The Truth About De-dollarization and What You Need to Know

The topic of de-dollarization is like the weird cousin no one wants to talk to at parties. They only come around once every year or two, and most of what they say is complete bulls***. But when the day comes that you need to take that weird cousin (aka de-dollarization) seriously, here are the three factors to look out for.

#1 Size – To be a currency of exchange, trade, and reserve, a currency must exist in a massive volume. Only four currencies meet the size requirement: Dollar, Euro, Yen and Yuan.

#2 Access – You need to be able to get ahold of a (nearly) unlimited supply of said currency at the drop of a hat. The Dollar comes out on top in this category, with the Yen and Yuan unable to provide the necessary level of access.

#3 Trust – You must feel secure that the chosen currency is a safe store of value and that the government will not intervene. This makes the currency a subset of trade, and if the country in charge wants to micromanage the value on a daily basis, it won’t work.

Several countries have been shouting from the mountaintops that they want to move away from the Dollar. I don’t take most of these too seriously, but one country is seriously considering de-dollarization, and we’ll talk about that tomorrow…

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 Colorado where the weather can’t decide what it wants to do. Today it’s sunny, so, you know, we’re going to work with it. A lot of you have written in asking me about all this hullabaloo about de-dollarization that comes up every year or two. And so I have to explain it again. Fundamentally, nothing has really changed this time, but let me give you the three things to look for if you do want to take de-dollarization seriously in the future, this is not the time.

Number one size. For a currency to be a currency of exchange, a currency of trade, and especially a currency of reserve. It has to exist in huge volume because that’s a lubricate trillions of dollars of financial transactions and physical transactions every single day, and something in excess of $25 – 30 trillion of annual merchandise trade. That’s a lot. And there are really only four countries in the world, four currencies in the world can even theoretically do that. The U.S. dollar, the European euro, the Japanese yen and the Chinese yuan. Number one.

Number two, access. You have to be able to get a hold of nearly unlimited volumes of that currency whenever you want to. Obviously, the dollar scratches that itch. The Japanese yen, not so much. The Japanese tried to go global back in the 1980s. It turns out their financial system couldn’t handle it and it contributed. It was one of the many factors as to why they have had on average 0% growth since 1993, 94 or something like that. And so they have kind of closed up shop. The currency is available. You can add it to the side, but it’s never going to be a mainline exchange currency. Let’s see, China is eliminated from that category as well. The number one concern that the Chinese have is for control. Absolute, domineering, dictatorial control over their own internal financial sector. That means they don’t want to see large cross-border flows, especially from China to the rest of the world. So every once in a while, the Chinese will do what they’re doing now and talk up the yuan and talk up internationalization. Then as soon as that starts to happen, a flood of currency from the Chinese goes elsewhere because the Chinese are the people who are the least confident in their own economic system. And then the Chinese government slams it shut and we don’t hear about it for a couple years again…like we are now.

Okay. What’s the other big one? Trust. You have to trust that the currency is going to be worth something. You have to trust that the government is not going to intervene. And that means this is kind of a subset of trade. Now, with trade, if you are a major trading country and a large percentage of your GDP is gotten from exports and imports, then you have a vested interest in what the value of your currency is every single day. The U.S. is perfect for that because the U.S. trade to GDP ratio is only about 15%, and about half of that is either energy or NAFTA. And everything else falls into that other like six, 7%. So the United States really doesn’t care what happens to the value of occurrence every day. The Chinese don’t have a freely traded system, so they can micromanage what the value is every single day. There’s also the issue of whether your money’s going to be there the next day. Now, the United States maybe is taking a hit on this with the Russia sanctions and that it’s weaponized the U.S. dollar in a few ways. But compare that to, say, what goes on with monetization. Now, I know I know a lot of you folks out there who are like gold bugs are like, oh, the U.S. monetizes like mad. And, you know, there’s something to be said for that. We do have a large money supply. It’s probably bigger than it needs to be. But a couple of things to keep in mind. It’s been shrinking for the last year as all the stimulus efforts from the last 15 years because of COVID and financial crisis and everything else have finally wound down. It’s going in the right direction. And second, I compare it to everyone else the Japanese, the Europeans, and especially the Chinese print currency in far greater volumes in the U.S. does. So the U.S. currency is the primary finance currency. It’s a primary currency. And everyone’s foreign reserves, the primary trade currency is the primary store of value. The Chinese yuan is none of those things. In fact, 99% of the issued currency of the Chinese yuan is held within the Chinese system. But their money supply is bigger than the United States because they print currency so ridiculously. So if you want to use that as a reason and talk down the dollar, that’s fine. Just make sure you apply the same criteria to everyone else. Because the yen and the U.S., even though the Japanese economy is less than a third of the size of the U.S., it’s about the same currency exchange. And the euro is bigger, too. So the U.S. runs the least bad ship, if that’s the right way to look at it. And then finally, of course, there’s the euro. The Europeans for a long time have been looting the U.S. dollar as a coequal currency, if you will. The European euro should be right there with them, but they confiscated insured bank deposits back when they had the financial crisis in the late 2000, early 20 tens. And as a result, anyone who could move their money out of Europe did. So. It’s a regional currency that’s not nothing, but it’s no longer a serious contender for any sort of broad, dominant international role.

There are a couple of other countries that have started to kind of join the shouting on this topic, but I don’t take those seriously either. One of them is Bangladesh. Bangladesh has recently publicly pledged that the nuclear power plant that they’re planning on buying from the Russians will be paid for with rubles. Yeah, that means nothing because the Bangladeshis don’t have the money to buy a nuclear power plant. So to pledge for something that’s never going to happen in a currency that they don’t have yet, whatever. And then there’s Argentina who says it’s gung ho to join any sort of not-dollar system. The Argentines are trailblazers in many financial matters, but currency adoption is not one of them. They’re basically looking for a currency that can be printed without causing inflation for them and without them having to pay back and foreign currency later. So, you know, I wouldn’t take that too seriously either.

