Finnish Presidential Elections and Anti-Russian Sentiment

Finnish politics are not something that often make the headlines, but with a marked shift away from “Finlandization” (when a smaller country remains neutral to appease a larger and more powerful neighboring country) comes some unfamiliar coverage.

Finland has become one of the largest and most assertive supporters of Ukraine, both materially and diplomatically. The most recent presidential elections reflect these anti-Russian sentiments, with candidates competing to take the strongest stance on large ticket items like security issues and more nuanced issues like revoking Finnish citizenship for Russian-Finnish citizens.

This election is just a glimpse at the complexities of Russian relations within Eastern European countries and a signal of what might be coming…

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

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

And then there’s you.

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

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TranscripT

Hey everybody. Peter Zeihan here. Coming to you from the slopes of Mount Lower with Mauna Kea there in the background, surrounded by volcanic, you was going to go all the way up to the top, but apparently the volcano decided to destroy the road. So whatever. Anyway, that means you get a bonus video. The big news, it’s happening today. We were seeing this on Sunday, the 28th, is that there are presidential elections in Finland and for the first time ever, they matter.

So since the Ukraine war, we haven’t had a lot of electoral contests in Europe in the context of the change security environment. This is really the first one that matters. It matters for more than one reason. Finland. Well, there’s a term for it familiarization. The idea that you’re scared of your bigger neighbor. So you plot a neutral policy in order to make sure that they’re not aggravated.

And this is the position that Stalin forced upon the Finns back at the end of World War Two. And so presidential elections have always been about that debate of just how friendly can we be to the Russians so that they don’t decide to invade us. And that has been the case now for over a half century. And the outgoing president was known as the the Putin whisperer because she had a tight personal relationship.

But with the Ukraine war that has changed. And Finland is arguably of the of the real countries, the sizable countries that are assisting the Ukrainians, the one who has provided the most material support per person as well as leading the charge in terms of diplomatic efforts, and has also jumped on board NAITO, which is something that they assiduously avoided for the last 70 years in order to not aggravate the Russians.

Now, the presidential contest is a beauty contest about who can be the most anti-Russian, who will take the strongest position on any type of security issue. And so we’re kind of seeing the debate take place in three general arenas. The first is the Ukraine, where proper who’s going to promise more aid, who’s going to be more of a hawk?

The second one has to do with citizenship. There are a substantial number of dual citizens who are Russian and Finnish citizenship. And the debate at the presidential level now is whether or not to revoke their Finnish citizenship if they do not surrender their Russian citizenship. And that’s important enough as it is, but it also is carrying out into European foreign policy because Finland is not the country in Europe that has the largest percentage of ethnic Russians among its population.

That would be Latvia, with Estonia and Lithuania coming up in second and third place. So there’s always been a little bit of a quiet human rights debate within Europe about the position of the ethnic Russians in those countries. With Finland trying to take the position of the ethnic Russians in order to mollify Moscow. Well, that is not the case anymore.

The debate is whether or not these people should be kicked out, whether they should be forced to change languages, whether they should lose their European Union citizenship. The fact that the Finns have changed so much in two years is just a testament to just how brutal war in Ukraine is and how close it hits to home to countries in these regions.

Something to consider if you don’t live in Eastern Europe for anyone else in the world, the countries from Finland to Estonia to Latvia to Poland, to Romania and Bulgaria. Now these are the countries who have the most experience of living under Russian rule or fighting the Russians, and they’re the ones who have been basically training their military in order to support the Ukrainians in the conflict because they know what happens if they don’t.

Anyway, by the time you view this, the polls will have opened in Finland and we should have results in the not too distant future as Europe’s most neutral country becomes its most aggressive. A One more thing for those of you who are not fueled by issues of democracy versus repression and mass rapes and or how about illegal migrants?

Yeah, so the Russians have been flying people in from South Asia and the Middle East and herding them through the force of northern Russia and forcing them through the Finnish border. So that really has the Finns all cheesed off to.

Ukraine Attacks Russian Energy Terminal

Ukraine managed to sneak some drones by Russian air defenses and hit the Ust-Luga oil refinery and loading facility. The attack didn’t cause significant damage, but it disrupted production and shipping operations.

The successful attack has given us a glimpse at Ukraine’s capabilities and what might be in store for the future. The Russian’s response to the drone strike pokes glaring holes in the Russian system, specifically the lack of qualified workers and immense strain placed on the limited skilled personnel actively working.

This attack is a reminder of how the Russian oil industry can impact global oil supplies and the massive vulnerabilities within the system. Sanctions have also intensified in a weird sort of way following the attack, which has further impacted the flow of oil to Europe.

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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

Everybody. Peter Zine here coming to you from above the very active Kilauea volcano. That’s the crater that kicked off last year. Today we’re going to talk about an assault that happened last week. The Ukrainian sent a squad of drones north out of Ukraine over Russian airspace into the gulf of finland to attack the Ust-Luga…hope i pronounce that right.

Oil refinery and loading facility now north mali, this wouldn’t really matter because normally drones, as we’ve seen, can’t get through any sort of meaningful air defense. But the Russian air defense in this area appears to be just as crappy as it is everywhere else in the country. So a bunch of them got through. The other reason I would normally care about this is most refineries.

Everyone gets all you want on. They expect Hollywood explosions when a bomb goes off in a refinery, you know? Yeah. Keep in mind scale here, most refineries are over a square mile and this one’s no exception. There’s a lot of standoff distance among the different facilities. So if something does blow, it doesn’t blow up the whole thing. And crude oil at room temperature isn’t even flammable.

