Top Secret Pentagon Documents Leaked by a 21-Year-Old

What happens when you give a 21-year-old access to TOP SECRET documents? They end up leaking those documents on a gaming chat platform…shocking.

Most of the information that was leaked pertains to the Ukraine War and how the U.S. has low confidence in the reports coming out of Ukraine. Nothing too far-fetched, but that doesn’t mean we should take everything in the public domain at face value. Let’s remember who is blasting this info around and how easy it is to tamper with.

Russia once boasted the largest human intelligence arm, but we haven’t seen much Russian interference since Snowden. This means they’ve gotten really good, or that capability has lapsed, and I lean toward the latter.

As the US faces another leak, the real question that must be asked is whether people like Snowden, Manning, and Teixeira should even have access to this stuff.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey everyone. Peter Zeihan here coming to you from Colorado where spring has sprung and the frogs are chirping, which means, of course, later today we’re supposed to get a foot of snow. Anyway, I thought it would be worth me commenting on the recent intelligence leaks by airmen Teixeira. Let’s deal with the contents of what was leaked and then we can talk about espionage and leaks in general.

So most of the documents that were leaked relate to the war in Ukraine in some way and involve internal U.S. assessments of how the war is going and how the Ukrainians are doing. And they’re broadly less than fully complementary. Basic indication from the leak is that the Ukrainians have been suffering higher casualties than are reported and more importantly, that the confidence in the numbers provided by the Ukrainians is very low. So the U.S. really doesn’t have a good view. In addition, there’s concern that by engaging in a static defense in places like Bakhmut, the Ukrainians are losing their combat firepower, which is going to make it more difficult for them to launch future offensives. There’s nothing about either of those assessments that is particularly controversial. But before you say that everything that is now out there in the public domain is true, keep in mind that it has been the Russians now that have publicized this stuff far and wide, and they have undoubtedly changed a lot of the details in order to make their propaganda machine a little bit stronger than it otherwise would be.

But three things to come from this. First of all. Teixeira, the guy who did the leak – the U.S. airman – from all appearances, was not recruited by the Russians. And that’s something that’s kind of had me curious for a while now. Not since Edward Snowden in 2013 have we had any of our leakers have a very firm and obvious Russian connection. Snowden apologists, of course, are going to reject that out of hand. But, you know, screw them. The Russians used to maintain the world’s best human intelligence arm. And in the last decade, either they’ve gotten so good that no one has detected them functionally working really anywhere, or that capacity has languished along with everything else that we’ve seen in the Russian state services of late, whether it’s the military or their cyber capabilities or anything else. That’s probably really good news. Second, Teixeira himself and why people do things like this, it’s really an issue of foreign recruitment. Even if they’re not a foreigner involved. People are often motivated by the same factors, with the big three being ego, ideology and sex. And in the case of Teixeira, it looks like it was probably a combination of all three. He was on a gamer’s forum. He had these documents. He had access to these documents. He brought them home. He photocopied them. He took PDF photos of them, and then he published them on the gamers platform, Discord, like the whiny bitch he is.

In the case of a couple of previous big leaks, I’m thinking here of Chelsea Manning and Edward Snowden. Ideology was certainly part of it for Manning in terms of Edward Snowden clearly was paid by the Russians, clearly fled to Russia, clearly married a trophy bride as soon as he got there. So, you know, I’m sure it’s for love, but let’s be a little bit more honest here. And then ideology, of course, intertwines with Snowden as well. I think the criticism here, if there is one, is we’ve now had three leaks of significance in the last 13 years that get into the files that are top secret and above. And if you look at the three specific cases of Snowden, Manning and Teixeira, they all have something in common. They probably should have never had access to these documents in the first place. Snowden was a part time contractor, and yes, he was definitely a spy. And yes, he definitely hacked into the system. But somebody at his level should have never been near a terminal, and given access in the first place. Manning was a private at the time and definitely should have not had access to the high end stuff. And Teixeira was a 21 year old airman. Now I am not the sort of person who’s going to go in and pick apart American security policy when it comes to information. But there is a pattern here and probably something that should be addressed in the not too distant future. But the biggest bit of encouragement I had is how fast Teixeira was caught. I mean, it really only took a few days for the FBI to find them. At the same time, a bunch of independent journalists found him and then publicized his information. So at least on time, on target, we are getting better from the law enforcement side of this. But maybe we should work a little bit more in information security on the personnel side.

Okay. I think that’s it for me. Take care.

Where Are All the Russian Hackers?

