Peter Zeihan, Author at Zeihan on Geopolitics

The US Credit Rating, Budget Deficits and Debt

We’ve all heard about the drop in the US credit rating, but what does it mean? Given the United States’ size and global standing, the resulting impact on financing costs is nominal. Think of this like your personal credit rating – sure, life’s easier with an 850 credit score, but a 700 isn’t the end of the world.

The bigger concern lies in the worsening fiscal conditions caused by growing budget deficits. With successive administrations exacerbating this issue and the Boomers transitioning from taxpayers to tax beneficiaries, the US has its hands full. And that’s before you mix in threats of the US not fulfilling its debt obligations…

The mounting uncertainty around this issue could impact credit costs and everyday financial transactions. So, unless there’s a massive shift in political responsibility and involvement, this budget deficit issue will remain hardwired into our system.

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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.

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Hey everybody. Peter Zeihan here coming to you from Austin, Texas, at the 360 Bridge. A lot of you have written in with the same question. U.S. is credit rating has been dropped. What does it mean? Is this something we should be worried about? The very short version is ish. Whenever your credit rating gets dropped, it generally means that you get put into a different category in terms of reliability, of repayment, and that means you might have to pay a different amount to service your debt.

So imagine if you will, that you’re trying to buy a house and on your last house you just walked away and left the keys in the mailbox. That’s a hit to your credit rating. The next time you try to get a loan or that loan is going to cost you more. And since the United States government is issuing bonds, debt every single day, there’s an incremental increase in what we have to pay because of reliability.

Now, in the case of something like a country, the wobble, especially for a country the size of the United States, tends to be pretty minor. In addition, the United States is the global superpower. It is the sole global currency that is not going to change in my lifetime. And as long as that is the case, the United States kind of is the is the marker of 100% on what you can get.

And anyone who is above that kind of gets extra credit and even below that has to compare themselves to the United States. So we’re talking at most a couple tenths of a percent in the difference in what financing costs are now in a country the size the United States that comes out to something in the tens of billions of dollars a year.

So it’s not insignificant. The bigger impact is what you’re going to be feeling if you happen to be downstream of that, where your debt is indexed to what the U.S. government does. And in that sort of environment, you’re talking about your mortgage, your credit card, everything is going to get a little bit more expensive again from a very low base, but still adds up to tens, if not hundreds of billions of dollars.

A year in additional credit costs. That’s not what I see is the big concern. So let me give you two one relatively minor one that’s really big. First, a minor one. This is only going to get worse. When George W Bush was president, he issued the most debt did the most deficit spending of any president in modern history.

And then Obama came in, was like, hold my beer. And he doubled it. And then Trump was like, well, I’m the best. I’m going to make the deficit huge. And he did so. And now Biden’s and he’s trying to top Trump. So this isn’t a Democrat thing. This isn’t a Republican thing. This is just a bad math thing.

All the fiscal people who have voted based on what the federal government will do with budgets have basically been purged from the political system on both sides. And so we should expect a budget deficit to get larger and larger and larger and larger, especially as the baby boomers go from being the largest tax payers in American history to the largest tax takers as they go from people earning income and paying taxes, to people who are drawing on social Security, Medicare and Medicaid and the like.

So this is going to get a lot worse before it might start to get better in, say, the late 2013, when the boomers are mostly all gone. So bad news, but we’ll live with it. The worse thing, the concern that most folks in the markets have today isn’t that the U.S. can’t pay. After all, the U.S. Federal Reserve has the ability to control the money supply with the click of a button and can basically print enough currency to buy all the government debt.

And that’s exactly what we’ve done in the last four presidents. However, the concern now is that the U.S. won’t pay. Donald Trump said we could renegotiate or abrogate some of the debt, which is the sort of thing you hear out of Greece or Argentina or Cuba. And in the current environment, we’ve had a number of people across the political spectrum heavier on the right, but not exclusively, who have tried to use the ability in Congress to shut things down.

Maybe it’s a program. Maybe it’s debt repayment. Maybe it’s the government itself. But basically saying that we abrogate responsibility for taking care of any of this anyway. And if the U.S. were to just walk away from any of its debt, whether it’s because we apply something like Monod, monetary theory or we just simply shut down the Treasury Department, then all of a sudden you’re talking about the biggest financial asset class on the planet being thrown into question.

And in that sort of environment, if just the fact that this is even a minor risk, just the point that this is a point of discussion, is sending up American credit costs of ECB, the rest of the world, and that very rapidly turns into $1,000,000,000,000 question. Now, if for an economy the size the United States military, the size of the United States, the reach of the United States, the U.S. dollars, complete domination of the financial space, $1,000,000,000,000 question is almost a rounding error.

But you will feel it each and every time you make your credit card payment. Get a mortgage, get a car loan. This is now hardwired into the system until such time that we have a twist in our political system that injects a little bit more responsibility. That’s not going to be this presidential cycle.

Unifor Strikes: Issues with the Canadian Industrial System

Unifor – a Candian public service union – has declared a strike on the St. Lawrence Seaway (a crucial maritime transport route). This has essentially cut off the direct delivery of seaborne goods from the Canadian interior and will disrupt the entire industrial base.

Strikes like this shouldn’t come as a surprise. With the population in decline, labor shortages will become the status quo. That’s before we mix in policies like the Jones Act, which places added stress on the Canadian system.

As bad as this strike may seem, we’re only looking at the tip of the iceberg. And if employers don’t begin fostering healthier relationships with their workforces…

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.

Hey everybody. Peter Zeihan here coming to you from Grand Rapids, Michigan. And the story today on the 23rd of October is that yesterday a Canadian public service union by the name of Unifor announced a strike on the Saint Lawrence Seaway. And there’s a bunch of things that come from this. Number one, what the Seaway is. It is a system of locks, I think 14, that connect the western Great Lakes to the St Lawrence Seaway itself, which goes out to the Atlantic Ocean.

It is the primary artery for getting cargo from the interior of the continent as well as from all of Ontario and Quebec out to the Atlantic Ocean. A Basically without the Seaway, you can’t go up river beyond Quebec City. And so you’re talking about the bulk of the industrial base of Canada being affected by this. In addition, the Seaway is part of what allows the Erie Canal to work, which allows the New York area to access the interior of the continent as well.

So as long as it’s off line, what is traditionally the primary and cheapest method of moving cargo in and out of interior? Canada is off line. And it complicates things for the United States as well. We’re going to see a lot more stuff like this coming forward. One of the things that’s going on right now in North America is that we are experiencing protracted population decline because we’ve had low birth rates for 40 years.

Now it’s not nearly as advanced as it is in places like Northeast Asia or Europe, but it’s still a factor. And in the United States, specifically in calendar year 2022, the difference between the retirees who are 18 to 65 and the people coming into the workforce who are aged into 18 was just under a half a million workers shortage just in this calendar year.

And that number is going to continue to be negative for a minimum of the next 20. In fact, it’s just going to go up and up and up for at least the next 11 because the people already been born. We know exactly what the inflow into the labor market is for the next decade or two. Two decades. Yeah.

Anyway, so that’s kind of the first problem. The second problem is there’s not a good alternative for the Canadians, courtesy of something called the Jones Act. You really can’t use the American Waterway Network. It prevents any cargo from being transported through the American system unless it’s using a ship that is American built, owned, captained and crewed, which by definition eliminates pretty much everything that comes from Canada.

So we’re going to be seeing a lot of stress in the Canadian system and a lot of stress, especially in greens, a lot of interior Canada. Their only way to get to the wider world is to use the Seaway. Their only alternative is to use rail now to a place like the Quad Cities in Iowa or all the way to New Orleans, which is, you know, technically possible, but a lot more expensive anyway because of the worker shortage.

We’re going to be seeing activities like this over and over and over again in the United States. We’re having issues with the United Auto Workers in places like Detroit right now, where they’re on strike. And the folks up in Canada are thinking they should be able to get at least as much out of their operators as the strikers are aiming for.

And so the is a 30 to a 40% wage increase to be phased in over three years, but not say that they’re not worth it. I don’t know what I am saying. That is in an environment where labor is ever more scarce in North America, you should expect to see more and more and more industrial labor action at all levels.

And this is just part of the environment now, so you best get used to it. And if you’re an employer, you’re best built as positive a relationship with your workers as you possibly can because they have become something that we’re not used to thinking of workers in North America as a scarce resource, and they’re going to be priced accordingly.

All right.

