and they notice things. And so while, yes, economic development by far is their credo and their job, they actually serve as kind of a first line of defense for the intelligence community because they see things in the communities that they’re in. 

Well, USAID was dismantled and closed by the Trump administration last year, so we didn’t get any advance warning of this outbreak. Second, you’ve got the center for Disease Control, which does all the genetic testing and mapping of diseases and the epidemiology and all that fun stuff. Well, it’s been gutted and under new leadership, including RFK Jr, who’s in charge of the overall health approach in the United States. 

It’s basically not present in most parts of the world. So normally when an outbreak like this happens, the CDC is the first or the second call that is made to try to figure out what the disease is, how it’s communicated, how lethal it is, all that good stuff that has basically stopped. And it wasn’t until last week that the CDC got the call. 

And that’s well after three weeks after it was discovered locally. The third thing is something called Barda, which is kind of like DARPA, the defense operation that explores new technologies. Bart does the same thing, but it maintains a pipeline for new vaccines. Well, Bart has basically been gutted and funding as well, because RFK has basically decided that vaccines are bad. 

So we’re finding out about this late. Definitely on the back foot. And only now is the sequencing process starting. For those of you who don’t know what a bola is, it’s pretty nasty. It’s a hemorrhagic fever, which is a technical term of saying that you bleed from everywhere eyes, nose, ears, but fingernails, everything. And basically your body falls apart from the inside out. 

It’s a particularly nasty way to go. And at the moment, we’re barely looking for it. So political decisions have consequences. And one of these means that Ebola may be coming to a town here, you. Which is nasty, but the only bright spot I have is from the information that has been reported through the W.H.O., World Health Organization, which the US is no longer cooperating with. 

So this is something they told us out of the goodness of their heart rather than out of any sort of contractual obligation. It does appear at the moment that this new strain, I believe, is how it’s pronounced. Probably butchered. That too is no different from normal Ebola, and that it is spread by bodily fluid contact rather than by respiration. 

Just keep in mind that diseases change all the time. As we learned with Covid, and we’re now in a situation basically where if it does change, we won’t know until it’s here. So food for thought.

Can Iran Control Internet Cables in the Gulf?

AI generated undersea internet cables

We’ve previously discussed the vulnerabilities of global internet infrastructure, but today we’ll focus on subsea data cables in the Persian Gulf.

Global data traffic depends on undersea cables that carry massive amounts of information between continents. Iran has now decided it wants the ability to control and charge for data traffic moving through the region (mirroring its stance on shipping through the Strait). Many Gulf countries built separate subsea infrastructure, so all of them are exposed to disruption.

These vulnerabilities will likely push more communications toward satellite systems like Starlink, but that opens a whole new set of challenges. Another reminder of the fragility of globalization.

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Transcript

Hey all, Peter Zeihan here, coming to you from the winery of Tenuta Oderisio in, where am I? Abruzzo in Italy. Today we’re going to talk about a little thing in the Persian Gulf called data cables. Now, for those of you who have ever sent an email, there’s got to be a way for you to access the internet, for the information packets to get from X to Y to Z, and eventually to where you need them to go. 

Now, there’s a number of ways you can do this. You can piggyback on the telephonic network. That’s a relatively new method using, say, 5G or 4G signals. Older school. For those of you who are Gen X or boomers, you remember, of course, modems where it went over the telephone lines that were physical at the time rather than wired. 

But if you want to go across the planet, there’s this little problem called the ocean, and there is no cell signal that is strong enough to get across. So you have to do one of two things. Number one, you bounce up to a satellite with something called Starlink, which is really the only model that does it right now, which has a cost and a hardware issue. 

Or you send it into the telephone network, and eventually it gets to a launching point on the coast and loads into a data cable that crosses the ocean to a spot on the other side. I think it’s loaded into their telephonic network, these data cables, there’s literally thousands of them, and the big trunk ones just carry a huge amount of data. 

Typically, one of them that crosses the ocean carries more data or has more capacity carry data than all of the telephonic systems just 25 years ago. Now, what is going on in the Persian Gulf is that the Iranians, who are trying to assert control and sovereignty over the Strait of Hormuz in order to get control of the oil trade, are not limiting their ambitions to that. 

They’re going after container ships, they’re going after Bulgars, they’re going after food carriers, and they’re going after the internet cables. And they’re now saying that they think they should be able to charge a transit feed for any data flowing in and out of the Persian Gulf. Now you look at a map of the Persian Gulf, and you’ve got a lot of Arab countries on the western side Kuwait, Bahrain, Saudi Arabia, gutter, the United Arab Emirates and Oman. 