Today’s video was recorded in Wānaka, New Zealand, during my yearly backpacking trip.

Since the onset of the Ukraine War, everyone’s been checking under their bed and looking in their closet for the boogeyman – a.k.a Russian Hackers – but they haven’t been there.

There are a few reasons why Russian cybercrime has been lying low. The Russians have been hitting NATO countries with cyber attacks for the past few years. Places like Estonia have learned a thing or two, enabling other NATO members to build robust cyber defenses over the past few years.

Additionally, much of Russian cybercrime is carried out by private crime syndicates, which makes going on the offense a bit easier. Unofficially, of course, the US was able to drop the hammer on many of these organizations, which limited their capabilities heading into the war.

I’m not saying everything is hunky dory, but we’re starting to see the true power of some offensive cyber tactics now on the table.

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.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

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Economic Growth Is Collapsing Around the World

When the International Monetary Fund (IMF) releases its least optimistic report in the last 50 years, alarm bells should go off for everyone. IMF’s projected global economic growth for the next year is 2.8%, and for the next five years is only 3%. The scariest part is that these numbers are likely overly optimistic.

No matter where you live in the world, this stagnation of economic growth will hit you, from the rich world to the developing world, and even the country that has had the highest growth rates for years – China. There might be a few isolated pockets of growth seen in areas that are nearshoring or friendshoring, but this will just exasperate the economic collapse of other places as industry pulls out.

We are looking at the unwinding of the globalized world from a geographic and demographic POV. In a situation like this, low economic growth rates will always be the result.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey everybody. Hello, from snowbound Colorado where it was 60 degrees yesterday will be 60 degrees tomorrow. The news of the last couple of weeks on the economic front has been from the International Monetary Fund, which is that big international lender that helps countries get out of trouble. They are arguably the best in the world when it comes to doing economic forecasts. And the most recent forecast is the least optimistic one they’ve had in the last 50 years. Specifically, they think that growth next year, on average for the world is going to be 2.8% and for the next five years, only 3%. And honestly, they’re probably being significantly over optimistic. So let me kind of give you it from three points of view.

So first of all, from the developed point of view, the rich world, the rich world, most economic activity comes in the form of private consumption. You run on your credit card, buying a house, going to college, raising kids, buying a home, all that good stuff. Problem is that most of that activity is done by people under age 50 and with mass urbanization starting in most places around 1940, 1950. We’ve seen lower and lower and lower birthrates throughout the rich world. There is no country that is an exception to that and in many cases, replacement population growth, which would be like a 2.1 children per woman. You know, most of the advance will drop below that rate over 50 years ago. Well, you fast forward 50 years and it’s not that you’re running out of children. That happened a long time ago. You’re now running out of working age adults. Specifically, the baby boomers were the last very large generation born in most countries. And on average, the baby boomers entered retirement last calendar year. So the rich world in most cases will never, ever be capable of generating the economic growth they have in the past. And in fact, it’s probably a little worse than that, because when you stop having kids, people still get older. And so when you have a lot of 30 somethings, but not a lot of ten year olds, those 30 somethings are spending money on themselves, on cars and condos as opposed to diapers. And that’s sort of economic growth, is a lot more has a lot more octane to it. And that’s what we’ve seen in, say, Europe in the 1990s and 2000s. Well, they’re never going back to that. They can never go back to that, but statistically impossible. Okay. So secularly lower growth rates in the rich world, it’s pretty much going to be the norm for at least the next 40 years.

Second, the developing world. Now, the key thing that separates the rich world from the developing world is that the developing world isn’t as rich, you know, pretty self-explanatory there. And they need a lot of capital in order to develop their systems. The rich world is the rich world because they have favorable geographies and it’s been easy for them to trade with the world, trade with one another and build infrastructure because things are relatively flat and open and rain falls from the sky to grow crops, all that good stuff. Most of the developing world lacks one or more or all of those characteristics. And so if you want to develop, you have to have the cash come in from somewhere else and that somewhere else has traditionally been the rich world. That money is no longer available, and even if it was, it would be going to pay for pensions and health care for an incredibly large and increasingly size retired class of people. So the developing world doesn’t have the money that it needs to build infrastructure or to develop consumer markets. So without that input, the most important input for the developing world. You are looking at a secular stagnation that will last until that capital can be generated somewhere else. So not only is the rich world looking at lower growth rates for at least the next generation, so is the developing world.