Now, all that said, there is one country out there that is seriously considering and maybe even implementing a degree of de-dollarization because it doesn’t care about these factors. It has something else that is driving its decision making. And we’ll talk about that tomorrow.

The Debt Ceiling Issue: Will the US Gov Default?

We’re talking US politics today, and for those who don’t eat, sleep, and breathe politics (aka having a life), it’s about the debt ceiling. Spoiler Alert: It will probably end the same way it always does…

Anytime the White House and at least one house of Congress are in different hands, that house of Congress will use it as a chance to squeeze in some concessions. This is all just political theater, but it has gone a bit further than usual.

It can be attributed to the state of flux many of the leading political factions have found themselves in. Between the unions, fiscals, and business conservatives all transitioning, there’s no one around to knock some sense into these other groups more willing to push the limits.

So how will all of this end? I would expect a last-minute compromise because no one in the government wants to actually face a default.

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 a windy Fort Lauderdale. Sorry about the background noise. It’s unavoidable on this one. But that’s okay because I’m talking about U.S. politics today, specifically the debt ceiling issues.

For those of you who don’t obsess about the ins and outs of what’s going on in Washington, I understand if you don’t understand what’s going on, that’s totally fine. The very short version is, since the United States runs a significant budget deficit that requires approval from Congress to raise the funds that are necessary to run the government. And so every couple of years, whenever the White House and Congress are in different hands, whoever is in Congress tries to use this issue as leverage to get political concessions in one way or the other. Rarely happens at all when the same party controls both houses. But since were in a divided government right now, the Republicans are trying to wring some concessions out of the Biden administration. 

Now, if the United States were to not increase the debt ceiling, that would mean that the United States would no longer be able to raise capital in order to fund government activities. And that would hit everything, whether it’s Social Security and Medicare or Medicaid or the military or the food stamp programs. Basically, the government would have to triage and decide what not to spend money on and actually live within its means. Now, there is no one that I know who has two brain cells to rub together in Washington, who thinks that a default on U.S. debt or a collapse of the US government functioning would be a good idea. So usually this is just used for political theater. And in order to generate a pretext for getting some concessions and both parties have played that game.

The reason that this has gotten a lot closer to the wire with us now within a month of the United States actually defaulting or entering into budgetary crunch is because our political system has shifted significantly. Now, for those of you who’ve been following me for a while, you know that I’m of the belief that we’re going through a political transition that we go through every once in every generation or two. And when that happens, the factions that make up the parties move around or they jump ship. Maybe they become swing voters, maybe they switch sides. And while that’s going on, everything is remarkably fluid and very angry. And social media certainly hasn’t helped. The stage that we’re at at the moment is that Donald Trump succeeded in excising the fiscal and the business community’s from the Republican coalition, but he’s also succeeded in bringing the unions in to the Republican Party from the Democratic coalition and Joe Biden, now that he’s president, has been partially successful at breaking up the unions and the Republicans and trying to get the unions back. And what this means is that the unions, the fiscals and the business conservatives are all in flux and all are basically swing voters. Now, those are the three factions that know how to do math for which economics is the core part of why they’re involved in politics. And so when you’ve got the three factions that know the most about things like math and finances and budgeting, no longer part of the political core. Everyone else who’s willing to use the debt ceiling as a political wedge can go a lot farther because there’s no longer a group of sane people in the background saying, No, we’re not going to do that. We’re going to try something else.

We’re seeing something similar with the Greens because we don’t have unions, fiscals, or business voters represented in Washington or really any level. The Greens are able to impress their view of economics on a lot of policies and so we’re getting a few things that maybe that don’t hold up to normal fiscal rules.

I still don’t think we’re going to be facing a default. I think I still think we’re going to have a last minute compromise. Joe Biden has canceled part of his Asia trip in order to come back and hammer out a last minute deal. But this is probably going to go down to the wire and that’s simply because our political system is too much in flux.

So hopefully that brings a little bit of context, a little bit of detail and what has become an unnecessarily problematic development. And I hope, hope, hope, cooler heads will prevail in the long run. 

Alright. That’s it for me. You guys take care.

Ukraine War Q&A Series: Who Really Started This Whole Thing?

We’re wrapping up our Ukraine War Q&A series with the most depressing question yet…how long can this war last?

There’s the dark, really dark, and truly dark.

The dark answer is that Russia’s current problems can be attributed to mobilization issues and ammo. Russia still has a deep reserve of armored vehicles and supplies they can tap into…Ukraine doesn’t…and the Western logistical chain is not as good as we would hope. Yes, the US has a significant backlog of equipment, but most other countries do not (and in many cases, they are competing with Ukraine to ramp up their own production).

The really dark answer is that Russian wars are rarely quick. If neither side of this conflict can maintain current industrial output levels, this could likely become the status quo of living on the Russian borderlands.

The truly dark answer is that the demographic situation in Ukraine before this war was already terrible and is now likely terminal. No matter how this war shakes out, we could very well be in the final generation of Ukraine.

If Russia continues down this path of denuding its occupied territories of children, in ten years, there won’t be anyone left to fight, let alone reconstruct the country.

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

Finally, and probably the most depressing question of them all, how long could this war last? I mean, no war lasts forever, does it? Let me give you the dark answer, the really dark answer, and then the truly dark answer.

So first, the dark answer. This at the moment is an issue of mobilization and ammo. The Russian military support system, the military industrial complex, is clearly not doing well. So much money has been stolen from the system that it’s difficult for the Russians to get stuff to the front and their internal logistical system is trash. So between not having as much as they thought they did. Between the government being fleeced blind by their own defense minister, Ukrainians interfering with transport systems via drones and sabotage and artillery strikes and general status of disarray of the Russian transport infrastructure. It’s an open question how long the Russians can go with this. Now they do have 70 years of reserves. And, you know, whenever we see a 1940s or fifties tank brought out, we’re like, ha ha ha, look, they’re pulling their old shit out. Well, couple of things there. Number one, they have shit to pull out. The Ukrainians don’t. And second, we’re seeing this old stuff come out because some of the newer stuff just takes longer to refurbish. If you have a pre optics tank getting that back into condition just requires some refurbishment, some more tubing, maybe running some fresh oil on it. You’re good to go. If you got 1970s and eighties styles, optics, you need to now replace those. And that means a much more expensive and lengthy overhaul. You may get a better tank out of it on the back end, but it does take more time and money. So they’re bringing out their old stuff first. They still have several million more armored vehicles that they can throw into this. Now, it’s a limited quantity. Yes, but, you know, Ukraine is basically limited now to what it captures from the Russians and what the West sends.

