Breaking New Ground in Argentina

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The new Argentine president, Javier Milei,  is getting right down to business. It’s only his first week on the job, and he’s already cut government ministries in half, dismissed public officials, halted public works, and devalued the currency by 50%.

On paper, the goal of all this is to add some stability to the Argentine economy and eventually dollarize it. This won’t be an easy process, but it’s an opportunity to overcome the economic struggles linked to Peronism and begin to recognize Argentina’s full potential.

If Milei proves to be successful, Argentina could become the model for countries attaching themselves to more stable currencies or economies in an effort to ditch their soft currencies.

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

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

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

And then there’s you.

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

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TranscripT

Hey everybody. Good morning from chilly colorado. The news today is that the Argentine government and its new president, Javier Milei, it has launched with a gusto in their first wave of reforms in the first week on the job. They’re cutting the number of government ministries by half. They’re firing a lot of public service officials. They’ve stopped all public works projects until the budget stabilizes, and they have already devalued the currency by 50%.

Nominally, the goal here is to get to a more stable situation where the country has a little spare cash. You can buy up dollars on the international market and then buy out with those dollars every single peso in circulation so that the country can dollarized. And in theory being that future governments then will be forced to actually act within their means, cause a massive budget deficit.

And the previous government has been printing currency like mad and leading to hyperinflation. And I think it’s something like 40% of the population of Argentina is in poverty. Now, two reasons of this matters. Number one, Argentina is a country that I expected to be doing fairly well in the future, not because of its government, because of its geography and demography.

It has a larger proportion of young people than almost any country, not just in its pure class, but in the entire advanced, developing, middle, developing. And of course, the advanced world. So a lot of the problems that everyone was dealing with with, say, pensions as mass retirements hit the workforce, it just doesn’t apply in Argentina at all and it won’t for decades.

Second, Argentina has got a pretty sweet spot on the planet. It’s got great arable land, great navigable rivers, pretty good infrastructure. Its educational system is top notch. They are arguably the most skilled country for their pure class as well. The problem has always been Peronism and the government. Now, if Malé can fix a few things, then great. But I think the other reason to look at this is in the world we’re moving to as it globalized is, a lot of countries are going to be watching the Argentinean experience very closely, not because they have a similar political culture or geography or economy, but because as trade breaks down, the ability of countries to maintain soft

currencies at all is going to be somewhat limited. And the past for Argentina with hyperinflation, government intervention, massive intrusion of the economy, authoritarian systems and printing currency, a lot more of that is going to happen. And the more logical path for countries who decide that they don’t want to be destitute in economic basket cases will be to attach themselves to a more potent country with a more stable currency regime and economic structure.

And that means doing something like dollarized Nation. Although it doesn’t have to be the dollar, it could be the yen, it could be the rupee, it could be the pound. You know, there are other options out there. But this sort of cold seen into currency blocks and trading blocks and security blocks is the most likely outcome of all of this.

So I’ll be watching Argentina very, very closely to see what they get right, see what they get wrong, see if this is a beautiful experiment or a beautiful disaster. It’s just way too early to know right now. What we do know for sure is that the Argentines system before Millay was broken. We will now find out if it’s broken beyond repair.

 

Naval Power in the Pacific: China vs. The United States

Photo of a US aircraft carrier on the water

There’s been much discussion lately surrounding the changing power balances in the Pacific – specifically the dynamics between the US and China. Sure, China has numbers, but would you rather have 25 kayaks equipped with BB guns or five speedboats mounted with mini-guns?

That’s pretty much the whole story between these two powers – quality over quantity. That’s before we look at the fun new toys that the US is introducing, which will only bolster their strategic advantage in places like Midway and Guam.

With the Biden administration taking a firmer stance on security measures, I expect the United States’ strategic advantage over China to grow. However, that doesn’t mean we should completely disregard the Chinese navy just yet.

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

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

TranscripT

Hey everybody. Peter Zeihan here coming to you from Colorado where we’re about to get a big dump of snow. So I figured I’d get out and hike while I could. Today we’re going to talk about some of the changing power balances in the Pacific Ocean, specifically as it relates to the United States versus the Chinese. Now, everyone seems to be all paranoid, almost a little defeatist about the concept that the Chinese have more ships in the water than the United States has.

Based on how you count those ships have got between 370 and 620. And on the American side, again, based on how you count the ships, somewhere between 250 and 300. So, you know, obviously there’s more there. But the bigger concern from my point of view, isn’t so much the number of ships, it’s the range of the weapon systems.

So most Chinese vessels are very small. In fact, just a couple thousand tons. Things that the United States, as a rule, doesn’t even bother fielding because they’re too vulnerable in their ranges to limited. So only about 10% of China’s ships can actually go more than a thousand miles. And very few of them have a strike capability that’s more than a couple thousand miles.

Obviously, America’s super carriers are fully blue water capable and with their aircraft can strike things considerable distance away, especially if they’re using standoff missiles. So I’ve never considered this a fair conversation or a fair fight in the first place. But let’s say that I was concerned that say that with the Chinese expansion of intermediate range missiles, kind of in the 500 kilometer or 5000 range, that they could really hold back US naval forces.

Well, if that is your concern, never really was mine. But look, if that is your concern, you can have whoa, slick. All of a sudden you can rest easy because there have been a couple of new developments in the Pacific that are going to be fully manifested by the end of next calendar year. The United States is going to be deploying two new types of weapon systems.

The first is a land based intermediate range missile, something that until recently was illegal in the United States during the late Cold War. The first big arms control treaty was called the Intermediate Range Forces or INF Treaty, and it barred any sort of land based missile with a range between 500 kilometers and 5500 kilometers. The idea is that if you remove those from the equation, then Europe is relatively immune from a blitzkrieg nuclear strike from the Soviet Union and vice versa.

The land based systems in Europe wouldn’t be able to hit the western parts of the former Soviet Union, where the bulk of the Soviet population lived. Well, two things led to that treaty’s demise in 2019. First, the Russians just started ignoring it and deploying their own weapons systems. And second, the Chinese, who were never a signatory, started implementing these things in mass.

