India Takes on the Shadow Fleet (Bonus Video)

An Indian War Ship off the coast of India with fishing boats on the shore

India’s navy has begun seizing shadow fleet tankers in its exclusive economic zone. If India continues down this path, other countries will likely join the bandwagon, marking the end of the shadow fleet.

Disruptions to the shadow fleet wouldn’t just impact Russia’s key export income, but also global energy markets. With 3-4 million barrels per day funneling through the shadow fleet, everyone would feel that. India has maintained close ties with Russia, so this move comes as a surprise to many and signals a major realignment.

As I’ve said in other videos covering the shadow fleet, once the first domino falls…the rest will quickly follow. We’ll just have to wait and see if India is willing to topple the first one.

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Transcript

Hey everybody. Peter Zeihan here coming to you from Colorado. I have kind of a weird one for you today. There was a report in the Wall Street Journal today confirming information that was originally released on the Indian Navy’s Twitter account. That was then subsequently deleted, that the Indian Navy has been carrying out raids and capturing shadow vessels in India’s exclusive economic zone. Starting almost two weeks ago on February 5th. Today is the 17th. 

Back story. The shadow Fleet is a group of roughly 1000 oil tankers that carries crude for sanctioned countries, most notably Venezuela, Iran and Russia. And apparently, these ships, the three ships that the Indians have so far grabbed, come from some combination of those three, with the Russians absolutely involved. 

The United States, after it captured the now former president of Venezuela, Nicolas Maduro, has gone after the parts of the shadow fleet that were actively carrying Venezuelan crude at the time, chasing them up on their way to Europe, chasing them into the Indian Ocean, I believe about eight have been captured so far. Eight out of a thousand is not a lot. 

But when the world’s naval superpower decides it wants to do something on the high seas, it’s really not hard for the United States to do it. And now it appears that the Indians are getting in on the act as well. This is really interesting from my point of view, for three reasons. Number one. Once another country joins the United States in targeting the shadow fleet, it’s probably only a matter of days. 

Two weeks before many, many other countries do it. There are a lot of countries that don’t like Venezuela or Iran or Russia. Especially the Europeans. And now that India of all countries is joining in, we should expect a couple of dozen other countries to do so as well, which would completely remove the shuttle fleet from functioning, in less than a few months, considering that there’s something like 4 to 5 million barrels a day transported in this matter that can have a really big impact. 

Economically or politically, based on who decides to take advantage of the situation. So that’s one. Number two, the fact that, the Indians are involved. India has been the second largest beneficiary of the shadow fleet since it really started getting going in the early days of the Ukraine war back in 2022. Basically what happens is someone affiliated with Russia or around or Venezuela goes out and buys a decommissioned oil tanker that probably doesn’t match current safety norms, gives it a fake insurance policy, puts a fake flag on it, and sends it to pick up the crude from one of those three countries. 

That crude then comes somewhere in the high seas, where it comes up against another shadow vessel, and they pump the crude from one to the other in a sea to sea transfer. Relatively dangerous. But these guys are busting sanctions anymore, so that’s not their primary concern. That then happens once, twice, three times more. Maybe they mix two crudes into another hold, or something. 

Anyway, eventually, another shadow vessel disgorged that cargo in a purchasing country, typically India and China and the Indians and the Chinese say, oh, we have no idea where it came from. You know, it’s just a convenient fiction. It’s just a question of who decides to enforce maritime law. Well, like I said, India is one of the big beneficiaries here and historically has been the second largest beneficiary of this process. 

And so for them to go out and grab ships in their own economic zone, who have been doing these CDC transfers for four years now to break that policy changes, the economics of the shadow fleet in the politics of India very, very deeply. A couple of things here. Number one, India has always, always, always been pro-Russian versus pro-American and has sided with the Russians. 

Because of the affiliation they had with them back during the Soviet period. So, you know, went away. Modern Russia has nothing to do with the Soviet Union. But the Indians kind of are still fighting the cold War ideologically from a certain point of view. So them flipping, matters. Second, because these are Russian vessels that have Russian flags. 

Having the Indians go against a Russian situation so boldly is really, really notable. It’s also been 11 days since this happened. And the idea that just happened once for three vessels is kind of curious. So I don’t understand why the Indian Navy posted this. I do understand why they tore it down right away. 

Because this is the sort of thing that will reverberate through the shuttle fleet very, very dramatically. Because if their ships are being confiscated and captains are losing their vessels, the entire capital investment is lost. And it won’t be long before the other captains basically throw in the towel or enough of them are grabbed that it changes the economics of shipping this stuff. 

So all of that combined is number two lot going on there. Number three. 

Russia. Russia. Russia. Russia. Russia. The Russians have been exporting somewhere between 3 and 4 million barrels a day this way for four years. And it is their primary source of income now. And if this is about to go away, then we’re going to see some very dramatic changes in a number of things in the eastern Hemisphere. Number one, the Ukraine war, if the Russians have lost their single largest source of income that will manifest on the battlefield, the Chinese may be supplying the Russians with all the gear that they can pay for. 

But the key thing there is pay for. And if the Russians can’t, then a drone war where the Russians can’t get enough drones is one where the Russians start losing territory. And we’ve seen just in the last 96 hours how when the Russians lose communication equipment, they start to lose coherence on the front line. 

And can no longer advance. This would be far more dramatic. Two. If the Americans and the Indians are seen eye to eye on things like the Russians, those are two big changes I’m going to talk about India, but about the United States. There are a number of people within the Trump administration who have been blatantly pro-Russian in this entire conflict, but now it appears that that might be changing. 

One of the fun things that happened about three weeks ago is we had a summit between US President Donald Trump and the Indian prime minister Narendra Modi and Trump said at the end of their meetings, the United States was going to drop its tariffs by more than half to allow Indian products back in the United States. 

And in exchange, the Indians were going to stop using Russian crude. The Indians said, thank you, Mr. Trump, for the tariff withdrawal, but not a single Indian government person statement post has ever said anything about not using Russian crude until now. And apparently now it looks like maybe less than two weeks after that summit, the Indians started going after Russian tankers. 

So maybe Trump really did get a deal. Just the Indians are doing that. A little bit on the down low. But now that they’re actually confiscating tankers, it’s not very down low anymore. And if you have the Indians stabbing the Russians in the back, and the Americans and the Indians now starting to get along in economic and strategic matters, 

That changes all the economics and the politics and the strategy of everything in South Asia, because the United States has reasonable relations with Pakistan. It’s been India that’s been clinging on to the Soviet era. If that’s no longer the case, if Russian influence has really been purged, then we’ve entered into a fundamentally new era. And if the Indians are stopping crude from Russia getting to India, you can bet your pretty ass that they’re going to stop it from getting into China, because now China is the only country that has been taking that is still taking Russian crude in volume. 