So the warheads that these bombs can carry, which are less than £100, probably with the models that were used probably under £20, it’s not that you can’t do damage, but you can’t do real damage. But this is not just a refinery. This is also a loading facility. And in a refinery, once you’ve made your fuels, fuel’s being more flammable than raw crude.

You then put them into a truck or a pipe and send it away With a port facility you put into a big giant tank and then a large vessel comes by and sucks off what it needs and goes on its merry way. And so the tanks themselves are the vulnerable points here. Now, judging from the size of the explosions and the fires that were started, the tanks were not hit.

That’s just something that you should have in the back of your mind when you evaluating. When somebody says a refinery, a certain piece of energy infrastructure was hit, you know what to look for. What’s interesting here are two things. Number one, it took the Russians more than three days to put out the fire and they put it out the wrong way, using water in, you know, the near Arctic winter, which caused a lot of water to freeze and then expand and break more infrastructure damage assessments are still underway.

We don’t know how bad it was. And it had this been a normal attack, we would have known within 24 hours whether or not anything substantial had been done. But here we are nearly a week out and we still really don’t have any more but the vaguest ideas and the facility is shut down. Now, there’s a lot of reasons why this matters.

Number one, while the Europeans have put sanctions on seaborne crude, seaborne oil product is in a loophole. So they were still taking stuff from this facility. And with its shut down, all of a sudden sanctions have gone up to a whole new level. And we’re going to have a very good idea of how the Europeans can absorb or not.

This newest change. Quick add on the Ukrainian attack on US. Luger was on Sunday, the 21st in less than 72 hours later. The Russians were able to begin shipping out again. However, what is being shipped out is primarily oil, almost exclusively oil and something called condensate, which is kind of a raw product somewhere between natural gas and oil.

The actual refining complex remains completely offline. There’s no naphtha, there’s no fuel, there’s no intermediate products that are coming out at all. And at present, the Russians are still completing their damage assessments. And at the pace they’re going, we probably won’t have any information on the level of damage until probably March. And then with their very, very thin remaining skin of skilled labor, they can start talking about repairs.

Second, this is the first significant Ukrainian attack against a significant economic asset of the Russian Federation. And at least on the surface, it looks like it was much more successful than they ever thought was possible. That means that the northern parts of the Baltic Sea and the Gulf of Finland are suddenly in a danger zone that is well within the Ukrainians proven range of operation.

Now, the Ukrainians and the Russians haven’t really gone against civilian shipping right now, but I can’t think of a better target than an oil loading and refining platform such as what we’ve got. And it was ooyala. Again, apologies for the inaction. We’re just going to put the spelling right here so you can see what I’m having the trouble with.

Okay, So this is the sort of thing we should now watch for in the future, because this is not the only facility of this type which is within the Ukrainians reach. There are a number of facilities that no virus sees on the Black Sea and two ops on the Black Sea and closer to St Petersburg, also on the Gulf of Finland.

And now that the Ukrainians are proving that a few things can slip through, you can bet that they’re going to target all of them and all told, if you look at all of the infrastructure combined, it’s combined export and throughput capacity is in the vicinity of three and a half million barrels a day, which is about three and a half percent of global output.

So if you put a meaningful dent in the export infrastructure, it’s impossible for the Russians to shunt this stuff somewhere else. There’s nowhere else to go. And so it just backs up through the system. There’s also one other thing to look at the fact that the damage control crews proved to be so incompetent is something that we’re starting to see at the edges as the Russian economic system frays.

The Soviet educational system collapsed back in 1986, which means that the youngest people who are worthy of terms like engineer, turned 64 this year. And so when I think of fire suppression, I think of something that normally I could not just pick up the hose and go do it. You want someone with specialized training, and especially if you’re talking about petroleum, natural gas or refined product fires, you definitely want someone has some idea what they’re doing.

Russia is running out of those people. It’s not just that a million people have fled the country and a half a million have been drafted and committed to the war being killed. They don’t have much of a skilled labor pool left. And what they do have is being dedicated to the war itself. Air defense in the vicinity of the war, or the military industrial complex to keep the war going.

So we’re seeing some very serious phrase with the system. This this is not the sort of thing that they should have gotten wrong. That fire should have been put out very quickly with things like foam, and it wasn’t. And that suggests the Russians ability to maintain their overall system is starting to feel the strain of all of this.

And they don’t have a backup plan. There isn’t enough labor in the country to redirect from somewhere else, especially skilled labor. All right. That’s it for me. Take care.

 

India’s Counter-Piracy Operation: A Geopolitical Wormhole

A cargo ship in the water

Today we’re talking about the Indians and pirates – sorry sports fans, not those ones. India launched a successful counter-piracy operation off the coast of Somalia, which has helped reaffirm its global strategic importance, but raised some eyebrows in the process.

India has a unique geopolitical position: they have an ultra-nationalist view on trade and an extreme reluctance to integrate with other nations. If you look back to the Cold War era, partnerships with Russia have left a bitter taste in the Indian’s mouths.

So, India will be pursuing its own economic path, independent of outside forces. As they look to double the size of their industrial plant, what they lack in quality, they’ll make up for in a market of 1.5 billion people.

The eyebrow raising portion of all this is that it means India could launch its own piracy operations. Meaning India will likely be the de facto controller of trade in the Indian Ocean Basin – a critical route for oil transport.

Other countries will have to find ways to work around this new obstacle, and financial incentives are probably going to be the best option. The US is far enough removed to take a hands-off approach and let the Indian’s determine the future geopolitical landscape of this region.

