Could a Russian Revolution End the Ukraine War?

*This video was recorded in May of 2024.

We’ve all stared at the stars thinking about the different ways the Ukraine War could end, but could a coup or revolution in Russia be the way it goes down? It sounds great, but there’s quite a few obstacles in the way.

The first option is a palace coup. Given that all the top Russian political figures are part of Putin’s cabal and have been thoroughly vetted for lack of ambition, this is fairly unlikely. What about a revolution? Despite the standard of living decreasing and economic challenges, public uprisings are unlikely given the nature of Russian culture. Historically speaking, revolutions in Russia have only occurred when military strength weakens significantly – and very suddenly.

So, even if a revolution did happen (and it likely will in the future), we probably wouldn’t know about it until that day. But once that first domino falls, it could lead to a complete restructuring of Russia as we know it.

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

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

And then there’s you.

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

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Transcript

Hey, everyone. Peter Zeihan here, coming to you from the south of France and the National Park. One of the questions I’ve been getting repeatedly in Europe is, “Isn’t Russia due for a coup or a revolution or something?” People are looking for a way to end the Ukraine war quickly. Well, there are three problems with that.

Number one, I don’t think we’re going to see a palace coup anytime soon. Most of the people at the top of the Russian political heap are folks that Putin has known or trained for the last 30 years. One of the many characteristics of the Soviet system is that the intelligence folks tended to be in charge, especially after they threw an internal coup back in the early ’80s. That’s when the Andropov, Chernenko, Gorbachev trio came to power, all former intelligence officers. Putin is an heir to that legacy. Remember, he used to be stationed in East Germany to steal industrial secrets from the West. After that coup, everyone else in the communist hierarchy was basically purged. So, those were the people who took over the post-Soviet Russian system.

There are only about 120 of them left at this point, but all of them are personally loyal to Putin from their days in the KGB or are former interns of people like Putin. Take Alexey Miller at Gazprom, literally a former intern. They all see the world through the same lens, and they all owe their positions partly to Putin. Putin has spent the last 30 years purging this group of anyone who might be disloyal. So, number one, they see the world the same way. If something were to happen to Putin, they would probably have a really interesting conversation about who’s in charge next and then just prosecute the war more or less as it’s been going.

Number two, they’re personally loyal. About the only one of the 120 who might have the guts to try something a little scrappy would be Igor Sechin, a former gunrunner who now runs Rosneft, the state oil monopoly. He probably has the guts to kill Putin. But the other 119, if there’s anything they agree on, aside from seeing the world through the same lens, it’s that they all hate Igor Sechin. So, if Sechin did try something, he would probably be dead the next day. So, an internal palace coup is probably not going to happen.

That leaves the option of revolution. The standard of living in Russia is dropping. They can’t access Western goods or Western travel destinations. The economic elite, such as it is, is having a rough time of it. Inflation is an ongoing issue in many parts of the world, Russia included, because now the Russian industrial complex is being retooled to make tanks and refurbish military equipment. So, it’s not available for what paltry commercial goods it was capable of producing in the first place.

So, what about a revolution? Well, the problem is that this is not the West. These are not democratic societies. These are despotisms. As a result, you usually don’t get public uprisings in a place like Russia unless and until the standard of living tanks and the sense of nationhood itself is thrown into question. Russia has had popular uprisings in the past, but the Cold War wasn’t one. Basically, you have to see the Russian army disintegrate in a military campaign to the point that people know the strongmen are gone and broken. We’re not there yet, and there’s nothing on the short-term horizon in the Ukraine war that suggests we’re anywhere close.

For those thinking this is still perhaps the path forward, I don’t want to say you’re wrong because we do have a lot of similarities right now between what’s going on in Russia and what went on in the 1980s: similar economic dislocation, similar failure of state institutions. The best parallel I can draw is the Wagner rebellion of last year. We had a rogue paramilitary commander who marched on Moscow for a thousand miles. Much to Putin’s delight, not a single military officer joined him. But much to Putin’s despair, not a single military officer stood against Wagner either. No one loves Russia, just like no one loved the Soviet Union.

When this does go, and the odds are it will in time, the whole thing goes—the whole regime, the whole governing structure—just like it did in 1992. Because aside from the corrupt, there is no vested interest in maintaining this system. It just has to have some sort of short, sharp shock, like an extreme military defeat, for us to get from here to there.

So, are we going to see a revolution in Russia? Almost certainly. But there aren’t going to be any warning signs until the day it happens. And as soon as it’s over, that’s it for the Russian state. They don’t have enough time, demographically speaking, to try something new. So, when this is over, it’s over.

China’s Tariff Wars: The EU Opens a New Front

*This video was recorded in June of 2024.

We’re talking about a different kind of war today – Trade Wars. Specifically, we’ll be looking at attempts by the US and EU to limit Chinese involvement in their electric vehicle markets.

With 100% tariffs from the US and around 50% from the EU, the Chinese EV industry is being backed into a corner…and its only going to get worse. China’s retaliatory measures are limited by their dependence upon foreign imports and attempts to restrict exports of other materials like gallium have backfired. Heck, the Chinese even tried to slap some tariffs on bacon.

China’s myriad of other issues (demographics, post-COVID decline, low value add, etc.) have only exacerbated the problems brought about by these tariffs. The semiconductor industry is a good example of the inefficiencies in the Chinese system and how reliant on foreign expertise it is.

Don’t get me wrong, China is the world’s manufacturer and that’s no small thing, but its dominance will be challenged by these ever-growing wars on trade.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

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

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

And then there’s you.

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

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Transcript

Hey, everybody. Peter Zeihan here, coming to you from the top of Frazier Peak in New Mexico. Back behind me, you can see Mount Walter and just a little bit of Wheeler.

Today, we’re going to talk about trade wars shaping up with the Chinese and why the Chinese don’t have too much leverage. The issue is that the United States and the European Union have both put heavy tariffs on Chinese electric vehicles—100% in the United States, about 50% in the case of Europe.

This is just the first round. Expect these tariffs to at least double over the next couple of years. The goal is to keep everything that involves any part of a Chinese EV out of the system, starting with the finished vehicles. This will extend to parts and especially batteries in the near future.

This is the beginning of the process, not the end. Regardless of what you think about electric vehicles, there’s a belief in the governing systems of both the U.S. and the EU that this is the future, and they don’t want another country or economic bloc to dominate it. Obviously, there’s a lot of subtext there, but that’s the core of the issue.