And now all of a sudden, we’re talking about the entirety of the 3 to 4 million barrels of the shadow fleet being gouged out of the Chinese economy. Now, a lot of this is a couple steps removed from what we know right now. I don’t want to say that all of this is destined to happen, but you remove that much crude from the system all at once, and the whole system feels it. 

You remove it all from one country’s system all at once, and that country is fucked. So we’re looking at a broad, structured rearrangement of things in Russia and Ukraine and India and China, perhaps all at once. The question is whether or not the foreign policy team in Washington can actually hold that together, considering how much they’ve purged the decision making apparatus in the State Department and the National security apparatus and in the military. 

This is a lot to hold in your head all at once. But if we are moving in that direction, we are looking at the single biggest shift in international politics of at least the last four years. And that will keep me very busy for months to come.

The U.S. Navy Goes Down Under

A US Navy battleship

The U.S. is turning to the Aussies for some help with stationing four American submarines at Stirling in a hedge against potential future conflicts with China.

This is done in an effort to help the U.S. reduce reliance on Guam should the Chinese strike, giving the U.S. options other than Hawaii. This move has some pros and cons. Stirling is outside China’s striking range, but it’s incredibly isolated. So, the U.S. couldn’t project power directly against China from there, but China’s trade routes in the Indian Ocean and Strait of Malacca would be vulnerable. The forces based at Stirling would also be on their own if anything boils up, which isn’t ideal.

Beyond this plan being good or bad, its just outright unsettling. This move signals the U.S. is preparing for a world where our current global trading system will be irreparably broken.

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Transcript

Hey everybody. Peter Zeihan here coming to you from Colorado. And today we’re going to talk about the U.S. Navy deployment plans for the Pacific. Specifically, the U.S. Navy has announced that it’s going to be working with the Australians to expand their naval facility at the Stirling base, which is on an island just outside of Perth. For those of you who don’t read or know Australian geography, almost everybody in Australia lives in the southeastern kind of crescent, but all the way in the far west all by itself is Perth. 

So it’s kind of in the middle of nowhere, both the city and the base. And that’s from the Navy’s point of view, kind of the point. If, if, if there is a meaningful military conflict with the Chinese, the Navy’s concern is, is its current forward military base at Guam could come under missile attack. And if the Chinese get a few shots through the missile defense at the island, then the ability of using Guam in order to project power in the direction of the Asian mainland would be destroyed, and they would have to fall back to Pearl Harbor. 

So the idea is, if you permanently station four of America’s submarines out in the Indian Ocean near Perth, then that is well beyond any range possibility that the Chinese have. So this is both very smart and perhaps a little dumb. First, the smart anytime you can disperse your forces and maintain a reach would be really a robust idea. 

So the overall concept of having a second facility in that corner of the world makes perfect sense. The Australians are about the best allies and most loyal allies. We have hard to come up with a better spot if your goal is to have it beyond the range. Second, the dumb part. It’s really beyond the range. Perth is near nothing, and there is no way you could use naval forces in that area to project power to strike at China directly. 

What it could do is you could strike Chinese shipping in the Indian Ocean and up into Southeast Asia to the Strait of Malacca. And so one of the things that I’ve been saying for a very long time is that any war with the Chinese, I’m really not overly concerned because they’re dependent on international trade. We’re not we have a global navy. 

They don’t. You put those two together in any hot war. The easiest way to destroy China. Not not not the military of China, China, the country. Let’s just stop the shipping of the stuff that doesn’t go to the United States, which obviously would be shut down. About 80% of their energy flows come through the Indian Ocean basins from the Persian Gulf. 

About half of their food flows and about 80% of their manufacturing good flows goes through the same route. So if you put some naval assets in sterling in case of a hot war, we now have a Ford missile base. It could shut it all down in a matter of days and weeks. Just keep in mind that this is a different sort of conflict. 

If you’re going to put subs to do it, you are not taking over the oil tankers or the cargo ships. You’re just sinking them. That would be really, really colorful anyway. The other other problem is that, if Guam is taken out, then there really isn’t. A series of stepping stones to get to Perth. So whatever is operating there is going to be more or less on their own unless they decide to go quiet and cross the Pacific the long way. 

So any assets there will be exposed. It’s not that this is a bad plan. It’s just it’s laying the groundwork for a very specific sort of action that assumes the global system is broken beyond repair. I would argue we’re getting there anyway, but starting to put teeth in a place where it would force that to happen gets my attention in a way that I’m not entirely excited about.

Japan Sees the Writing on the Wall

Flag of Japan over mount fuji

Japan’s ruling Liberal Democratic Party just won a two-thirds majority in the lower house. This gives Prime Minister Takaichi a rare personal mandate and practically total control of the government for the next few years.

Now that the PM can act decisively, we could see changes in the U.S.-Japan relationship. Japan is still facing the same core problems: demographic decline, debt, and forever out of reach of its old economic weight. At the same time, the U.S. alliance is growing shakier by the day; we’re not in the danger zone yet, but Japan is beginning to see the writing on the wall.

So, Japan could begin the process of constitutional change to loosen military constraints, but that’s not going to come overnight. Japan isn’t breaking away, just getting ready for the alliance to weaken.

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Transcript

Hey all, Peter Zeihan here. Coming from Colorado, it is, February somehow 60 degrees. Anyway, today we’re talking about the recent elections over the weekend in Japan. The Liberal Democratic Party, which is the largest party by far in the country, got a two thirds majority in the lower house of the diet, meaning that Prime Minister Takahashi has basically everything she needs to run the government, however she wants for at least the next couple of years. 

Politics in Japan aren’t really policy or party based. The more personality based and the first hurdle that any new leader has to achieve is a personal mandate. And she has now done that in spades. This doesn’t happen very often in Japan. Usually we have seen a series of successive weak governments that are never able to get that mandate. 

The last leader of the LDP, the last prime minister who was able to secure that sort of personal mandate, was a guy by the name of Shinzo Abe who ruled for about a decade, and he was Takahashi’s, mentor. So, she’s learned from the best. The question, of course, is what she will do with it. Japan today. 

Japan ten years ago. Japan 20 years ago. Japan 30 years ago has always had the same two big problems. The first is demographics and the debt that comes from that. The country basically saw its birth rate collapsed before World War two and has been the oldest demographically speaking country in the world for several decades. They’ve managed to slow that decline. 

So about another dozen countries are now aging faster than them, but they are still aging, and they are still the oldest. And that means consumption in this country is really not possible in any meaningful way, because there just aren’t enough young people, to do it. That leaves them dependent on exports. But after the 80s and the 90s and a series of trade conflicts with the rest of the world, most notably with the United States, they’ve basically re domiciled their economy. 