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 the winter wonderland that is Colorado after a snow storm. It is the 8th of January. And the news today is that the Indian navy has successfully engaged in a counter pirate operation and freed a vessel with a majority Indian crew from pirates off the coast of Somalia. This is nearly at the outer reach of what the Indians can reach, which the rebel forces and counter-piracy operations are always lots of no fun for everyone.

And so this is a pretty important tactical victory. And I think it underlines the role that I see India playing in the region in the future. Now, India is not like any other country in the world. It’s certainly not like the United States. They have a very nationalist view of trade and they don’t like to integrate with anyone.

And they are an ideology vehicle, opposition to globalization because it was American led and during the Cold War, the Indians tended to be more pro-Soviet to the point that even when the Soviet Union wasn’t around anymore, the Indians tended to be fairly pro-Soviet. But we’ve seen this weakening in that position over the course of the Ukraine were not because they’re having a change of heart, but because they’re realizing that all of the billions of dollars that they spent on developing joint weapons systems with the Russians was basically stolen.

And they’re never going to get any of it. So the Indians, from a national security point of view, are increasingly going their own way. That may include some deals here and there with the United States, but those will be tactical, not strategic. And it’s going to be a very l’écart experience, as opposed to, say, the American relationship with Japan or with Australia or even with Saudi Arabia.

India is going to do its own things for its own ways. Also, India doesn’t really like anyone and there aren’t a lot of countries out there that like India, so they won’t be partnering with anyone else in economic matters for manufacturing. They’re going have to do more or less the same thing that the U.S. is going to have to do as the Chinese system breaks down.

And that means doubling the size of their industrial plant. But they’re not going to have a joint manufacturing system with Bangladesh or with Pakistan or Sri Lanka or with Iran or with Myanmar. And those are all the countries that the border. So India’s industrial plant is going to expand massively, but it’s all going to be in India. That will affect quality issues, of course.

But, you know, India is a market with 1.5 billion people. I think they’re going to deal with that just fine. What that does mean, however, is their threshold for military action is going to be very, very low compared to a lot of other countries because they’re not integrated with anyone. They’re also the first major stop for oil going out of the Persian Gulf to East Asia, which is where it almost all goes.

And now the Indians have conclusively demonstrated that they’re capable of doing anti pirate operations. Well, not to put too fine a point on it, but if you’re good at anti pirate operations, you’re also, by default, very good at pirate operations. So now that the Indians are not beholden anyone, and now that we are seeing a breakdown in the Chinese system, we’re going to see the Indians taking that de facto control, the de facto management of any trade that happens to come through the Indian Ocean Basin, and that includes the world’s largest oil transport route.

So the issue for everyone else in the area is whether or not you can find a way of dealing with the Indians. And to be perfectly blunt, the best way to do that is cold, hard cash, because the Indians are otherwise more or less going to be self-sufficient in the world that we’re going to, and no one can reach them.

They’re literally a continent away from all the other potential players. And as for the United States, if we have an India that is a little bit that’s the best word, persnickety in its own region, that’s fine, because there aren’t a lot of U.S. interests that pass through that region in a post China scenario. So this is just where we’re headed.

And the Indians very clearly are a step ahead of everyone else.

US Natural Gas and Global Energy Supplies

Today, we’re looking at the US natural gas market based on energy data from 2023. The US natural gas market was remarkably stable in 2023, so being the world’s largest producer and exporter of natural gas has its perks.

Thanks to shale and fracking tech, the US maintained an average natural gas price of just over $2.50 per thousand cubic feet (and the low was about $2.20). As soon as we zoom out, we see much more volatility in the global natural gas markets…

Most of the world faced higher prices due to disruptions in Russian supplies and increase in demand across the board. As the Russian natural gas system continues to degrade, the world will struggle to find a suitable replacement. Liquified natural gas (LNG) is a top contender, but it’s expensive and quite technically challenging. A Russia-China pipeline has also been tossed around, but I just don’t see them overcoming the logistical and financial hurdles.

As the rest of the world scrambles to figure out their energy solutions, the US will be well equipped to ride out the wave and even emerge as a key player in the global energy landscape.

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 everyone. Peter Zeihan here coming to you from flat on my back in bed because I threw out my back. This is the last what I heard from here. We have a dead update from the U.S. government, specifically the Department of Energy’s Energy Information Agency, which tracks energy production, usage and prices and everything and their data for a calendar year 2023 indicates that the average price for natural gas in the country was just over $2.50 per thousand cubic feet.

In fact, it bottomed out at just below $2.20 in May. And this is after a really volatile year in calendar year 2022, when because of the Ukraine oil cuts a slow, we’re because we’ll just we’ll just do that we’re because of Ukraine or there was high demand everywhere and everyone was trying to get away from Russian natural gas in that calendar year.

U.S. prices hit nearly $10, but that was nothing compared to what happened in the rest of the world. With prices for several months being above 50 and even approaching a hundred in a few areas, which still boggles my mind that we actually hit those numbers that way. 2023 was much calmer. And the reason for it is twofold. Number one, that the United States is not just a producer, an exporter of natural gas, but it does so using a series of technologies that are broadly not applicable in the rest of the world.

The shale technology and fracking. Because of this, the United States has a break even price in our pure shale natural gas fields, typically below five in some places below $3 per thousand cubic feet. And second, we get a lot of associated natural gas production that comes from our shale oil operations, which, you know, technically based on how you run the numbers, that could be free anyway.

It means the United States is the world’s largest producer of natural gas, kicking out about 120 billion cubic meters a year. And most of that is trapped in the system at home because moving natural gas from A to B is kind of difficult. There’s really only two routes. One is to have a pipeline network that sends it from production to consumption locations.