The Chinese are looking for things to retaliate against. The problem is, when you’re a major manufacturing country that imports all of your raw materials and relies upon foreign markets for all of your sales, there’s not a lot you can do. If you impede trade, you’re destroying the trade system you rely on for your economic model.

The demographic situation in China has gone from bad to horrific. Since the beginning of Covid, we’ve discovered that not only did they overcount their population by well over 100 million people, but people have aged out of the block that does most of the consumption.

We only got our first decent look at Chinese demographics a little under a year ago. The Chinese are now starting to understand why retail sales have not rebounded post-Covid—they’re not going to rebound because they no longer have enough people to generate a rebound. So, foreign sales are all they have. China is also not the technological leader, which means it can’t withhold technology from its trading partners to get market access.

So, the question is, what can they reach for? In the United States’ case, if you retaliate with tariffs on anything, it immediately triggers a second round of tariffs on you, which hurts you more. Even with things where the Chinese might seem to have an advantage, like gallium and germanium (two rare metals they dominate in production), they restricted access to Japan and the U.S. after previous sanctions rounds. The problem is, these metals are just byproducts of aluminum manufacturing. The U.S. is getting back into aluminum smelting, solving that problem, and leaving China without leverage.

In Europe, this is the first significant trade dispute between the EU and China, and it’s not likely to be the last. Europe is known as Fortress Europe for a reason, and China is ripe to be cut out of the European market. Right now, however, the Chinese don’t feel the same danger in doing retaliatory tariffs against Europe as they do with the U.S. The problem again is finding leverage, and they’ve gone after pork.

Back before Covid, China was hit by a massive outbreak of African swine fever, decimating their herds. America and other swine exporters stepped in to fill the gap. Then, the Trump administration cheesed off the Chinese government, leading China to decide to never buy American foodstuffs again unless there was no other option. They switched to European supplies for pork, mainly from Denmark, Spain, and to a lesser extent, Italy.

Fast forward a few years, and China’s swineherd has recovered, creating overproduction. Now, they’re sticking it to the Europeans on pork. It’s not nearly as impactful as targeting semiconductors, but the Chinese don’t have much leverage there either.

No one makes high-end semiconductors by themselves. Making chips better than 28 nanometers involves over 9,000 firms globally. China can make chips of about 90 nanometers, suitable for smart light bulbs, but anything more sophisticated requires significant outside help. The idea that having a fab plant means you can run with it is false. It takes a village for specialty chemicals, design work, and lithography.

If the Chinese ever find something to retaliate with, the EU and U.S. can hit back in ways that impact core Chinese interests very quickly. This leaves the Chinese with limited options, like going after pork. Unless you’re raising pigs in Spain, this isn’t a big deal yet. Sooner or later, Chinese demographics will cause their system to collapse, revealing how much of the lower-end manufacturing the rest of the world can do without. China is the workshop of the world for mid to low-quality products and the king of assembly, but that’s not the tool you use to fight a trade war.

A Crack in the North American Drug War

An image depicting cocaine in lines, a card credit, and bill rolled up

I’m back home from Yosemite on a brief intermission to my summer backpacking trips, and wanted to issue an update on the Mexican Cartels. Specifically, we’re talking about the arrest of Sinaloa leader, El Mayo.

El Mayo is one of the heavy hitters in the Sinaloa cartel, known for being the logistics and money guy under El Chapo. This past week, he was mislead by one of El Chapo’s sons to enter the US, where he was immediately arrested.

This shakes things up for the Sinaloa cartel, but what will the fallout be? Well, you can expect lots of violence as different factions compete in this newly developed vacuum. I wouldn’t expect any lags to your drug supply though, but don’t get too excited, as this gives the US more insight to ultimately dismantling the cartel’s operations domestically. If I was the shot caller, I probably would have gone after the leader of the Jalisco New Generation cartel – El Mencho – but hey, I’m not complaining.

Oh yeah, if you we’re hoping for an update on the US political situation…nothing has really changed in my book. Just a different name on the ticket.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

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

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

And then there’s you.

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

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Transcript

Hey, everybody. Peter Zeihan here, coming to you from smoky Colorado. We’re definitely in the depths of fire season here; in fact, there’s a forest fire about five miles that way. No stress. Anyway, I’ve been gone backpacking for a couple of weeks, and I’m about to disappear again, so I figured I’d take this opportunity to update you on what has gone down while I’ve been out.

I’m sure lots and lots and lots of you have a long, long list of things you want me to update you on, but there’s really only one thing that I saw that happened that really requires giving you guys the lowdown. That happened in Texas and Mexico last week when a guy by the name of Ismael Zambada, also known as El Mayo, the titular head of the Sinaloa drug trafficking coalition in Mexico, got on a plane, flew to Texas under false pretenses, and was promptly arrested.

Quick background: the Sinaloa cartel is not simply the most powerful drug trafficking organization in Mexico; it’s the most powerful one here in the United States. In fact, it’s the largest organized crime group in the world. The reason it got into that position is because of its previous leader, a guy by the name of El Chapo Guzmán.

El Chapo ran the cartel like an American or Korean conglomerate. The idea was that they were all on the same side—don’t shoot at each other, don’t engage in petty larceny, things that would anger the population. Instead, they branched out into affiliated industries on the side—not just cocaine, but also marijuana, heroin, maybe a little bit of light kidnapping and human trafficking, and even local government, transport, agriculture, and tourism. Anything you could launder money with. He ran it as an institution, which kept the violence rate within his organization relatively low and minimized clashes with local governments. This allowed him to take the Sinaloa cartel to dizzying heights.

The United States named him public enemy number one, and eventually, in a series of operations, we got him. Then he escaped, and we got him again. Now he’s serving a life sentence in some dark hole in the United States. His successor is El Mayo, recently arrested. El Mayo is best known as El Chapo’s accountant. He knows where all the bodies are buried, how the institutions run, who the key players are, where the money flows, and how it’s laundered. So, big win. It’s also noteworthy how he was captured—not a DEA or FBI operation, but a setup by one of the other leaders of the Sinaloa cartel, one of El Chapo’s four sons, who tricked him into getting on the plane to the U.S. under the pretense of looking at an investment property.

El Mayo turned himself in immediately and is basically going through a plea bargain, leaving him with nowhere to turn because the evidence against him is overwhelming, and now there’s another insider involved.