Which brings us to the second point. How much durability is the logistical chain on the western side? It’s not as good as you think. When 1992 happened, the Cold War ended. Pretty much every country in Europe started to slim down their defense budgets until we got to the point in 2022, when the Defense Ministry in Germany was actually appointed by a woman whose goal was to shut down the military completely. And that means that what they do have is either old or in need of refurbishment or is from a very thin crust of stuff that has been purchased in the last 30 years. Well, most of that thin crust has already been committed, either to the military’s of these forces themselves, because now the Russians are on the warpath. Nobody wants to completely disarm or the stuff has already gone into Ukraine. So you have to build new stuff if you want to send it. And the Ukrainians have to compete with all of these countries who now want to beef up their own military because, you know, the Russians are on the warpath. Now, in the case of the United States, there’s a lot deeper tranche of things to pull from because we spent 20 years in the war on terror, which means we spent 20 years building out our military for a task it wasn’t designed for, and we were upgrading our actual, quote, real military assets, you know, our jets and our tanks and everything at the same time. So the United States has a significant backlog of all of that stuff that we would have used to fight a war back in the nineties, in the eighties. We don’t use any of it anymore. We actually have to dispose of it. So from a weird point of view, the Ukrainians are doing us a budgetary solid by taking our old stuff off and disposing of it in the Russians mouths. But even here, a limited supply. So we’re trying to spin up artillery creation here. The Europeans are using some of their solidarity funds to buy ammo. But in all cases, you’re talking about needing to triple or quadruple our current manufacturing facility. For a lot of this equipment simply to keep with where we are right now. The process has been started, but it’s expensive and it’s time consuming and we’re not going to see a real impact, especially on the European side this calendar year. We’re really talking about the second half of 2024 before the Western Industrial Complex really becomes a meaningful factor in terms of the supply of equipment…ammo will come a little bit earlier. So that’s the first kind of really dark side.

The second even darker side is if you look at history, the Russian wars are very rarely quick. You know, everyone thinks of World War One and World War Two, which only lasted a few years as being how wars are fought. And that has been how it is in the industrial age. But if the Russians and to a lesser degree the Ukrainians can’t maintain an industrial level of output and this becomes more of a long term slug match, the Russians have been expanding bit by bit over the last four centuries and various groups that they have occupied refer to things like the Russian encroachment as the 200 Years War. Ukraine wasn’t captured in one lightly armed conflict. It was captured in a series of conflicts over a century. The same is true for most of Russia’s frontiers. It ebbs and flows and ebbs and flows. Remember, the Russians here are trying to seek a more defensible perimeter, and that means going through all of the flat, open territories that are near them. And all of Ukraine is open and flat. So history tells us that this is less a discrete conflict and more just the normal status of what it’s like to be on the Russian borderlands.

And then, of course, there’s the dark, dark, dark, truly dark possibility. And that’s the demographics. Ukraine has among the world’s worst demographics. You generally have kids when you feel positive about your future. And there hasn’t been a lot to be positive about in Ukraine for the last 25 years, and especially since the Russians invaded the Donbass and Crimea in 2014. It has one of the world’s lowest birthrates and is an extraordinarily distorted demographic structure, with fewer people in their forties, in their thirties, in their twenties, in their teens than children. And that was before the war. We now have, at any given time, at least a million, probably closer to 3 million Ukrainian men involved in the military conflict or training in addition to one third of the population of Ukraine pre-war. So almost 15 million people are internally displaced or refugees. Finally, most of the refugees you’re talking to in excess of 2 million people here most days. I mean, that number fluctuates a lot. Are women and minor children. Well, folks, birth rates don’t recover unless the men and women are in the same place. And the longer those women and children are in a third country, the less likely they are to ever come back. And then the Russians are doing damage on their own side. Based on whose numbers you believe. Somewhere between several thousand and several hundred thousand Ukrainian minors have been kidnaped, sent through what they call filtration camps on the Russian border and shipped out throughout Russia. The Russians aren’t even denying this has happened because they have a minister who’s responsible for it has done a number of commercials advertising Ukrainian children by the dozen for mass adoption anywhere that’s not close to the Ukrainian border. She specifically wants people in Siberia to pick them up. And the Russians are doing everything they can to destroy any data related. They don’t keep track of the data at the filtration camps. They destroy any documents the kids have. And so getting these kids back, even if the Russians have outsized victory in the battlefield, is going to be a long and maybe impossible slog…because a 14 year old was going to remember enough about Ukraine to maybe with the right access to information and communication, being able to issue a call for help. A three year old can’t. A baby certainly can’t. So what that tells me is, no matter how this war shakes out, we are in the final generation of Ukraine. And if the Russians are able to keep denuding their occupied territories of children, there’s not going to be a lot left to fight ten years from now, much less reconstruct the country over the next generation. And we’re already talking about a reconstruction bill that is in excess of a trillion U.S.

So where to end on a high point with that last question, I’ll see you guys next time.

Ukraine War Q&A Series: Who Really Started This Whole Thing?

The fifth question of the Q&A series is…who is the ultimate provocateur in the Ukraine War? And I really hope this answer doesn’t surprise anyone.

If Russian propaganda has led you to believe that nazi-jewish-gay-demons run Ukraine…maybe this isn’t the video for you. Equally as absurd is the idea that NATO and the US are responsible for Ukraine being in this situation.