So rather than work with the United States to expand the arms control regimen to give themselves greater security, they just decided that everybody else sucked and they do it anyway. And apparently they believed that everyone else was just too dumb to follow suit. Well, so if you think about how fast this has happened, the treaty was abrogated in 2019.

First discussions on these new weapons systems would have happened within the next year. It’s only 2023 and they’re to be implemented by 2024. So he notes, that’s pretty quick for weapons development system. The Pentagon’s been pretty tight lipped about the range of the new systems, but they’re making it very clear that at the moment they’re not going to Japan or the Philippines.

They’re only going to U.S. territories like Midway and Guam. And of course, the Australians are there and they’re going to pick me, pick me. So they’ll probably be some in Darwin as well. And that basically allows the United States, with the flick of a few buttons to launch cruise missiles with ranges in the thousands of kilometers to basically intersect any shipping route and any naval patrol that the Chinese are currently putting out, although these are mostly land based.

So it’s going to be more about wind tech for the most part. Which brings us to the second piece. There’s another new weapon system that is going out primarily to the subs, and that is a version of the Tomahawk cruise missile, which will now be able to target maritime targets. So for those of you who remember back to the Gulf War in 1992, we’re going to break here for a minute.

Sorry about that fire mitigation crew. Kind of noisy anyway. Sea launched Tomahawks, which will be able to target maritime targets. Now, for those of you who remember back to 1992 in the Gulf War, you’ll recall that they were the first of our smart weapons basically systems. They could follow a GPS map and target things from over a thousand miles away with a warhead that has about a half a ton.

Now, you throw something like that against a vessel. There aren’t a lot of vessels that can take more than one hit from something like that. The problem, of course, has been targeting remotely. Now you can use reason GPS information to target your missiles. The Chinese do some version of that with their ballistic missiles, which are designed to take out U.S. naval targets.

The problem with that strategy and one of the reasons why I’ve never been overly impressed with Chinese weaponry is unless you have active eyes on your missiles blind, it can’t adjust on its own. So you can program in a path kind of like what the Shaheed drones are being used for in the Ukraine, where the Russians, they basically program in a specific point in space.

So when they hit a school or apartment complex, they’re specifically aiming for it. They’re kind of dumb weapons, even if they do have some degree of guidance. But ships move and that doesn’t work. So the Chinese rely on satellite recon in order to provide placement. But the Chinese don’t have a satellite warfare system like the United States has had for 30 years.

So if you remember back to our Chinese, it’s been a while, 15 years ago, maybe there’s an eight. I think there was all this hubbub blue when the Chinese destroyed their first satellite and created that debris field that took out a lot of stuff. Well, very quietly over the course of the next day, the United States, just to underline to the Chinese, how far behind they were, took out a half a dozen of our old satellites using a half a dozen different weapons programs to show to the Chinese that, like, look, you may think you’ve got a gun that can target our Navy, but if we ever get into a hot war, the first thing

that’s going down is your entire satellite network. So stop it. Of course, China only became more narcissistic nationalists after that, but they haven’t fixed the underlying problem the U.S., however, has. We all talk about artificial intelligence and how the Chinese have 1.5 billion people and all the coders they want and all the data they want. That’s true. But they very tightly control the type of A.I. that can be developed because they don’t want independent decision making, and they certainly don’t want anything that’s going to give people an independent means of existence independent of the state.

So a lot of the things we’re seeing here are things like church liberty. They’re just not allowed there because they could be used for political purposes. And that means the United States has a much more well-rounded approach to A.I., including in its weapons systems, whereas the Chinese are precisely focused on social monitoring to keep their population under control.

Well, that technology is undoubtedly in play with this new version of the Tomahawk that can target surface ships because ships move. So you now have the quite a subs in the world with the greatest range in the world and in addition to their normal weapons outlay. By the end of next year they’ll also be packing tomahawk hawks that can target naval vessels.

So in the case of a hot war, you put two or three American missile submarines out there and you know, the Chinese don’t have a long reach navy because you use those systems to hit the ships that do have range and nothing else can leave far beyond sight of the coast. So, you know, done and done. Now, there is unfortunately a political component to this, because if you’re looking at these technologies, I mean, medium range cruise missiles are things we stopped working on back in the late eighties because of the INF Treaty.

And the Tomahawk is a weapon that was first debuted in 1992. So none of these are new. So the question is, with the Chinese becoming more jerk like and the Russians becoming more jerk like day by day, why haven’t these things happened faster? Well, some of this is explainable, so go all the way back to the Clinton administration.

It was the early post-Cold War days. We were all trying to be friends. Why would you develop a weapons system to specifically target your hopefully, friends? That makes sense. Second, the W Bush administration was when relations with the Russians and the Chinese started to turn. But the W Bush administration was more than a little occupied with things in the Islamic world, and especially when it came to the operations in Afghanistan, The more reliable partner for us in getting equipment to our troops in Afghanistan was Russia, much more so than Pakistan.

So I can understand why it was backburner then. But by the time you got to the Obama administration, the Russians had started invading people again. The Chinese were just shamelessly stealing everything that they could and starting to hack into government databases. But President Obama couldn’t be bothered to have a meeting with anyone. So nothing happened for eight years.

He also kind of unofficially thought of the U.S. military as an enemy and didn’t want to imbue it with any more power than he had to. Well, let me get to the Trump administration. Will, you know, updates to the strategic doctrine, a new weapon, systems that doesn’t work by tweet. And so we basically got some strategic incompetence, two administrations in a row lasting 12 years during the period while the Russians and the Chinese were starting to feel out how they could expand their influence.

So it wasn’t until Joe Biden that we actually got firm decision making on the development and deployment of these things. So there’s a lot of reasons I don’t like Joe Biden, but one of the advantages of having a president that’s been around for 170 kajillion years is back in the eighties when he was a full grown great grandpa, he remembered these systems.

He remembered the dawn of the tomahawk, He remembered the weapons we were working on when the IAF treaty was adopted. For him, the context that was necessary to develop in order to make the political decisions to order these developments was already there. And so as long as he’s not a drooling mess, we’re getting a lot more robust security decision making, especially forward looking decision making than we have had since at least George Herbert Walker Bush in 1991.

Is it enough? We’ll see. But if you were the the Chinese or the Russians and you were counting on the general incompetence of Obama and Trump to be the new norm for American politics, I can happily report to you that you were flat out fucking wrong and now you have to deal with.