So if you’re going to exports from something from Japan, you actually take your industrial plant to the country you want to export to build it there, operate it there, employ people there, sell to people there. And the connections between Japan proper and the rest of the world economically are actually just limited to energy. Pretty much these days. It actually, as a percent of GDP, trades less than the rest of the world, than the United States does. 

Even, that doesn’t mean that all is good. It means that you’ve got a Japan that really can’t grow. They can still advance, they can still update, and they still have influence. But there are never going to be the economic weight that they used to be. And that limits some of their options. The second problem, of course, is relations with United States. 

Japan, throughout the Cold War into the post-Cold War era, has maintained the second most powerful expeditionary navy in the world, second only to the United States. And it’s been the American Japanese alliance that has been the cornerstone of not just the American position in the Pacific, but of Japan’s existence as a major power. The question that the Japanese are starting to ask in the age of Trump two is whether that has legs under Shinzo Abe in Trump won a free trade deal with a security add on was negotiated, in which the Japanese basically gave in on every irritant in the bilateral relationship. 

And Trump two comes in and says that that deal was stupid. And he actually specifically said it was a Biden deal, which was hilarious. Anyway, the Japanese are thinking that, you know, if if we give the Americans everything that they want and they’re still not satisfied, should we give the Americans any thing that they want? We’re not to the point that the alliance is in formal danger, or we’re not to the point where that is part of the debate in Japan. 

But when the Japanese see what the Trump administration has done to even firmer allies, countries like Denmark, they have to be wondering how long this can last. It doesn’t mean a war is imminent, much less inevitable. But Japan is starting to lay the groundwork for going its own way, whatever that happens to mean. 

And without the American partnership with Tokyo, the American position in the Pacific, it goes from unassailable to something significantly less robust. The process for that happening would require probably a constitutional change, because the alliance with the Americans and not having an independent military structure that’s hardcoded into the Constitution that the Americans wrote for the Japanese. After the last time we had a tussle at the end of World War Two, now the new government can start that process. 

They now have a two thirds majority in the lower house of the diet, which is where constitutional amendments start. But then it has to pass through the upper house and the upper house is a little bit like the U.S. Senate. 

Half of it is reelected every three years. And unlike the lower house, where the Prime Minister can declare fresh elections whenever he or she wants, can’t do that for the upper house. 

It’s only on the schedule. And we just had elections in the upper house in 2025, so you have to wait till 2028. So barring a really significant change in the political environment and relations with the Americans, it’s difficult to imagine the upper house just amending the Constitution in the direction of Japan being a more independent power without something dramatic happening. 

And that is at the moment, not in the cards. Granted, two months ago, I would have said that the Americans willing to walk away from the entire Western alliance in order to grab a chunk of ice cap wasn’t in the cards either. So the Trump administration is perfectly reserves its right to throw all of this into the shitter at the first opportunity. 

How the Japanese respond to that, of course, is going to be the issue. And at least for the Prime Minister, she now faces no meaningful opposition in making day to day policy. So the Japanese response to whatever happens can actually be pretty quick.

Japan’s Debt Crisis Is Just the Beginning

Photo of Japanese Yen

Japan has a…special way of measuring deficits, leaving true borrowing understated by excluding major obligations like pensions and local government debt, and counting planned bond issuance as income. But Japan isn’t the only country facing debt issues.

Japan has run an annual deficit of 7-10% for decades, making it the most indebted country in modern history. The U.S. and Europe are on a similar trajectory, though. The U.S. has interest payments that rival defense spending, thanks to the demographic situation. Europe has the same people problem, a weaker tax base, and has to ramp up defense spending to deal with Russia.

While Japan might be first through the gate, this is a global issue. Budget cutting alone isn’t going to solve any problems, but existing economic models simply can’t square this circle.

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Transcript

Hey all, Peter Zeihan here. Coming to you from home in Colorado. Whether it’s craps on inside. Anyway, a lot of people have written in about what’s going on with financial markets specifically Japan. For those of you who don’t follow this sort of thing, there’s been a bit of a challenge in the bond market recently. We’ve got a number of countries ranging from the United States to Germany to Britain, that are issuing record amounts of debt. 

That’s something that’s only going to continue in the future. But, we had a scare when it came to Japan specifically recently. So I thought it was worth digging into that a little bit. Japan doesn’t run their numbers in a normal way. So normally it’s like here in the United States or really in any other advanced country, if you spend more than you take in in taxes, you issue bonds which are sold on the international market, and that generates debt that goes into your overall stock. 

And the figure that we normally go for is, deficit spending as a percent of GDP, which based on your country, can be anywhere from 1 to 10% based on the circumstances. As a rule, whenever that number is higher than your economic growth for the year, your debt load is going to increase and it will put pressure on your economy. 

Year after year after year, growing, growing, growing, growing. And in the United States and a lot of advanced countries, we now have debt levels that are over 100% of GDP, which has reached the point that it is a constant drag. So in the United States, interest payments on that debt is one of our biggest outlays. We spend as much as that we do on defense, and is absolutely making economic activity for everybody higher because it increases borrowing costs. 

So the difference between, say, a 4% and a 6% mortgage is a mortgage payment that’s about 50% bigger. So you can see how that could really hurt really, really fast. Japan. Japan does their numbers differently. According to the IMF, their deficit spending is roughly 2 to 3% of GDP on any given year. But the IMF follows the Japanese way of producing the statistics, and it doesn’t count inter government transfers as potential debt. 

And they also count things like Social Security payments or what we would call them here as income, as opposed to something that needs to be put into a box and really shouldn’t affect the math at all. The Japanese say that their deficit spending is in the vicinity, typically of 4 to 5% of GDP, which, considering they’ve averaged less than 1% growth for the last 35 years, is really, really bad. 

But that’s also not very honest, because when the Japanese do their budget, if they’re doing deficit spending, they don’t count that as deficit spending because it was planned. So if they’re issuing bonds, they actually count that as income. So their core deficit spending doesn’t count at all according to them. They only counted as deficit spending if it’s a supplemental budget that they have to do later in the year for, say, construction or stimulus or whatever it happens to be. 

So in reality, Japan’s budget deficit has been in the 7 to 10% range for almost 30 years now. And so their total national debt as a percent of GDP, everything accrued is about 230 to 240% of GDP, well over double what we have here in the United States. And that doesn’t count local government debt, and it doesn’t count pension arrears, and it doesn’t count the bankrupt nature of their social security network. 

You throw that all in your somewhere between 400 and 500% of GDP, making Japan by far the most indebted country in modern history. Which isn’t to say that the rest of us are not catching up. The four most prolific spenders for administrations in American history are Barack Obama. Trump won Biden and now Trump two. And each one has spent more than the last. 