The question is, what kind of operational impact will this have on the Sinaloa cartel? The cartel fractured into several dozen pieces after El Chapo’s fall, with El Mayo controlling the largest chunk. The second, third, fourth, and fifth largest chunks are controlled by those close to him, one of whom just turned him in. We already have another key player in custody in the United States, so two of the four are down, and three of the five kingpins are down.

In the short term, this means a lot of bloodshed in Mexico as these factions, without their leader, splinter and other factions try to grab pieces. Local crime groups in these areas will also try to seize opportunities. Mexico is already coming out of a three-year period that’s the most violent in the country’s history, and this situation isn’t likely to improve that.

However, now that the U.S. has some idea of where the money is flowing and the routes used, we can start dismantling the Sinaloa apparatus within the United States. Don’t expect this to have a huge or immediate impact on the flow of narcotics into the U.S. That is driven by two things: one, Americans really like their cocaine, and two, because cocaine is very expensive per unit of weight in bulk, it’s easy to smuggle. There will always be groups in Mexico and the U.S. willing to push that stuff through, but it just won’t be at the institutional level of the Sinaloa cartel.

If you wanted to make a bigger impact, the target would have been a guy named El Mencho, leader of the counter-group to Sinaloa in Mexico, known as the Jalisco New Generation Cartel. Unlike El Chapo or El Mayo, El Mencho runs his organization as a one-man show and a crime boss, ruling by fear and violence, which is the point of his operation. He just happens to make money on the side selling drugs. Removing him would likely lead to a significant impact on the cocaine flow in the midterm, but it wouldn’t end it. As long as Americans want their coke, this will continue.

But I don’t want to take away from the victory here. The bookkeeper has been brought in, and that will absolutely have significant impacts.

Now, about that other topic you want me to talk about, Biden’s withdrawal from the race. It really doesn’t change things. I made the call two years ago on how this election is going to go, and I don’t see any reason to adjust that now. I made some minor adjustments a few weeks ago during the presidential debate, which showcased the mental incompetence of both candidates. But I would just add one thing: a lot of Americans, roughly 20 to 25% of voters and the vast majority of America’s true independents, have been saying for months that they want someone else to choose from. They don’t want to choose between two people they’ve had to choose from before. Independents are fickle voters; they hate voting for the same person a second time. Well, with Biden out and Harris in, they no longer have to. So what was likely to be a lopsided contest in favor of the Democrats already is now likely to be a rout for the Republicans, unless Vice President Harris absolutely messes things up in some way in the next few months. And that doesn’t seem to be her style.

Okay, that’s all I’ve got. Take care.

Can AI Replace Those Retiring Boomers?

*This video was recorded in mid-July, prior to Peter departing on his backpacking trip.

As the baby boomers age into retirement and Gen Z fails to satisfy the gaping hole left in the labor market, will artificial intelligence be able to help mitigate some of the fallout?

AI has solidified its spot in the labor mix of the future, but “when?” and “how?” are the looming questions. Producing AI-capable chips remains highly complex and reliant upon a web of critical international suppliers. Until that supply chain is slimmed down and fail-safes are added, production disruptions will continue to be a huge factor in limiting the AI buildout.

On the other front, the nature of AI lends itself to better take on white-collar work. Most people picture AI taking care of the manual and mundane tasks no one wants, but it is better suited to a lifestyle “in the office”. So, the places we need the help most, like blue-collar jobs, won’t get much help on the AI front.

AI’s transformative effect is coming, but it won’t occur as quickly as many expect. Think in the 40s rather than the 20s. When it does arrive, the productivity in white-collar jobs will skyrocket, but fields that really need some extra hands (or hand effectors or whatever you call robots’ metaphorical gripping mechanisms) will still be scrambling to navigate the labor shortages.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

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

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

And then there’s you.

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

Support medshare's ukraine fund
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Transcript

Hey, everybody. Peter Zeihan here, coming to you from the Lake of the Ozarks in Missouri. Today, I’m taking a question from the Ask Peter forum about artificial intelligence. The question is, with labor shortages looming due to the retirement of the baby boomers, the largest workforce we’ve ever had, and the new generation, Generation Z (the Zoomers), being the smallest generation ever, can increases in productivity, such as through artificial intelligence, help round out and fix these issues? The answer is… maybe.

There are a couple of problems here. First, it’s very unlikely that we can sustain the level of production of artificial intelligence-capable chips necessary to fundamentally transform the American or global workforce. The issue is that thousands of companies are involved in manufacturing these chips. Yes, 90% of these chips come from a single town in Taiwan, which poses a security risk, but the problem is even bigger. Most companies in the supply chain for these fabrication facilities only make one product for one end user, which is TSMC in Taiwan. If something happens to a few of these companies, we could lose the ability to make these chips at all. So the idea of having massive server farms crunching data for artificial intelligence is probably not going to happen this decade and might not happen next decade. We’ll need to build a new ecosystem for that, and it takes time.

The second problem is the nature of artificial intelligence itself. There’s a saying that’s becoming popular: “We want artificial intelligence to do the dishes so that we can spend more time writing, not to do our writing so that all that’s left is the dishes.” The issue here is that artificial intelligence primarily helps with white-collar work, like brain work, correlation tasks, paralegals, researchers, writers, and editors. These are the sorts of jobs that AI is most likely to slim down. But that’s not where the labor shortage is in the United States. Over the last 50 years, baby boomers have focused on getting their kids into college and into high-value-added white-collar jobs.

However, in a world where China is fading quickly and the United States is experiencing an industrial renaissance, we need electricians, welders, linemen—people to physically move and make things. These are blue-collar jobs, not white-collar, and artificial intelligence can’t help nearly as much with them.

So while artificial intelligence will be a part of the future, I don’t think it’s going to happen as quickly as some expect. When it does, it’s going to reshape industries like finance, making it more efficient to move money around, which could reduce the need for large numbers of coders in places like New York. It’s going to increase the productivity of white-collar workers, so we might not need as many people handling tasks like processing insurance claims in doctors’ offices. AI might also help crack the genome to boost agricultural productivity and will certainly play a role in defense and cryptography to enhance security.

But it’s unlikely to have a huge impact on manufacturing. For that to happen, we don’t just need AI; we need robotics—mobile robotics—and AI isn’t quite there yet. It’s progressing, but we’re looking at the 2040s, not the 2020s, for significant developments in that area. So can AI help? Sure, at the margins. But you’re probably still going to have to do your own dishes.