 

Europe’s Cold Winter Threatens Energy Supplies

We all know Mother Nature saved Europe’s behind last year, but that won’t be the story this year. So, let’s break down the potential impacts on energy supplies across Europe.

With cold temps settling in much earlier than last year, those energy stockpiles won’t last too long. Europe has reduced its dependence on Russian energy, but can the continent’s new energy suppliers keep up with demand?

We will see this energy diversification’s effectiveness put to the test very soon, and any disruptions could carry global implications. This will likely serve as an ‘aha’ moment for countries that source energy from far away and poke holes in that vulnerable system.

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

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

TranscripT

Hey, everybody. Peter Zeihan here. Coming to you from Colorado. It is the 5th of December. You’ll be seeing this the following week. And today I want to talk about the weather in Europe and what it’s setting up for us. Unlike last winter, which was one of the warmest winters on record in Europe, winter has come a little bit early across the continent, and it’s a little colder than normal.

We are in roughly the thirties to the forties in Berlin at about ten degrees warmer than that in Paris, about ten degrees colder than that in Kiev. So much more typical, maybe a touch on the colder side. The problem we have, of course, is that the Europeans have gotten most of their energy from the Russian space and they’re in the process of trying to phase that down to zero.

And they’ve had a relative success in doing that. Lots of hiccups, of course, But, you know, it’s a big place.

They’ve done this by doing two things. Number one, they’ve shut down some of their heavier industry, although some of that did come back on this lot online this summer. They’ve also grabbed a lot of natural gas from the United States. The Norwegians have really bellied up to the bar with some new projects and then they’ve gone into kind of what you might consider their near abroad, places like the Middle East and basically and West Africa and just taken everything.

That means that if you are a country that used to get things from those zones and I’m thinking here about Southeast Asia or East Asia or Africa, you’re now getting your crude from further and further away. And this is going to spell some interesting things this this winter. The Europeans lucked out last year because they had such warm weather that they were able to keep energy prices under control and only had to go through a few controlled brown and blackouts if they were to have a really harsh winter.

We’re going to put to the test all the things they put into place over the last year and a half since the Ukraine war. And it’s too early to say that that’s going to be wildly successful or horrible. But what we do know is that because they have reoriented their supplies from further away now and everyone else is now having to get stuff from you and further away.

For example, the anything that the Russians are exporting right now typically goes still out to the western ports on the Black Sea and the Baltic Sea, then goes all the way around Europe and then through Suez or around Africa. But to get to East Asia, for example, which is, you know, a for almost as far actually I think it’s a little further than halfway around the planet.

It is a big place, especially when you throw in Africa anyway. It means that if there is a disruption for any reason, we’re not just looking at the Europeans having problems this time around, it could be much bigger. Something to keep in mind is that there are very, very, very few countries on the planet who have the ability to project maritime power.

The top of the list, of course, is the United States. But the U.S. is in its own energy bubble, so it’s really a non-factor. The second one is Japan. They’ve got the second largest long reach Navy in the world. The United Kingdom is clearly in the third place. The French are clearly in fourth place. And after that, it’s kind of a mix of regional navies.

The Japanese get a lot of credit for having a lot of ships, but most of their ships are these very small 2000 ton Corvettes that really can only sail a few hundred miles. So they may have a lot of vessels, but they don’t have a lot of weight and they certainly don’t have a lot of reach. So in any scenario where there’s not enough energy, either because of a disruption somewhere or a strike or a war, the Europeans are perfectly capable of using their regional navies.

And I’m here thinking like the Spanish navy, the Turkish Navy, the Italian Navy, in addition to the French and the Brits to go into their near abroad and ensure the oil and the natural gas comes to them. And it helps that the United States isn’t going to be a security problem from an energy point of view, and it helps that Norway is hooked up by pipe.

No one else has that. So if you have a disruption, the United States is fine, the Europeans are fine, and the Japanese have the reach and the friendship with the United States to make things happen. No one else does. So we’re now entering a situation where harsh winter anywhere in the world can generate an energy crisis or a military conflict anywhere in the world can generate an energy crisis, or a political spat anywhere in the world can generate a energy crisis, and it makes for a much more vulnerable system because it’s not like you can go next door.

You now have to go several countries away or maybe even a couple of continents. And for most of the world, that has never been an option. And for the countries where it is, they’re the ones that have the military to make sure it works. So it’s not so much that I am worried about Europe this winter, although I’m not not worried.

We haven’t put any of this to the test. I’m worried about everybody else because the Europeans have the capacity to use multiple tools to try to address their problems and they’ve got allies to help. No one else can claim that.

 

Ukraine, MedShare, Cindy Crawford, and a New Book

We’re checking in on Ukraine today, and it appears that Mother Nature is keeping temps cold, the ground frozen, and enabling operations to continue. This means the Ukraine War will shift towards a war of logistics – which the Russians are notoriously bad at. As for the Ukrainians, it means support from outside countries will be even more critical in the coming months.

With that in mind, on behalf of the entire Zeihan on Geopolitics team and everyone at MedShare International,  thank you to those who participated in our November fundraiser. ZoG subscribers – and especially those who offered matching donations of their own – were able to raise over $500,000. With this infusion of cash, MedShare will be able to deliver nearly $25,000,000 worth of life-saving medical supplies and equipment, including spinal surgical kits, directly to healthcare providers in Ukraine before the end of the year.

This is because of all of you – whether you subscribed, helped share the word, or were able to donate – we helped MedShare do what they do best: partner with organizations in the US and abroad to maximize our donations by a couple orders of magnitude and deliver vital equipment where it’s needed most. And while our November campaign is over, the people of Ukraine will continue to need our help. We will continue to have a link posted if any of you want to donate to MedShare in the future.

DONATE TO MEDSHARE'S UKRAINE FUND

And our last order of business today, Cindy Crawford is a fan of my books (see the clip attached in today’s video)!!! Now that I know she’s a reader, I wanted to remind her (and everyone else) that the updated version of my first book – The Accidental Superpower – will be released on December 26th. You can preorder it using the link below!