The US has seen NATO growth since the Cold War’s end; roughly 20 countries have joined, and many of them are former Soviet territories. But joining NATO is no cakewalk. It’s a grueling process and must be unanimously agreed upon by all members.

So the idea that NATO started this war and has been plotting to eliminate Russia is a tad far stretched. Oh, and when you actively send tens of thousands of troops into another country, it’s pretty hard to get the red off your hands.

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

All right. Next question is, whose fault is this really? Who really started this? Who is the ultimate provocateur? From my point of view, that’s a pretty straightforward question. But let’s look at it from the other side real quick, because we do have a number of people in the United States who are just parroting blindly and brainlessly Russian propaganda.

The argument that the Ukrainians are led by a bunch of Nazi Jewish gay demons, we’re going to put that to the side because that’s as stupid as it sounds. And hopefully for most people, the fact that that is a leading thread in Russian propaganda is indicative of how much truth is behind the rest of what they say. But let’s focus on something a little bit more substantive. The idea that NATO has been very aggressive with the Russians since the end of the Cold War, and it’s ultimately NATO’s fault and specifically the United States is fault that Ukraine is in the position that it is today, and the Russians have to do this for defensive purposes. The very, very short version is that’s utter bullshit, but let’s pick it apart.

The argument is that the United States has been aggressively expanding NATO.  And, you know, you make an argument for that because we have seen roughly 20 countries join NATO since the Cold War ended in 1992. But you have to take a look at the NATO accession process, because it is not just an issue of the United States waving a wand. What happens is the countries in question have either a vote or an act of their parliament where they apply for NATO membership. And then every individual government that is in the alliance already has to sign off on that entrance. And then it’s not like you wave a wand, then starts the accession process, which involves military reforms, civil reform, democratic transitions, moving away from a top down cannon fodder style military strategy like the Russians favor in favor of something with better logistics and a lot more forethought in order to help these countries not just defend themselves, but move along the path towards a democratic transition or if already democracies, to consolidate that transition once all of that is done, once the report card is finished, the countries then formally apply and there again have to have either an act of parliament or a vote of the general population, or more likely both. And then once that is done, NATO gives it a rubber stamp. But that’s not the end of the process either. Then the accession has to be signed off by each individual NATO country with a minimum of an act of parliament and in some cases an actual plebiscite. Only then can the countries join. This is not an issue of the United States just saying, Hey, I want to expand NATO to Hungary and it just magically happens. Everyone has to be on board with every step of the process or there is no accession. Now you also have to consider the list of countries that have joined Nieto since the Cold War ended. Estonia. Latvia. Lithuania. Poland. Romania. Bulgaria. The Slovak Republic. The Czech Republic. Hungary. Macedonia or North Macedonia now, Albania and future accession targets are potentially Ukraine, Georgia and Azerbaijan. With very few exceptions, these countries have all either been at war with or occupied by Russia. Oh, I forgot. Finland. Finland too. Anyway, at war with or occupied by Russia. So from their point of view, the defensive argument that Russia is the one that’s threatened by Latvia is just asinine. So thats kind of piece one.

Piece two is what actually happened in the early days of the war, starting in 2020 and 2021. Vladimir Putin and the Russian government in general started talking about the Ukrainians as not really existing, that they were a made up ethnicity designed by the Nazis or by the Americans simply to put a thorn in Russia’s side. And as such, it was Russia’s manifest destiny to reclaim lands that were once it. And as the time went on, the number of territories that were traditional Russian territory, according to this propaganda, expanded to include most of the countries that have joined NATO since 1992. And then by the time we got to December of 2021, the Russians started moving tens of thousands of troops onto Ukraine’s borders. And by the time we got to January and early February, we had over 100,000. By the time we got to February 22nd, the day that troops crossed the border, we were at about 130,000. On the 22nd, over 70,000 troops crossed from the Russian territories into the occupied Ukrainian territories. And we all of a sudden had a mass mobilization in Belarus as well. And then on the 24th, forces crossed from Belarus south and from those occupied territories in the east, further west into Ukraine proper. And never forget that this is not the first war between Russia and Ukraine since 1992. In 2014, the Russians flat out invaded the Donbass territory in the east and also captured Crimea in the south.

So any time somebody tells you that this war is someone’s fault other than Russia, you can tell them to go screw themselves because you’re smarter than that.

Next question.

Ukraine War Q&A Series: Why Worry About Ukraine’s Agriculture Exports?

The fourth question of the Q&A series is…why am I so worried about agriculture exports coming out of Ukraine?

Ukraine’s preferred route for its bulk wheat and maize exports has always been water—specifically via the Black Sea. Now you’re probably thinking, “Even with seaborne export routes being blocked by Russia, can’t Ukraine just send stuff by rail to neighboring countries?” Theoretically, yes, but there are a few problems.

There are two sizeable hurdles to overland transit. The first is limited rail capacity and differing infrastructure. Ukraine’s Soviet past means its rail lines are of a different gauge than most of Europe, forcing it to rely on aging legacy connectivity in Romania and Poland. And now there is a new issue on the horizon. As Ukraine started dumping more and more grain into its neighboring EU countries, the local economies took a hit. Resulting in many of these countries refusing Ukrainian grain in support of their local farmers. It can still pass through, but it can’t stop there.

As Ukraine’s exports now need to go further, new infrastructure is required, and profits will get even lower. There isn’t a quick fix for this. To add insult to injury, Russia will soon target Ukrainian agricultural infrastructure. Meaning last year was likely the last time Ukraine would be a significant producer of foodstuffs for the world.

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

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TRANSCIPT

And why do I care so much about agricultural shipments? I mean, Ukraine only has one water frontage. It’s got Poland through the northwest and Romania to the southwest. Why can’t it ship stuff by land? Well, agricultural products really doesn’t matter what it is, have a very high weight and bulk to value ratio. So transport really is important from a cost point of view. And on average, as you know for me, blah, blah, blah, blahing forever, it costs about 12 times as much to ship anything by truck as it does by water. And so Odessa and Kherson are the big blue water ports in the area, it’s always been easier in the Russian and Ukrainian spaces to get the stuff on water wherever you can and send it out. In this case, there’s another problem.