And then, of course, there’s China. Now, the Chinese, as you know, tend to lie about all their statistics, but they have managed to sustain growth rates above that of the rest of the world for some time now. In the rich world, typically 2% is considered kind of middle of the road. In the developing world, it’s usually in the 4 to 7% range. And for most of the last 40 years, the Chinese have been above 8%. And even if you consider that you can’t trust all of their data, they’ve certainly been on the high end of the poorer side of the world in terms of growth rates. And now they’re thinking that, you know, 4% may be as good as it’s going to get. In many ways, what the Chinese are dealing with is the worst of all worlds. Like the developed world they are facing a demographic bomb, that’s actually a much steeper decline than any other country in the world. This is a country that absolutely is going to get old before it gets rich and reach its first world living standards. So this type of consumption led growth that we’re used to seeing can’t happen. And the export growth that they use to sell products to the rest of the world can’t happen because that requires growth elsewhere. Second, the Chinese have followed the developing world paradigm to a certain degree in throwing a lot of cash at projects, especially infrastructure, to make it work. Well China already has a great infrastructure now, and as the Japanese discovered in the 90s and the 2000s, if you already have a good infrastructure and you build more infrastructure, you don’t get more economic growth except for from, you know, the development of that infrastructure itself. It doesn’t do much follow on because there’s no need for it. Well, the Chinese have been doing this year after year after year for decades now, and they now have a debt load of probably about 300 – 350% of GDP, which again, world record. And they’re just not capable of sustaining that in the long run. And then third, and most importantly, the single most important factor behind China’s success these last several decades has been de facto American sponsorship to allow the Chinese to have risk free, secure and above all, cheap access to the world’s energy markets, commodities markets and consumer markets without them having to lift a finger. That’s clearly not in the cards anymore.

So every aspect of growth from every corner of the world looks like it’s going to be lower for quite some time. And the IMF forecast is probably overoptimistic. What we’re dealing with is the unwinding of the globalized world from both a geographic and a demographic point of view. And that was always going to generate low growth rates. Now, low on average does not mean low everywhere. We’re seeing a lot of near shoring, reshoring, friend shoring as countries want to move manufacturing capacity, particularly for critical materials and critical technologies back home. So they’re not vulnerable to say, I don’t know, a genocidal dictatorship that will be growth stories in those places, but by definition, that manufacturing capacity will not be global. So it’s a bit of a global starvation diet from a growth point of view. So for every place where you have a Vietnam or Mexico, the United States will do very well in this environment. You will have a China and Korea and a Germany that goes down the tubes, and that’s just where we are now.

Okay. That’s it for me. See you guys next time.

Iranian Seizure of Oil Tanker Could Spell Disaster for China

The Iranians have seized the Advantage Sweet, a Turkish-owned oil tanker carrying roughly 800,000 barrels of Crude. The press release (or should I say ‘slap on the wrist’) issued by the US Navy should have the Chinese very concerned about their supply lines.

Since World War II, the US has patrolled the sea lanes and enabled the safe flow of international resources and products. However, this incident is just another indication that the US is slowly stepping away from its commitment to the maritime order of protecting the high seas.

While the US can just shut down its international energy trade and operate with its neighbors in North America, places like China have much more at stake. Since China falls at the end of a very long supply chain, any disruptions could spell disaster for the Chinese economy; that’s only one of many issues they face.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey everyone. Peter Zeihan coming to you from Colorado. It is the 27th of April. You’ll be seeing this the morning of the 28th. The news that just came out is that the Iranians have snagged another tanker, a vessel called the Advantage Sweet, which is a SuezMax oil tanker, which means it probably is carrying about 800,000 barrels of crude. It is owned by a Turkish company and is registered in the Marshall Islands.

The U.S. Navy has issued a press release basically saying bad Iran, very, very bad Iran. And that’s it. This is your periodic reminder that when it comes to international energy markets, the U.S. just doesn’t care anymore. And if somebody wants to deal with Iran seizing tankers, then they will have to do it without the United States. This is a big change, of course in most people’s perceptions, especially compared to the policy sets that we have seen in the United States for the last several decades. But remember why those policy sets have existed. It’s not that the United States imports a lot of oil from the Middle East. It doesn’t, it really never has, but its allies do. And the entire basis of the American post-World War II global environment was that we will fight wars to protect resource flows and product flows so that “you” will sublimate your military needs to us. Basically, we will fight your economic war. So you don’t have to. And that gives us a free hand in control of your militaries in case of a confrontation with the Soviet Union. The Russians may be coming back in a big way, but they are not the Soviets and they do not have a global position. And so the United States, bit by bit under Obama, under Biden, under Trump, have all basically steadily reduced the American commitment to the maritime order that allows global trade and global energy markets to work. And so this Advantage Sweet, this tanker that’s been gone, the U.S. really doesn’t care.