So, for example, despite the personnel gutting of the federal government, early last year in the Trump administration’s second term, we’re actually now spending more on the government than we ever have before. And that’s before you consider increases to spending for things like homeland security, defense. So we’re absolutely moving in the wrong direction. We’ve been north of 5% of GDP spending for over a decade now. 

Not just Covid, but overall. And we’re showing no sign of going the other direction. Part of this, like with Japan, it’s a pension issue. We’ve had the baby boomers go from the biggest taxpayers we’ve ever had to the biggest tax takers we’ve ever had as they retire. That’s something that’s not going to improve for at least the next 10 or 15 years, until they pass on. 

And the new generation, my generation, Gen X, are the retired class because we’re a small number, elsewhere in the world, the situation is also getting worse. Specifically, in the case of Europe, they have the same demographic problem that we have here in the United States that we have in Japan. But unlike the United States, where we have a large cadre of millennials who are filling out the numbers and in time will repair the tax base. 

Most European countries don’t have a population bloc of size in that number. So you’re just looking at the numbers getting worse and worse and worse and worse every year. Unless you just decide to liquefy old people somehow, which would be just as complicated. In addition, after 70 years of slimming down the defense budgets, especially in the last 30 years in the post-Cold War era, we’re now in a situation where the Europeans are actually facing a hot war, at the same time that the Trump administration is threatening to withdraw American support. 

So we’re seeing these countries needing to build a more normal military force. And that does not mean expanding their military spending from 1% to 2% of GDP, or even 5% of GDP. Like the Trump administration has recently arm twisted them to do. They need to get closer to 10 to 30% of GDP, because they need to build up the institutions, in many cases from almost scratch in the next few years to prepare for a war with the Russians. 

That is very, very expensive. And the only way they can do it is by basically ignoring all of their budget and deficit laws that are entrenched in the eurozone formation. Bottom line is, there’s a huge amount of debt out there already, and all signs point to getting bigger and bigger, and bigger. even if there’s sufficient political will to cut the budgets in places where perhaps you can find some fat to trim the structural nature of the environment demographically and strategically, is arguing for far bigger deficits moving forward. 

Does this mean we’re going to have a debt crisis? I don’t know. We haven’t had a real country have a real debt crisis in a long time, and certainly not in the current era we’re in, where the United States is by far the largest economy, which means I also can’t tell you what will happen on the other side of this. 

All I know for certain is the combination of globalization and rapid aging means that the economic models that underline everything that we understand about finance, capitalism, socialism, fascism, whatever you want to call it, they’re all based on the population getting bigger, and that is no longer true. So we are going to have to find a new economic model. 

And in that sort of environment, I don’t know what is going to happen with debt. I can only point to an example that Japan has provided us in the past, something called Tokyo Side, where basically the emperor just walks out, waves his scepter around, declares that every debt is null and void, and everyone starts over. That would liquefy everyone’s savings account. 

It would liquefy everyone’s mortgage and would literally be a disruptive event. But at the moment, that is really the only model that makes any sense. That doesn’t mean that you should plan for that, however. So.

Trump Announces $12B Rare Earth Stockpile

Photo of rare earth minerals: praseodymium, cerium, lanthanum, neodymium, samarium, and gadolinium. Photo by Wikimedia: https://en.wikipedia.org/wiki/Rare-earth_element#/media/File:Rareearthoxides.jpg

The Trump administration has announced a plan to create a $12 billion stockpile of rare earths. The goal is to create a buffer against any supply disruptions, but this is just a band-aid.

Depending on the metal and use case, this stockpile might give the US a five-month supply. But the core problem still exists: the US doesn’t have any domestic refining or processing. It’s not all that hard or expensive to extract and process this stuff; the US just hasn’t invested in the infrastructure to do so.

If the goal was to establish real supply security, this stockpile isn’t the way to go about it. But hey, at least we’ve got an extra five months.

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Transcript

Hey all, Peter Zeihan here, coming to you from Colorado. And today we’re looking at a new initiative from the Trump administration to solve the critical materials issues. Short version. The United States doesn’t refine most of its materials these days. It relies on countries that have much lower pollution concerns, like, say, China or India, to do the processing. And then we buy the process material and do whatever with us. 

What that means is, well, while you save a lot of money and you certainly clean up your own local environment, you subcontract all of this out to countries that, in the case of China, might not be the most friendly and then might cut off supplies at a later time, as the Chinese have done to a number of countries from time to time, including the United States. 

Anyway, the idea is you establish a $12 billion stockpile. The U.S. government is going to be tapping the import export bank. And so the idea of using one government agency to finance the development of another, I personally find that delicious, but bygones. And the idea is you buy these processed metals, primarily rare earth metals, and then they are in the United States. 

So you have a buffer. I don’t want overstate this. It’s a good step. It’s in the right direction, but it’s going to get crazy. $12 billion of critical materials for a country that is a $25 trillion economy is not going to last a long time, probably somewhere between 1 and 5 months, based on the specific material, because there are over 30 different materials that they’re talking about here. 

It’s a step in the right direction. But if your goal is to really achieve a national security issue and economic self-sufficiency, you need to make these things yourself. Right now they’d just be buying them from China on the open market a little bit more than what we need, and put them into basically a safe. What you need to do is build up the processing. 

The problem here is that there is no such thing on the planet as a rare Earth element mine or rare Earth element production line. Rare earth metals exist as small, small impurities in other mineral extraction, primarily things like silver, but also copper and zinc and a lot of other things, uranium, for example. And so what happens is you have your mine that produces X mineral. 

You process that to get X refined mineral and then the waste material you then go through a separate set of steps that involves several hundred vats of acid. Basically with every step you concentrate the mineral that you’re after, whatever it happens to be. And after six months to a year of such processing through acid, you eventually get some refined metal rare earth metal that you can use, but it takes several tons of raw material to generate one ounce of the finished metal over months of steps, and hundreds of vats us and until the United States builds that infrastructure, which isn’t technically difficult. It’s chemically very tricky. Until you do that, you are never going to have independence from international suppliers. Now, there’s nothing about this technology that is new. It was developed back in the 19 tens and 1920s. The U.S. obviously can do it. It’s not even particularly expensive even if it is environmentally dirty. 

But it does require space, and it does require capital and does require planning. It does require infrastructure. And at the moment, the Trump administration has not put a dime into that effort. If and when that changes, I will be there with bells on to sing and dance. That is not what is happening today. Today we are building the equivalent of a piggy bank that we still have to fill up.

The End of Nuclear Arms Control

nuclear bomb with a mushroom in the desert

The last remaining US-Russia nuclear arms control agreement has expired, which means for the first time in decades, we’re in a world with no active nuclear arms control.