Usually those are within individual country because natural gas being a gas is hard to store. And the U.S. does have the world’s largest system for distribution by far. The second option is to chill it down to -300 odd degrees into a liquid form and then put it in onto a special sea tanker to send it across the ocean to someone who has a specific receiving facility, who can take the liquid and reclassify it without it blowing up.

All of that is as expensive as it sounds. So what happened in 2022 in Europe was the Europeans used to be on a pipe system that brought in stuff from northwestern Siberia for the most part, and that gave them access to reliably, large and reliably cheap supplies. So when the Europeans decided to move on from the Russians, they had to go to some other piped suppliers that they have, specifically Algeria, Libya, and especially Norway.

But that wasn’t enough. So they had to go out and tap the world for liquefied natural gas, which is not available in large volumes in the way that piped gas from a neighbor can be. And so prices went up and up and up and up. And in the United States, we sent everything that we could and that allowed the Europeans a degree of energy security, but only at a very, very high price point.

What we’re seeing now is the slow motion so far, slow motion degradation of the Russian system, because the pipes are all oriented towards Europe and they are falling into disrepair because they’re not being used. And the Russians are using all their technical experts to maintain their war effort. They do have a couple of liquefied natural gas facilities, some in the Far East and the island of Sakhalin, north of Japan, and some on the IMO Peninsula in far northwest Russia.

But it is foreigners who provide the technical skills for those facilities to operate. And as those technical skills are increasingly withheld, these facilities will fall into disrepair. And well, let’s just see when you’ve got a refrigeration unit that is dealing with billions of cubic meters of flammable materials and something goes wrong, something goes wrong all at once. We haven’t had any industrial accidents at these facilities yet, but it’s only a matter of time, one year to year, five years.

I don’t know how long before those facilities go offline and then Russian natural gas will be gone. Getting it out by other means is nearly impossible. There are very few countries that can do LNG liquefaction. China is not on that list. Most of them are part of the Western alliance plus Japan that is backing Ukraine. And if you’re going to get a pipeline for the small peninsula to populated China, you’re talking about the world’s largest chunk of infrastructure with roughly 70% of the train it’s going to cross being virgin with no existing infrastructure at all.

So you’re talking tundra and tiger and permafrost and mountains. Building that pipeline would be $100 billion project. It would take a minimum of 15 years. And even if it was done, the cost of operating would be two, three, four times as much as the natural gas would be worth. So the Russians and the Chinese repeatedly say that this pipeline is going to happen.

They’ve been saying that for 20 years. And then you get down into the details and the traders again, the Russians are going to pay for the operation pipeline. And the Russians, like, you know, the Chinese are going to pay for the operation of the pipeline. And that’s why nothing has started. So the world has to get by without Russian natural gas.

And until a year and a half ago, they were the world’s largest exporter. That is going to have big price implications everywhere except in countries that produce natural gas for themselves. Read the United States. Now, that means in the United States, the 2 to $3 range we’re in right now is more or less normal. We’re not going to go above five for any more than very short periods of time, because what we’ve discovered is that the shale gas guys can bring on well, wells in a matter of weeks.

If you remember your shale history back between 2004 and 2011, roughly, it was all about the natural gas. And then in 2011, the 2013 oil really came into its own and natural gas faded, not because we were producing it, but because we were producing it as a byproduct of oil production. What we saw in calendar year 2023 when prices were going up is that the shale guys went back to the old natural gas fields and were able to produce using the tricks they’d learned in the shale oil fields the last ten years.

And that pushed down the cost of production and push up the volume of natural gas that was produced by massive volumes. And we basically got back to a balanced market. Now, the United States does have takeaway capacity to get some of that natural gas to international systems. We have roughly 10 billion cubic feet of pipeline capacity, mostly in Mexico and about another 10 billion cubic feet for LNG, which is mostly going to Europe now.

That’s in comparison to 120 billion cubic feet of overall production, which is a number we now know that we can increase in fairly quick succession when we need to. So again, prices should be lower for a longer. We might have those occasional spikes, but then the shale guys will just drill and bring the price right back down. Now, why does that matter to you?

Three big reasons. Number one, natural gas remains the number one fuel source for electricity generation in this country. About 40% of the total. So anything that requires electricity, which is almost everything, natural gas is the solution, at least in the mid-term. And since the United States needs to roughly double the size of its industrial plant. As the Chinese fade away, we basically need 50% more electricity, and natural gas is going to be a huge component of that.

Second, let’s say you don’t like fossil fuels at all. Let’s say that you’re a greenie and you like solar and wind. Well, you should still like natural gas because when the wind doesn’t blow or when the sun doesn’t shine, which happens, you know, every night, you need a partner, a fuel in order to keep the lights on. And natural gas combined cycle power generation facilities can spin up and spin down in less than 15 minutes.

So they are the best partner for GreenTech that we have. And while the Californians don’t like to say it out loud, about half of their energy that they generate within California itself comes from natural gas, specifically because of this pairing capacity batteries cost an order of magnitude more. They don’t last very long and they have some other problems with their construction That is ugly from any number of strategic and green points of view.

Natural gas is a known and as long as we’re going to be moving towards wind and solar for most of this country, even in increments, natural gas is the logical partner for all of it. And then the third thing is a little bit more esoteric, and that has to do with what happens in manufacturing. Once you decide you want to really get into everything in globalization, we have broken up the supply chains.

Energy comes from someplace, iron ore comes from someplace, steel comes from someplace else, plastics comes from someplace else. It’s brought together for assembly, different locations. As the world breaks apart and we have a more national or continental system, more and more of those intermediate steps need to be done at home or near home. And a lot of those intermediate steps use raw materials that are made from natural gas.