Is Chinese Nuclear Tech Better Than the US?

Photo show three nuclear power plant reactors

*This video was recorded in mid-July, prior to Peter departing on his backpacking trip.

I’ve been asked to address the claim that China has surpassed the US as a nuclear power. On paper, China might have the upper hand, but that doesn’t always translate to real life.

China has been busy building the world’s largest nuclear fleet, and the US hasn’t built a plant since the 70s (even if they have had more recent expansions). However, the technology being used in the Chinese plants is dated and ignores major safety concerns. The US has struggled to keep a labor force large enough to operate new plants, but there’s potential for modular reactors and new tech to shift the tides in favor of the US in the coming decades.

Now onto the explosive stuff. The US nuclear arsenal is top-notch, well tested and maintained. The Chinese are expanding their arsenal, but precision manufacturing and testing are limiting that growth.

So, the Chinese may have the numbers leaning their way for nuclear power, but in the areas that really matter (like nuclear weapons) the US is still sitting comfy.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

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

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

And then there’s you.

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

Support medshare's ukraine fund
Support medshare's global efforts

Transcript

Hey, everybody. Peter Zeihan here, coming to you from a stormy day in Colorado. Hopefully, we won’t have a lightning strike close enough to make things too exciting. Anyway, today we’re taking a question from the Ask Peter forum. The question is about recent reports suggesting that the United States is falling behind China in nuclear technology. What are my thoughts on that?

This is a complex issue with both yes and no aspects. Let’s start with where China is doing well, which primarily concerns nuclear power generation and the deployment of new nuclear power facilities. Since the Three Mile Island incident in 1979, the United States has only built one nuclear facility, the Vogtle plant, constructed by Southern Company. A major issue they faced was talent and labor. When you haven’t built new nuclear power facilities for nearly 50 years, there aren’t many people entering that field, and those who were in it have mostly retired. As a result, the U.S. has had to reinvent certain skill sets and recruit former Navy nuclear engineers, like those who worked on submarines, to fill the ranks. This is a very costly process.

In contrast, China is building out what will easily become the world’s largest nuclear fleet. This means there’s a whole generation of nuclear engineers and construction workers in China who are experienced in this field. So, it’s not that Americans can’t do it or that we’ve lost the technology; we’ve lost the labor force. From a practical standpoint, that’s almost as bad. But it’s important to note that the type of nuclear reactors used in both the U.S. and China are typically light water reactors, a technology dating back to the 1950s. While China is developing a more robust and redundant labor force for 1950s and 1960s technology, this doesn’t necessarily mean they’re getting ahead in innovation.

If the United States decides to re-enter the nuclear power generation field, the likely approach would be through small modular reactors (SMRs). The advantage of large nuclear facilities is that they can generate over a gigawatt of power, enough to supply many cities. However, the problem with light water reactor technology is the potential for meltdowns, like a lighter version of the Three Mile Island incident. Public resistance to having these reactors near cities is a major reason why the U.S. hasn’t built more. In China, where public opinion and safety concerns are less of an issue, they’re building them rapidly.

The advantage of SMRs is their small size—they can fit on the back of a truck and be plugged into existing systems, like decommissioned coal plants. They are mobile and can be moved to where they’re needed. This makes them a good partner for renewable energy sources like wind and solar, which are intermittent, or for decarbonizing energy production. You can take an SMR to a decommissioned coal plant that already has all the infrastructure and simply set it up and run it. This technology could be a real game-changer.

However, building the prototype is a significant challenge. A company that was trying to break into this space faced setbacks last November when contracts fell apart, setting the effort back to the drawing board. While other companies are working on it, none are likely to have a working prototype within the next 3 to 5 years. Without a prototype, mass production of the technology is unlikely within the next decade. While SMRs are an interesting concept, they’re not progressing rapidly at the moment. As far as I know, China isn’t focusing on this direction either, as they’re more concerned with building large reactors.

There is also the possibility of using fourth-generation reactors, such as pebble-bed reactors. The French are working on this, but we’re not yet at the stage of having a functional prototype, so it’s too early to draw any conclusions. Even if the prototype is perfect, actual construction might not begin until 2035 to 2040.

Now, let’s talk about nuclear weapons. Nuclear materials aren’t just used for generating electricity; they can also make very dangerous weapons. The United States was not only the first country to build and use an atomic bomb but also the first to develop a hydrogen bomb. American nuclear weapons are likely still the best in the world, although we haven’t used one in quite some time. We’ve developed ways to use computer simulations to ensure our arsenal is effective and safe. The U.S. remains the world leader in maintaining and refurbishing nuclear reactor cores to ensure they don’t degrade.

However, the only way to know for sure how well these systems work would be to engage in a full-scale international intercontinental nuclear missile exchange—a test that, thankfully, we don’t want to conduct. But I’m confident that American weapons are still the most advanced. From the last time we had insight into Russia’s nuclear capabilities, they’ve likely slipped from being the second-best to something like ninth in the world. They still have many warheads, but the question is whether these warheads have degraded. Considering the poor performance of other Russian military equipment in Ukraine, it would be surprising if their nuclear arsenal were the one thing still functioning perfectly. This doesn’t mean we should provoke Russia into a nuclear conflict, but if such a situation arose, the blast radius of their bombs might be less than expected. It would still be a disastrous event.

As for China, they currently have only a few hundred deliverable nuclear weapons. They’re working on expanding this force and aim to reach some form of numerical parity over the next 15 years. This goal involves overcoming significant challenges, primarily related to precision manufacturing. Building a plutonium bomb requires creating an explosive core with a series of synchronized explosions around the core to force it to collapse and trigger a reaction. The Chinese can do this, but scaling it up is a challenge. They also need to miniaturize the warhead and ensure it can survive the forces of launch and re-entry. While the Chinese are not lagging in these areas, achieving all these requirements together is complex and untested in real-world conflict scenarios.

If they fail, it won’t be for lack of trying.

Ukraine Targets Russia’s Most Important Weapon: Artillery

*This video was recorded last week, prior to Peter departing on his backpacking trip.

There are reports coming out of Ukraine indicating that there has been a sharp uptick in Russian artillery losses. This data isn’t confirmed, but it could be a good sign for Ukraine.