To be fair, it’s not like the Russians were honoring those deals even when they were in place. And given Russia’s war in Ukraine, negotiations for a new deal were a moot point. So, that leaves the world’s largest nuclear powers without limitations on their nuclear arsenals. Which means any other nuclear-capable power will be looking to expand or acquire its very own nuclear arsenal ASAP.

There’s a long list of countries eager to bolster security through nuclear armament, so a long period of nuclear proliferation is right around the corner…

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Transcript

Hey everybody. Peter Zeihan here coming you from Colorado today is the 4th of February. You’re gonna be seeing this in the morning on the fifth. And it’s a big day because for the first time in several decades, for the bulk of my lifetime, there is no active nuclear disarmament or arms control deal. In effect, the last one to start deal with the revised start deal, expired today. 

And there is really no appetite within the administration of the United States or the Russian Federation to negotiate a new one. What this means is we’re now in a situation where both sides have between 1000 and 2000 warheads, and there are no longer any legal restrictions on them expanding those arsenals. Now, some people try to put the blame for this on the Donald Trump. 

And I will not say that the Trump administration is really a champion of arm control in any form, but this is really mostly a Russian thing. You see, the The Russians know that they’re the strategically inferior partner in these deals. And the only reason that they were originally negotiated back in 1979 and 1985 is that they faced just a crushing, overwhelming American superiority in technology, reach and alliance structure. And so they knew that if there was a conflict, the United States had a bomber fleet, they had a missile fleet, it had a sub fleet, and they really just only had the missiles. 

And they were not confident that they could survive a first strike in order to deliver a second strike. So arms control back then was largely designed as a way by the Soviets to deflate tensions and eventually set the stage for a lasting detente that eventually ended the Cold War. Things really picked up after 1986, when Mikhail Gorbachev, who was really the only economist to ever run the Soviet Union, and he realized that the system was breaking and there was a limited amount of time. 

And so talks accelerated. And then in the post-Soviet system, under Yeltsin, we were no longer enemies. So getting rid of the thousands of warheads made a lot of sense to everybody. But in the time since that, we’ve had 20 years of Vladimir Putin and the Russians, rightly or wrongly, feel that the West has betrayed them time and time and time again. 

And the only way that they’re treated seriously as is if they’re threatened, the destruction of the human race with nuclear weapons. To that end, we’ve had two big trends that have happened in the last decade. Number one, bit by bit, the Russians have abrogated or cheated on every single one of the treaties in order to prompt the Americans to be the ones to cancel them. 

And Trump one did cancel a couple and others have expired. And so, you know, you can blame Trump if you want to. But the real fact was, is that the Russians were testing and fielding new weapons that were explicitly barred by the treaties and did it anyway, saying that they were still abiding by the conditions. The second issue, of course, is more recent with the Ukraine war. 

They’re in a hot war. And the idea that the Russians are going to voluntarily abide by any sort of meaningful arms control when they’re actually in the process of shooting a lot of people, is a bit rich, just like back in the late 70s and into the 80s, the reasons that the Russians thought they needed to do this is because they didn’t think that they could win on a field of battle. 

And unless and until they feel that way again in Ukraine, the chances of them going into any negotiations with good faith are pretty, pretty weak. Also, again, keep in mind that the Russians have abrogated or cheated on every single arms control treaty, nuclear or conventional, that they have ever signed. So any meaningful deal has to involve invasive inspections by both parties onto the other side in order to confirm these weapons are actually being taken out of service, dismantled, and eventually spun down. 

So they can’t be used, for weapons again, that requires a degree of intervention in the American military complex that we’ve done before. It would require a degree of intervention in the Russian complex that they have done before. it also would require a degree of trust on both sides that at the moment just simply doesn’t exist. 

And again, again, again, they are in a hot war. The Russians are in a hot war right now. So the idea that you can have American military and civilian personnel poking around into the Russian nuclear complex, it’s not feasible. 

So next steps. As to arms control, there really aren’t any, because until there’s a substantial change in mindset in Moscow, the idea that they’re going to negotiate with anyone in good faith simply evaporates. That leaves the situation open for everybody else. Now, the Americans and the Russians combined have over 90% of the nuclear weapons that are available in the world today. 

But they’re not the only ones. Israel has some, France and Britain have some. And the Chinese, of course, have a significant arsenal. Although it’s not merely in the same class as either Russia or the United States, unless and until we have some sort of deal between the Russians and the Americans and what a ceiling might look like, other countries not only don’t have an incentive to limit their own production of weapons, they have a very strong incentive to build more and more and more, not just to get to bigger tables, but to secure their own existence. 

And that is as true for China as it is for Israel and Pakistan and India and unfortunately, now true for Korea and Japan and Poland and Germany and Sweden and Finland as well. So we are not simply at the end of the great era of arms control that literally took tens of thousands of weapons out of circulation. We are now at the dawn of a new era of massive proliferation, because we no longer have a structure to limit it. 

And the changes to the international strategic environment basically demanded. Because if you’re a country that has been on the sidelines for the last 50 years and relying on the bilateral system between the Russians and the Americans to kind of keep a lid on things, and all of a sudden that is gone. You no longer have the time that is necessary to build up conventional force. 

Building up a nuclear force is the fastest way to get to a degree of security, where you actually hold some cards. And we are now going to see that in country after country after country after country for at least the next 15 years.

The Two-Speed EU of the Future

A map of Europe with lines going from different countries and showing connection points

The EU struggles to take any decisive action on foreign and security policy because it has to wait for all 29 member states to agree. Whereas the US can make and enforce security decisions at the drop of a hat.

The Europeans have long debated whether they should become bigger or closer. Bigger = more members for weight. Closer = deeper integration. Both cause more problems. So, a compromise has been proposed for a two-speed Europe.

There would be a loosely integrated EU for everyone, alongside a much tighter inner core that coordinates on economic, political, and security matters without vetoes. It’s still messy, and it would require a new treaty, but most importantly, powers like Germany and France would have to relinquish their treasured veto power, which likely won’t happen.

Unless a truly catastrophic war breaks out, the Europeans aren’t going to be on board for true political-military integration. So, we’re probably going to see the EU structure and institutions snap before actual reform takes place.

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Transcript

Hey all Peter Zeihan here. Coming to you from Colorado. Today we’re going to talk about Europe. Specifically, the Europeans are being faced with what is not a new problem. The idea is that the United States, on a whim, in this case with the Trump administration, can make a decision and enforce security realities across the continent, in a matter of hours or days. 

Whereas the Europeans have to sit down and have a meeting among their 29 member states and hash things out over days, over hours, over weeks, over months, over a year. And then maybe, maybe, maybe there needs to be a new treaty that has to be ratified by everybody. And so it’s a decade or two decades or three decades from now when action finally starts happening. 