There are rail connections that go into the countries to Ukraine’s west, and some grain has gone there. But two problems, number one, there’s not nearly enough of them and capacity is limited. So you’re talking about maybe one fifth of Ukraine’s pre-war grain could have made it out through the western zones by rail. But problem number two, the rail gauge is different. So once these carriages get to the border, they either need to be on a special kind of carriage where you can adjust the rail gauge car by car at the border, or you need to switch the cargo to a new carriage in order to go into Europe. And I guess there’s a third problem, too. What has happened for the first years in order to maximize that 20%, they’d be going in Romania or Poland or Hungary, and then they dump their cargo and then the railcars would come back empty to get loaded up again. That is what allows Ukraine to hit that 20% number. The problem is Romania and Hungary and especially Poland are all grain producers and exporters and all this Ukrainian grain getting dumped on the local market was pushing down the cost of local grain and forcing the Poles, the Hungarians, Romanians, to then increase their shipments out. Well, that meant they had to pay the transport costs now as well, and it was starting to drive some local farmers out of business. So what we’ve seen in the last three months is most governments on the entire swath of European countries that border or near Ukraine have stopped accepting Ukrainian cargo as an end destination. You can still trans ship to get it through, can still get to a port, no problem. But that means that the carriages that used to be able to do short back and forth now has to go all the way through these countries to get to another country or to get to the coast. And then it takes up port space. And so that’s taking that 20% and probably cut it at least by a third, maybe as much as half. And the only solution to this that isn’t waterborne is to lay twice as many tracks or get a lot more rail cars. That’s not something you do in a few months. And so we are now looking at an environment where maybe 10% of Ukraine’s grain can get out this year. And once the Russians actually start going after the infrastructure, especially in places like Odessa, those venues close off completely.

So last year was probably the last year that Ukraine is going to be a significant producer of foodstuffs for the world. Next question.

Ukraine War Q&A Series: What’s Going On in Bakhmut?

The third question of the Q&A series is…what the hell is going on in the city of Bakhmut?

Bakhmut is the city in eastern Ukraine that the Russians, specifically the Wagner Group, have been hammering for months. The city is in ruins, the bodies are stacking up, and the Russians still don’t have much to show for it…

This battle has been part of Prigozhin’s ploy to show how great of a leader he is with the hopes of becoming defense minister. All he’s done is proven how incompetent he is as a military leader and pissed off the current defense minister in the process.

Wagner has exhausted its resources (and men), so the Russian military is beginning to take the reigns in Bakhmut. The Ukrainians have jumped on this transitionary period and reversed the flow of territorial captures for the first time since the start of this assault.

The issue with Bakhmut is that it doesn’t hold much strategic significance. Sure, it’s a road nexus, but it falls within striking distance for both sides. It would require significant territory gains on either side to be a viable stronghold. Perhaps there’s something bigger at play here…

(The military situation in Bakhmut is extremely fluid, and I am, you know, not there. So I’m focusing on the big-picture strategic issues rather than a tactical blow-by-blow of what’s going on in and around the city’s remains.)

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

Here’s a question a lot of you asked. What the hell’s going on in the city of Bakhmut? Now Bakhmut is a place in eastern Ukraine where the Russians have been throwing themselves at the Ukrainian defenders for months now. Apparently, the devastation is just extreme. There’s probably no building in the city that’s still standing. Lots of people, assuming they are still there at all, are living in basements. Everyone else has just left. And this is the place that Dmitri Prigozhin, he’s the leader of Wagner, has tried to make the centerpiece of his participation in the war in Ukraine, thinking that if he can achieve a significant breakthrough somewhere, then he can go to Putin, say, look, Wagner is great, I am great, and I should be part of the formal chain of command. And you know what? Maybe just make me defense minister and well, he has proven that he is incompetent as a military leader and he has burned through huge numbers of people. So Wagner is the group that has gone into prisons and recruited people to fight for six months in order to have their sentences commuted. And he has used them as cannon fodder to clear minefields, to charge very lightly armed with no training straight into Ukrainian positions, to soften them up. And then the professional Russian soldiers that have been recruited by Wagner in the past are then supposed to take advantage of those circumstances and push forward. And they have pushed forward by inches, not miles, inches and six months on there’s parts of Bakhmut that are still in Ukrainian hands. Of late Prigozhin has been screaming from the rooftops that he’s not getting the equipment and especially the ammo that he needs. But considering that he is literally after the defense ministers job, you can understand why the defense minister is like you know Prigozhin were to experience a high profile defeat, you know that wouldn’t be so awful. 

And in the last few days we’ve had some interesting leaks out of the Pentagon Papers, if you remember that from last couple of weeks, indicating that there is intel from the Ukrainians and from the Americans that Prigozhin has actually approached the Ukrainians with tactical information on the disposition of Russian forces, not Wagner forces, Russian government, military forces. He says, like, if I kind of zig to the left, you can hit them on the right. Now, the Ukrainians have not done anything with that information, so they don’t consider him to be even remotely trustworthy. But the fact that we’re hearing this from more than one source is kind of interesting.

Now, the position of the Russians in Bakhmut since it hasn’t achieved a breakthrough is probably not very good. Wagner itself has a problem here because they’ve already emptied the prison, so they don’t have any more cannon fodder. And the rest of their troops are people who retired from Russian military service before the war who then got recruited into this paramilitary arm. Well, there’s no more of those to be had either, because those are all being grabbed by the military. So Prigozhin has spent all the troops he’s ever going to get. And there’s no point really from the Russian military’s point of view in sending them equipment, even if they liked the guy. So the Russian military is now bit by bit taking over control, and they’re a little bit more parsimonious with the men than Prigozhin is, which is, you know, saying something. And so in the last several days, we’ve actually seen some significant counterattacks by the Ukrainians in this space that have reversed the flow of the territorial captures for the first time since this battle started, which was, I think, last July. It’s been a long time now.