As we know, the Russians rely heavily on their artillery for inflicting casualties on Ukraine. If reports are true, this could be a serious blow to the Russian military. So, what is contributing to the Ukrainians success?

There are a number of factors at play here. The Russians are using North Korean shells, which limit their range and accuracy. The Ukrainians have Western tech and support, which has enabled them to utilize long range drones and advanced weapons like the ATACMS.

Should this trend continue, the Russians will struggle to keep up with the losses they are incurring and it could be a huge break on the frontlines for the Ukrainians. Once I return from my backpacking trip, perhaps we’ll have a more clear picture of what all this looks like.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

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

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

And then there’s you.

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

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Transcript

Hey, everybody. Peter Zeihan here, coming to you from Denver International Airport, where I’m about to catch a flight to California for some hiking in the area. This means you won’t get any updates from me on Ukraine or anything else for the next month, as I’ll be out of touch. So, let me give you an idea of what I’ll be looking for when I get back, as there’s a new wrinkle in the conflict worth noting.

The Ukrainian government, over the last five or six weeks, has been reporting a tripling in the tolls inflicted on Russian artillery. Russian artillery is critical to their military strategy. The Russian military is fundamentally an artillery force, rather than an infantry or armored force. Approximately 80% of the casualties suffered by the Ukrainian military have been due to artillery. When the Russians advance into a town, they don’t clear it door by door; they use artillery to reduce everything to rubble and then take control of the ruins.

While I can’t confirm the accuracy of this reported tripling—it’s likely part propaganda and part optimism—independent reports also indicate a significant uptick in artillery activity. However, these reports are often somewhat dated. There are a couple of factors suggesting that the Ukrainians are seeing more success.

The first factor is somewhat technical: a lot of North Korean shells are now entering the field. These shells can’t be used with modern artillery systems. North Korea is many things, but a technological leader it is not, so most of the artillery pieces the Russians have that can use these North Korean shells date back to the 1950s. They have a much shorter range.

Until now, Ukrainian loitering munitions only had a range of about 12 miles, which meant not many Russian artillery pieces were within range. But with the North Korean stuff, some are, and more importantly, the Ukrainians have built up an industry from scratch for robotics and drones. There are now not just dozens, but hundreds, possibly even low thousands, of basically garage shops around the country.

These garage shops are producing more advanced and, most importantly, longer-range drones, with ranges now extending to 20 to 35 miles. This puts a majority of Russian artillery potentially within range. So, it’s really a question of how quickly the Ukrainians can ramp up production. It’s not just the Ukrainians, of course.

Most Western allies have now allowed Ukraine to conduct at least limited strikes within Russian territory using the weapons they’ve been provided. Weapons like the American ATACMS are having a significant impact. However, the number of these weapons is relatively limited, so they’re reserved for large concentrations rather than single artillery pieces.

But if the Ukrainians can produce thousands of drones and deploy a dozen to each target, this could significantly change the frontline dynamics. By the time I get back in a month, we should have a clearer idea of whether this strategy is working. The Russians started the war with about 2,000 artillery pieces in active units and another 19,000 in reserves, in various states of disrepair. If the burn rate on these artillery pieces has indeed tripled, the Russians won’t be able to keep up with new production and refurbishments.

While I hesitate to use the term “game changer,” given the many variables in play, this development could certainly be the most significant happening this summer.

Is the US Looking for a War?

*This video was recorded in May of 2024

The potential of dragging the US into a major conflict is top of mind for a lot of Americans, but what would it actually take to get us there?

The US isn’t just going to rush into a significant conflict, there has to be something major that occurs first. We’re talking a political leader with a strong international agenda or a major provocation (like Pearl Harbor). China (at least for now) knows better than to provoke the US due to Chinese reliance on maritime trade. Russia’s incompetence and aggressive actions in Ukraine pose a potential threat, but only if the conflict directly impacts US interests.

When looking at US military action within North America specifically, conflict with the Mexican drug cartels is top of mind. Although the situation in Mexico is dire, any action by the US without Mexico’s cooperation would be disastrous for the future of the US-Mexico trade relationship.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

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

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

And then there’s you.

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

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Transcript

Hi, thanks for joining us today. My name is Michael, and I’m your director of analysis here at Zeihan on Geopolitics. It’s my pleasure to have a conversation with Peter Simon about some of the questions you’ve sent us about what’s going on in the world. Let’s start with the big one: What would it take to pull the U.S. directly back into a major conflict or war?

Oh, wow. Okay, so the United States has not been in a major, major conflict since World War II. In terms of the conflicts we’ve had since then, they were either in the context of supporting the global order—basically bleeding for our allies so they would stay our allies, like in Korea and Vietnam—or it was our attempt to forge a new world post-Cold War, like Desert Shield and Desert Storm.

For us to get involved in anything on that scale would require one of two things. Number one, a political leader in the United States who sees international issues as the crucible in which a new identity could be forged. There’s no sign of that happening on either side of the political spectrum at the moment. Or, someone doing something really, really, really breathtakingly stupid and provoking the United States.

This has happened before. You could argue that Pearl Harbor, the Cuban Missile Crisis, Sputnik, and the Kuwait invasion all fit this description. But when I look around the world at the powers in play, I don’t think the Chinese are anywhere near dumb enough to do that.

At least a few years ago, Chairman Xi and the Politburo realized that if there were a fight with the United States, it would be a fight on the water, and China depends on freedom of the seas to keep its people alive. The entire economic model, the food imports, the energy imports—they would just stop, and they know that would be suicide.

So, the only country right now where that might be an issue would be Russia, and that’s because of Russian incompetence. We’ve learned over the last three years that Russia doesn’t have a classic army in the sense most people think of. They basically have a mob they put guns in the hands of and throw at things.

It’s not that this strategy has never worked for the Russians. The Russians have won half of the wars they’ve been in. But if the fight reaches a point where it’s hitting U.S. interests, that’s where you get the direct clash. As long as the United States is at least passively interested in NATO, should Ukraine fall, then we could be in a more direct fight.

But we’re not there now. Even if the Russians continue making the gains they’ve been making in the last year for the next five years, we will still not be there. The dynamism of this conflict is difficult to get your mind around because so many things are shaping both sides. I’m not suggesting for a moment that Russia is about to break through the lines in Ukraine and win. I’m just suggesting that it has to be something on that scale for the United States to consider getting involved, barring some idiot somewhere doing a direct attack on the United States. Remember, the United States has rested and recouped from the war on terror. Its military isn’t doing much from a military point of view right now.