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

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

TranscripT

Hey, everybody. Peter Zeihan here coming to you from the Chicago River Walk. I figured I owed you an update on what’s going on in Ukraine. Really? This is a weather thing. So normally, what happens when it turns from summer and fall to winter is you get a six week period kind of mud season where everything gets all gooey.

Well, it looks like that’s not really happening this year. It’s been much colder and as a result, operations can continue. But if there’s going to be a limiting factor in the war, it’s probably going to be equipment. Most of the Western countries have already provided the Ukrainians with all of the spare gear that they have and anything they provide at this point, they have to dig into their stocks of what is actually operational equipment.

And that’s a very different decision making process. So we’re probably not going to see the sort of big camera fences that we’ve seen of the attempts this year in the Big Apple operations we saw last year. Instead, this is likely to turn into a war logistics. Now, the Russians are have never been very good at that. And the Ukrainians have proven that they’re able to take basically garage project missiles and take out Russian flagships.

So expect the Ukrainians to be going after rail nodes, especially in the areas of Crimea and southwestern Russia. There was this massive storm in the Black Sea last month that did a lot of damage in those areas that the Russians are still cleaning up, which makes it’s kind of a perfect time for the Ukrainians to snarl things as much as possible.

And if you consider how poorly the Russian soldiers have fought and how badly they’ve been equipped to all of a sudden lose access to resupply is something that can really hit them where it hurts. The Russians have made it very clear what sort of targets they go after. Their guidance isn’t nearly as good as what the weapon systems are that the U.S. has provided to the Russians.

So they go after static emplacements, specifically power nodes and rail junctions. So you should expect large scale brown and black outs to be carpeting Ukraine over and over and over again. Which brings me to you. In the month of November, we had a matching program for donations to Medicare, which is a charity that provides medical assistance to communities who are under threat in some way.

Specifically, we were giving to the Ukraine fund and a number of people wrote in to help us with our matching. And ultimately we matched the first $100,000 of donations. Well, including that 100,000 donations from all of you hit us up to 500,000, which just blows my mind so much. Has it been given millions, $25 million in surgical kits and they now have the cash necessary to get these into the hands of doctors and provide training to save God knows how many lives.

So thank you. Thank you. Thank you. Thank you. Thank you. Now, do have one other announcement. There was a book fair in New York recently and it came to my attention that Cindy Crawford, of all people, has read my book. I’m Cindy Crawford. And the most recent best book I read was called The End of the World Is Just the Beginning by Peter Zeihan.

I believe, and it’s fascinating, but a little depressing. Cindy Crawford knows what I mean. So two things. Number one, call me. And second, if you like books, if you like my book personally, Crawford likes my book. There’s this bad boy. About ten years ago, Accidental Superpower, my first book was published, and we have been working in the last few months on an updated version that kind of fills the gap in those ten years and give you an idea of where it was right, where I was wrong and why and what is next.

And it publishes and it is available for you the day after Christmas. So, you know, everyone by 14 copies, that would be great. But mostly I want to make sure is Crawford gets one.

 

Russia and China Gang Up on Finland

The schoolyard bullies are back at it again. Russia is funneling waves of migrants into the Finnish border, and China has wreaked havoc on the Gulf of Finland by dragging an anchor across the sea floor.

These are clearly intentional and deliberate actions, but what do they signify? In all likelihood, these indicate potential cooperation between Russia and China in different global theaters – challenging the ability of the US to focus on multiple fronts.

We’ve discussed this in the past, and I’m not too worried about the United States’ ability to handle both Russia and China simultaneously. Click below for a refresher:

Can the US Military Fight Russia and China?

Besides Russia (once again) underestimating Finland’s support network, these actions will likely spark some changes in naval patrol patterns for the US.

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

Support medshare's ukraine fund
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TranscripT

Hey everybody. Peter Zeihan here coming to you from Phenix, where I’m on my last business trip of the year. Very exciting. Today we’re going to talk about something that the Russians and the Chinese are doing against Finland, of all places. We’ve had two big events over the course of the last few weeks. Number one, the Russians started funneling illegal migrants from Central Asia and South Asia into the Finnish border.

Clearly, this was intentional, clearly that it was premeditated because you don’t go from having less than one person a day to almost a thousand in an area that the Russians consider a security zone. Second, the this one, Solaris the Chinese in with the container ship new new polar bear. Makes more sense in Mandarin dropped their anchor in the Gulf of Finland between Finland and Estonia and then proceeded to drag the anchor on the seabed for about 20 miles until they suffered a telecommunications cable and damaged pipeline or sorry, it was an electricity transmission and make them some cable damaged pipeline.

Again, that’s not something that happens by accident. And in both cases, the Russians, the Chinese are kind of going like, what do you do about it? And it’s not clear exactly what anyone is going to do about it, because it’s one of those definitely less than war scenarios. So we’ve got three things going on here. First is this is practice for the Russians and the Chinese.

They’ve never really functionally cooperated before. They’ve certainly never coordinated their actions. But in doing two things in different theaters versus the same country that has managed to displease the Russians of late by joining Dito, this is practice for kind of a larger scale. Well, the U.S. does not consider itself capable of being involved in two major military operations at the same time, even though one would be naval and China and one would be on the land in Ukraine.

But, you know, putting that to the side. So anything that forces the United States to look in two directions at once is kind of a win in above itself, even if nothing comes from it. Second, there is the issue of implications for action. And we’re already seeing NATO countries changing their naval patrol patterns to look out for things like the Chinese.

Because, you know, when you’re dragging your anchor for 20 miles, it’s not like that is a normal bit of operation. Oh, by the way, they found sea anchor. They matched it to the vessel in question. So the Chinese are, you know, doing their normal association and lying thing. But the Finns and the Estonians really have no doubt as to what went down here.

But then there’s the third issue, and that’s the target choice. Now, until recently, Finland was officially a neutral country because it was terrified of facing the Soviet Union. And then eventually the Russians. It’s not that they think they’re weak. It’s that they know that they’re outnumbered. So if you go back to World War Two, the Finnish chapter of that conflict was called the Winter War.

And when Stalin’s troops came in, they were massacred in the winter conflict, looking at 2241 casualty ratios throughout the winter. But when the snows finally went away and the advantage of just being able to ski through the Russian forces went away. The Finns were forced to sue for peace and accept a deal that gave up territory on which about a quarter of their population prewar lived.