So natural gas makes naphtha, makes polyurethane makes plastics, naphtha makes fertilizers and pesticides, makes agricultural products. Natural gas is the base material for a lot of this stuff. And now the United States is the largest producer, supplier and exporter of all of those intermediate products. And what we’re seeing now is the U.S. moving up the production chain, moving in a greater value added production system for all of this so that we can still do the classic manufacturing and have the entire input system at home.

So to have natural gas at these price levels for a very long time is great and it’s going to be a very long time. We largely stopped looking for natural gas about ten, 15 years ago because we knew at that time we had over 30 years of supplies at current rates of production. And we proved in 2023 that it’s pretty easy to bring even more on line.

So this is going to be the norm for the United States while it goes through these massive re industrialization phases. And natural gas will both power fuel and provide the base materials to make all of the possible. And that is not going to be replicated any where else. No one else can produce natural gas at the price point that the United States can.

And no one else has. In natural gas production facilities relatively close to the population centers like the United States does. So this this is our new normal, and it’s going to provide the bulwark for American industry for at least the rest of this century.

How To Do Greentech Well: The SunZia Wind Farm

The largest Greentech power generation system in the hemisphere is under construction in New Mexico. SunZia has raised $11 billion for this project and aims to generate 3.5 gigawatts of wind power for the NM, AZ, and CA energy markets.

This is a massive step for the green transition, and it will play a pivotal role in bolstering green power generation within the US. You might be wondering why they chose wind power; well, it’s more cost-effective than solar, more reliable, and tech advances have enabled us to tap into more stable and powerful currents.

The transmission component of this project is important to; it shows that the energy can be generated and captured in regions with low demand and moved across state lines into areas with high demand. We’ll have to wait and see how this will work in practice, but this is looking like a ‘win’ as of now.

The SunZia project is just the tip of the spear as we’ll continue to see more of these projects pop-up soon, but this is a great start for the green transition. The first energy from this plant isn’t expected to be generated until 2026, so don’t pop the bubbly quite yet.

Prefer to read the transcript? Click here

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

And then there’s you.

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

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TranscripT

Hey, everybody. Peter Zeihan here coming to you from Colorado. Now, I get a lot of flak for never having good news. So I figured, you know, here, here’s something fantastic that’s happened over the holidays. There’s an organization called Sun Zia, which is a company that produces and transmits electricity that has closed funding and started construction on what will be the largest green tech power generation system in the hemisphere, 3.5 gigawatts, which in electrical terms is huge.

Why does this matter? A bunch of reasons. Number one, $11 billion is how much money they had to raise. Raising money these days is difficult because the baby boomers are majority retired. All of their capital, all their savings has been put into relatively static things like cash and T-bills. And so if you’re trying to raise funding for anything, it’s gotten a lot more expensive.

In addition, unlike if you were to build, say, a natural gas power plant or anything that’s fossil fuel based with those systems, fossil fuels, only about one fifth the cost of your of your full lifecycle cost for your facility has to be raised at the front end to pay for construction. But most of it is instead raised from fees when you’re generating the power as you go.

Instead with green tech, two thirds of the cost is upfront because there’s no fuel costs, but the upfront cost is much higher. So you’re talking about two thirds of the total value of the entire lifecycle of the project has to be raised before day one. And so doing that at all is difficult. Now the capital costs of roughly tripled, but Sunsilk was able to pull it off.

So our number one big achievement for the capital cycle. Number two, the size 3.5 gigawatts, biggest in the hemisphere. If we are going to do the green transition, we need to increase the amount of power generated in the country by at least 50%. This is a nice little bite taken out of that. But from my point of view, if we’re going to deal with the post China world and expand the industrial plant to manufacture everything we need, we need to expand it by another 50%.

So regardless, if you’re a green, if you’re pro-development or both, this takes us a significant step forward. We still need another 500 of these steps, but you know, we’re going in the right direction. Okay. Number three, what it is, it’s wind and it’s in New Mexico. So wind, as a rule, is much more cost effective. And solar in large part because every time the sun goes down, all those solar panels just become paperweights, whereas the wind blows at night.

In addition, while we have had incremental improvements in the capacity of photovoltaic cells over the last 15 years, it’s nothing compared to what has gone on with wind. It used to be that wind turbines were 100 feet tall.

This year we’re going to have prototypes for ones that are thousand meters, 1000 feet, 300 feet tall. You know, just massive, massive structures. And they generate more than an order of magnitude more power than the old ones do. And more importantly than their size is their height, because they’re reaching wind currents that are far more stable and far stronger.

And so we’re seeing places in Texas, in Iowa, and now in New Mexico that are using some of these taller turbines to not just generate intermittent power, but baseload power. And that’s one of the big problems with green tech. If the wind stops or the sun goes down, you’re kind of out of luck and you have to switch to a more conventional system or a battery system, which is much more expensive.

But if you are tapping a wind current, that never stops, you can use it for baseload and avoid both of those problems. And that’s part of the goal here for the Sun Zia project. But fourth, and I think most importantly is that unlike almost every green tech project that we have done in the United States to this point, a huge portion of his own solar project is transmission.

They realize that there aren’t a lot of people in New Mexico and Albuquerque can only suck up so much power. And so this project includes massive transmission lines that go into Arizona and link into the network that goes into Los Angeles. And of the three and a half gigawatts of power generation that they’re anticipating all but a half a gigawatt of it is for export to the Arizona and California markets.