There are no occupations. There are no hot deployments. So, if somebody did pick that fight, God help them because no one else will. But you mentioned that the U.S. military isn’t doing much broadly, and most of the conflicts you described aren’t within North America. There’s nothing within North America that looks viable at the moment, something targeting a U.S. strategic interest to the point that would motivate the U.S. to enter conventional warfare.

Stepping back a little bit, are there regions within North America, perhaps, or concerns that American strategic leadership has within North America that the military could be used for, to bring some kind of resolution or achieve a strategic gain? Not at the moment. The only issue where that theoretically could arise would be dealing with Mexican drug cartels. Americans’ preoccupation with cocaine—their love of cocaine—has basically destroyed the capacity for rule of law to exist in large portions of Mexico. Add to that the general incompetence of the AMLO administration, and Mexico is in a much worse position now in terms of public safety, public health, and infrastructure than it was five years ago. There’s plenty of fault to spread around.

I will just underline that if anyone thinks the United States can impose a military solution on the cartel situation, you are batshit. Mexico is a huge place, and the cartel situation is far more complicated than anything we had to deal with in Pakistan or Afghanistan during the war on terror. If there is a military angle to be played there, it will have to be hand in glove with the Mexican administration, something like what we did with Colombia.

But at the moment, with the current administration in Mexico City, that is not even under a hair of consideration. If the U.S. were to try to impose a military solution without active participation from the Mexicans, you can kiss the trade relationship goodbye, and then the United States would fall into an economic depression as the single most important economic, human migration, and manufacturing and energy relationship in human history all break at the same time.

Don’t do that.

The Gaza Conflict and Shifting Politics in Israel

*This video was recorded last week, prior to Peter departing on his backpacking trip.

The conflict in Gaza has been raging on for nearly 300 days, and there is no end in sight. However, Israel is heavily reliant upon American tech and weapons and that relationship could be changing.

The political situation in Israel is complex. As the country grows more conservative and reactionary, tensions between the three largest population groups are rising. These groups are the Palestinians, secular Jews, and the ultra-Orthodox (Haredi).

The Haredi are gaining influence and have some hardline policies against Palestinians. In 25 years, their voting power will rival that of secular Jews and Israeli policies will be drastically impacted.

This shift in local politics is amplified by the shift in international relations with the Americans. The US remains a strong supporter of Israel, but shifting demographics and growing criticisms of Israeli practices in this war indicate that this could change in the coming decades.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

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

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

And then there’s you.

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

Support medshare's ukraine fund
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Transcript

Hey everybody, Peter Zeihan here. Today we’re going to talk about Israel. There is no reason to expect the Gaza war to end anytime soon. And while both Israel and Hezbollah really don’t want to have a military conflict, there are some factors that are pushing them more in each other’s face. So, we can’t rule out a specific war there.

But what this does is keep Israel top of mind for a lot of American security planners, especially for the White House, because at the end of the day, Israel relies on American tech transfer and weapon procurement in order to keep its own security in order. And the question is whether or not that is in a degree of danger.

Let me cut to the chase and say that the short answer is no, for now. There are two issues that kind of define this problem. The first is that the political evolution of Israel is towards a much more stodgy, reactionary approach to not just politics, but security.

If you consider Israel and the Palestinian territories as a single unit, there are three forces in play. The first, of course, is the Palestinians themselves, who are capable of resistance, but not in a traditional manner. What we saw back in October with the terror assaults, that’s about the most they can hope for.

There are no anti-tank rockets, no air forces, no tanks. So, from a security point of view, this is a pain and tragic, but it’s not a traditional state challenge. It is an ongoing, grinding issue of occupation and resistance that will always be there in the background. The second group are the Jews, specifically the secular Jews, who have controlled the governing system of Israel for the last 75 years.

Now, these, of course, break into different groups with different politics, just like any other country. But ultimately, they’re all drawn from a similar political stock, if you will. The third group, the one that is disrupting this balance, if that’s the right word, are the Haredi, the ultra-Orthodox, who are much more conservative and, for the most part, not integrated into Israeli life.

Until very recently, they were not even contributing to the military. We’ve recently had a change in law there, which we will link to that piece and the implications of it here. Anyway, this is a group that basically lives on the government dole and does what their rabbis tell them to do. It’s not that simple—don’t send me hate mail for that statement—but these are people who are not as sophisticated as the secular Jewish population.

And they have some very, very, very strong opinions on what should be done to and about the Palestinians. Much more hawkish, but they haven’t really contributed to the assets that are necessary to carry out that policy because they pay very little taxes. Most of them haven’t served in the military, and yet they want a very hardline response.

Well, for the last couple of decades, this ultra-Orthodox coalition has been a bigger and bigger factor in internal Israeli politics and has been the kingmaker in any number of governments, including the current one. Because they’re basically paid to exist by the state, their numbers are growing very rapidly, and we’re going to need a position within the next 25 years where they are going to be neck and neck in terms of voting power with the traditional secular Jews.

That transition from here to there is going to generate a very different set of policy options in Tel Aviv and Jerusalem. So, the question is, how does this relate to the Americans? Well, in the short term, it really doesn’t. Donald Trump, when he was president, was very pro-Israeli, very anti-Palestinian. His policies reflected that, and the folks in charge of the Israeli government were very supportive of that.

Under Biden, there’s been a little bit more oblique criticism. The Palestinians, of course, would disagree with that assessment. But Biden is basically starting to call a spade a spade and has said that some of the things that the Orthodox-tinged government in Israel is doing are perhaps not legal internationally and border on, from time to time, a little bit genocidal. At times, that criticism has boiled up in international affairs and actually affected Israel’s ability to access American weapons.

It hasn’t gotten to a break point, because one of the advantages in the United States of having a president who’s older than dust is he remembers when the Jewish state was formed, which means he remembers personally the Holocaust. He remembers Abraham, and Isaac, and all the rest. So, he knows that in the long sweep of history, what’s going on right now is a bit of a bump.

But Biden will not be there forever. Trump will not be there forever. And we’re having a demographic shift in the United States as well. In Israel, right now in 2024, the majority of America’s baby boomers, who are probably the most pro-Israel generation we have, have already retired. Over that same transition period, while the ultra-Orthodox sects are going to rise to power in Israel, America’s baby boomers are going to die out.