The problem is an age old debate in Europe that goes back to the late 80s. The debate is over whether we should be bigger or closer. So the idea, step one is that the more members, the European Union has, the more geopolitical and economic heft it will have, and the more powerful it will be on the larger stage. 

And, you know, it doesn’t take a lot of genius to see the logic behind that. The United States is, in part, very powerful because it controls the best part of an entire continent, and that allows it to be a huge force economically, politically, culturally in Project Power, where I say Swaziland, not so much. And so when you take a country or a union of the EU that has as many people as the United States, you would think, at least on the surface, that it should be able to punch at its weight. 

The problem with that is, if you’ve got 29 members, you’ve got 29 opinions. And for the big issues, which most foreign affairs issues are big issues and I’m all security issues are big issues. Everyone has to agree. Every single member has a veto. So if only one country disagrees with the path, that plan falls apart, which is one of the reasons why four years into the war with Europeans having explosions on their territory, a hot war on their border, and the Russians specifically threatening each and every country individually, you still haven’t seen the Europeans be able to take a really firm stance that has really tipped the balance, because they have one member, Hungary, who is basically in the Russians pocket. And it’s galling. So being big is great, but that’s not enough. The second path is called getting closer or getting deeper. And the idea is that you change the treaty structure of the European Union so that these national vetoes don’t exist or that they’re harder to use. And if you do that, if you allow fewer of voices to derail whatever the common goal happens to be, well, then you can act faster. 

The thing is, countries then have to give up their vetoes before the issue comes up, knowing that when an issue that is of importance to them surfaces, they might not be able to stop it. Now the EU has edged this direction with something called qualified majority voting, where a certain percentage of the states representing a certain percentage of the population can force something over the others. 

But this really has to do with economic issues that are really not all that important, as opposed to foreign policy, and especially security issues, which everyone thinks are part of the reason why the United Kingdom ultimately left the EU. 

what’s being debated now also not a new idea, is something called a two speed Europe, where you get a cluster of European countries that want to go the deeper route, who integrate more and more tightly and give it away their vetoes for core decisions. 

So basically you’d have an EU light that is everybody, and then an EU deep, which is a cluster of six, seven, ten, 15, 20, whatever the number happens to be who agree to coordinate on not just economic and financial issues, but political and security issues as well. Without those national vetoes, or at least with them watered down, it’s an intriguing idea. 

Organizationally, it would be horrible because at every meeting you have to decide what is in what bucket and what not, and then those other people just leave the room because they’ve got vetoes and they’re not invited. But there’s a couple other obstacles that are going to prevent this from probably moving forward. Step one this requires yet another treaty. 

And every time the Europeans start a treaty process, it’s at least a decade long. So whatever they do now is not for the Ukraine war. It’s for the world on the other side of Ukraine. On the other side of Trump. And based how things go, there may be a hot war in Europe when that is happening. And so this will all be tossed to the side based on current circumstances. 

The second problem is that the two countries that matter the most in these discussions are Germany, because it’s the largest population and largest economy, and the biggest industrial base by far. And France better has a nuclear deterrent as the most powerful military by far, and is also, you know, second largest in the Union by every other measure. 

These countries don’t want to give up their vetoes. Think of it this way. Let’s say the United States and Canada merge into a super state. And let’s say the next president just happened to be from Ontario. And all of a sudden you have a Canadian commander in chief commanding American forces. Can you can you see how that would be really awkward? So in the case of a deeper union where the Germans and the French and a lot of other countries are involved, let’s say we have a, I don’t know, a Latvian president, and the Latvian president is now commanding the French nuclear force. 

This sort of integration culturally for everyone to really, truly, deeply agree that they’re on the same side to the point they’re willing to bleed because someone else made a decision that is not something that happens, or 2 or 5 or 10 or 20 years. That is something that has to start at the beginning or require a devastating conflict that is so extreme that everyone was already fighting and dying on the same side. 

Anyway, that just hasn’t happened in Europe yet, and it’s probably not going to happen even with the Ukraine war. Or more to the point, any sort of merger would happen after. So all the countries who want to maintain their vetoes could veto this plan. And then once you get to the other side, you have to decide what sorts of sovereignty to pull and whether that actually makes a difference at all. 

Because when you’re talking about the Trump administration specifically, or the United States in general, all of this is already done. All of this was done over 200 years ago. You could even argue that since, the Civil War, it’s been locked in hard when someone from Virginia or New York or California is president. It’s not like you have a half a dozen states that refuse to pay taxes and actually go through with it, or pull their troops. 

There’s no legal structure, there’s no cultural structures, no support in these societies for things like that. In Europe. All of that is still there. These are nation states talking about pulling power. They are not component states of a larger political entity. So I find this very unlikely that this just like the last couple times it’s gone down, it’s going to lead anywhere. 

The question is whether or not the legal structures of the EU are going to fracture under the pressures that they’re in. And if once that happens, a new form ultimately emerges from the other side. And I’m down on paper going back 20 years, seeing that some version of that is far more likely than the negotiating incrementally into a more federal Europe, because the systems we have right now in Europe are designed for globalism. 

They’re designed for multi-party democracy. They are designed for not having a hard war, and those worlds are going away. And I really doubt the Europeans are going to be able to adapt their institutions before they snap. Now, what happens on the other side of that? That’s a different conversation. But we have to have that breaking event first. Brexit didn’t do it so far. 

The Ukraine war hasn’t done it. And it doesn’t look at the Trump administration to be doing it. So it’s gonna have to be something a lot more dramatic. And that’s just not in the cards today.

Is Venezuela Ready to Move On?

A person walking draped in a Venezuelan flag against a desaturated background

Venezuela has been dragged through the mud thanks to Chávez and Maduro, but it might be seeing its first genuinely positive development in decades. Former VP and now President Delcy Rodríguez has announced a sweeping amnesty covering all crimes since ’99.

That’s three decades of corruption, repression, and institutional collapse that is getting wiped clean. This offers Venezuela an alternative ending; rather than ending up as a failed state due to anarchy or civil war, it can head down a brighter path. But simply granting amnesty won’t cut it; they’ll need an open truth-and-reconciliation process similar to what South Africa did.

This development could give Venezuela a real fresh start. With Rodríguez already shutting down political prisons, I’m cautiously optimistic and hope that she continues to surprise me.

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Transcript

Hey everybody, Peter Zeihan here coming to you from Colorado. And today we’re trying to talk a little bit about Venezuela because we’ve had some interesting developments. The sitting president, woman by the name of Desi Rodriguez, has announced an asylum for everyone, going back to 1999, 1999 is when Hugo Chavez, became president and started the country down on its. 