That’s kind of the background in the personalities. The question is what’s going to happen now? This city has no strategic significance. I mean, yes, it’s at a road nexus, but as long as you’ve got Ukrainian or Russian forces within 15 miles of it, this whole nexus is under potential artillery threat. So neither side can or will use it unless there’s a significant break and they’re able to achieve huge breakthroughs in one direction or the other. That doesn’t seem to be in the cards right now, but that doesn’t mean we’re not going to see more fighting here, because, remember, the Ukrainians are getting ready for their spring offensive. And one of the things that we saw last year is they advertised where they were going to go and then they went somewhere else in order to draw Russian forces off. Their counterattacks in Bakhmut could very well be a similar sleight of hand if they can force the Russians to reinforce in an area where they’ve already taken at least 20,000 deaths and a hundred thousand casualties, that can’t be great for morale. And if you lock them down there, then those Russian forces are not somewhere else where the Ukrainians might be more interested in launching a real assault.

So again, fog of war persists, but it looks like the Russians’ chance for achieving this breakthrough is gone. And the question now is what are the Ukrainians going to do about it? Next question.

Ukraine Shoots Down Russia’s “Unstoppable” Kinzhal Missiles

Russia launched a volley of missiles into Ukraine overnight, of which six were Kinzhals, aka Russia’s top-shelf hypersonic ballistic missiles. Reports coming out of Kyiv state that Ukraine was able to shoot down all the Kinzhals in the strike.

This is one of the most advanced weapons in Russia’s arsenal, and Ukrainian defenses were able to put them down with relative ease…talk about a shot to Putin’s ego.

For anyone with looming concerns about a war with Russia, their coffee probably tasted a little bit better this morning.

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

Ukraine War Q&A Series: Why Does Russia Have Oil Supply Issues?

The second question of the Q&A series is…if Russia is such a massive producer of oil and oil products, why are we wasting time discussing supply issues?

The Russian oil problems are best understood when compared to the American system. If you compare California and New York gas prices to those in Texas or Alabama…you might have a heart attack. Outside of the crazy taxes in CA and NY, this boils down to transportation.

Like CA or NY, most Russian oil is produced in one area, refined in another, and then needs to be shipped to its final destination. For the Russians, thousands of miles separate each of those steps. To complicate this supply chain even further, most of this stuff must be trucked into Ukraine since the Kerch Strait Bridge rail capabilities are gone.

The Ukrainians are fully aware of this shortcoming and are now focusing much of their firepower on oil transportation and infrastructure. Destroying refineries is easier said than done, so I would expect the main targets to be fuel tanks, fuel trains, and the occasional pipeline.

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

So, you know, Russia is this massive producer of both oil and oil products. Why do I even talk about problems with them supplying the front when it comes to fuel supplies? I mean, isn’t there plenty? Well, let’s look at this first from the American point of view.

If you live in California or New York, you know, you know, the gasoline prices are significantly higher than they are in places like Alabama or Texas. And it’s not just about where the crude comes from. It’s also about where it’s processed. So, yes, California, New York, have higher taxes, but there’s also a transport component because the stuff is produced in one area, refined in a second area, and then it has to be shipped to the third area. In the case of Russia, most of the oil production, roughly 70% of the total, is in a corridor in southwestern Siberia, specifically Tatarstan and Bashkortatastan going north all the way up to the Arctic Sea. And with the exception of Tatarstan, there are very few refineries in this area. So you have to then ship the oil by pipe several thousand miles to another location where it is turned into refined product. And the refined product has to be shipped typically over a thousand miles in order to get to the Ukrainian front. There are refineries in places like Belgorod or near Rostov on Don, which is another reason why the Ukrainians have to take those two cities out of the equation. But they’re really along that entire western periphery because they used to supply the former Soviet satellite states of Central Europe, as well as a little bit of exports to the wider world.

Now, because the Russians have lost the Kerch Strait Bridge, they can’t rail fuel to the southern front at all. And so most of this stuff has to either rail into eastern Ukraine or go by truck to everywhere else, which is one of the many reasons why the Ukrainians have been going after the truck fleet and have destroyed most of the military truck fleet at this point. Another thing to keep in mind is that this is one of the many, many reasons why the Ukrainians are putting so much time and effort developing technologies in getting equipment from the West to target oil infrastructure. And in that, fuel tanks are absolutely the best thing to go after. And cargo trains are probably number two. And then, of course, trucks are number three.

Now, you can technically target refineries. The problem is one drone or one missile or one 2,000 pound bomb is only to do so much damage. Refineries are huge. Most refineries, once you include the standoff distance, are something like three square miles and they’re this forest of columns and pipes. And yeah, throwing some explosives into that is generally frowned upon. But when you have a noncommercial grade explosive like, say, diesel or gasoline or naphtha, when you hit it with fire, yes, it burns, but it only explodes under very specific conditions. And so if you want to blow up an entire refinery, it’s going to take you a huge amount of ammo to do so. And this is one of the reasons why I always found myself talking down threats to the oil sector back in the 2000s and 2010s, when groups like Hezbollah or the Iranians or al Qaeda or the Islamic State would try to target a refinery. There’s just not a place where you hit it with a pinprick and you trigger a chain reaction. This is not the Death Star. That means the Ukrainians have to follow by the same rules here if they really want to take a refinery offline. It’s a huge amount of effort. And if they are going to target a piece of energy infrastructure, that’s not a specific pipe or fuel cell or train, the one they’re going to go after is the city of Samarra in southern Russia.

Samarra serves as a junction point for multiple pipes coming in from northern Siberia, coming to and from eastern Siberia, coming up from the Caucasus and of course, going west. Roughly 40% of Russian crude is capable of going through this nexus in addition to its refineries. Now, the Ukrainians probably do have the capacity right now to throw a drone or two into it. But again, they’re going to do dozens, if not hundreds or a lot more sabotage.