But if you’re China, this is a problem because the entire existence of the Chinese economy and its strategic position is based on the idea that the United States, no matter what else happens, no matter what the Chinese do, no matter how much military action China carries out, that the Americans will still uphold civilian freedom of the seas. And as we’ve seen today, again, the U.S. has no interest in that anymore. So next time we do get a meaningful interruption to international energy flows, the United States basically closes its borders to energy trade. It’s self-sufficient within North America. And the Chinese are at the very end of a very long supply line that they have no hope of protecting. And that means they’ll deindustrialize. And that means it’s the end of China’s unified nation state. And of course, if you’ve been following me for a while, you know that that’s only one of the many reasons why the Chinese are going to end this decade.

Alright. That’s it for me. Till next time.

Russia (Almost) Gets Military Supplies From Egypt

Most countries put up their “no solicitors” signs when they see the Russians coming around to buy military supplies. However, a handful of countries will at least open the door to hear the pitch and Egypt just so happens to be one of those countries.

To sell military equipment to the Russians, you have to be able to check a couple of boxes. First, you can’t be worried about the political blowback from partnering with a genocidal, war-hungry country. Second, you either have a lot of extra supplies or are not worried about entering a war yourself.

Countries like China, India, Algeria, and Vietnam might entertain the conversation, but at the end of the day cannot check off both boxes. This leaves the Russians to deal with Egypt and North Korea.

Once the Americans caught wind that the Egyptians were considering making a deal with Russia, a quick cost-benefit analysis shut that deal down. That only leaves North Korea on the table. And if you want to pull out a sliver of good news from all this – that likely means North Korea won’t be entering any wars anytime soon.

This limited market is somewhat illuminating to the Russian predicament. While this remains Russia’s war to lose, if they can’t spin-up their military-industrial complex any quicker, this could be the war that ends Russia as an expansionary power.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey everybody. Peter Zeihan coming to you from Colorado. One of the things that’s been in the news for the last couple of days or a couple of weeks has been that the Russians have been going out around the world trying to find military equipment that they can purchase. And one of the countries that almost nearly sold them some was none other than Egypt, a country that at least nominally is a U.S. ally. And that’s kind of caught a few people off guard. But if you look at the sort of decision making that goes into providing a country that is in a genocidal war of aggression against someone else, you can see that it actually makes a certain degree of sense to go to the Egyptians.

There are certain boxes you have to check if you are willing to supply weapons to Russia in its current environment. First of all, you have to not overtly be concerned with the political blowback from the United States. And second, you have to not really need that equipment yourself. And there are precious few countries of size with, you know, military equipment worth talking about that can actually scratch the itch for that. The single most important one that falls into both categories is North Korea, because the North Koreans have, you know, a million man army, a quarter of the population can be drafted any moment. They have been doing nothing but building military equipment now for decades. And apparently the Russians have gotten a lot of artillery shells from the North Koreans. And honestly, that tells me everything I need to know about the military posture of North Korea, because if they were concerned at all about the United States or South Korea, Japan launching a conventional military attack on them, they wouldn’t even consider selling their armaments to the Russians. So honestly, that puts North Korea not in the peacenik bucket by any stretch of the imagination. But it tells me that all the nuclear blustering is really just that, blustering. If they were concerned about a war, they would not be disarming by selling their weapons to someone else.

Other countries that the Russians have turned to that have been turned, the Russians down flat, China, India, Algeria, Vietnam. Now these are all countries that to a degree are either strategically or ideologically favorable to the Russians, but they either don’t want to antagonize the United States. That is the situation for Vietnam. Who is looking to have a firmer relationship with Washington in order to fend off China. That is the case for China, who is desperate to avoid a direct confrontation. They like stirring the pot. They like making everybody think that something is about to happen. But they know that if there was a military conflict, that would be the end of China as a modern, industrialized economy in a matter of months. So they’re certainly not going to cross that Rubicon. Algeria, if they don’t deal with the United States, they have to deal with their former colonial master, the French. And that is something they’re desperate to avoid. So from them, strategically, it’s just completely off the table. But for India, it’s different. India is always concerned that it could have another war with Pakistan tomorrow, and so they are absolutely unwilling to provide any military assistance at scale, regardless of what it might do to relations with the United States, because they think they might need that equipment themselves.