The civilizational spiral gutted the energy company. Everyone started to basically lose the educational attainments they had had. Venezuela used to be the third most advanced country in the Western Hemisphere, after the United States and Canada. And under Chavez, you drove into the ground. And then his successor, Nicolas Maduro, who used to be Chavez’s bus driver, proved to be quite a thug. 

Stole even more from the place than Chavez did and continue to drive it into the ground. And his VP is Delsey Rodriguez. now that the U.S. has removed Nicolas Maduro from the stage, Rodriguez is now in charge and she’s offered this amnesty. So basically, any crimes were committed by anyone from 1999 until present, wiped clean. 

This is probably I don’t want to play this because there’s a lot that still needs to happen. This is probably the best news. It has come out of Venezuela in 20 years. 30 years, almost 30 years. Okay, so when you have an authoritarian government, rather it’s a dictatorship like the Maduro Chavez system or a colonial rule or communists or whatever it happens to be. 

Usually when the system ends and ends one of two ways. Number one, a key personality dies and there is no clear successor. And the place just kind of dissolves into anarchy. Or number two, other groups form and you get a more ossified opposition, and the two start fighting, and eventually that fighting becomes very literal, and you eventually get a civil war. 

And neither of these options are great, because in the first one, the institutions were destroyed by the authoritarian. And so there’s nothing to carry on after the authoritarian is gone. And civil war, I would like most people to understand is generally not good for much of anything. This is potentially a third way that has been tried by very, very few places, and even fewer successfully. 

But I think the best example I can give you of how a general amnesty works can work is South Africa. Everybody knew that the apartheid government was a little off. And when the apartheid government fell at the end of the Cold War, there was something very similar, an amnesty program where all of the whites who everyone knew were torturing the blacks were given blanket pardons. 

And all of the blacks, especially the more militant groups who had basically been killing people for decades, in their resistance against the apartheid government were also given pardons. And what we have to remember is that is step one. starting with a blank slate. Very important, deciding to bury the past and move on. Very important. 

But even if everyone is in agreement that this is the right path, the step two is very important. And the way the South Africans did that was was something called a truth and reconciliation committee, where basically everybody got together and shared with everyone else what they had done. So the Zulu nationalists talked about their their murder brigades, and the white nationalists talked about their torture techniques. 

And it was raw and it was awful. It was jarring. But by being honest with one another, they set the stage for a pluralistic society. And while South Africa has many, many, many, many, many problems, democracy is not one of them. If Venezuela is going to turn the page, something like that is going to happen. And if something like that happens, it is going to be awful. 

There are political prisons that are in the process now have been shut down as part of this asylum program. And kudos to Marco Rubio, who is US Secretary of state, who has basically pushed Rodriguez in this direction. But it’s not just enough to wipe the slate. You also have to have an open, honest conversation among yourselves about why it happened, how it happened, what happened, who did what. 

And with that, you can then potentially move forward with a new constitution, a new political system, and have a true fresh start. That is now what’s in front of Venezuela. But I gotta say, when this all started, I looked at Dulce Rodriguez, who was one of the most famous thugs and one of the most famous looters of the country, and I did not expect this step. 

So for one rare moment, I’m actually a little bit optimistic about how this could go. Don’t fuck it up.

The Real Winners After a Chinese Collapse

A man holding a Chinese Yuan in the middle of Tinannamen Square

First order of business: No, this isn’t financial advice. Second order of business: taking a loan out in Yuan to profit from a Chinese collapse is a very bad idea.

Practically all yuan is locked inside mainland China, so you probably couldn’t get it out anyway. If you managed to, you would have to convert it before the collapse. The smarter move would be investing in the physical infrastructure and industrial capacity that will fill China’s shoes.

In all likelihood, a Chinese collapse will be more Venezuela-esque than Soviet…so anyone with yuan claims would be SOL.

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Transcript

Hey, everybody. Peter Zeihan here, coming from Colorado. Taking a question from the Patreon page specifically, and this sounds a lot like seeking financial advice, so I’m not giving it in that way. But if the Chinese system collapses, wouldn’t it be a great idea to take out a big loan in yuan and then convert it to dollars or some other currency? 

I wouldn’t recommend that. A couple things to keep in mind. Number one, over 99% of the yuan is locked within mainland China, and most of what is traded abroad is done through currency markets in Hong Kong specifically. So if you take out a yuan loan, you’re probably taking out the yuan loan in China, and the money cannot be transferred out. 

The Chinese do it this way to maintain full control over the Chinese financial system, which they see as a political tool more than anything else. 

So you wouldn’t be able to get the money out most likely in the first place. But, you know, if you could, then what? Well, you would definitely need to convert it out of yuan before the collapse. 

One of the things that we have learned over the last 40 years from a number of countries that have collapsed is when their system breaks, their currency becomes not just soft, but nearly worthless. So in the post-Soviet system, for example, there were a fair amount of rubles out there because the, Russians, Soviets sold a lot of hydrocarbons and other materials to the wider world, some of that manifested as ruble circulating in the international system. 

But it basically became worthless the next day. So you need to look at maybe not the Soviet collapse as a guide, but maybe the Venezuelan collapse. Venezuela used to be one of the richest countries in the Western Hemisphere, before Hugo Chavez took it over in the late 1990s. That was driven into the ground by the current bus driver, Nicolas Maduro. When you have a petroleum economy, you generate a lot of hard capital in hard currencies that are not your own. You can use that currency either to bring home and subsidize things to achieve whatever it is you want. You know, more roads, better education, happier people by just handing out cash. 

In the case of Venezuela, AK 47 is for everybody. Or you can take some of that money that is already outside of your country and invest it outside of your country in longer term assets, whether they be financial or real estate or some sort of productive capacity. So, for example, Venezuela used a lot of their money to improve their educational system. 

Preach those again. And they also built up their own oil industry at home. So they became, at the time, one of the most sophisticated energy companies in the world. And they invested in hardware in the United States that would further entrench their relationship with America, specifically buying or building refineries that were designed to process their crude oil. Well, as Chavez came in and started mismanaging everything, and eventually we had fiscal and eventually nutritional collapse in Venezuela, these assets all of a sudden were there. 

And Venezuela lacked the financial capacity to service them and operate them. So eventually they kind of fell into a degree of receivership that was eventually brokered by the US government. And they either got spun off into independent firms or bought by third parties. I think some version of that is what the Chinese collapse would look like. Now. China is a lot bigger than Venezuela. 

They have $10 trillion of investment in the wider world, about one third of which are foreign direct investment. So hard assets like a, say, a refinery or a farm, and so when these things go, you basically have the owning entity and the Chinese Communist Party and all their affiliated companies back in Beijing, cease to exist in some form or be denied functional ownership by the governments where the assets were held. 