And the younger generation coming up, the Zoomers and, to a lesser degree, the millennials, are not nearly as evenhanded when it comes to Israel versus the Palestinians. So, demographics are absolutely against Israel on this topic. But never forget that demographics are like a glacier; they move slowly. They don’t matter until the day they do. We’re not going to hit that day in the next four years, but we will hit it in the next four decades.

So, for now, the Israeli government, regardless of its makeup, can be assured of long-term American support. But long-term does not mean permanent.

Yes, We Have to Follow Elections in Europe Too

*This video was recorded last week, prior to Peter departing on his backpacking trip (and prior to Biden leaving the race).

Today, we’ll be looking at the recent European Commission presidential election and its broader implications for the Europeans.

Former German Defense Minister, Ursula von der Leyen, will remain as president for the next term. She has been in office through the Ukraine War and has kept a tight grip on many policies coming out of the Commission.

 

The President serves as a crisis mediator among European countries and handles issues requiring unanimity and majority voting. Ursula von der Leyen has prioritized the Green New Deal, cyber defense, and a common EU air defense system (which is top of mind for everyone).

There’s lots of moving parts throughout Europe right now, so von der Leyen will have her hands full. Specifically, we should expect to see significant changes to the EU-NATO relationship and European security dynamics.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

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

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

And then there’s you.

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

Support medshare's ukraine fund
Support medshare's global efforts

Transcript

Hey, everybody. Peter Zeihan here, coming to you from Colorado. Today, we’re doing a video that’s a reminder that it’s not just elections in the United States that matter this year. We just had elections for the European Commission president. And I know, I know, I know, you’re like, really, the election of the chief bureaucrat in Europe? That’s what we’re going to talk about today.

But, hey, it matters. So, Ursula von der Leyen, a former defense minister of Germany, was elected to be the president of the Commission a few years ago. She’s now been reelected with a fairly strong majority. I would argue she’s done a decent job overall, considering that she’s been presiding over the European Union during the entirety of the Ukraine war and has emerged as a bit of a hawk on most policies.

The leader of the European Commission is basically responsible for two things. Number one is managing the bureaucracy that is in the European Union, which is very small by European standards, but technically it has legal authority over most of what happens in Europe. Second, to basically serve as a crisis mediator among the various European countries. There are a lot of issues in Europe that require unanimity.

And when you’ve got countries as small as Malta and as large as Germany all having functionally one vote, it requires a lot of proactive work on the part of the executive. Other issues in Europe are decided by something called qualified majority voting, in which it’s kind of a hybrid voting structure where states, based on their population size and their economic strength, have more of a say than others.

It still favors the small states a little bit like America’s electoral college, but it’s a lot more nuanced. And, of course, it’s done European style, so it’s more complicated than it needs to be, and someone has to ride herd over all of that. And that is von der Leyen’s job, and now will be for another few years. The reason I wanted to shortlist this topic specifically, though, is in her final pitch before the vote happened, she indicated what her priorities were going to be.

And, you know, a lot of it is the normal stuff: Green New Deal, cyber defense, all that good stuff. But one that really stuck out, both to me and to the members of Parliament, was her assertion that the EU now needed to create a common air defense space. Now, there are two institutions that have dominated Europe for the last 75 years.

The first is the European Union itself in its various forms, starting with the coal and steel community, turning into the European Community, and now the European Union. Its job has pretty much always been economic integration: the creation of a common trading bloc, the creation of a common market, eventually getting into banking and financial regulation, all that good stuff.

And in that, the European Union, in my opinion, has actually done a lot better than I thought it was going to do 25 years ago. That doesn’t mean that there aren’t problems. Oh, my God, there are so many problems. There’s so much drama. But it’s still there, and it’s still kicking, and they’ve been making more than incremental progress.

Especially since the financial crisis of the mid-2000s. So, you know, give credit where it’s due. The second big institution is NATO, which has always been American dominated. Or if you want to be really kind, American-British dominated, and it’s responsible for defense issues primarily, but not exclusively, versus the Soviet Union and now the Russians. Now, NATO was kind of on its back foot in the 2000s and 2010s, when most Europeans didn’t see any security problems anywhere. Even with the Russian invasion of Ukraine dating back to 2014, a lot of Europeans, the Germans most notably, just tried to pretend that didn’t happen.

And so NATO was fading because the Americans were getting frustrated. The Europeans weren’t taking European security seriously. And the Europeans didn’t think security was an issue at all. In fact, we got to a point just before the Ukraine war where the Germans were actually openly, publicly talking about dismantling their military completely, which would have been, you know, monumentally stupid, but anyway.

Von der Leyen’s discussion of an air defense space is really interesting. It’s not that it’s not necessary. It’s not that it’s not needed. The Europeans are looking at the Ukraine war and are getting a little pale. They realize that their system is much more integrated. It’s much more dependent upon energy and electricity than anything going on in Ukraine.

I mean, Ukraine, I don’t want to call it a failed state or anything like that, but on the technological scale, the industrial development scale, it is significantly below anyone in Europe. And so the Europeans know that if the sort of attacks that the Russians are doing daily against Ukrainian infrastructure would have happened somewhere else in Europe, the impact would be an order of magnitude bigger.

There’s just so many more important things in Europe that run on electricity than what you have in Ukraine. That the damage would be immense. And an air defense system, a missile defense system, is really the only way to make that happen. And if you have a Polish, a Slovak, a Latvian, and a Romanian system, that’s great.

But what you really need is integration, especially with things like radars. And since missiles, you know, from the point that they’re launched to the point that they hit, if it’s a few hundred kilometers away, you’re talking about, you know, single digits of minutes. Reaction time is really important. And that has to be all set up ahead of time.

What really stuck out in my mind, though, is that she wants this to be an EU prerogative.

And until now, we’ve only had a few little… well, let’s just call them temper tantrums. That’s what they were when a few countries decided they didn’t like what the United States was doing with its military, so they wanted to form a European answer to NATO.

The problem is that the resources were never there. And anything that you dedicate to a NATO project is automatically not available to be dedicated to an EU project. Well, with the Russians basically launching a genocidal war next door that is a combination of forward scorched earth and kidnapping and sexual assault, the Europeans have found themselves motivated to massively expand their defense spending.