And that brings us back to Egypt. Egypt, aside from North Korea, is the only country in the world who might be willing to kind of stick it to the United States, because the strategic situation in Egypt has been stable for so long. There hasn’t been a military conflict with the Israelis since the seventies, and we now have a peace treaty that’s 40 years old. The Egyptians know there is not going to be a conventional war between Israel and Egypt or Libya in Egypt or Sudan and Egypt. So they actually have the equipment to spare, but they still have a very large military and a lot of gear they could potentially give away.

So it obviously didn’t work out. The Americans heard about it and, you know, put a little bit of a cost benefit analysis in front of Cairo that the Egyptians, you know, made the same choice. But it does kind of underline just how alone the Russians are. They have North Korea and that’s it. And if they can’t get their military industrial complex spinning up at a faster rate than what we’ve seen so far, this is the sort of war that could get them stem to stern and really end Russia as an expansionary power. Now, we’re not there yet, but this is still Russia’s war to lose. But wow are they trying.

Alright. That’s it for me. See you guys next time.

The New Zealand Dairy Industry

Today’s shenanigans come to you from Lake Pukaki in Central Otago, New Zealand.

I think I’ve found my favorite trail snack – Kikorangi Triple Cream Blue from Kapiti – I swear it will turn a 15-mile trek into a brisk walk. It just goes to show that as the world’s top dairy exporter, New Zealand has its s*** figured out, and the Americans need to step up their game.

There are two traditional approaches to the dairy sector: French vs. American. The French way is centered around small towns, with lower throughput, and offering specific products to the local community (oh, and the safety standards are subpar). The American way is to supersize everything for more reliability and a more economical system. And you don’t have to worry about subsidies like the French (and yes, everything is safer).

The issue for the French is that you can’t scale their system. The issue for Americans is that not everyone wants American Cheese. However, the Kiwis found the perfect blend of both. They have low costs thanks to mellow weather, rain, and open land. Since they don’t have many people, they have plenty of leftover products to export….and they know how to create specialized goods that people actually want.

Finding a balance of scale and specificity seems to be the sweet spot for the dairy industry…now we just have to convince Kapiti to start selling this stuff back in the States.

CHECK OUT KĀPITI

They’ve been doing it since 1984, so they know a thing or two about dairy. Although we might not be able to get this in the States, we can still admire from a distance…

LEARN MORE

CHECK OUT ÍSEY

Have you heard of creme brúlée skyr before? You need to try it…

LEARN MORE

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.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

Crumbling Infrastructure in the Russian Taiga

Today’s video comes to you from the Rockburn Track in New Zealand.

Terrain as you see in this video, doesn’t exist in many places, as it takes the right mix of altitude and humidity to form. However, this is very similar to the dominant vegetation in Russia’s northern Taiga.

This terrain makes it extremely difficult to build any form of solid infrastructure. In Russia, they wait until the ground freezes solid, then dig down to the permafrost and fill the hole with sand, gravel, or whatever else they have. This forms dikes or berms on which they can build roads, lay pipes, or install any other key infrastructure.

In a post-Ukraine War Russia, will this infrastructure come back online quickly? All of this infrastructure is old and barely hanging on, and now that the West won’t be involved anymore, I wouldn’t count on any of this coming back online for a decade (+).

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

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TRANSCIPT

Hey everybody. Peter Zeihan here coming to you from the Rockburn in New Zealand. And I just saw some vegetation that reminded me of something of significant import.

So behind me, you just have a normal tree stump, but it is covered in several inches of moss. You can see how my hiking pole really sinks into it. Terrain like this doesn’t exist in many parts of the world. You need just the right altitude and the right humidity in order for the stuff to grow in the first place. You’ve got it here in New Zealand, in the temperate rainforest. You’ve got it on Vancouver Island in northwest Canada. It exists in Manitoba, in what they call the Muskeg that is approaching the Arctic Ocean. And then it is also the dominant vegetation and some of the Taiga in northern Russia.