It’s something the Finns have never really forgotten. And so ever since then, the Finnish military has basically prepared for one fight. What happens when the Russians finally come? But this is a creative country that has shown that it can punch well, well, well, well above its weight. It arguably has the most effective military in terms of per capita in natto.

And they’re starting to trade with nature now that they’re members. And they just kicked everybody’s ass in the biathlon competition last winter, which, you know, they’re terrifying because that’s one of the reasons why the casualty ratios were so high, because these are all natural sharpshooters and these are all natural ski folks anyway. Also, when the Finns are involved, it’s not just the Finns.

They’ve got their kind of little brothers, if you will, Estonia, Latvia and Lithuania. But more importantly, they get along excellently with their other Scandinavian cousins in Denmark and Sweden and Norway. You know, the Vikings, not to mention excellent relations with the United Kingdom and now the United States. So basically what the Russians have done is pick someone that they thought was on the fringe they thought was alone.

But primitive is representative of the fact that Russian decision making at the diplomatic and security level has really broken down. They’ve kind of forgotten that even Stalin was a little bit scared of the Finns. And so they walked around and now they’re going to find out.

 

Generating Geothermal Energy Using Shale Technology

The Google-backed company, Fervo Energy, has launched two geothermal projects that use preexisting shale technology and infrastructure to generate electricity. Could this be a partial solution to the looming electricity shortage?

The pilot project in Vegas is too small for me to place any bets, but the next project in Utah aims to be on par with other large power plants. This technology allows us to tap into the Earth’s crust, detect and access hot zones where they might not typically be found, and develop a reliable and dispatchable energy source.

Again, don’t go counting those chickens until we hear back on whether this project was a success or not. In the meantime, we’ll appreciate this technology as a refreshing solution in light of a rather hefty need for power supply expansion.

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

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TranscripT

Hey, everybody. Peter Zeihan here. Coming to you from the Denver International Airport, where I am waiting for my flight. It’s my last business trip of the year, so it’s kind of exciting. Anyway, it’s early December, and the news is that in late November, a new project for geothermal launched near Vegas. And by launch I mean began operations. And I’m just starting drilling.

It’s Furbo energy. It’s backed by Google. We don’t have any data on what their cost point is because, you know, it’s Google and as a pilot project. But Google has been sufficiently excited about it to go ahead and launch another project in Utah. The one that’s in Vegas is only about three and a half megawatts, enough for about 2600 homes.

So very, very small scale by really any power plant standard. But the next one is going to be 400 megawatts, which puts it up there with some of the larger power plants in the world, assuming that it is spec, geothermal is awesome where it works because you can tap heat within the crust to generate steam and use the steam to generate electricity.

It’s green. It doesn’t have any chemical issues. And one of the best things about geothermal is you can use it either for surge or for baseload. You just decide when you’re going to use it, which makes it a lot more reliable and dispatchable than, say, solar or wind would be. Because, you know, the earth is pretty much always hot.

That’s part one. Part two, what makes this interesting is that it’s not a typical geothermal project. So normally with geothermal, you’re tapping something like a geyser or hot water worth a hot spot that’s relatively close to the surface, usually within just a few hundred feet. But this is the first project that’s been attempted in so far successfully that uses shale tech to go after a different sort of geology.

So rather than letting the earth put something that’s up close to the surface that only happens in a few places, it’s almost exclusively in the Rockies. And as you guys know, the Rockies are not exactly densely populated. So geothermal with the old style is only providing about 0.4% of overall American electricity supply. But with the shale tech, you can drill down, in this case, 7000 feet into a hot spot that is nowhere near the surface.

And that means assuming this works and works at scale, that means we can do this everywhere where there’s shale, where there’s not geologic activity. You’re not going to do this in the San Andreas Fault, obviously. Let me do a better job of explaining that the two things that make shale technology really appropriate for geothermal and you know why it works in general is, number one, you’ve got really good acoustical detection by using some version of sonar and you can bounce sound waves off of different types of formations at different levels within the formation and map them out from the inside out.

That’s how they know exactly where to go to the petroleum rich strata when they’re doing oil and gas production. And then second, drilling has advanced in courtesy of shale. So you go down and then laterally in order to access whatever the specific layer is that you don’t have in a straight line. So it’s like you can go up into like the fingers of a curved hand.

So you apply this to geothermal and really what you’re looking for impermeable zones that are really, really hot, and you can pick that up with the acoustics. So by taking these technologies, you can go to the best, densest, hottest material possible in order to then run your liquid into it, which it then captures the heat, which can then be used to generate electricity that is potentially a game changer.

One of the big problems the United States is going to be facing over the course of the next decade is a massive, massive shortage in electricity. Even if we don’t do the green transition, even if all we do is reshore a lot of manufacturing to deal with a post China world, you’re talking about conservatively expanding the power supply by 40%.

50% would make me feel a lot better. That includes processing for things like aluminum and lithium and the rest. You know, that’s a lot of power. We haven’t had that kind of power in decades. The green transition would have problems on top of that. And so if we can take something like geothermal and existing technologies that are now off the shelf and apply them at scale in all 50 states, now you’re talking about a very different sort of math, because these things can, in theory, come online pretty quickly.

And so those of you who follow the shale sector know it only takes 6 to 12 weeks to bring a shale project online. And most of that is involved in the drilling and the fracking. Oh, that’s exactly the technology we would be applying to geothermal. So obviously it’s not a complete plug and play. Electricity is different from generating oil or gas, but the the technology and the ways that confusion are very promising.

We’re just waiting from Google to find out what the numbers are, to know if this is economically viable or not. And that’s the whole point of the Utah project. Okay. That’s it. Take care.

 

Economic Warfare in Siberia

There’s been a series of explosions along one of the main lines of the Trans-Siberian rail network. To fully understand the significance of these attacks, we must look at Russian exports, alternative options, and what maintenance looks like.

These explosions could cause disruptions to Russian exports, specifically those bound for China, but the lack of alternative routes and limited maintenance capabilities could be the nail in the coffin.

Ukrainian officials have claimed responsibility for these attacks – unofficially, of course. Regardless, Russia’s economy could be facing a severe blow if these explosions continue.