The Third Shale Revolution: Reshoring Manufacturing

The third piece of the shale revolution is all about timing. As the world shifts from globalized supply chains to more localized and secure means of production, utilizing cheaper energy sources and products will be essential.

The US has become the lowest-cost-highest-quality producer of intermediate materials, meaning much of the leg work to reshore supply chains and manufacturing has already been done. So what do we have to show for it?

Between agriculture, wiring, textiles and refined products, the US has shaken up dozens of industries and ramped up reshoring efforts. While industrial construction spending has grown significantly, we must maintain that growth to retain this newly added competitive advantage.

Reshaping the US manufacturing landscape is no easy feat, but access to cheap power and materials surely doesn’t hurt. With the foundation already laid, the US has a considerable leg up on other potential sources like China and the Persian Gulf.

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.

Hey everyone. Peter Zeihan coming to you from Colorado where fall has firmly set in. Today we’re into the third part of a three part series on the shale revolution. The third shale revolution. Phase one was the production side. Phase two is processing and turning things into fuels and intermediate materials that we use in pretty much everything. And the third revolution is everything.

One of the truisms of the last 70 years of globalization has been that material production and manufacturing moves to wherever the competitive advantage happens to be, regardless of national identity. And that means that a lot of energy intensive industries moved out of the United States, particularly after 1973, because oil prices were cheaper or electricity high prices were cheaper, natural gas prices were were cheaper.

Or the processing process was less expensive, usually due to things like labor and environmental restrictions that we might have here that we don’t have in places like, say, China or Egypt that is in the process of unwinding that between globalization and a new appreciation for national security as a component of economic activity. More and more things are being reassured, and the shale revolution has gotten us a jump on this because the shale revolution has provided the United States with cheaper oil, cheaper natural gas, cheaper electricity and cheaper chemical products than anywhere else on the planet.

In part, that’s because natural gas is largely a byproduct here, but mostly it’s because the break even price and a lot of shale fields is now very, very low. And in fact, in the Permian Basin, which is the largest one in the United States, which is responsible for over a third of our overall energy production, it’s less than $11 a barrel on average compared to, say, places like Saudi Arabia, where it’s really cheap but still more than 20, or places like Russia, where with all of their Siberian work, you’re talking 30, 40 and even $50 a barrel.

So huge price advantage. In addition to the changing understandings of security. And what that means is the United States already this isn’t something that’s in the future, already is the lowest cost, highest quality, lowest pollution index producer of every one of the intermediate industrial materials that can come from energy products. And what we’re seeing now in this third phase of the shale revolution is those are being turned into manufactured goods.

And it’s really difficult to find a manufacturing subsector where this is not a game changer. Let me just hit a few of the highlights. First of all, agriculture, natural gas is turned into nitrogen based fertilizers. So where the U.S. is now the world’s largest producer and we’re seeing more and more of that value add chain come back. Even when the United States became the largest producer of natural gas and ethane, we were still shipping the intermediate products abroad, primarily to places like the Middle East or China for processing to finish fertilizer.

That is changing day by day for those who you think we should go organic help god. You are so bad at math. Organic fertilizers require multiple applications over the course of the year, which requires a lot more carbon input. In addition, they require about an order of magnitude more energy to produce in the first place. And if you’re going to be moving six, seven, eight, ten times as much of the stuff, you can imagine what the carbon footprint is for transport.

The same goes for pesticides. Most pesticides in the United States now are a once or twice and done for the season, as opposed to something you have to put on every few weeks in case you want to go organic. Another industry that’s seen a lightning change is wiring, which I know doesn’t sound very sexy until you realize you just go through your life and look at everything that uses electricity that includes your car.

Even if it’s not a an electric car. Anything with a wire has to have a protein. And those coatings are almost exclusively if you produce with some sort of petroleum derivative. Normally the wires are pulled from the metal close to the point of manufacture. So every industry that reassures is going to do more and more of that at home.

And since the coatings come from a petroleum derivative, the United States now has a huge economic advantage in addition to the security advantage over almost every other player. This means that whether it is automotive or electronics or semiconductor, there’s there’s a fairly large petroleum footprint that has nothing to do with energy. One of the things that folks forget is that we use petroleum for a lot more things than just burning.

And before 2015, about one fifth of the oil that the United States used was used in refined products that were not fuels. As we double the size of the industrial plant over the next several years, that number is probably going to at least double, especially if we continue down this path of ever more fuel efficient vehicles. More and more of the petroleum we use will be used for things where it’s not burned, which means that the carbon footprint is an order of magnitude less than it is for, say, gasoline.

Okay, what’s another one? Textiles. Not everything is cotton anymore. Any type of synthetic fabric. Like, you know, what I’m like or what I’m wearing right here. That is 100% of natural gas and petroleum derivative. And as such, that is the frontier in low carbon clothes making, because you don’t have to grow this. It’s just a byproduct of a natural form, of a natural, but of an industrial process where very little is actually emitted.

Polymers are all like that. Let’s see what semiconductors. I mean, obviously, the silicon is important and obviously you need dopey materials. But those dopey materials, as a rule, involve a lot of petroleum materials and there’s wiring throughout the entire process. In fact, it’s difficult to find a manufacturing sector where a petroleum derivative is not one of the top three or four components in it.

That’s true for automotive. That’s true for aerospace. That’s true for white goods. That’s true for heavy equipment. And now that all all of these materials are already being produced here, it’s really easing the pace at which the United States is reshoring industry from the rest of the world. So we have seen industrial construction spending, spending in the United States expand by roughly a factor of eight since just five years ago, and it’s almost tripled in just the last 18 months.

This is a good start. We need to do a lot more because we need to expand what we’ve done in these last five years by at least a factor of four and hold it there for at least another five years. And that will be inflationary and that will lead to labor disputes. And there’s a fierce competition among the American states as to where this stuff is going to go.

But the fact that the shale revolution has given us cheap power and cheap materials to do it at whatever scale we want. From a certain point of view, a lot of the hard stuff is already done. Everything else is a known quantity. Anyone else who wants to do this ultimately is going to have to import those materials, and there are only three real sources for them at scale.

China. The Persian Gulf. And here.

Gaza and Israel: The Start of WWIII or an Isolated Conflict?

We’ve all been following the events unfolding in Israel and Gaza, and questions of this triggering a larger conflict are starting to bubble up. To be blunt, this isn’t the start of WWIII, but let me explain why.

Of the countries in this region, there are no powers that (a) have the capacity or (b) have any interest in throwing themselves into the mix of things. The more significant concern for many is the possibility of a bigger player getting drawn into this.

The US has one thing on its mind – get our people out – everything is second to that. China might entertain the idea of involvement, but it simply doesn’t have the military capacity in this region. And Russia, let’s be honest…they have nothing to spare right now.

This region lacks a broad geopolitical significance that may otherwise entice external involvement, which means this conflict will remain an isolated issue for Hamas, Gaza and Israel.

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.

Hey everyone. Peter Zeihan here coming to you from No Lucky Milwaukee. Milwaukee. Okay. There has been a lot of discussion on social media in the media writ large about what’s going on with the Israelis in the Gaza operation and the term World War Three. And concerns of a broader regional conflict are everywhere. No. Just. No, no, no. There’s not a single third country that is likely to get involved in this, much less a real country like China or Russia.

So let’s start close to the situation. Explain what’s going on and then build out. So when Hamas launched their operation almost two weeks ago now. Well, no. Two weeks ago. Yeah. They caught the Israelis with their with the pants down. Looking at Gaza should have been be primary goal of an Israeli intelligence and it has been for 20 years.

The only real security threat that they face and they share a border with it and every text message and cell phone call that is made in Gaza goes through an Israeli cell tower. So they should have all the tools that we know about the people on the ground. We know that they’ve embedded within the system and they failed utterly.

So the only solution they have for rooting out Hamas is to go into the Gaza Strip and go house to house through an area twice the size of the District of Columbia with a population of 2.3 million and physically rebuilt everything from the roots. And that is a process that won’t take weeks or months. That will take years.

And when they’re done, they will then have to decide if they want to stay in occupy it or right of themselves, which they really don’t want to, or they leave and just let the next generation of whatever the replacement is for Hamas grow up. It’s an ugly situation, but it is a tempest in a teapot. It’s good for the region.

The only country aside from Israel that Gaza borders is Egypt. And people forget that the Egyptians control all the territory from 1949 to 1973 and hated it. I’d say that the only people that the Palestinians are more disliked by than, say, the Israelis are the Egyptians. And there’s absolutely no love lost. And it took Biden personally interceding to get the Egyptians to agree to allow aid into the southern crossings into Gaza.