So not only is this likely to help NATO quite a bit, but there actually could be the resources necessary for the European Union to do something in defense on its own. Whether it’s enough is an open question, which means that this is going to go one of two directions. Either number one, the Europeans are going to massively expand the defense spending.

And the worse Ukraine does in the war, the greater the push for that is going to be in order to build a kind of parallel capacity. Or number two, the European Union is going to sign a series of agreements with NATO that basically merge the two from a certain point of view. Now, most of the countries that are in the European Union are also in NATO and vice versa.

And the holdouts are countries like the United Kingdom, which isn’t going to leave NATO, but has a pretty strong position on European defense. The sticklers are going to be the four countries that are members of the EU, but are not members of the military alliance. One of these, Malta, doesn’t have a security concern aside from illegal migration from Africa.

So we can put that one to the side. Another one is Ireland, which kind of has a Canadian approach to defense or like, by the time anything gets to us, the world’s already ended. So we’re just going to free ride on this. The Irish hate me. I’m sure I’ll get that here in no time. But the other two matter a little bit more.

One is Austria, which has been a neutral country because everyone wants it to be neutral. The last time the Austrians started to get into security policy, we got Hitler. So, you know, it’s like the more they simmer down, the better. They’ve got a good relationship with NATO that will probably mean that they can just abstain on everything and let it sail through.

And then the last country that matters is Cyprus, which, you know, has very little to do with the Ukraine war. But if you’re going to have a European defense network, the idea is it’s going to protect against countries that are not in the European Union.

And while everyone’s eyes right now are on Russia, and that’s the whole thing that von der Leyen’s trying to get people agitated about, Cyprus’s primary security concern is Turkey. And so you have this one country that has under a million people who has deep, abiding cultural and military conflicts with a major trading partner of the EU, Turkey, but probably is going to have veto power over all of this.

So even if von der Leyen is able to get the Europeans to come up with the money, even if they can figure out a format in Europe that allows NATO and the European Union to do this side by side, we have one hell of a fly in the ointment here as regards the Cypriots. How will that be sorted out?

God knows. Keep in mind that the last time Cyprus really made the news from a global point of view, it was in the financial crisis of the late 2000s. And in that time, we had huge bailouts for Italy, for Spain, for Hungary, for Greece. There was one for Cyprus too. It was the smallest of all of them.

But because Cyprus is a money laundering center, it became very quickly the most controversial, the most complicated of all of them. And we’re going to see something like that in defense as well. So stay tuned.

Major Protests Break Out in Bangladesh

*This video was recorded last week, prior to Peter departing on his backpacking trip.

There have been significant protests in Bangladesh over a law reserving a significant portion of government jobs for supporters of the 1971 independence revolution and their descendants. The job quota has been suspended, but protests continue.

For context, Bangladesh has a young population of over 100 million and accounts for nearly a tenth of the global textile supply. The current protests revolve around the chokehold on opportunities that this job quota has caused, forcing many college grads into low-wage textile jobs or something of similar stature.

The protestors have been met with curfews, arrests and worse, but it appears they will continue to push back against the government. Depending on the resolution of these protests, the Bangladeshi textile sector could be in trouble…which would be amplified by the technological advances hitting the industry.

Prefer to read the transcript? Click here

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Transcript

Hey everybody, Peter Zeihan here, coming to you from Colorado. Today, we’re talking about a country we hardly ever talk about, and that is Bangladesh. There are nationwide protests going on there right now. At least 20 people have been killed, and the protesters are literally saying that they’re trying to shut down the country, and they’re doing a pretty good job.

For those of you who don’t know what Bangladesh is, it’s a small, physically small country kind of nestled into the armpit of India, to the northeast of Delhi. It’s that little chunk that kind of wraps around India, and Bangladesh is there at the mouth of the Ganges, right in the Bay of Bengal.

It’s got a huge population, very young, over 100 million people. And it is textile central. As China moved out of textiles, or at least out of mass market textiles over the last 20 years, Bangladesh has picked it all up. Now, roughly 20% of textile supply chains involve Bangladesh in some way, and really 8% of global supply comes from there.

Anyway, the protesters are attempting to do nothing less than overthrow the constitutional order of the country. So, you know, kind of a big deal. The short version is that back when Bangladesh got independence in 1971, one of the founding laws for the country was that roughly 30% of all government jobs, regardless of what they are, were guaranteed to go to people who supported or fought in the revolution in the first place, or their families and descendants.

Well, that has basically given some very, very politically connected people a chokehold over government contracts and jobs. And if you are, say, a college graduate in Bangladesh, your options are to try to compete for what’s left. You can go into the textile industry and be a wage slave, or you can work on a beach breaking old ships, and that’s it.

That is the entire economy of Bangladesh. So there are several millions of people who are skilled and kind of have no prospects whatsoever because, you know, Bangladesh. You can walk to maybe India, but Indian labor laws aren’t exactly welcoming for migrants, just like most countries where migrants are a portion of the workforce. So they’re trying to shut the whole place down.

Now, this is both not a big deal and a very big deal. There’s nothing magical about textiles, especially when you’re talking about the relatively low tech level that the Bangladeshis do. However, the integration of textiles, typically a garment, especially things that involve a lot of stitching and maybe something sewn on or stamped in, like a button or a rivet, involves a dozen different countries.

And if you have a significant disruption within what is actually the single biggest node in the world, any number of supply chains are simply going to break completely. It’s not that they can’t be repaired. It’s not that they can’t be rerouted. But none of that can happen quickly because Bangladesh really has emerged as the singular node. So we’ve got a lot of cheesed-off college graduates who are basically trying to overthrow what is like one step removed from the constitutional order of the country.

And no matter how this goes down, we’re looking at disruption in global textiles for at least the next couple of years. For those of you who have been watching China, there are a couple of interesting years upcoming. As the Chinese system hits the skids and the second-largest concentration of textiles has problems, in the background, we have a change technologically in how textiles are being done, which is undermining both the Bangladeshi and the Chinese systems, specifically here in the United States.

We figured out a way to automate a lot of the process and take everything from raw cotton to turn it into thread and yarn, turn it to cloth, cut it into sections, and all of that is now cheaper than what goes on in Bangladesh. We’re probably only a few years away from actually being able to stitch the clothes together into a semi-finished process and make that cheaper as well.

So this is the economic sector that matters in the country, and this is potentially the next big source of outmigration as this sector fails. Anyway, what’s going on right now with the protests could simply make it fail faster.