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

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

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

And then there’s you.

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

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TranscripT

Hey everyone. Peter Zeihan here coming to you from chilly Colorado. The news is that last week, on Tuesday the 20th, I believe, a series of explosions hit a couple of pieces of Russian infrastructure in the Far East in southeastern Siberia. Specifically the Sarah Mosque tunnel, which is part of the Trans Siberian network, specifically the Buckle Aylmer main line were hit.

And then a few hours a day later, details are a little fuzzy. A similar line in the vicinity of the tunnel was also hit, which is serves as the backup for the tunnel, a place that they call the Devil’s Bridge. Some anonymous Ukrainian security officials have claimed responsibility for the attack. I can’t tell you if that is true or not.

What I can say is that we’ve got three things going on here. Exports, options and maintenance. So first, exports. Since the Ukraine war began, the Russians have only found it more and more difficult to get their product to market. The Europeans were the natural market. They were the closest for most oil and gas, even a lot of the minerals.

And so when they decided, for whatever reason to stop buying it, a lot of this stuff ended up in China. And for that, the Koreans Siberian rail system is critical. It provides probably 80% of the cargo capacity for land based stuff. And more stuff is going on lands than ever before. Also, all of these lines of which there are basically five, you’ve got one that’s the least important that kind of goes down into Kazakhstan before going over into emersion, Zhejiang.

That’s the least used and the most Frankenstein, the other for all parts of the Trans Siberian system that does cross over the mountains on the passes into China at different places. But all of them collectively are the only way to get things to China. And they’ve all been running at more than 100% capacity, which, you know, we’ve been kind of waiting for a safety situation to boil up, to knock things off line.

And now it’s been done, at least in part by an attack. And when a blight is being used at more than 2% capacity, that means you can’t just ship it to alternatives, even if you’re willing to turn your train around for off people, can you back up the trains you depot? Anyway, point is that one of the four lines, at least for the moment, is off line completely.

Second options. You’ve got these four lines, one that crosses through Mongolia, two that go into northeastern China and one that goes all the way over to the Russian Far East, where things can be kind of repackaged and put on ships. No one lives in Siberia because they want to. I mean, there’s a reason why this is where all the prison colonies were.

Some of the more stable lines, like the bomb line that was hit, are on permafrost, which is not particularly stable. Something happens to the permafrost. The whole thing just kind of sinks in. And it looks like, at least on one of these attacks, a rail car that was full of fuel was hit. So we’ve seen in other parts of the conflict in Ukraine how that can go bad really, really quickly.

Because of this. There are not a lot of population centers along this entire route. In fact, less than 10% of Russia’s population lives along this line. Everybody else is on the western Russia where it’s, you know, warm. And because of that finding, repair crews in the first place might be really difficult. You’re dealing with a lot of tunnels, a lot of bridges, a lot of canyons, a lot of permafrost, a lot of territory where if there is damage, you don’t just slap down some fresh line and start up.

And a road takes years. When this line was built back in the seventies and eighties, the Russians wouldn’t even allow any foreign observers to see it because it was so shoddily put together and it could only operate reliably over about a third of its length. And this was when the Soviets actually had engineers. post-Soviet Russia really doesn’t. And as we’ve seen with the Kerch Bridge, which connects the Russian mainland to Crimea, you know, that was hit over a year ago now, and it’s still not running at full capacity.

So doing repairs in this area is no minor issue. Of course, getting information out of this area is no minor issue as well. Anyway, third maintenance. The Russian educational system collapsed 35 years ago and so there aren’t a lot of people who are, I would consider to be fully capable of claiming the term engineer. In fact, the younger of them turn mid-sixties this year.

Also, everyone that the Russians have who can repair physical infrastructure is in the Ukraine theater right now because the Ukrainians have been blowing up rail depots and rail lines in bridges and roads and everything for a year and a half now. So there just isn’t a lot left that the Russians can use if all of a sudden they’re getting hit on a very, very exposed, vulnerable place 4000 miles east of Moscow.

If this was the Ukrainians or really if this was anyone who really means the Russians ill will, this is an excellent strategy because the Russians barely have the military capacity to patrol their own lands in western Russia abutting Ukraine, much less 4000 miles. The other direction, 5000 miles, the other direction. This is something that can really hit to the heart of their economic plans in a postwar scenario, because if they can’t get the stuff to the Chinese, the Chinese aren’t going to pay for it.

And there’s really only three other lines now that this stuff could be shipped. And so if this is real, we’re going to find out about it really, really fast because there’s just so many points of exposure and so many failure points throughout this part of the Russian system. It would be an easy way to take down the Russian economy far more effectively than anything we’ve seen with sanctions so far.

All right. That’s it. Stay warm.

The Problem with the COP28 Climate Change Conference

COP28, the United Nations Climate Change Conference, is underway in Dubai. As with many of these foo-foo summits, I’m not expecting much to come out of it.

COP28 is a progress report on countries’ emission reduction commitments, equating to a parent-teacher conference where all countries get Ds or Fs on their report cards. The current focus of this year’s conference is adding protocols around methane.

Methane is the low-hanging fruit of climate-change talks, so it’s a no-brainer to add regulations surrounding it. However, China’s reluctance to abandon coal production (and, as a by-product, methane) underscores the difficulties in addressing emissions on a global scale.

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

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TranscripT

Hey everybody Peter Zeihan here. Coming to you from a snowy Colorado. Today, we’re going to talk about what’s going on in the Persian Gulf. There’s something called the COP 28 conference going on, which is the United Nations Global Climate Change Update conference. The acronym stands for Nothing, so don’t look for it. As a rule, I don’t comment on these things because any organization where Djibouti and Japan are both represented generally does nothing and there’s not a lot you should expect to come out of these talks at all.

It’s really just an update on where everyone is. Folks made commitments to reduce greenhouse gas emissions a few years ago. This is kind of progress report. And the bottom line is pretty much everybody gets a d/f. Not a lot has happened. Two things. Number one, the way these things are negotiated is you have political authorities and you have scientific authorities.

The political authorities are the ones who actually have to get stuff done. And the scientific authorities tend to be the ones who set the thresholds and the targets. And oftentimes the two of them don’t discuss things very often. And so the political statement and the scientific statements often have very little to do with one another. Nothing really different here this time around.