The Egyptians would be thrilled if everyone in Gaza just dies. Jordan is a non-factor. Jordan It doesn’t really have a military worthy of the name anymore. Anyway, it’s a satellite state of Israel, so no problem there. Syria is in civil war and most of the fighting is going on in the northwest, in the northeast, parts of the country, which leaves the south.

Now, the south is primarily populated by Druze who don’t really care for the central government at all, but have sat out the war. And then you’ve got the Golan, which is unpopulated. So any effort by the central government or by the Iranian proxies in Syria would have to relocate forces from a hot front to open up a new hot front where there’s a buffer zone anyway.

And their chances of doing anything are very, very slim. I mean, this is not the Syria of 1972 when it had a military that’s been ravaged by the war and everything’s locked down. So they’re a non-factor. Then you’ve got Lebanon. Lebanon is a borderline failed state. Hezbollah is the militant group that is there. And they certainly don’t care for the Israelis at all.

But there’s two things that hold them back. Number one, they’re part of the national government. So there are other factions in Lebanon that would politically restrain them if they get too uppity, because they know that in the Israelis current state of mind, the Israelis would not think twice of sending in some assassins and just wiping out the entire government.

And that is a very focusing factor for the non Hezbollah faction factions within Lebanon. And then second, while Lebanon could definitely send Hezbollah could definitely set a lot of rockets into northern Israel, that doesn’t change what’s going on in Gaza. We’re honestly overtly shift the military disposition of the Israeli army. And Hezbollah doesn’t have an army. If they were to launch a ground invasion, they would be massacred.

So they are definitely the faction to watch, but the chances of them doing anything meaningful are very, very low. All right. Next, let the countries of Iran. The Iranians don’t have anything they can really do directly. They could launch some long range missiles. All that would do would be generates a huge amount of international condemnation. And get this, all the sanctions slammed back in in a matter of seconds might even get the United States through some slow boat trips by all of the oil platforms.

It just blow them to hell. We did that back in the 1980s. The target to watch there was a place called Kharg Island, which is their only, only oil offloading facility. You take that alone, that’s the end of the entire export industry for Iran. So it’s a question about whether they would risk that in order to do something symbolic that would have absolutely no impact on the ground.

They also have militants in Syria, but again, they’re on the wrong side of the country and they’re already engaged and if they crossed into Druse territory. The interesting because the truth about us look, they have always considered Hamas to be disposable. Hamas is Sunni and Arab, whereas the Iranians are Persian and Shia. And so it would be official position of the Iranian government is that Hamas, like all Sunni Arabs, are apostates and therefore should be wiped out and their alliance with them is purely tactical and they have played that card and now it will be destroyed and we’ll have to find a new card.

That’s Iran. That’s Iran’s entire position here. The only country that really matters. And it’s not military when it is Saudi Arabia, because the Saudi Arabians were carrying out talks with the Israelis on normalization. The idea would be that if you can get the major Arab states to recognize the existence of Israel, then eventually you’ll have this Arab wall versus the Iranians.

And it doesn’t matter what the Americans think anymore is, it’s all taken care of. The debate here is whether to continue those talks. There’s a generational split in Saudi Arabia. The older generation, the King. King Solomon likes the idea of China being the Palestinian cause and would think that if we’re going to normalize, we should get something of real substance for the Palestinians.

Maybe it’s more control of the West Bank, maybe it’s more self-governance, maybe it’s more money, maybe it’s official statehood. They’re flexible in what that thing is as long as it’s real. And then you’ve got the younger generation. Crown Prince Mohammed bin Sultan, he’s the guy who likes to dismember and barbecue journalists who couldn’t care less about the Palestinians.

He just wants them to all go away so he can get on with reshaping the region under his leadership. But think of King Solomon as the CEO who spends a lot of time fishing, and Mohammed bin Salman, the crown prince, as the CEO who actually runs the shop and we’re going to find out in the next month who actually is the major decision maker based on how this decision base of Israel goes.

But no one in Saudi Arabia is talking about resurrecting the sort of policies that Saudi Arabia enacted back in the 1970s when they created OPEC and basically shut down global oil markets until Israel was punished. That’s not even on the docket right now. So their discussion is relevant, but not from a war point of view. And that’s everybody in the region.

Let’s go out again. Start with the United States. We are not not not going to be putting boots on the ground in Gaza or Israel in order to fight this conflict or help the Israelis with the cleansing operation. So there’s never been something the U.S. has ever considered in any age, at any war in this region or anywhere else.

Israel in this region, sorry. Very important detail. What we will do is help them with intelligence and equipment and munition and what we will do is attempt to locate our own people. The Israelis have at least a hundred of their citizens have been kidnaped and take back into Gaza. There’s at least a dozen American Jews and the Israelis and the Americans have very, very different views when it comes to hostages.

The Israelis treat it as a non-factor because they don’t have they have limited resources. And if they allow their citizens to be kidnaped, allow that to dictate policy, they’re always going to be on the back foot. But the United States, number one, has a lot more resources to throw at this if it wants to. And number two, there’s a social contract between the American citizenry and its population.

Whoever you are, wherever you are, whatever you’ve done, whoever has you, we will come for you. But first we have to find you. And so the reason that we’ve got an amphibious assault group and MCU streaming to the area so that the Marines and the Special Forces have a platform to operate from. And there’s already very credible information that some special forces are already on the ground in Israel, liaising with the Israelis intelligence issues.

Hopefully, they’ll be found. Getting them out will be hideous because they’ve undoubtedly been split up and relocated to places of military significance to a loss, which means you have to go in on the ground with small forces and physically retrieve them. And that will not be pretty. All right. What else? Okay. So that’s the United States. Let’s talk China.

China can’t deploy forces past Singapore. I mean, there may be just doesn’t have a range. And in a question of Gaza, it’s just a political issue of what makes the United States look bad. And what we’re seeing here is an outcome of the catastrophic decisions that the Chinese have made over the last five, ten years in managing their own political system.

Chairman Ji is executed the messenger so many times that no one will bring him information and he’s making decisions in the dark and the bureaucracy is kind of run wild, trying to make the cult of personality happy. So they’ve sided firmly with the Palestinians so far, which is making a lot of people take note. Under normal circumstances, I would say that the Chinese have no interest in partnering with Iran because they’re the world’s largest oil importer and the Saudis are the world’s largest oil exporter.

And so they would sell out the Iranians in a heartbeat if it meant they could get a better deal with the Saudis over the long run. The concern with saying that firmly today is the decision making. The Forbidden City has collapsed so completely that it’s not even clear what degree to which JI is personally aware of what’s going on in the Middle East at all.

I’m guessing he knows more they normally would because Putin was just in town as part of the Belt and Road Summit and he probably got an earful and probably requested some more information for himself. But the capacity of China to play in this field is ridiculous. And I’m siding with the Palestinians when they’re more dependent upon the Arab states for their energy.

Security is something that has been noted in Riyadh and Abu Dhabi and in Kuwait City and all the others. The Chinese are dramatically out of touch, but regardless, they don’t have the capacity to put boots on the ground in this region. And then finally, you’ve got Russia. I don’t know if he has noticed that the Russians are in a war in Ukraine that is using all of their military bandwidth and are having a hard time operating in the Black Sea.

And they can’t get forces out of the Black Sea at wartime under a treaty called the Treaty of Montreal. So they can’t be could fly them commercially. Where would you fly into. Can’t go to Jordan. Can’t go to Israel. Can’t go to Egypt. Okay. Yeah, there’s absolutely you’d have to fly a commercial jet over the area and a parachute out the emergency exit.

I mean, just ask. Okay. So there is no one not no one. No one who is going to be sending troops or in into any sort of meaningful military operations. This is between Hamas and the Gazans and Israel, and that’s it. Economically, there’s nothing in play here. This region, Israel, Palestine, produces nothing, transits, nothing and consumes very little.

There’s not an oil story here. There’s not a lithium story or agricultural story here. There’s a horrible cleansing operation that’s about to begin, and that’s enough. But that doesn’t mean escalation is going to happen at all.

The Second Shale Revolution: Industrial Expansion

So, how did the US use all that crude oil and natural gas produced during the first shale revolution? As the need for industrial expansion grew, so did the American refining industry’s footprint.

That’s the essence of the second shale revolution – America could now turn that crude oil and natural gas into a suite of products, ranging from refined oil to intermediate chemical products.