So if you are going to see something a little deeper in Russia besides what we’ve seen so far, which is kind of been in a band around that part of occupied Ukraine, what you’re going to see is the Ukrainians probably going after the pipes themselves. They won’t take things offline for very long. Pipes are easy to replace, especially in segments. But if they hit them enough, they disrupt the flows the refineries shut down. How do we know? This happened in Chechnya during the 1990s. The Grozny region used to be the third largest refining center in the entirety of the former Soviet world, and it was a significant oil producer as well. Now that’s all gone to zero, but it gives you an idea of the long, grinding attritional fight that has to happen to really take this stuff offline for good.

And so in the meantime, they go after fuel tanks. You go after fuel trains. Okay. Next question.

Ukraine War Q&A Series: What Happened to the 500k Russian Soldiers?

Question number one of the series is…what happened to the half million Russian soldiers I predicted would hit the battlefield by June?

This goes without saying, but the data we’re working with is shaky. The video could stop there…but it’s also worth noting that even [especially] Russian President Vladimir Putin is being lied to. I suppose you’re asking for it when your inner circle is comprised of only six people (of which only half are competent).

Now back to the 500,000 number. At least 300,000 soldiers have been injured or killed since the operation began, which is close to the total from the first Russian mobilization. Yikes.

The Russians will need to bring in more numbers with a second mobilization, which means low-skilled soldiers and weak points in the Russian line. Now we’re looking through a murky and convoluted lens, but this all sounds like an opportunity for Ukraine.

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. We’ve done a quick series on the counteroffensive that the Ukrainians have planned for this spring and summer. And a lot of you had questions. We’re kind of turning in Q&A into a fourth video that features cloudy, Colorado. Haven’t seen the sun here in a few days. Probably aren’t going to hit for a few more.

So question number one, what happened to the half a million Russian soldiers that I was predicting three or four months ago were going to be on the field of battle by the time we got to June? Well, we’re talking about Russian data on Russian information here. So, you know, on the front end and now. But the best guess we have right now is that Putin was lied to.

We know that Putin is stacking his inner circle with sycophants for quite some time. There’s really only about six people we talked to at all. Only three of them are competent. And the other three, unfortunately, are in charge of the defense industry and especially the military plans in Ukraine. The two personalities that matter the most, the first one is the Defense Minister, Sergei Shoigu, who is arguably the most incompetent person in the Russian government right now.

And he’s obviously in charge of the broader battle plan and the entire defense industry. And we now know that Shoigu has probably Stalin personally, one third of the Russian budget that was appropriated for defense equipment manufacturer over the last several years, and probably one third of a second third was stolen by his underlings. So whenever you see the Russians just not having enough equipment to do anything meaningful, it’s probably his fault.

And he’s the one in charge of the battle plan, and he’s the one who indicated there were going to be a lot more weapons shipments. The second defense official, who arguably rivals Shoigu with his military incompetence, is the guy who runs the Wagner Group, Dmitry Rogozin. This guy was literally a caterer until a few years ago and then got a little bit of money from the Russian government in order to build up this parallel military group that we know as Wagner that would go around the world hiring itself as mercenaries and committing war crimes when the local governments didn’t want to.

That doesn’t mean he can’t run a paramilitary organization, but it means he has no experience either. Managing or leading or participating in a military operation himself. And he has been leading the military operation and parliament. Now, for those of you who have been following Ukrainian news, you know that the Russians have been throwing body after body after body after body against the bombing city for six months now.

And conservatively speaking, 20,000 Russians have died and 100,000 have been injured. The real numbers are probably significantly higher. How much higher? We don’t know. But that means this one battle, which is not particularly strategically significant, where they’ve lost huge numbers of forces taking a real bite out of any other conscription or mobilization programs that the Russian government has been instituting.

So back to that half a million number. Best guess is that the Russians have lost at least 100,000, maybe as many as 200,000 men since the operation began. In addition to the at least 100,000 that were injured in Baquba and probably another 100,000 everywhere else. So let’s add it up. When the Russians first came in, in February of 2022, they had about 100, 140,000 men.

They then did a partial mobilization that is confirmed as anything as we can get with Russian data that brought in another 300,000. But if you’re talking 100,000 injured throughout the war, 100,000 specifically in Barkman and another at least 100,000 dead. That’s the entire mobilization.

So we’re probably looking at a second partial mobilization, maybe 200, maybe 250,000. But that doesn’t leave Russian forces with all that many more troops than they started with. And these new troops aren’t going to be nearly as skilled, which argues that the Ukraine is going to have a relatively easy time of things. Most of these new recruits haven’t really been in battle.

They’ve been building anti-tank fortifications. And I don’t know about you guys, but I’ve never built an anti-tank fortification myself. And if you were mobilized over the course of the last 90 days to build tank fortifications, I would argue that maybe they’re not the best anti-tank for fortifications that could be built. All this would suggest that the Ukrainians are going to do really well in the next couple of months.

But fog of war and Russian data and people actively lying to the Russian government about the status of the war. So. Okay, onto the next question.

Turkey’s Presidential Elections: A Turning Point for Turkish Politics

Turkey’s presidential elections are upon us. President Erdogan has run the country for nearly 20 years, but his challenger, Kemal Kilicdaroglu, hopes to shake things up. This could very well be a turning point for Turkish politics.

Once upon a time, Erdogan was well-liked in Turkey and beyond. He ran a tight ship, and his policies were solid. And then he fell into a spiral of narcissistic nationalism and everything went to s***. Needless to say, much of the country is ready for a change.

Kemal Kilicdaroglu is the top challenger but also comes with some baggage. Yes, he’s old. More importantly, he’s the head of a six-party coalition. Meaning at best, this is going to be a transitionary government. At least it’s a step in the right direction.

Probably.