And the fact that this taps into the L.A. market is beyond awesome. I don’t know how many of you have heard of California, but doing business there is almost impossible. Electricity demand is hardly encouraged, but in many ways, electricity generation is flat out illegal. Very heavy regulatory environment. The state is also very power hungry and they import about a third of their electricity because they’ve made it very difficult for producers to operate in their home state.

Arizona is by far the single largest supplier they have. And every night when the sun goes down and all those panels of Californians built stop working, ten gigawatts of fossil fuel power comes from Arizona across the border, flooding into the L.A. zone. The Sun Zia project will now be able to put roughly three gigawatts of power into that network.

It doesn’t solve it at a stroke, but it’s a much more sustainable program from an environmental point of view than anything that we have right now. So, you know, a great step forward. One of the big things that we forget about in the wind and solar is not just the intermittency. It’s just that not everybody is places sunny and not every place is windy and most people don’t live in those locations.

So our best wind locations are the Great Plains from eastern Montana, North Dakota, going down to the panhandle of Texas and west Texas. Our best solar zone is from southern California. Go into west Texas as well. New Mexico is on the edge of that great Plains region, great wind potential, great solar potential. But there aren’t a lot of people in that entire area.

You got a wire somewhere. And this is one of those projects that has managed to work out the details of crossing state boundaries, two of them, and getting power to where people actually live in Phenix and Los Angeles. So we need many, many, many, many, many, many, many, many, many more of these for this to go. But the fact that we have our first really big one that’s already started construction.

First power is expected in 2026. It’s a great start.

 

Scandinavia, After America

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Today’s video comes from Doubtful Sound during my backpacking trip to New Zealand. We’re talking about an area in northern Europe fractured by history – the Scandinavian region. What was once a series of powerful and interconnected Viking port cities has been a fairly sleepy backwater for the past 300 years…but it might be time for a family reunion.

If there’s one thing that can get the family back together, it’s a common enemy. And Russia is the big bad wolf. This cluster of countries will reunite with similar geopolitical orientations, absent external powers pulling them apart, and Sweden will be at the center of it all.

The Brits and the Americans will be the best options for external allies. The Brits want to hold onto their naval independence, and preventing a single power (like Russia) from emerging is in their best interest. For a very small price, the Americans would gain a powerful ally that punches above its weight and dovetails with American power.

While we might not see epic battles as portrayed in the show “Vikings,” this cluster of Scandinavian countries will be a region to watch in the coming years.

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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Texas Did Not Fall Down: Energy Grid Updates

With cold fronts rushing through much of the country, the Texas power grid had lots of eyes on it this past week. Thankfully, some “updates” over the past couple years have helped the Texans avoid catastrophe.

There’s a handful of reasons this storm was weathered: a shorter cold snap, regulatory changes, and structural updates. The first one is self-explanatory, but let’s breakdown the last two.

Governor Abbot introduced a series of winterizing efforts following the 2021 crisis, which enabled the natural gas system to continue operating through the storm. The winterizing technology used is over 50 years old, so I use the term – updates – loosely.

As for the structural updates, Texas is a bit ahead of the game; they’ve introduced some ‘Texas-sized’ wind turbines and expanded solar capacity. Combine the expansion in clean energy and a more reliable natural gas baseload system, Texas had its bases covered.

These changes made in Texas are just one example of how global energy systems will adapt and evolve over the next few decades.

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. Winters here. I’m coming to you from Eastern Washington. And today we’re going to talk about winter in Texas. Now, if you guys remember back a couple of years and it was 2021, Texas got hit by a cold storm and basically everything collapsed. All of their energy generation, especially natural gas, just ceased functioning and 200 people died over the course of a couple of weeks because of the loss of electricity.

That has not repeated with this cold front, even though by many measures in most parts of the state, temperatures got a little bit lower. So five things are different now compared to what happened back in 2021. First of all, while it did get as colder, even a little colder, the cold snap wasn’t quite as long. It didn’t last like the two and a half weeks like it did last time.

So the system wasn’t put under as much long term stress. But the bigger issues have to do with organizational and structural changes that the Texans have implemented. The big driving factor for things on the legal side of the regulatory side was Governor Abbott, who had spent a lot of time before 2021 making fun of California for the rolling brown and blackouts because they just have a horrible grid and a horrible energy system.

And then, of course, in Texas you had two or two people die. So he was personally motivated to make some changes and he pushed them through the legislature, which forced the regulatory structures in Texas to adjust. And the biggest part of those changes affected the natural gas industry. So Texas, before 2021 didn’t have its natural gas system winterized at all.

And there’s a lot of water vapor that comes up as a byproduct of natural gas production. And a lot of time it’s in the gathering pipes. So what would happen when we got to subfreezing temperatures is that water vapor would condense into liquid and you go virtually condense into ice and then clogged the pipes. So the entire system across, especially northern Texas in the Dallas area, froze up.

And so there was no fuel to burn, to do everything else. For political reasons, Abbott blamed the wind industry because, you know, when dad stopped going, but it was mostly natural gas that carries the backbone of power generation in Texas, and that is what failed most spectacularly. So in order to get things going, they actually had to waive almost all of their safety regimens and regulations and people were going out with acetylene torches to manually melt the pipes.

And of course, natural gas is flammable explosive. So we were kind of lucky that that didn’t get completely out of hand anyway. This time around, the changes in regulations forced producers across Texas to actually implement some of the best winterizing technologies that we had back in the 1960s. And the Texas grid now is on par with where Arkansas, Oklahoma and New Mexico were about 1975.

So, you know, this is some really basic stuff when it comes to things like insulation. Anyway, it was more than enough to make a difference. Okay. So that was the first big structural change. The other big structural changes had nothing to do with regulation. It’s just how things have evolved. So the new turbines, wind turbines that the Texans had put up more than 200 feet taller than the ones that were up three years ago.