This industrial buildout helped prop up the green transition by offering a flexible backup fuel source for solar and wind power. Ethane, a byproduct of all that natural gas production, gave way to the US becoming a major producer of fertilizers and plastics.

As the US continues to extract this light sweet crude, more processing capacity will be needed to handle the surplus. This will likely cement the US as the world’s largest exporter of energy and energy-derived products in the coming decade.

As you may have guessed, that’s not the end of shale’s story in the US…so I’ll see you tomorrow for part three.

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.

Okay. So yesterday we talked about the first shale revolution and how it basically gave the United States top level energy independence and natural gas and oil. Today, we’re going to talk about the second shale revolution, which is what we did with that. Crude by itself is of limited use. That’s if anything, it’s a big negative. You have to turn it into something else.

And so the second shale revolution largely is about building out the industrial plants starting in roughly 2013 to 2017 in order to massively expand the footprint of the American refining industry. And we added huge amounts of distillation capacity based on whose numbers you’re using somewhere in the equivalent of 6 to 7 million barrels per day of oil and oil equivalent to take all this oil and all this natural gas into turn into other things.

Now, natural gas you can use as a power plant, fuel, and it is the single largest source of electricity in the country, sometimes where between 30 and 40%, based on which state you’re in on average. And that has broken the connection between the United States and coal, which for a long time was our largest source. And so that switch by itself made the United States, the country on the planet that had reduced its carbon emissions the most in relative terms on a sustainable basis.

Now, there is more to it than that because it has also set the stage for the green transition. One of the big problems with solar and wind is, as you know, the sun doesn’t always shine and the wind doesn’t always blow. And so you need to have another source of energy to step in when green tech cannot deliver, especially if you’re not in a place like West Texas, where the sun is bright and the wind is strong.

The best fuel source for that that we have discovered so far is natural gas, because a combined cycle natural gas plant can spin up and down and in as little as 10 to 15 minutes, whereas a coal plant can take up to 8 hours and like a lignite plant, looks like what they use in Germany can be 3 to 4 days.

As a result, the Germans have actually seen the carbon footprint go up despite spending over €1,000,000,000,000 on green tech and transmission. And all of this is a side effect and I’m sure that the frackers who put all the natural gas in the system weren’t really thinking about natural gas and the green transition when they were doing their work.

The second thing to keep in mind is, for the most part, natural gas is a waste product with Michail sector. It doesn’t earn nearly as much on the open market as, say, oil or liquefied petroleum. Gas is like propane do, and it often comes up as a byproduct or co-production. And so it’s typically sold into the system at a loss.

So not only is the shale revolution made the United States the single largest producer of the stuff and user of the stuff, it’s at a price point that is significantly lower than everyone else, which is one of the reasons why the debate around things like the green transition in the United States actually hasn’t been nearly as rancorous as you might expect because the math has been a lot easier to do.

Having that backup fuel is all part of the Second Shale Revolution, and of course there’s more to it. Something called ethane often comes up as a byproduct of natural gas production, and ethane is a chemical that’s a little bit different from methane has an extra carbon molecule. And you can use it as the base material for any number of chemical processes.

For example, the creation of things like methanol and butadiene, which provides a whole product suite that includes things like fertilizers and plastics. And so the United States has become the largest producer of all these intermediate products as well. But the same happens with oil. There’s more to producing oil than simply making diesel and gasoline. You can make an intermediate product called naphtha, which goes on to make everything from bowling balls to insulation to diapers.

And the United States is now the largest producer in all of those as well. This second shale revolution has seen a tripling of investment into the space of industrial construction to bring all these refineries and chemical plants online. And we’re not done with the Second Shale Revolution yet. One of the freaky things about oil is it’s not all the same.

You have different grades based on contaminants and you’ve got heavy sours, which is what most of the American Petroleum Complex is designed to run on. And then you’ve got light sweets, which are rather very easy to refine. But our understanding back in the seventies, the eighties and nineties is the world had run out of that. Well, everything that comes out of shale is light sweet, because it’s trapped at the moment of formation.

It never migrates through the rock strata. It never picks up mercury, the sulfur or anything else. And because of that, we actually have a massive oversupply of light sweet in the country to the tune of 5 to 7 million barrels a day of crude oil. That’s the final stage of the second shale revolution will be building up the processing capacity to process that as well.

Now, the United States is already a net exporter of pretty much every energy product. And as we build out the refining complex in order to take advantage of this local surplus, we’re also going to become the world’s largest exporter of pretty much every energy and energy derived product as well. And that’s all probably all going to go down in the next 5 to 6 years.

And that sets the stage for the third shale revolution, which we’ll talk about tomorrow.

The First Shale Revolution: Humble Beginnings

With ExxonMobil’s acquisition of Pioneer, it’s time to kiss the days of mom-and-pop shale operations goodbye. But before we look at what’s next, let’s look at the shale journey over the last two decades.

Thanks to high oil prices in the early aughts, small shale operations could innovate and develop new techniques for extracting that black gold. Once the US was close to achieving energy independence, super majors caught a whiff of the money and started buying up those smaller producers.

This recent acquisition signals the end of an era as the super majors now dominate shale production. So what does that mean for US shale? While there will be less innovation and slower production growth, ExxonMobil will provide more stability to the industry.

But that’s only the beginning of this story…we’ll be breaking down the second shale revolution tomorrow.

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.

Hey everybody. Peter Zeihan here coming to you from Colorado, where the big news from last week, which was a believe the 10th of October, was that ExxonMobil, the energy supermajor, has bought up a company called Pioneer with an all stock by about $60 billion of stock. Pioneer is the single largest producer in the shale fields in the Permian Basin, which is the most productive energy basin in the world now.

So I thought it would be great to kind of take a walk down memory lane and then take us forward into what’s going on with the energy sector in the United States and the wider world starting Michele. So short version is that there have been multiple phases to the shale breakout. It all started back in the early 2000s when the United States found itself facing kind of a double bind.

We had had a coup in Venezuela, which had taken one of the major suppliers of crude for the Western Hemisphere off. And the Iraq war had started. So a major source in the Eastern Hemisphere was offline. And energy prices hit near record levels in a very short period of time. And there’s nothing like high prices to trigger the sort of activity that’s necessary to bring new supplies to the market.

And a lot of technologies that had been part of the energy matrix for decades, in some cases over a century. They started to play with them in new ways. So the two issues in question were something called fracking, which is basically injecting water into a well with a suspension of sand in order to crack the rock. And then you pull the water back out and the sand stays behind and props open the cracks.

We’ve been doing some version of this for over a century, but that was now being combined with something called horizontal drilling, where instead of just going down and punching through a cap rock to get to a reservoir, you go down and then you go laterally across a rock strata. Shale is different from normal crude. Normally, the crude migrates through the rock formation until it hits some sort of non-porous rock that it can’t pass through.

And then it builds up into kind of a pool with a lot of pressure. So when you punch through the tap rock with a drill bit, you get pressure that pushes the oil out. And then eventually you can pump water down into that formation in order to loosen up more of the oil and get even more out. Shale is different because the rock itself was never porous, and so the little bits of energy are trapped almost at the moment of formation within the rock strata.

And so you’ve got to break them out. It’s neither of these technologies were really new, but combining them was. And as is normal, when new technologies come to the fore, it’s not the big players who do it. It was the small players. So this is not ExxonMobil or Chevron or ConocoPhillips or Total or any of the rest. These are mom and pop operations who only own a few acres of mineral rights, who would drill everything that they had.

Now, the economics of that are maybe questionable, but remember, we’re in an environment of much higher oil prices. So you had small operations that were desperate to find a way to crack the code on new technologies in order to stay in business. And since we had high prices from roughly 23 until 2008, they had a long period of high prices that they were able to operate in.

And for small companies, that meant a lot of innovation. And so we developed dozens of new techniques, kind of clustered into these two general categories. And that brought a lot of natural gas, which was easier to produce into the market. And by the time we get to 2008, we’re starting to do the same thing for oil. And of course, we had the financial crisis, so everyone got hammered.

But then we had Wall Street, who was looking for new investments. And since these small mom and pops had done so well for the last few years, there was a lot of money that came in from the stock market or bonds or joint ventures, whatever it happened to be. Now, by the time we get to 2013, 2014, these technologies had matured quite a bit, and the United States was very, very close to achieving technical energy independence.