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 on the road. I’m traveling and I’m sick. So you’re not going to be getting a fancy backdrop on this one? We’re just stuck with the hotel room. Anyway, this video still needs to get out on May the 12th because we’ve got big things happening in the country of Turkey, which is one of the more important, more dynamic, more flexible countries that I see for the times ahead.

It’s one of the handful of countries that security forces and economy are basically right size to its neighborhood and ambitions. And I expect it to be one of the five countries moving forward for the next couple of decades to really dominate the human condition. If you want to see more about that, there’s a massive turkey chapter in my third book, this United Nations.

But for purposes of today, I want to talk about the elections that are in play, because we’re at a turning point in Turkish politics. The incumbent is a guy by the name of Erdogan who is basically run Turkey for the last 20 years. And his first decade, you know, he ran a tight ship economically. He was very inclusive.

He sought out broad coalitions and he even did some selective purges of the military to prevent the military from purging civilian governments like the Turkish government had done in four decades. And so overall, most folks in Turkey and beyond Turkey liked him quite a bit. But then he turned into kind of a narcissistic nationalism and started alienating everyone in the country beyond the country.

Also, his economic policies were great. His policies were wildly inflationary. He he was of the weird belief that if you drop interest rates to zero, that that will be counter inflationary as opposed to spurring demand and economic activity that maybe the economy can’t support. As a result, inflation in Turkey has gotten to levels that they haven’t seen in quite some time, and cost of living has really increased.

He also used this cheap money that was flowing into the system to support his political cronies, specifically in the construction sector, which generated something that looks a lot like the subprime boom in the United States, but like an order of magnitude bigger. And that bubble started to pop about three years ago. And so his political support has hemorrhaged away since.

Cronyism, of course, is not popular anywhere. But in the short term, the real issue is that we had a couple of really bad earthquakes in Turkey a few weeks ago, and Erdogan completely botched the recovery. Countries tried to provide aid and he basically said no because he thought they were spies. And since we had this massive construction boom, we now know that Erdogan had moved away from things like safety checks and, you know, sand in concrete in the regulatory structure in order to have his buddies make more money.

And so all of these things just flattened when the quake hit. On top of that turkey is a very young country demographically, and the bulk of its population is under age 30. And for most of the voters, you know, and under age 40, they’ve never known anyone but Erdogan. And so they are willing to move on. Now, his challenger is a guy by the name of let me see if I get this right.

Kilicdaroglu. Kilicdaroglu. Apologies for Mr. Kilicdaroglu if I completely bash that, I’m just going to call him by his first name. So Kemal has been in Turkish politics about as long as Joe Biden has been alive, which gives you an idea of how viable of a candidate he is in the long run. But he is the leader of a six party coalition who decided to put all of their differences aside in order to get Erdogan out.

And what that tells me is that even if he wins the presidency and even if the opposition can carry the parliament, and even if Erdogan goes quietly, none of these are given. I mean, we’re leaning our way, but they’re not given. Even if all of that happens, all of our hopes occur for these elections. It’s a six party coalition with a guy that’s older than dirt.

It’s going to be a transitional government, even in the best case scenario. So those people who are looking at Turkey from a foreign policy point of view, who are expecting big, radical changes, you know, you temper your enthusiasm. Now, I do expect there to be a significant shift, at least in tone, because everyone has become more and more erratic as he’s become more and more dictatorial.

And he’s now seen spies under every every precaution. So, you know, the Greeks are always an issue. The Armenians are always an issue. But because he’s a strong man, he’s kind of cozied up a little bit. I mean, that’s might be overly harsh, but cozying up a little bit to Vladimir Putin, I think the United States is trying to overthrow them.

He hates the Europeans with a passion and simply injecting a little bit more realism into would be perfectly blunt mediocrity into Turkish foreign policy making. To calm everything down would really be a good idea. But the biggest policy shifts we would probably see our number one, the Turks under a new government would probably lift their opposition to Sweden, join NATO.

I don’t want to said publicly that the only reason he’s holding up the the Swedish accession to NATO’s for personal reasons so he can win the election. So even if, you know, Erdogan walks away with this election again, we’re probably going to see Sweden and pretty soon. The second is relations with the Russians versus the Americans as regards the Ukraine war.

Turkey hasn’t done anything that’s technically illegal, but Turkish companies are serving as middlemen between the rest of the world and the Russians in order to get products into Russia that the Europeans have been trying to sanction. Now, the Europeans and the Americans aren’t happy with that. But until the Europeans or the Americans get a much broader sanction program, it’s nothing that the Turks are doing that’s illegal.

But getting a little bit more understanding from Ankara on what needs to be done in order to put Russia in a box is something that Kilicdaroglu Kemal seems to be amenable to in terms of other relations, really. Israel, Egypt or the big two? Erdogan Really? Butted heads with multiple Israeli governments and it’s only recently that things have started to warm and relations with Egypt are fraught.

Turkey is a former colonial power and Egypt was one of its provinces. Hell, for a while. Israel was one of its provinces. And if there is going to be some sort of new regional order in the eastern Mediterranean or the western parts of the Middle East, Israel and Egypt and Turkey are all going to be part of it.

And there was a time in the first decade of Erdogan’s rule when it looked like the old Cold War partnership with Israel could be resurrected in a partnership with Egypt, could be forged. But then Erdogan kind of went off the rails. And so simply letting history and regional geopolitics take the course. Turkey’s the natural leader of that bloc.

And since the Israelis were having some wackadoo political issues at home and Egypt has descended into full narcissistic dictatorship, it’s actually a really good opportunity for a more open and moderate Turkish government to make some some gains in this area. And really, that doesn’t take firm foreign policy making. It doesn’t take a strong leader. That just means taking advantage of the economic and proximity issues that make Turkey the logical power in this region.

Okay, so first round is this weekend. And if nobody gets 50%, we do a runoff. And that’s the same for the parliament and for the president. The runoff will be in a couple of weeks. So we’re going to know one way or another really quick how this is going to go. And as long as, you know, Kamal lives through the election process, it looks like he’s got a pretty good shot.

All right, you all take care.