What is different this time around is they’re trying to add a completely new category to the greenhouse gas emissions protocols. So until now, it’s been focused mostly on carbon dioxide, which is by far the number one source of climate change. But this time, they’re trying to add methane. Now, methane, a.k.a. cow farts, a.k.a natural gas, is a much more potent greenhouse gas emission, but for a shorter period of time.

So CO2 lasts in the system for centuries with a moderate warming effect, whereas natural gas usually dissipates within about a decade but has a much stronger impact in that time. So if you’re looking for the low hanging fruit in climate talks, methane is where you want to go. And in cases of like the United States, most of our methane emissions are linked into oil and gas production in some way.

In a lot of oil production and shale fields, natural gas comes up as a byproduct. And so really, all you need to do is have better sealant on the pipelines and the production system. You would have a pretty outsized impact on methane emissions from a climate point of view. In addition, a lot of these things pay for themselves because natural gas is a product that can then be sold into the power system or the chemical system.

So the Biden administration is in the process of perfecting some regulations with the goal of reducing American methane emissions by about 80% over the course of the next decade, which I think is an actually fairly achievable goal that I don’t think the oil and gas industry is going to push back against too much because, again, it’s a product.

But that doesn’t mean it’s going to be involved in these cop talks at all because of the Chinese. Give you an idea of just how hypocritical some of these talks are and how little progress you should expect. The Chinese are against involving methane as an emission target because most of their methane is a byproduct of their coal production.

And if they’re going to continue to use coal for the vast majority of their power, then they’re going to kick out a lot of methane as a side effect. And unlike in the United States, where this is something that can be solved by sealing up pipes, all you have to do in China, if you want to not have the methane, is to shut down the coal, the coal mines.

So the Chinese are kind of dead set against this category in general anyway. We’ve seen this in environmental regulations before with the Chinese, where in a lot of the advanced countries, most notably the United States, it’s an issue of kind of cleaning up after yourself and a lot of it pays for itself. Something very similar happened back in the eighties, in the nineties with something called the Montreal Protocol, which is something that banned chlorofluorocarbons, which is something that used to be in freon and air conditioning systems.

We banned it because it was bad for the ozone layer, gave everybody sunburns and we replaced it with something called HFCS, which were an order of magnitude better. Now, the Chinese were the ones at the time were produce most of the world’s freon, and they didn’t think that the replacement technologies are something that they could master. So for technological sovereignty issues, they refused to go along with it until the rest of the planet had made the switch and then they finally joined on the tail end.

We’re probably going to see something like that with methane in the talks this week. Okay. That’s it. By.

Dutch Politics: What Geert Wilder’s New Coalition Means for Europe

The Netherlands has recently undergone an election of its own, so let’s look at the incoming coalition and how it will impact Dutch politics.

In the Netherlands, voters cast their ballots for a party rather than individuals, giving them a multi-party system with countless coalition possibilities. Geert Wilders will likely lead the incoming coalition, but bringing together at least four parties is no easy task. All that to say, Wilders will have to compromise on some of his more extreme ideas if he wants to build this coalition with any semblance of speed.

The Netherlands has long operated as a broker for Europe. The previous PM, Mark Rutte, played that role perfectly, but I’m not as optimistic about Wilders. The longer it takes to form his coalition, the more the plot will thicken…

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

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

TranscripT

Morning, everybody. Peter Zeihan here coming to you from a chilly New York City in Central Park. We’ve had a fresh election in the Netherlands, which looks like it’s going to generate a couple of interesting effects. So I thought it was worth talking about it. Specifically, the outgoing government of Margaret Ruther is now giving way to an incoming coalition that will be led most likely by a guy by the name of Gert Viel.

There’s who’s got frizzy hair. He’s oftentimes called the Dutch Trump because of his views on immigration and other countries in general. It’s nothing like that. This is still very Dutch, which is to say center, center right. Fairly calm politics. But a lot of people are worried that this is going to break a lot of European issues, perhaps causing complications for Ukraine policy and the short version is we’re just not there yet.

The Netherlands has a very different electoral system for the United States. So in the United States, we have a first past the post single member district system, which is a fancy way of saying that when you go to the ballot box, you vote for a very specific person who’s going to represent a very specific group of people in a delineated geographic area, whether it’s your state or your district.

That’s not how it works in the Netherlands and the Netherlands, you go and you vote for a party. And if a party gets 30% of the vote, as Wilders party did, they then get 30% of the parliamentary seats. This is an interesting system that allows for maybe a little bit more of a pure democracy system, although you don’t know who you’re going to necessarily get because it’s on a party list.

And if they get 30 seats in the top 30 people on their party list, get the seats. But the Netherlands has a weird way of doing things because they really don’t have a floor. There’s 150 seats in the parliament. And if you get 1/150 of the vote, you get a seat, which means you get a lot of parties.

And I think there’s going to be something like 11 in the new parliament. So Wilders isn’t simply going to be prime minister. He first has to cobble together a coalition of a minimum of four parties in order to then establish a government. This is a lengthy process, even when everybody sees everything from the same point of view. So the outgoing government of Ruth, for example, took them nine months to build their government last time, I think eight months the time before that.

So we are not going to see a new Dutch government this year. And it’s entirely possible, considering how actually I say this personality challenge to builders is that we might not even see it next year. Now, you shouldn’t necessarily expect to see huge shifts in policymaking in the near term because some of the builders more from the Dutch point of view, egregious ideas are going to have to go away if he’s going to build a coalition.

In addition, there’s really not a lot of argument anywhere across the political spectrum in the Netherlands about Netherlands place in the world. The Netherlands is pro-American and pro-British and pro-European for reasons that are different from a lot of other countries. Specifically, they’re pro-European because they don’t really like the Germans or the French that much. And the general idea is if you can get the French and the Germans into an institution where other members can kind of dilute their influence, then everybody wins, especially the Dutch, because they handle the trade between the French and the Germans.

They like to keep the Brits close because it’s, again, a hedge against Germany and France and let’s keep the Americans close for the same reason. Keep in mind that the Netherlands is a small chunk of territory, roughly the size of this state here, and as a result, it has a little problem with the fence because it’s completely flat and it’s its borders are completely exposed to its neighbors.