And that meant that the super majors started to come to play. Now, starting back in the 1970s, when U.S. energy production really started declining and force the super majors knowing that there wasn’t anything left in the United States with how they understood energy production, they went abroad and well, things got ugly. Most of the countries that they started producing energy and whether it was in the Middle East or off the coast of Africa or South America, didn’t have very strong rule of law.

The local energy partners were tended to be pretty corrupt and it was a crapshoot, especially since a lot of these projects were in areas with limited infrastructure. It could take ten years of investment before you saw any return, and then it might just be nationalized. So they kind of had a crap sandwich for 30 years. Well, then they look back home and they see this flotilla of small companies just making bank.

And so they started coming back to the United States and buying of the shale plays and buying up the engineers. And sometimes even these smaller companies in total in order to learn what had been developed back home. They saw a lot of familiarity because, you know, these two technologies were not breakthroughs. And of them themselves, the the the technique of combining them, that’s where the interest was.

And so year after year after year, the companies came back in greater and greater force. The company that was first for that was ChevronTexaco, because it had a lot of legacy production from the Permian Basin in West Texas, which had been part of previous oil booms. But it also had 20 layers of shale. So they were able to use their preexisting mineral rights and buy up some of the talent that was available and apply it to what they already had.

Exxon didn’t have that option. Exxon just had to come in and bye bye, bye, bye bye. And in the meantime, Pioneer, which is a company that dates back to the T Boone’s Pickens days, if you guys know that name was a legitimate producer in its own right, but it too was just basically was hoovering up all of these small companies for a decade.

You fast forward today, ExxonMobil is like, okay, okay, okay. The crap sandwich that is the international energy industry that’s not nearly as hopeful as we thought it was going to be. So we need to do something a little bit bigger. And so they found the single largest player in the Permian Pioneer. And just and when when Exxon does a merger, whoever is after the Exxon part is still, you know, technically it’s ExxonMobil, but Mobil’s long gone.

So basically, there’s been absorbed into the Borg behemoth that is ExxonMobil. Which brings us to today. This is probably the end of the first shale revolution because the character of it all, these small companies doing massive innovation that is now pretty much gone. And the majority of the shale production in the United States now is owned by the super majors again.

So we’re back to where we were in the seventies. That doesn’t mean that production growth is going to stop. That doesn’t mean that innovation is going to stop. But things are definitely going to slow down now. Exxon has a lot more market control. It has a lot more market discipline. And when you’ve got a small company that only owns a few acres, they will drill every theoretical spot that they think they can get oil out of.

But when a huge company owns hundreds of thousands of acres of mineral rights, they’re going to drill the best spots. And when those are tapped, they will then do a little bit more targeted innovation on the next best spots and so on, which means we should expect production growth to be less frenetic than we’ve seen in the past.

It doesn’t mean it’s going to stop. But, you know, in the last 15 years, the U.S. shale sector has set records for added production, I think, in nine of those years. Those days are probably behind us, will probably never add more than a million barrels a day a year again. But, you know, records exist to be broken. We’ll see now from the point of view of a normal person at the end of the first show, revolution isn’t going to seem very much different, but from within the industry, it’s going to be pretty significant.

Kind of the defining characteristic of ExxonMobil is it has all the stuff that it needs in-house. So it can’t just use these technologies or carry them forward. It can do so at scale and kind of turn it to an assembly line process. It’s much more reliable and gets more output for less input. Perhaps just as importantly, the defining characteristic of small companies is they don’t have a lot of cash, so they take it from wherever they can get.

Most of these aren’t publicly traded. So you’re talking about loans or bonds or joint production ventures or whatnot, whereas Exxon can fund whatever it wants. So in the old days now, 5 to 15 years ago, small companies were dependent upon getting capital either from regional governments or banks or Wall Street. Well, that pretty much ceases to be a concern with Exxon.

And they can do the investment day in, day out, based on their own short, mid and long term economic forecasts. And this should generate a lot more smoothness in terms of production output. But it also means that a lot of the financial ups and downs that we have seen in the energy sector that were related to things that had nothing to do with the energy sector, those are probably behind us, and it should make all of this a lot more reliable in the time to go.

And it’s time now to start talking about the second shale revolution, and we’ll hit that tomorrow.

India Assassinated a Sikh Emigrant on Canadian Soil

While giving a parliamentary testimony, Canada’s Prime Minister, Justin Trudeau, accused the Indian Government of assassinating a Sikh emigrant living in Canada who supported an Indian separatist group.

Intelligence from the Five Eyes has revealed that Trudeau’s claim was valid. This is significant because it means India is willing to “take care of business” outside its borders and could impact the entire Indian diaspora globally.

This will undoubtedly strain relationships between the Five Eyes and India moving forward, but there are still greater power politics at play. Although India’s stance will tarnish some relationships, it will still benefit from the anti-China actions taken by the West and the rest of the world.

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.

Hey everybody. Peter Zeihan here coming to you from Colorado today. We’re going to talk about something that you guys have been writing in for weeks about what is up with the Indians and the Canadians yelling at one another over this assassination plot. For those of you who are unaware, the Canadian prime minister, Justin Trudeau, accused, who actually kind of mentioned it in passing in a parliamentary testimony that the Indian government had assassinated a Sikh emigre on Canadian soil.

The guy had Canadian citizenship. He had renounced his Indian citizenship. But the Indians have never liked this guy because he supports one of the separatist groups in India. It wasn’t a group that was part. I mean, this issue has basically been resolved in India’s favor. But he didn’t stop talking about it while he was abroad. And so as the accusation goes, the Indians wanted him dead and did it.

This has a number of implications. It took me so long just to kind of get to the bottom of it, because it involves intel that hasn’t been made public for the most part. But let’s say five things. Number one, looks like it was true. The intelligence didn’t come from Canada. It came from the United States and the Five Eyes system.

Five Eyes is a group of five Anglo countries Canada, Australia, New Zealand, the United Kingdom and the United States that share intelligence on almost everything. Anyway, the intelligence originated from the United States because that’s going to sound weird. Or maybe not. The United States has much better intelligence capabilities in Canada than the Canadian government does. So yeah. And then it was verified by the British government.

And the Brits have much better information gathering in India than the Canadians do. So all of the five eyes have basically kind of quietly said Canada was right on this one. That makes things a little bit complicated because, two, we have never seen the Indian government assassinate anyone outside of arm’s reach of their own borders. This is a fundamentally new capacity for them.

Now, assassinations are a little bit coming into vogue. The Russians have obviously picked up the pace for that considerably, even before the Ukraine war with radiation and poisoning and polonium being their preferred methods, although they’re not afraid of a gunshot to the head. And if you ever see somebody jumping out of a hospital window, that was only an assassination.

These kind of Russian culture are the Americans, of course, are are fans of it, too, as long as it’s done by a drone where we really frowned upon it when it’s done in person for some reason probably left over from the Cold War issues. And then, of course, the Brits are good at it anyway. Seeing this with India is significant because the Indian diaspora is arguably the largest on the planet, and if the Indian government starts patrolling it using extraterritorial and extralegal means that is going to rub a lot of people wrong in a lot of places, and eventually it’ll probably end up offing someone that actually matters to a government and not just because

it’s a citizen. So this is not yet a really big deal, but it has the potential to become a very big deal in the not too distant future. Number three, Canada is among the largest destinations for Indian students traveling abroad, and the Indian diaspora in Canada has become its fastest growing ethnic group. Now, obviously, the people who leave a country are not Brazil patriots.

So expect to see a lot more agitation within Canada as a result of this, as opposed to quieting down. If the Indian goal was to quell discussion of these topics, they probably just achieved the opposite because Canada, for all, for its faults, is a free country with a more or less free press, even if it is a little bit slanted, in my opinion.

And it’s very easy for anyone to say anything about anyone, anywhere. And because of freedom of information and the ability to send electrons around the world in a second, that will generate actually a lot more publicity in India as well. So this probably wasn’t the smartest play by New Delhi if their goal was to keep this very, very quiet.

Okay. More significantly, number four, relations with India. You know, by the five eyes putting their stamp of approval on the Canadian statement, that obviously raises the question about what relations between the Brits, the Australians and the Americans are going to be with the Indians. The Americans and the Australians are in the quad grouping with India, which is a kind of a security talk shop.

And the Brits obviously have ongoing relations and economic and otherwise with everyone who’s in the Commonwealth in their former colonies. So if you’ve got a major power, India starting to do things that are incredibly unsavory from the point of view of democratic norms, that is absolutely going to impact relations. The question is how much? The issue for the Americans and the Australians, of course, is China trying to try to try to China.