And that means they reach higher. They tap stronger air currents that are more reliable. So even though the wind did drop, we hadn’t seen nearly the drop off in power generating capacity because the physical structure is now different. Second, Texas has put up a whole lot of solar. And when these winter storms come through Texas, usually what you get is a lot of wind, a lot of freezing rain, maybe some snow.

And then once they blow through, it’s cold. Well, but it’s clear air. And so when you have temperatures in the twenties, solar doesn’t really care what the temperature is unless it’s like crazy lower, crazy high. So solar was generating near record energy for the time of year. So you had two different streams of energy coming into the electrical system that they didn’t really have last time.

And they’re baseload system with natural gas worked a lot better than it did. This sort of change is the sort of thing we’re going to see in some way across not just Texas, but the entire country, the eventual world. We’re seeing more and more wind and water and more solar. And it doesn’t always go right the first time.

And we discover that meshing these systems together is more problematic than kind of the breezy things that the Greens say. But when you have multiple systems that do feed into the same network, you do get a lot of redundancy when one works and the other doesn’t. The trick is to make sure you have enough spare capacity that you can dispatch at any given time.

Now, in the past, solar and wind aren’t very good at that because you can’t dispatch them. If the sun’s out, out of the wind’s not blowing, they’re kind of useless. And you have to rely on older fossil fuel. Things like natural gas. But what we’re seeing in Texas specifically, as it were, already seeing turbines that are 800 meters tall.

But in the next year or two, we’re going to be pushing the kilometer tall barrier and again, stronger currents, more reliable use for baseload. So I don’t mean to suggest that all of these problems when it comes to storms and interruptions are going to go away. But as the technology evolves, we’re getting better able to adapt and having a little bit more insulation on the back side as well.

That’s it for me.

 

China’s Energy Problem and Dealing with the Taliban

When one of your best options for securing an energy supply route is with the Pakistani Taliban, you know you’ve got some problems. So go ahead and add that one to China’s ever-growing list of ‘shit to figure out.’

The issue China faces is that securing a safe and reliable energy supplier is practically impossible no matter where they turn. Given their geographical position, the Chinese have to go through Pakistani Taliban territory, deal with rivals like India, go over treacherous terrain or a combination of all those.

China’s energy will remain vulnerable until they can sort this out, but at least they have a stockpile of low-quality coal to keep the lights on until then.

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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North Korean Missiles Heading to Russia, Part Two

A missile being fired against a blue sky

We’re back with part two of Russia’s missile-sourcing escapade. Today we’re looking at the specifics of these North Korean missiles and their significance.

The North Korean’s are sending the Russians some of their KN-23 and 25 missiles, which are limited range (max. 400 miles) and low accuracy models. This means that each of these missiles is a war crime waiting to happen, but what’s another drop in that bucket? Unfortunately, this has just dumped a new load of gasoline onto the fire that is the Ukraine War.

The Russians will be able to use these missiles in conjunction with satellite guidance to close in that accuracy ring a bit. In the meantime, they’ll be gathering insights on the technological capabilities of the North Korean and Iranian missile systems.

Once the Russians mesh the missile and satellite tech together, the Ukrainians will be facing a much more intimidating Russia than before.

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? Well, there’s no other word for it. It’s a frigid Colorado this morning. We’re right at two degrees Fahrenheit. Anyway, I want to do a follow on to a little bit. We we talked yesterday on the transfer of North Korean missiles to Russia. The models in question are called KN-23 and 25.

They have a very limited range and they’re not particularly accurate when the North Koreans use them. The accuracy range is typically 100 to 200 meters. So they’re not much. Well, they’re just not smart. There are most artillery actually hits more reliably than they do with the add on of satellite guidance. And a little bit of extra hardware. You could probably get them into the 50 to 100 meter range.

Now, this is important for two reasons. Number one, it means that every missile that the Russians fire in the general direction of a population center, which is where most of these things are being used in Ukraine, is almost by definition a war crime. So, you know, we’re we’re now getting half of we’re past 150,000 documented incidents. So if the war crimes tribunals ever do happen to happen at the end of this war, who is to be a lot to do?

But the second and slightly more important in the long range point of view is the assistance, the military assistance, the supply assistance that the North Koreans and to a lesser degree the Iranians are providing the Russians. Is it just important for the war or to get an intelligence look at what the North Korean and the Iranian systems can do technologically?

And from a production point of view, the Russians are also promising that both countries are satellite tech, or at least the ability of the Russians to launch a satellite for them. And so if you marry Russian satellite tech, which doesn’t have to be top notch to provide guidance to C weapon systems, and you apply it to these two laggard countries, you can actually make a fairly significant improvement in their capacity to target going from a 200 meter range to a 100 meter range, obviously is a significant step up.

So I don’t mean to belittle any part of this transfer system that is going on. It’s just a question of time. Okay. That’s all I got for now.

Why Are the Russians Shopping for Missiles?

The Russian military industrial complex can’t keep up with the demands of the Ukraine War, so the Russians are sourcing large quantities of short-range ballistic missiles from North Korea and Iran.

This reveals, or confirms suspicions, that Russia’s production capacity for certain weapons systems has collapsed. Specifically, the Russians are sticking with their Soviet roots and purchasing Scud-like missiles for their outdated systems from the 60s and 70s. As the faux Scuds make their way to the front lines, Western intelligence will get a glimpse at North Korean and Iranian military capabilities.