And at that point, typically what happens is the government nationalize it, and then auctions it off or sells it off in some way to their own domestic entities. Which means if you have a yuan loan, you would still get nothing, because your deal was with Beijing and Beijing is now gone. So if you’re looking to profit from the disintegration of the Chinese system, I know this is going to sound really boring, but it’s like just invest in the physical infrastructure and the industrial plant that will have to replace what the Chinese are doing now. 

And to be perfectly blunt, doing that earlier rather than later is a lot cheaper because then you can have it up and running when the Chinese break, and then you can really rake in the cash. But it is a long term play and it is not a financial one.

India: Overhyped or Global Player

Flag of India

Is India overhyped or genuinely important moving forward? Well, you could make a case for both.

India struggles with national unity due to diverse groups spread across a fragmented geography. This, and a difficult list of neighbors, limits power projection and forces largely self-contained growth. But India has something that most other countries lack, a relatively young population; this cohort will extend India’s consumption-driven economy into the 21st century. India also sits along the path of major energy flows, giving it influence and power in the region.

So, India might not look like a classic global superpower, but its demographics and geography outweigh the internal struggles it will face.

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Transcript

Peter Zeihan here, coming to you from Arizona and back by popular demand. It’s biscuit. Hey, there you go, buddy. Today we’re going to talk about India. One of the things that people really get wrong about India is it either matters or completely doesn’t matter based on your point of view. And it can be both at the same time. So first let’s talk about why a lot of India is overhyped. 

Let’s start with the geography. So in most countries, you have some sort of geographic feature. Usually a river valley that the ethnicity has risen up around, and then they expand from there into other zones. and then there’s, some sort of geographic barrier separating them from other countries. So, for example, the Po Valley in Italy or the greater Mississippi in the United States. 

Gets something or, the various rivers of Europe because you’ve got, you know, Dutch rivers and German rivers and Russian rivers and all that kind of stuff. Well, part of the problem you have in India is you got a lot of river valleys, most notably the Ganges, but there aren’t any clear geographic points of separation among them. So everybody gets their chocolate and everybody else’s peanut butter. 

And, it’s very difficult to achieve just the basics of national unity. So even today, only about half the population of India actually speaks Hindi. And you’ve got large minorities, of which Muslims are the single largest at about 15% of the population. And that makes, national unity almost impossible. It’s more like the Roman Empire than, modern. I’m sorry, not the Roman Empire or the Holy Roman Empire rather than a modern nation state. And it’s actually the third largest country in the world for Muslim populations, after only Pakistan and Indonesia. And he’s just ignoring me now. That’s just rude, buddy. Anyway, getting everybody to agree on anything is kind of crazy. And it takes five weeks to do national elections because the place is so large and so varied. 

Geographically, it’s got a problem with its neighborhood as well. It is surrounded by countries that it does not like and countries that do not like them, not just Pakistan, but Myanmar and Nepal and Sri Lanka and Bangladesh and India believes that none of these things should matter. And you should just look at the fact that it’s 1.5 billion people and it’s a large country. 

So it should be a global power, but it doesn’t have the ability to project power within its own neighborhood, much less out of the Indian Ocean basin. And you keep looking. And the Indian Ocean basin is kind of disconnected from the rest of the planet. Anyone who has the power to get there can easily dominate economic trade in the area, but the countries that are in the region have to go a long way to get to anything, because you get the Middle East with all its sand. 

You hit the jungles and mountains of, Southeast Asia. You hit the Tibetan Plateau in the Himalayas. It’s just really hard for India to be a player in any meaningful way. But any country that can project past those barriers into South Asia, they do pretty well for themselves. And that’s why the Brits were able to control the area for so long. 

Okay, so that’s why, the cards are kind of stacked against. Chomp chomp chomp chomp chomp. That’s why the deck is kind of stacked against, the country. But why does it matter anyway? Well, you know, 1.5 million people and, well. Or is most of the advanced world started industrializing back in the 1920s to 1950s. 

And so their populations urbanized and people started having fewer kids. And you play that for today, and we’ve got population bombs going off. India didn’t start the process until the 1990s. And while their birth rate has dropped by almost three quarters since then, it is nowhere near as demographically age as most of the rest of the world. 

So if they keep aging at the current rate, they’re still going to have a strong consumption LED system for their pretty much the remainder of the century minimum 2070, maybe even a little bit longer. You’re you can’t eat my thumb. That helps a great deal. Especially considering that India more or less needs to do the same thing that the United States does. 

As the Chinese fail, and that’s double the size of their industrial plant. So the problem that the unions are going to face is that because they don’t like anyone and because no one likes them, and because they are very anti-free trade and any for any number of reasons, strategic, economic, political, ideological. Anyone that you on my jacket? 

You are just weird this morning. Where was I? Oh, yeah. No trade. So all of their manufacturing supply chains have to be done in India. For India. They don’t have partners like the United States does. I mean, we’ve got trade deals, of course, with Mexico and Canada, but also with a number of other countries, including Israel and Colombia and Chile and others, and so we can participate in economic links with other places and we can all focus on, you know, you can’t eat my shoe. 

No, not the shoe, not the shoe. back up here. Come on, come on, come on. 

Here we go. Where was I? Oh, yeah. And so they’re not going to be linking with anyone else. Which means it’s going to be a longer store. It’s going to be a slower store. It’s going to be a dirtier and more expensive story. But it’s going to be an Indian story. And that is absolutely. Theres, one other thing to think about from a strategic point of view here goes back to the shoes. 

Is that, in any version of the world where the United States steps back from maintaining their global naval structure and allowing trade to continue? There’s going to be a problem for some sectors more than others. And the one that matters the most to the Indians, of course, is energy, because the Persian Gulf is right there. In fact, if you stay out of the Persian Gulf, you’re on your way to anyplace important. 

Your first stop is going to be India. So India doesn’t need a navy that is capable of projecting power on a global basis to be very significant, because ultimately you like that. That’s what you’re after. Your head is heavy. The, because India has the ability to protect or interfere with the supertanker energy shipments coming out of the Persian Gulf. 

So if you happen to be downstream from a shipment point of view, whether that’s in Northeast Asia or Southeast Asia or even the American West from seaboard, if you don’t have good relations with the Indians, you’re going to have some problems reliably accessing the Persian Gulf for energy. And since this is where today, half of all globally traded energy is sourced, that is going to be a real problem for everyone except India, because India will ultimately be the broker. 

So it matters just not necessarily in the way that a lot of people are thinking. And the way it matters is evolving very, very rapidly. And I look forward to seeing what they do with all of it. And now you’re chewing on my calf. Okay, I’m going to go and change clothes, bye.