And honestly, I don’t think in this relationship we’re going to see too much of a change. Which brings us to the fifth issue, which is the nature of great power politics. When you have identified a country that you see as a large threat, a lot of the niceties that dominate the normal diplomatic and economic discourse fall by the wayside side in favor of hard security concerns.

And that means you are willing to partner with different sorts of countries and personalities that you normally wouldn’t even consider. So, for example, when Hitler was on the scene, we were best buds with Stalin, sent him billions in today’s terms, tens of billions of dollars of military aid in order to fight off the Nazis. Then when Hitler fell, we got into bed with Mao, who was the greatest mass murderer in history, in order to counter Stalin.

So the idea that we would partner with a mostly democratic but little bit unsavory India in order to counter what has become the most totalitarian government in the world. That’s an easy decision to make, but it does mean that the nature of the American and to a lesser degree British and Australian relationship with the Indians is going to change.

We never considered Stalin or Mao or French. They were allies against a very specific threat. And when that threat was neutralized, the relationship changed again. Now, there are a lot of decisions that Indians are going to have to make in the next several years as actions against the Chinese heat up. And the question will be whether or not they want a more productive relationship with these Western nations.

There’s a lot of water under that bridge. The answer may very well be no, but that means India will be doing Indian things with Indian policy for Indian interests. And to be perfectly honest, looking back on the last 70 years, that’s not much of a change. India unofficially sided with the Soviets in the Cold War, but they were very big on non-alignment for the most part carried it out.

What we’re seeing today is just kind of the slightly greater power equivalent of that same sort of political ideology. Now, sitting here in the United States, it’s easy for me to wag my finger and say that this is not the best thing for India or Indians, but I don’t get a vote in this. This is a decision to be made in New Delhi specifically, and to be perfectly blunt, in a world where lots and lots of countries are aligned against the Chinese and in my opinion, the Chinese are long for this world.

India is going to do very well regardless of what the relationship with the West happens to look like. This is their decision. Doesn’t mean we have to like it.

The Southern U.S. Border: Venezuelan Immigration

Today, we’re peeling back another layer of the U.S. immigration onion – Venezuelan immigrants. Since Hugo Chavez took power in the late 90s, Venezuela has been spiraling into a political and economic crisis, so fleeing the failing state is the best option. (The damage inflicted was so deep, and his successor so incompetent, that Chavez’s death didn’t help at all.)

These aren’t the typical low-skilled immigrants showing up at the southern border; these Venezuelans are highly skilled and educated. This begs the question – could this be the solution to the US labor shortage? The short answer is no, at least until immigration reform occurs.

But the long and treacherous journey these Venezuelans make isn’t for economic reasons; it’s simply to avoid starving to death in their home country. The dynamics of the southern U.S. border are changing, and Mexico’s role will also evolve.

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.

Hey everybody. Peter Zeihan here coming to you from chilly Colorado, where fall has definitely set in. Today, we’re going to talk about the situation on the southern border as regards a very specific group of people, the Venezuelans. For those of you who don’t follow South America, Venezuela used to be one of the most advanced countries in the developing world with excellent health care, education and infrastructure.

But in 1988, a populist by the name of Hugo Chavez won an election and took the country down the path into populist desolation, complete with a gutting of the industrial base, the destruction of the oil sector infrastructure fell apart over the next 20 years, and as of three four years ago, the country actually fell into famine, which is just bonkers because this is a country that used to export about 3 million barrels a day of crude and be a significant food exporter as well.

Today, well, as of the first of the year, oil output had dropped down to nearly a half a million barrels a day. They’ve increased that by maybe a third to half. At this point, well, but they import over 80% of their food. And while they’re in a bit of an ideological war with the United States, most of that food comes from the United States via Colombia, which is a country that the socialist ideologues in Venezuela say that are their enemies.

Anyway, the whole place is falling apart. Something like 7 million people have already fled the country out of a famine, population of over 40 million and more coming every day. Most of those people, single largest chunk over 2 million, have gone to Colombia. Most of the remainder are elsewhere in South America, and roughly a half a million have made the very long, very dangerous trip through the Colombian jungles and mountains.

Through the Darién Gap was a section of lowland jungle where Panama meets South America. Then, all the way up through all of Central America and all of Mexico in order to reach the United States. A couple of months ago, the Biden administration granted them a degree of protected status because these are not your normal migrants. When we think of migrants today on the southern border, we’re not thinking of Mexicans.

Mexicans are way too skilled and the situation at home, despite the crime economically, actually is pretty decent. We haven’t had positive migration out of Mexico to the United States in 15 years now. In fact, it’s been negative in most of those years with more people going home than the other way around or American Snowbird in, for example. Venezuelans are different.

Most of the Mexicans who migrated in the eighties, in the nineties, in the 2000, the 20 tens didn’t come from northern Mexico, which is the wealthy part of the country, or central Mexico, which is the political zone. But the southern areas that have kind of been left behind. They’re of a different ethnic stock. A lot more indigenous blood education levels are lower.

And that’s why Mexicans in the United States have a reputation for doing manual labor. The Mexicans who have doctorates for the most part, stay home or work in northern Mexico, and there are a lot of them anyway. The flows more recently have been Central American countries, most notably Honduras, Guatemala and El Salvador. All countries that are flirting with failed state status.

And so their infrastructure is poor, education is poor, economic outcomes are thin. Agriculture is limited to tropical, which is very low value added, does not require skilled labor force. And so these are people who are desperate to look for anything else. And so, ironically, America’s capacity to interdict migrants is seen as a plus because it means their state capacity here in the United States, which they don’t have at home.

And as long as their countries are failing, they’re going to continue to look for ways to come here. Venezuelans are from category. Any Venezuelan who is over age 45 is one who was educated in the pre Chavez days, and that means he or she benefited from one of the most sophisticated educational experiences in the entirety of the developing world before Chavez drove the entire place into the ground.

So these are people with tradeable skills, master’s and doctorate degrees, and they are walking 3000 miles for a chance to avoid famine. So I’ve often said that the only way to keep the Central Americans out is to basically shoot anyone with a tan who tries to cross at the border. That wouldn’t work for Venezuelans because where they’re coming from has fallen so far.

Its standard of living, arguably, is now below that of the central American states and is going to get worse. We are looking at outright state collapse in Venezuela and everyone who has something that’s portable, mostly a skill set, is on their way to somewhere else. So a few things to keep in mind. Number one, we are facing the labor shortage in the United States that will not let up for a minimum of 20 years at some point, the American political system is going to have to deal with that.

And our options are fewer goods, fewer services, especially for retirees and much, much higher inflation or a degree of immigration reform. Now, I don’t think we’re going to get that in the near term. It will coming up on a political election year. Both the Trump team and the Biden team are furiously anti-migrant because they’re trying to court the unions into their political coalitions.

And the unions are arguably one of the two top most anti migrant and immigration groups in American politics today. So we’re not going to get it anytime soon. And of course, in the short term, Congress is not functioning because we don’t have a speaker for the House. So there’s that to a. But these are the sort of people, honestly, that the United States has always said that it wants skilled labor, not unskilled labor.

Second, no matter what happens on the border, no matter what our policies are going to be, these people are going to keep coming because their state is literally dying behind them. And what limited capacity we have to fly them home just starts the journey again because the alternative is to starve. So that’s not great. Perhaps third, most importantly is that the nature of Mexico has really evolved in the last five years.

The Mexican birthrate started to fall 35 years ago when NAFTA was operationalized, which means that the Mexican birthrate has been falling steadily that entire time and now is only just barely at replacement levels. That means Mexico has become a net destination for inward migrants. And so for the first time and all of these conversations about the border, we actually have the Americans and the Mexicans more or less coming to the table with a similar point of view.

And that is going to provide some interesting opportunities, especially since we can’t get any sort of legislative change when it comes to managing the flows. I don’t mean to suggest for a second that the situation on the southern border is about to solve itself. Hardly, but it is about to change pretty significantly in ways that are going to have a hard time wrapping our minds around.

We’re seeing more and more skilled migration coming up from the South and that’s not what we have set in our mind. So changes to come. We’ll see where it leads.

Israel, Hamas and Gaza: Q&A w/ Peter Zeihan

In the early hours of October 13, Israeli military officials issued an evacuation order for the residents of Gaza City, a sprawling metropolis with over 1 million people. This evacuation order has warranted an early release of our Q&A video, initially scheduled for Monday.