Of course the Russians will deny this, but when you see some gold-heavy planes trickling over to Iran and North Korea…don’t be surprised. However, the Russians aren’t the only ones getting prepared. A number of European countries have ordered Patriot missiles and Germany has reversed its plan to decommission its military.

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 Colorado. One of the bits of news that came across my screen as I was flat on my back with a thrown muscle is that the Russians have started to contact the North Koreans and the Iranians about purchasing large numbers of short range ballistic missiles. Now, the concept of the Russians shopping around for weapons systems for the Ukraine war, that’s not new.

And the two systems that have seen the most activity of the Shaheed drones, which are those moped drones, really loud ones, the fly in a straight line, those are from Iran. The Russians have been launching those at Ukraine for months and then artillery from North Korea because the burn rate for Russian artillery is an order of magnitude or more than what they can produce for themselves.

But this time they’re going for short range ballistic missiles. Now, this tells us a series of things. First of all, it gives us a really good peek into just how horrible the Russian military industrial complex is. The Russians had stopped or at least slowed the making of most of these things. If you remember back to the Gulf War of 1991, the Scuds, that’s the class of missile that we’re talking about.

They’re not advanced. They were developed in the sixties, in the seventies. They’re so basic that even the Iraqis had their own weapons program where they would make their own. They’re not particularly accurate. They don’t have much of a range. And the Russians had intended to replace all of their Scuds with Iskander, which are a weapon system that is more accurate with a little bit longer range.

But it’s turned out that the Russians can’t produce those in any meaningful number. And since they have already scaled back their ability to produce the older weapons in the first place, they’ve got to go somewhere else. They don’t have a significant skill set in military technologies anymore to speed everything up at the same time. And so this is something where they simply have to shop around to find it.

Okay. So that’s number one. And number two, we’re going to get a really good look at the inside of the military industrial complex in the military capabilities of both North Korea and Iran here. We think of these countries as being, you know, warlike, but they haven’t actually been involved in a major war for quite some time in the case of the Iranians, it was in the aftermath of the 1979 revolution that brought the mullahs to power.

That was the Iran-Iraq war. So in 1998, it was the last time we saw the Iranians actually going at it. And in the case of the Koreans, you know, we got third hand reports from countries that have bought a few of their missiles here and there. But for the most part, you’ve got to go back to the 1950s for the Korean War, which ended in 1953 when these weapon systems didn’t even exist.

So if you’re in Western intelligence or Western militaries, you’re going to be really curious to see how these things look. I mean, don’t get me wrong, it sucks to be Ukraine in this situation. But in terms of kind of lifting up the skirt and being able to see what’s going on, this is going to be a really robust intelligence gathering operation.

Then we’ve got the third thing. What are the North Koreans and the Iranians getting for this? There were some reports early on that the North Koreans were going to get some sort of intercontinental ballistic missile technology from the Russians in exchange for artillery shells. And there may indeed be some of that. But it appears that the Russians are giving the North Koreans the runaround like they did to the Indians.

The Indians spent billions of dollars in years giving money to the Russians in order to develop a joint cruise missile called the Brahmos. And the Indians are now not in public, but behind closed doors, admitting that all the money was just stolen and that they’re never going to get that weapons system and it’s time for them to move on.

And it seems that some version of that is going on with the North Koreans as well, though the Russians have talked a big talk, but the number of people that they have that can actually do the work is so small and they’re all working on weapons projects within Russia. There isn’t a lot to spare in terms of sending it to the North Koreans, which leads us to what the Russians do have.

And that’s a goal. The Russians are under any number of sanctions. They can’t use the U.S. dollar in international markets. The Chinese aren’t really even interested in having their own yuan. So bilateral trade there has proceeded, but not by the volume that the Russians would like. And nobody wants the ruble. In fact, some governments have made it very publicly to how little they think of the Russian currency.

And so the solution is gold. Russia is arguably the the world’s largest second largest, the third largest gold producer here. And then their gold reserves, both in terms of bullion and partially processed gold, are completely off the books. And they’ve got a stockpile that they don’t admit to. So probably they’re the world’s largest producer, the world’s largest processor and the world’s largest holder of gold bullion.

In addition to having a massive stockpile of stuff that they could process into finish bullion if they wanted to. And so it appears what they’re doing is when they have a lot of stuff that they want to buy and they’ve got a long list of these days because there are so many tech sanctions, is they simply load up a plane with gold bullion and fly it to the country or the entity that they’re buying stuff from.

So expect to see some version. So Marine jets weighed down by gold flying across the Caspian to get to Iran or flying across Siberia to get to North Korea to pay for this stuff. I may be laughing because it’s so weird, but. But it works. It’s un trackable. And once the gold gets into the Iranian, another country in systems, it’s a fairly straightforward process to get it laundered through a place like Switzerland or especially the United Arab Emirates.

Those are the places that do the gold certification. So this is the path we’re on right now. It’s a little nonstandard, but it is definitely showing a lot of light on a lot of things that we haven’t had good information on for a very long time. And Russia’s propensity to throw the kitchen sink and everything that’s not nailed down in the Ukraine war necessity, need to, you know, do this.

Massive arms shopping has encouraged other countries to alter their defense systems. And we now have a coalition of European countries that have placed an order for over 1000 Patriot missiles so they can shoot down all of this stuff that the Russians are now buying up so that they can throw. And the country that has placed the largest order is a country that just two years ago was quiet.

Lee in the midst of its plans to decommission its entire military because it was so committed to global peace, and that would be Germany. They’ve now come full circle and now they’re arming up as quickly as they possibly can manage, which in German terms is still not all that fast because there’s a lot of paperwork, but still.