So it’s never going to be a military power. All it can hope is to entangle as many other military powers into its own interests so that the French or the Germans don’t just run roughshod across them. The problem we’re going to see is not with European policy per say. It’s not like things are going to change in the Netherlands, it’s just that for the next several months, maybe up to a year, we’re not going to have a government in the Netherlands that’s capable of playing what has traditionally been the other big role of the Netherlands in Europe, and that is of broker because the Netherlands is either considered the smallest of the large states or

the largest of the small states. They’ve got their fingers on a lot of pots, and it allows the Netherlands to broker deals with parties across the spectrum on economic size and wealth that you wouldn’t expect a middle power like the Netherlands to be able to pull off. And in this, Mark Rutte, that has been key. There’s been a lot that’s happened under his leadership.

He came in at the tail end of the financial crisis when the Greek bailouts were getting really crazy. He helped participate in the solidification of the expansion to include the new members. And now he’s played a central role in the next wave of expansion that is supposed to include a number of countries in the former Soviet sphere of influence up to including Ukraine.

And he’s been doing this while being a relatively reliable spokesman for American and British interests in Europe, as long as it doesn’t hurt Europe. So this sort of balanced, integrated player has been very, very, very important. Everything that’s gone down in Europe for the last decade because he’s been running the place for almost 15 years now, Villiers, regardless of what he says, does have a lot of experience doing this.

Yes, he’s been in the Parliament for the last quarter century, but he’s never been in a government. He reminds me a little bit of Joe Biden and that he’s never really had a big boy job. And so it’s going to take time for him to build the gravitas. It’s necessary to play that broker role within the European Union.

And until then, the French and the Germans don’t have the marriage counselor, and the rest of Europe doesn’t have their advocate of their handbrake. That’s assuming we get a government tomorrow and we’re not going to get a government for months. So the ability of Europe to manage in this environment just went down a very, very big Dutch shaped notch because the Netherlands at the moment can’t play its traditional role.

Argentina Elects A New President: Javier Milei

The big news out of South America is that Argentina has elected a new “libertarian” president, Javier Milei. So, what will this political shift mean for Argentina?

Since Milei won’t have enough parliamentary support from the Peronists, we should expect some unconventional tactics to bypass Congress. Milei also has a strained relationship with several BRICS countries – with China and Brazil topping that list – so hopefully they have some good translators.

The quick and dirty here is that Argentina will be the center of lots of drama for the foreseeable future. So you may want to hold off on your investments in this region and grab some popcorn while you’re at it.

Prefer to read the transcript? Click here

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TranscripT

Hey everybody. Peter Zeihan here coming to you from Central Park in New York City. And on the topic of Skating on Ice, let’s talk about what’s going on in Argentina. They recently had just about a week ago, had a new presidential election and they have a new president by the name of Javier Malay, who bills himself as a libertarian.

Now before you libertarians get too excited, a libertarian in Argentina does not mean the same thing that you’re probably thinking of. In fact, nothing politically in Argentina means the same thing that you’re thinking of. Argentina does things its own damn way and it’s always really weird. So for example, the ruling Peronist are often lumped into the socialist camp.

Leftist camp. But really what they’ve done is they’ve combined the most counterproductive and self-destructive aspects of socialism with some of a really, really sloppy version of fascism. So leftist they are not. They just like to print currency. And don’t let that go to your head. Same holds true for Malaysia’s own thing, and you shouldn’t expect him to fit any pattern.

He’s not the Argentine Trump. He’s not anything. He’s himself. He’s also never been in government. So he may have some grand ideas about what it comes to abolishing the central bank or dollar raising the economy and doing away from the peso. Just keep in mind that he does not have sufficient votes in parliament to get any of this done without cooperation from the Peronist.

So we’re going to see a lot of loud policies, a lot of attempts to do end runs around the Argentine Congress. And whether it goes anywhere, it’s just early days, too soon to know for sure. It’s going to have a much bigger splash when it comes to foreign policy in Argentina, like in most countries, the political leadership has a lot more freedom in dealing with foreign policy than they do with domestic policy.

So in the case of Malaya specifically, he’ll loathes President Lula of Brazil, who is a more classical leftist, if you want to use that category against not perfect, but it’s more it’s more fitting for Brazil than it is for Argentina. And so Lula has already announced that he’s not going to be at the inauguration, getting the relations off to the best possible foot.

And that means a Mercosur, which is the common market, the free trade zone of the Southern Cone that involves Brazil, Uruguay, Paraguay and Argentina is basically dead in the water from both an economic and a diplomatic point of view. Oh, hey, I got a visitor. Anyhow, we’re just going to crop him out. Sorry. Anyway. Or maybe not. New York.

What do you do? Anyway, this was one of the world’s great trade zones, and it’s basically on ice now. Beyond South America, things are also going to get fun because Argentina was just given admission is to the BRICS alignment. Now, BRICS is an association of Brazil, Russia, India, China and South Africa that has well, it’s never punched up to its weight.

It’s always been kind of an odd grouping. And Malaysia has made it very clear that he hates all things Chinese. And since China is Argentina’s largest trading partner and is the dominant power in the BRICS, this is colorful really soon. So the thing you have to keep in mind about all of this is when it comes to Argentina, there can be a lot of smoke without being fire and a lot of noise without anything real happening.

But when you apply Argentina, his own pension for drama to other groups outside the country who have more flavor than substance, things like BRICS, things like Mercosur, things can get really crazy really soon because he’s going to call a spade a spade and he’s going to throw a lot of monkey wrenches into the works. Probably the thing that is going to have the biggest single impact is going to be the Mercosur attempt to have a free trade zone with the EU.

Now, this deal has been under negotiation for how we’re pushing 20 years now, and they believe that they finally have it worked out. Now, Lula decided he wanted to get this all shoved through before Malaya was inaugurated, but then he flat out asked the Europeans for a multibillion dollar bribe to get it done. So pretty much that trade deal is done, too.

So if you’re looking at investment into Argentina or Brazil for the foreseeable future, anything that requires value added work and like manufacturing honestly should just kind of write off for the moment because the entire legal framework is going up in smoke right now.