Within this video, I’ll break down what’s going on with Israel and Hamas, what this means for the Gaza Strip and the implications for relations in the region and wider world.

As this continues to develop and you have more questions, feel free to drop them at this link.

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.

Hey everybody. Peter Zeihan here coming to you from Colorado the morning of October 13th. We just had our first very light snowfall. The news is that last night, my time and early in the morning on the 13th, the Israeli government ordered all the citizens, the Palestinians of Gaza City, to evacuate to the south because their assault is imminent. The Israelis are going to be rolling in with a significant ground force with the intent of rooting out the entirety of Hamas leadership.

And maybe they even have some indication as to where their hostages are evacuating a million people, plus, which is what lives in Gaza. Two other places within the Gaza Strip, which is the most densely populated spot of humanity on the planet, is a practical impossibility. Of course, people on the other side of the argument are going to say it would have been really nice if Hamas had given the Israelis 24 hours to evacuate before their assault problems on all sides.

Anyway, we had recorded a lengthy video answering to as many of your questions as possible on what’s going on with Israel and Hamas and the Gaza Strip and what it means for wider relations in the region and beyond. The intent was for that to publish on Monday. But in light of this development, we decided to go ahead and release it.

Now, everybody, Peter Zine here coming to you from fall in Colorado. Lots and lots and lots and lots of you who had questions about what’s going on in Israel with the Gaza assaults. I’ll do my best to kind of rapid fire through these. So many questions. Okay. Question number one, how did the Israelis not know? Israel supposedly is the gold standard for intelligence and there aren’t a lot of things in the area that honestly they need to worry about all that much.

If you look at the big picture, Lebanon is a known quantity. Yes, Hezbollah, there is a problem, but Hezbollah is a political party in Beirut. And so there are lines of communications. There’s phones you can tap. And while they’re always worried about fighters in the hills of southern Lebanon launching attacks, whether rockets or missiles or artillery across the border, it’s kind of a known quantity and there are avenues to gather information.

So it’s an issue, but it’s not a critical war series. And civil war hasn’t been a problem on the Syrian border in over a decade. Actually, honestly, it’s been a problem on the Syrian border in three decades, especially since the Israelis literally control the high ground in the Golan Heights. So that’s not an issue. Jordan’s a satellite state that is dependent upon Israel for economic support.

So that goes away. Egypt is functionally an ally and the bulk of the Egyptian population is on the other side of the Suez Peninsula. So there’s just not people there that can theoretically cause problems. That just leaves the Palestinians and there is no one thing for the Palestinians. It’s Palestinian territories are broken into two chunks. The first one is on the West Bank of the Jordan River and kind of a crescent around Jerusalem.

And here you’ve got the PLO who is basically calling the shots. And while the relations between the Israelis and the PLO are Palestinian Liberation Organization, for those of you who don’t drink the Kool-Aid, while relations aren’t ever good, it is a semi functional local government and there are relations and that means there’s ways to monitor what’s going on.

And so that area has been relatively quiet. And then there’s Gaza where Hamas took over what’s been about 15 years now. Gaza is basically an open air prison that houses 3 million people. It’s about twice the size of the District of Columbia. So it’s one of the most densely populated places on Earth, heavily industrialized lifestyle, but no industrial inputs.

All the food from 90% of the food, 90% of the energy is imported along with all the liquid fuels. So to think that this zone could create a industrial power that controls Israel is of course laughable. But to think that people living in a prison camp, knowing that the height that they could aspire to be mayor of the prison, that’s as good as it gets.

You can understand why some less than savory ideologies might bubble up and why people might think that the situation is hopeless. Or when I go kill a bunch of people, I don’t mean that as justification and just as explanation. Anyway, this is the 1b1 the one thing that the Israelis have always been obsessed about. That’s where all of their microphones appointed.

And so the fact that they missed this is just mind boggling, because there were hundreds of fighters involved, dozens of vehicles using six different transport options. And the Israelis missed it all. Which leads into the second point. In Israel, there will be political connotations here and it will lead to the fall of the Israeli government. Now, the Israeli government was never particularly popular.

And so they’re enjoying at the moment a bit of a rally around the flag moment. And Netanyahu was smart and reached out to all the opposition parties to create a national war council to prosecute the conflict. He really needed to do that. He did do that. But the civilian government underneath that, that’s someone that’s in trouble. Part of its demographic.

The Israelis have some laws that protect basically people who commit themselves to Judaism. So if you’re studying to become a religious scholar and all you do is study the Torah, you don’t have to pay taxes and you don’t have to serve in the military. And that means that you can have lots of kids and don’t have to pay for them, which, you know, encourages people to have kids.

And that means somewhere between ten and 30% of the population, based on where you draw the line of the population, basically doesn’t work but can still vote. And think of that relative you have who’s on disability insurance and doesn’t work and who sits in his La-Z-Boy all day and bitches about how people are screwing up the world a problem and they are a rising demographic because of population growth.

I mean, the demographic and that means that they have been the king maker in any number of governments in recent decades. And they are a strong, strong minority within the Israeli system, and there’s no way to get rid of that. One of the many, many outcomes of being Jewish in a post all the cost world is that you value the opinion and you refuse to silence the voices of anyone within your community.

So the political system in Israel, it works on something called proportional representation, where you vote for a party and if the party gets 10% of the vote, they get 10% of the seats. Normally, if you’re going to have a political system like this, you want to have a floor so that the real whack jobs don’t get into government.

And in Israel, there really isn’t one functionally because they don’t want to silence anyone’s voices. So you have this whole rainbow of whack job right wing parties, right? Which is probably about the right term, is to call them religious fundamentalist parties who are supporting the current government. And they’re not very good at what they do because they’re coming from a stock of people that doesn’t value secular education at all.

So here in the United States, we’ve got Matt Gaetz gets the Florida guy who caused the downfall of Speaker McCarthy and basically made the American Congress nonfunctional. Take him take his awesome hair away and clone him. And that is roughly 40% of the Israeli government right now, people who are absolutely mind numbingly incompetent but have very firm ideas on how the world should work.

And they’re the ones who are now having to explain how they have presided over the greatest intelligence debacle in the world in the last 50 years. That will have consequences. So let’s do a Ron next. At the moment, there are no smoking guns indicating that Iran is behind this. But I would be shocked if they didn’t put their finger on the scale, at least for the timing.

Also, considering the various ways that the Hamas fighters launched into Israel that required nonstandard supplies, which had to come from the outside, and Iran is the most likely suspect. But really, it’s about the timing. The Saudis and the Israelis were working on a normalization process that if it would have completed, you would have taken the most powerful country in the Arab world, Saudi Arabia, economically, and as well as one of the larger ones.

And put it basically in the same bucket for security issues as the Israelis. And that would have triggered a number of other countries to follow suit, including places like Oman and Kuwait. And if that would have happened, basically the Iranians would have been facing a wall wall opposition throughout the entire region. Because, remember, the Iranians are Shia and Persian, where most of the region is Sunni and Muslim, Sunni, Shia being the two sets of Islam and Persians and Arabs being the ethnicities.

If that had happened, Israel would have been able to basically work through the Arab world to contain, be the Persians, the Iranians. And it would have been a downhill slide from there, no matter what happens with policy for anyone in the rest of the world. So they had a vested interest in disrupting that and we will probably find out in a month if it worked or not.

There’s an argument going on in Saudi Arabia right now about what to do and how much value to ascribe to the Palestinians. There was one pro forma news release that came out a couple of days after the attack, and that’s been it, although and I can’t underline this enough, this is not an alliance and Hamas is not a proxy of Iran.

Hamas is doing Hamas things for Hamas reasons that are defined by their position in Gaza, living in a prison camp. The Iranians think at best that the Palestinians are animals. Remember, there’s a religious and an ethnic split here. Hamas, like the Saudis, are Sunni and are Arab. And so the Iranians officially consider Hamas, the Palestinians and the Arabs in general to all be apostates and therefore worthy of elimination.

So if there was a deal on the table for the Iranians from anyone on anything like trying to get a discount at Red Lobster, they would sell out Hamas in a heartbeat. And that may well happen considering everything being up in the air these days diplomatically in the region. OC For thing what to expect next in the war, it’s going to be awful.

Hamas is not a unified organization and we’re not talking about the Catholic Church here. We’re talking about an institution that officially runs the place. But they import all their energy and their food. So they in charge of a little bit of distribution, and that’s about it. Security is managed by dozens of independent factions who pay at most lip service to the central government of the Hamas led Gazan government.