Oh, yeah, unstable ground. So it doesn’t really matter what the reason for a spongy ground, whether it’s moss or permafrost, happens to be, it’s very difficult to build artificial infrastructure. But if you want to do anything with the land, that’s what you’ve got to do. In the case of the Russian space, you’ve got that mushy, marshy top over what is ultimately permafrost, somewhere between five and 30 feet under the surface. And until you get to the permafrost, the frozen layer, everything is just goo. And so any infrastructure that you were to build in the summer would just sink into the swamp. So what they have to do is they wait for everything to freeze solid in the depths of the Siberian winter, and then they go and excavate it and then bring in rock and sand and gravel and aggregate and tar and everything else to build giant berms that go from the permafrost all the way up until you get these dikes that run over the landscape. Environmentally devastating, of course, but that’s never been something the Russians have really cared about. And then you can run roads and pipes and the such, over those berms.

So one of the things that people discuss, you know, in in a post Ukraine worst scenario, will we be going back into Russia in order to tap those resources again and, you know, even in the best case scenario where the government and the politics line up, you really should still count all the Russian stuff out for several decades because that’s how long it took to bring this stuff online. Western techs have been essential to maintaining output in the Russian oil and natural gas fields and their petrochemical center and their general industry since 1992. Because most of this raw infrastructure was built in the 1960s and it’s barely holding on by its fingernails now. And with the Western techs, the Western skills sets, the western capital gone. We’re seeing industrial accidents that are, let’s just say Soviet in scale.

So a lot of this stuff is going to have to be rebuilt and then you’re going to have to have a positive security environment that goes all the way from the point of production through hundreds, if not thousands of miles of permafrost to get to populated Russia and then finally to get out to the wider world. And that is not something you’re going to fix in three months or six months or nine months or ninety months. That’s a decade plus project minimum. And that’s a decade plus in which relations with Moscow have to be positive. So we should all kind of pencil in that materials coming out of the former Soviet space, specifically the Russian space, just aren’t going to be there for the foreseeable future. Until next time.

The Economics of Green Energy

The economics of green energy are vastly different from traditional fossil fuels, and we must understand their differences if the transition to green energy will ever be successful.

When building a traditional power plant, most of the costs come from the fuel used to manufacture the plant, which can be paid over time by the fuel you sell. Most of the expenses for green energy plants come from the plant’s initial construction, which requires lots of capital on the front end.

There are two complications with the transition to green energy. First, the cost of capital is rising and will continue for the next 10+ years, making those upfront costs even heftier. Second, energy costs are traditionally inelastic. So as the system is converted to green energy, the cost of components will have to be factored in.

The bottom line is not that we shouldn’t go green; instead, we should only put these plants where the technology matches the geography. Putting solar where it’s sunny and wind where it’s windy. Once we can figure that out, we’ll just need some help from the tech space and Congress to help with the transmission side of things.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey, everybody. Peter Zeihan here. Coming to you from the hike and bike trail in downtown Austin. Today I wanted to talk a little bit about energy economics, specifically green energy economics.

Now, the idea that once you’ve paid for the sunk cost of the solar or the wind system, that you’re in the clear. You know, to a degree that’s true. But you first have to get the thing built. There’s two complications here that we’re facing. The first is capital. So when you’re going to build like a normal thermal power plant, about three quarters, 60%, three quarters of the cost of that plant is actually in the fuel that you are going to burn over the lifespan of the project. You don’t have to finance that upfront. You pay for that as you go. And you typically use the income that you get from selling your electricity to your customers to pay for that. So the only part that you have to finance is that initial construction, which is typically a quarter to a third of the total.

With GreenTech, that’s not how it goes. With green tech, roughly 80% of the cost of the project over the life span is in construction. And even if you can get into a situation where you’re in a sufficiently sunny or windy place that the per cost for the kilowatt hour or the power you generate is or over the lifespan of the project, the same as it is for a fossil fuel system. You still have to finance that all upfront. And with the baby boomers moving into mass retirement and liquidating all over their holdings because they can’t take a shock of a currency crash or a market crash anymore, the cost of capital in the United States is going up, and it will remain high until such time as the Millennials are the capital rich group in our population. That won’t happen until most of them are in their fifties, and that won’t happen for another 10 to 12 years. So we’ve got this period of much higher capital costs, which means much higher development costs for electricity projects in the green space. There’s really no way around that.

The second problem has to do with the elasticity of energy costs. So let’s say you need a gallon of gasoline in order to drive to work. If you can only get 9/10 of a gallon, it’s not like you park your car and walk the rest of the way and just leave your car for all time and up. You will pay whatever you have to pay to get that last 10th. And that price then applies to the entire market. And if you have a shift in demand of only like 10 to 15%, you can easily see a change in price of 50 to 100%. And we know this is true for electricity, for coal, for natural gas, for oil, and even for nuclear fuel. Now, if we decide we are really going to go with the green transition in mass, then all of a sudden a lot of the components that go into electricity generation are going to become power fuels. That’s chromium, that’s copper, that’s aluminum, that’s fiberglass, that’s graphite, that’s lithium. We have not priced in that the system.