But something that everybody forgets is all of these countries really don’t like one another, and some of them would just flat out hate one another. So they, whenever possible, try not to make their national infrastructure dependent upon what happens in the next country. Over. So the United Arab Emirates, for example, doesn’t have a data cable that crosses Saudi Arabia and goes up to Jordan and into Israel and then on to Europe. 

And no, no, no, their only access is out into the Persian Gulf through the Strait of Hormuz on a subsea cable. The same for Kuwait, the same for gutter, the same for Bahrain. Which means that if you take a country like the UAE, which is actually reasonably well run and not nearly as medieval and thudded like, say, Saudi Arabia, they’re completely vulnerable to this sort of blackmail. 

And if you play this forward into a world, you have to realize that data cables can’t be defended and they can’t dodge. So anyone who decides they want to go after them can really sever them in a day if they want to. So the transmission system that we have become used to, that we don’t think of as a globalized thing, is actually one of the most hyper globalized aspects of physical infrastructure that exists on the planet today. 

And in the Strait of Hormuz right now, we are getting a glimpse of what to come when data connections that are allowed upon physical connections simply aren’t going to be viable long term. And that only leaves satellites. And that starts a different conversation about sovereignty and space and the ability to defend that sort of network. Because Starlink is already in the thousands of satellites, that already makes it more populous and orbit in terms of number of satellites than everything else put together, that is also not sustainable, but we’ll deal with that on a different day.

Civita di Bagnoregio: A Microcosm of Italy

Photo of the city of Civita di Bagnoregio, Italy with mountains in the background

Civita is living proof that places facing decline can adapt and overcome by drawing on their unique identity. This hilltop town-turned-tourist destination is a microcosm of Italy itself.

Faced with demographic challenges, Civita was forced to get creative to save its way of life. By charging a visitor tax, Civita was able to fund restoration projects and preserve this beautiful place.

Italy’s demographic crisis is only worsening, but success stories like Civita are a glimmer of hope.

Maurizio says ciao!

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Transcript

Hey everybody, Peter Zeihan here, coming to you from Civita, Italy. And today we’re going to talk about Vita. And Italy is kind of Italy in microcosm. It was founded by the Etruscans, 2500 years as a hilltop town for defense. And because they could watch trade routes in the time since, it’s of course, changed hands, it does bene times as Italy has changed systems, and in the modern day it’s kind of actually facing a rough patch. 

As you’ll see in some of these pictures, it’s perched on the side of cliffs that are slowly eroding, and the country’s moniker these days is come see it before it’s gone. 

So many people have now visited that them simply tracking dirt out of the city has dropped the level of the main square by about a foot in the last six years. 

In addition, demographically, the city looks a lot like Italy. Italy has the lowest reproduction rate in Europe, with less than 1.15 children per woman. And here in Cheviot, there’s really only about a dozen permanent residents left, and some years up to a million tourists come through again. Italy is number two destination for tourism Europe after France itself. 

that’s really what’s been keeping the system alive. In fact, if you go through Italy as a whole, whether it’s Rome and Vatican City or Venice, these are countries that have been tourist destinations now for the better part of eight centuries. And it looks on the surface like there’s really not much hope there. The buildings date back, in some cases 2000 years. 

There was an earthquake in the 1600s that the city really had never recovered from, But that doesn’t mean they’re gone. And it doesn’t mean they’re going to be gone soon. In the case of Covid, they instituted a €5 ahead tax a few years ago, and that has made this the only tax free municipality in the entirety of Italy. 

And they’ve used that income to do things like do Geological survey’s and reforest the hillsides around them to slow the rate of decline to almost nothing. 

Yes, they’re thronged by tourists. But as you can see behind me, on the one street there really is, everybody lives on the up and the out. So in the day to day operations at home, they don’t really suffer at all. 

It’s an interesting study about how resilience is really just an exercise and reimagining what it is to be stubborn. And in the case of both Italy and Vita, we have an area that realizes by the norms of the age things don’t look very good. And so 

They’re finding ways to turn their challenges into things that allow them to survive in the way of life that they want. Which, of course brings us to the bridge. The bridge was simply an issue of stubbornness, where they decided to make the investment that was necessary to protect themselves. When geography that self tried to cut them off the bridge brought revenue, revenue bought time, time brought a strategy, and the whole place is now holding together, and everyone is fighting to maintain the way of life that they’ve all wanted all along. 

It’s a nice story, and if you ever happen to be in the area, come visit Vita. And best of all, you should really look up my buddy Marisa. He maintains a restaurant with one table, and every second you’re in there, it’s glorious.