And that means that each faction does their own thing in their own way. And the challenge that the Israelis have always had is figuring out who to hold responsible when one of these groups does something. And because if you punish the Hamas formal civilian government for something that a militant group did, it’s not like the formal civilian government has tools or even awareness over some of these factions.

And best guess here is that we have a new faction in play because we see new tactics, new approaches, new aggressiveness, new seem of absolute brutality that we have never seen in the Palestinian movement before. And with that in play, the Israelis are doing what now? The key, and they’re trying to dismantle all of Hamas. So everyone that they are aware of who is in the Hamas chain of command and any faction they’re targeting for elimination now, and they’ve already delivered something like 4000 tons of explosives into the Gaza so far, basically wiping out the entire human infrastructure of the entire organization, every individual faction.

But considering the intelligence failure, that means they’re probably missing the one that actually did the attack. And the only way that the Israelis might be able to find and eliminate those people is by going into Gaza hard on the ground and going building them by building room by room until they find the people that they’re looking for and kill them all.

So you’re talking about a building by building scouring of a zone with 3 million civilians. That will likely take months, if not years. And the human damage will be immense because again, this is a zone, densely populated industrial area with no food or water or power. The scale of the devastation is something we have not seen since at least World War Two.

I think the closest one that I can imagine would be the Russian siege of Grozny in the nineties, which conservatively killed 20,000 people out of a population of a quarter of a million. You’re talking about a zone with so many more people. So no matter what side of this that you are on, be careful who you condemn. No one is in a good situation.

No one is going to come out of this looking good. No one is going to come out of this anything but bloody and bruised and scarred. So careful you condemn, except, of course, the terrorist who do the attacks pluck those guys. Okay, finally, the American angle. The idea that the United States didn’t see this coming, that doesn’t really strike me as an intelligence failure.

Just we have to focus. U.S. has a lot of interest in a lot of places and a lot of eyes and ears, but it has to focus on the places where it sees a strict national interest. Of late, most of that activity has been in the Ukraine zone. So Moscow, Kiev, places in between in order to assist with the war effort.

Israel is a capable country that largely takes care of itself and we have zero interest in Gaza because there’s nothing economically there. It doesn’t sit astride any sort of transport routes. It has no resources. It’s not a manufacturing hub. It’s not an intellectual technological hub. It’s a camp. So we basically let the Israelis deal with that because it’s their concern.

That’s how we deal with pretty much any zone where we don’t have a direct national interest. We outsource to the locals. Okay. But we now know there are at least a handful of Americans who were involved in the attacks on the receiving end and who were kidnaped and taken back into Gaza. And that’s a problem. The United States is not a perfect place, but part of the social contract between the American population and the American government is no matter who you are or where you are, no matter what you have done, we will send to the Marines for you.

But first, we have to know where you are. And since the Israelis had such a colossal intelligence failure, there’s no one to ask which puts the U.S. in an awkward position. There are really only two approaches approach. Number one is you put every eye and every ear that you can spare on the Gaza just to find a couple dozen people.

That’s a huge expenditure of effort for very little payback. We’re going to do it, but that’s a lot of things we can’t be doing instead. And once we know that, we will send in the Special Forces and maybe a marine group and basically blaze a path in and get them out and hopefully it’ll go better than what happened in Iran in 1979.

Feel free to Google that. If you’re under the age of 40, you don’t really catch the reference.

There’s only one other approach that might garner something working from the theory that the Iranians put their finger on the scale for this assault. The Iranians are the only people who have meaningful access to the people who actually carried out the assaults. The first rule of intelligence is you have to go where the information is. Sometimes Americans forget that we put a lot of effort into breaking people who had nothing to do with it because they just happened to be proximate.

For example, waterboarding Osama bin Laden’s driver didn’t get much, but in this case, the people who know something are friends or at least coworkers with the Iranian government. And that means one of the very, very, very, very few places where the United States can turn for information on where to send those special forces is Tehran. So regardless of what you think of the Trump administration or the Biden administration or American approaches to the Middle East in general, we now have a clear and present reason to engage with the Iranians in order to get the information that we need to fulfill one of our most basic sacred social contracts.

And that’s the only way forward for us. What happens in the rest of Gaza, from the American point of view, has now become secondary. It’s all about getting our people back, and that is not going to be a pretty process. Okay. One of these days, people are going to ask me friendly questions, but that’s probably not going to be for a while now.

So everyone take care and I will see you again soon.

Why Rising Capital Costs Could Kill Greentech

The Greentech industry has reaped the benefits of cheap capital for years, but that’s all changing as demographics take a turn and investment patterns start to shift.

Financing Greentech projects requires a boatload of upfront capital, and if the cost of that capital rises, the viability of those projects has the inverse effect. This means the Greentech space will be in hot water even if economic growth holds steady.

Sure, Biden’s Inflation Reduction Act will help the US a bit, but there’s no replacing private investments. This isn’t an isolated issue either; if countries with solid Greentech potential want to see their industries thrive, we will need to see some major breakthroughs.

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.

Hey everyone. Peter Zeihan here coming to you from Mexico City. And today we’re going to talk about some of the challenges that are facing the green tech space. If you’ve been following stock tickers in New York in general, you’ll know that there’s been a lot of pushback from the financial world about everything that has to do with wind and solar and interconnections, not just in the United States, but on a global basis with many communities getting sticker shock and changing some of their plans.

Now, this, of course, is going to be a story that’s going to look a little bit different everywhere. But there is a common theme, and that has to do with capital. One of the things that really sets green tech apart from any other power generation, whether it’s in transport or the generation itself, is that you have to pay for it all up front.

The the system is different. So like if you’re going to build a coal plant or a natural gas burning power plant, most of your cost over the life of the facility is going to be the fuel. Actually setting up something that, you know, burns it is not all that complicated from an expense point of view. But with solar and with wind, where the fuel is free, all of the expense is upfront, or at least two thirds of the total versus less than a fifth for most conventional systems.

And that means it has to be financed. Now, from 2000, literally from 1997 until very, very recently, that has not been a problem because we’ve been living in an environment of absolutely dirt cheap capital, and it’s been a demographic moment. The baby boomers were in their forties, fifties and early sixties, and in that time frame in your life, your expenses have gone down, but your incomes are high and they’ve been socking away all the money that they’ve got to prepare for retirement.

All that capital makes it into various different investment opportunities, whether it’s T-bills or the stock market. It makes it very easy for people, for corporations, for governments to borrow at scale. Well, as of the fourth quarter of 2022, the majority of the United States is baby boomers. The majority of the world’s baby boomers had moved into retirement, and they’ve liquidated their savings and they’re not generating any more.

And they’ve moved their savings into less prospective projects. So a lot more cash, a lot more government debt, a lot less things like stocks and bonds. And that means that the cost of capital has already gone up for everyone. And we’ve seen mortgage rates just in the United States double in the last 18 months. And for large projects like wind turbines and solar panels, we’ve seen it closer to a tripling now over, say, a ten year payback, which, you know, is just kind of a good benchmark.

That means that the interest costs have gone up to the point that the overall payback is going to be at least a quarter higher than it was just a year and a half ago. And if you have to finance your GreenTech project, all of a sudden you’re facing an expense that you weren’t having to deal with before. Now, this, to a degree, this sort of overbuild and retrenchment happens with any industry as people kind of grasp the realities of that.

Maybe solar and wind aren’t as great for our community as we thought they were going to be. But the capital that’s going to hit everyone everywhere, it’s going to slow economic growth on a global basis. And for projects that are very capital forward, like green tech, it’s absolutely going to retard the progress of everything. And the United States, we’ve got this little thing called the Inflation Reduction Act that the Biden administration was able to get through Congress, which is basically a green plan that is going to help a lot with making the finances of green tech a little bit better.

But it was never going to replace private capital. It’s just going to supplement. And now, since we need 25% more minimum, probably closer to half again more by the time we get to 2026, it’s going to be able to start seeing some of the edges off, but not fundamentally change the problem. But if you’re in other countries, I’m thinking here, places that have good green tech potential, places like Argentina or South Africa or Mongolia or Greece or Mexico.

That borrowing difference is everything. And unless we have a significant breakthrough in the economics and the physics of solar and wind in the next couple of years, it’s just not going to cut it. So my recommendation remains the same that it’s been for the last three years. We know the texts in their current form won’t get us to where we think we need to go, which means we need better technology.

And until we develop that, the rest of this is just kind of spinning in place.

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

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