The bottom line of all this is not don’t go green. The bottom line of this is you only put these technologies in places where the geography matches the capacity for these things to work. So you put up solar where it’s sunny, you put up wind power where it’s windy and if you’re going to put it somewhere else. Not only do you have to think of the cost over the long term in an entirely different light, you’ve got to change the metrics because it’s going to cost more to build and is going to cost more to finance. And that means we ultimately need better technologies than what we have now, especially in transmission, so that we can bring the electricity from where it’s produced in a reasonable manner to where most people actually live. And that requires, among other things, multiple acts of Congress, both to appropriate the money for that research and to make it easier for power to pass through different states, jurisdictions, and especially between the three power grids that the United States shares.

Alright. That’s it for me. Talk to you guys later.

Demographics Part 10: Problems in The Middle East

Coming to you from Milford Sound in New Zealand.

The demographic situation in the Middle East can be explained by three factors: water, oil, and food. Water prevented the population from expanding. Oil generated the capital needed to industrialize and help the population grow. Food security will ruin all of this.

The Middle East doesn’t have a ton of moisture, so most populations remained relatively small and geographically concentrated. This kept demographics in the traditional pyramidal structure. Once oil was discovered, these populations had the money to industrialize. This enabled Middle Eastern populations to grow beyond the land’s carrying capacity.

As the population expands, you naturally have more mouths to feed. The only way to sustain a growing population is through imports and subsidies. While Middle Eastern countries have retained their pyramidal demographic structures, these populations have become increasingly unstable.

Since the Middle East is so dependent upon globalization, any disruptions to the global system could turn catastrophic. Combine a potential food crisis with wealth inequality and political instability, and the degree of civil breakdown in the Middle East could be devastating.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey everybody. Peter Zeihan here. Coming to you from Milford Sound, one of my favorite places on the planet. Still in New Zealand. Today we’re going to do the most recent of the demographics series, specifically focusing on the Middle East. Now, the key thing to remember about the entire swath of territory between roughly Kuwait and Algeria. So that whole stretch – Northeast Africa, all the way into the Persian Gulf region – is that there’s not a lot going on from a moisture point of view. Most of these cultures are centered around oases or narrow river valleys. The Tigris and Euphrates in many places, the entire coastal plain is less than ten miles thick. And the coastal plain in places like Libya look very, very similar. Egypt doesn’t even have water on its coastal plain. It’s just the Nile. So you get these very, very dense population patterns on a very, very concentrated footprint. And the carrying capacity of the land is very, very low. And it wasn’t until the 1900s when you could introduce things like artificial fertilizer that you really got a very dense population even within that zone. So this is an area that was among the last parts of the world to enter the industrial era. And so you had kind of a classic pyramidal formation for the population density until relatively recently in their history.

Okay. Where was I? There are some exceptions. In northern Algeria, you’ve got a much wider coastal plain. So agriculture is more favorable there. Obviously the Nile Valley and Mesopotamia, places that are still desert, but they have irrigation figured the places between the Tigris and the Euphrates Rivers. Obviously going back to antiquity. These have had a lot of people. But the general point when it comes to industrial agriculture stands, you can have a certain concentration and then you just kind of stop to be in the desert, which means that these are some of the last areas in the world to experience industrialization, artificial fertilizers, mechanized agriculture, that sort of thing. And so they don’t, they just have never historically reached the level of population density that you’re able to achieve in, say, the Western world or the East Asian world. Now, what that means is that there’s been a hard population cap on all of these regions up until today, until one thing changed. Oil, whether it’s in Algeria or Libya or Egypt or Iraq or Iran or Saudi Arabia. Once oil became part of the equation, the income potential for these regions expanded by more than an order of magnitude in some cases, almost literally overnight, certainly within a decade. And what that has allowed is these populations to expand beyond the carrying capacity of the land. In the case of Egypt, Cotton contributed well. So these countries could all bring in food and sell the oil to pay for it and then generate a very, very different population matrix.

And we’re back. All right. So what this means is the countries have had it. All these places have a traditional pyramid going back to antiquity and then as we hit industrialization because of oil and the food just kept coming, they were able to maintain very high birth rates. They were no longer doing this with domestic food production, but instead with imported food. So the pyramid has stayed. It’s just gotten broader and broader, broader and broader because most of these countries have food subsidies in order to maintain political tranquility. But when the food is cheap, but you’re not producing it yourself, we get more and more people, but it eventually becomes more and more unstable from a demographic point of view. And now, whether you’re in Algeria or Egypt or Iraq, and especially in places like, say, Lebanon or Libya, you’ve seen the populations increase by a factor of four or five, even six or seven over the time since 1945, while food production has gone stagnate or in many cases like in Egypt, actually gone negative as we switched over to things like citrus and especially cotton. Which means these are the parts of the world that are now most vulnerable to anything that happens with globalization, because if anything impacts their ability to export their non staple food products and import wheat, you get a population crash. It’ll probably be worse in places like Libya, where food production has maybe doubled since 1945, but population has increased by a factor of seven or eight. And in Egypt, where a lot of the wheat has gone away and it’s been replaced with cotton and citrus since a population has boomed. And now, even if they switch all the food production back to wheat, you still would have a 50% shortage. And the ability of local food production in order to support the local population. So these places have seen some of the greatest expansions in population ever in human history and we’re not too far away from them experiencing some  population crashes in human history. What we’re about to see as the global population sinks in is a degree of famine that is absolutely unprecedented and is likely to be even far more extreme than what we’re about to see people in china.

And so remember when you got a pure pyramidal population structure with lots of people under age 40, in that sort of situation, you’re going to have high growth because of the consumption, high inflation because the consumption and not a lot of productive capacity, because you don’t have a lot of skilled workers that are age 40 to 65. You also don’t have a lot of capital. And so these societies had a hard time lifting themselves out of poverty, except when it comes to things like oil sales, which is then usually the province of the state that doesn’t generate the sort of velocity of capital that is necessary for good infrastructure, for good education, and for all the other things that we kind of celebrate as the norm in the first world. It also means that you have a lot of young people who don’t really have a stake in the system because they don’t control the wealth that’s controlled by the sheiks and the princes at the top. So you tend to get very politically unstable systems. And if you add in the coming food crisis, the degree of civil great down that is possible in this, these areas are few. And for those of you who consider yourself students of history, if you look back and the rise and collapsed rise of cloud and the rising collapse of city states and empires throughout this entire region, this is starting to sound a little bit familiar. This may be where humanity got its start, but it’s also capable of some of the most catastrophic civilizational collapses. And we’re going to see that next decade or two.

Oh, yeah. One more thing. On yeah we relocated to Te Anau. I know there is a unique demographic pattern for some countries in the Middle East that is largely based on their intense wealth, because once you get to a certain level of income, you start paying people to do other things. So, for example, if you’re in the United States in your top 1%, you probably have a housekeeper. Well, you carry that into the Middle East where you’ve got this oil and natural gas income and you’re surrounded by places with a pyramidal demographic structure, and you start hiring people to do everything. So it’s not just menial chores or raising the kids. It’s building roads. It’s building bridges, it’s doing your oil infrastructure. You bring in labor for absolutely everything. And so if you look at countries such as Saudi Arabia, Qatar or especially the United Arab Emirates, you will notice that they have a pyramidal demographic structure. But on the men’s side, between roughly age 15 and 40, there’s a huge bulge that goes out, which is in essence, foreign guest workers who for the most part, unless you’re on that top end, it’s like doing the air traffic control and stuff, basically slave labor.

And in some cases that is not just a significant percentage of the population. In the case of Qatar, that is like half the population for the UAE, almost three quarters. So when you’re looking at the geopolitics of the region, you’re like, Oh, you don’t like the Iranians or We don’t like the Iraqis. Just keep in mind that the countries that the Israelis and the Americans, to a certain degree have identified as potential allies of the future Saudi Arabia, Qatar, UAE.

You are dealing with slave autocracies. So have fun with that.

The Mega-Prison of El Salvador

Coming to you from just above Glendhu Bay at Lake Wanaka in Southern New Zealand.

Today we’re talking about El Salvador’s new ‘mega-prison’ that will be filled with gang leaders, drug traffickers and the worst of the worst. In theory, this sounds great…lock up the bad guys and throw away the key…but the reality is that they may have just opened a can of worms.

Here’s the problem. When you place a bunch of bad people in a high-stress environment, hierarchies and bonds will begin to form. And in a country of only a few million people, these shot-callers have the influence to form political parties and sway major decisions.

So what does all this mean? To this day, El Salvador has NOT been a Narco state….it will be now.

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.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY