How to Solve the Cocaine Problem

Photo of man in gloves opening cocaine package

It would appear that my suggestion for everyone to stop doing cocaine hasn’t solved the problem, so let’s look at some of the solutions others have proposed.

What about domestic cocaine production? The U.S. doesn’t have the extremely specific tropical growing conditions necessary for coca plants. What about legalizing cocaine? Healthcare costs and reduced worker productivity would likely outweigh any savings from reduced law enforcement or tax revenue.

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Transcript

Hey all, Peter Zeihan here, coming to you from Colorado. Today, we are taking a question from the Patreon page. And he says, you keep telling people to not use cocaine. True. But people are going to keep using it. Probably true. So wouldn’t it be better for us to just domesticate it and take advantage of the addiction? Like, oh wow, that’s dark. Let’s start about the the practical restrictions on having a cocaine trade in the United States. 

And we’ll talk about it. It’s a bad idea in general okay. Cocaine is an incredibly finicky plant. It demands subtropical to tropical temperatures year round, is one of the least frost tolerant plants on the planet. Even a light frost will kill the entire plant completely. Won’t come back. It also needs water. Lots of water, at least a meter, preferably two meters of water a year. 

And it can’t have a dry season. So tropical rain year round. But it also hates being wet, so you have to have acidic soils that are very, very well drained. You put those combinations together and you basically have two options. Number one, the Andes, where the mountains prevent the water from sticking around, but at a relatively low elevation, typically about 3000ft maybe. 

So you get the water to drain itself, but you’re low enough that you never have to worry about frost. Now, if you industrialize this production, you could put it in other tropical zones that are lower altitude, that are flatter. But then you have to basically engineer your fields so that they drain, but again, can’t be tropical dry season like say, a lot of Brazil. It has to be fully tropical all year long. No dry season. And that means you’re basically looking at the Andean crest. Or if you want to industrialize, maybe places like Southeast Asia specifically, maybe Indonesia. 

The United States has nothing like that. Even in Florida we get frost from time to time. And so the entire crop would die anywhere further north just would not work. There is just not enough water and not enough reliability. Okay, so from a technical point of view, wouldn’t work. From another point of view, every study I’ve ever seen has always shown that whatever gains we might get by legalizing cocaine in terms of lower costs of law enforcement and maybe higher income from taxes, is going to be wiped from higher care costs and higher worker absentee rates. 

So economically, there’s no case. Environmentally there’s no case. The simplest answer is just not do cocaine. If you’re looking for a horribly destructive drug that we can domesticate production of your answer is fentanyl. It is made from precursor materials that come out of almost any possible chemical company in the United States, is the world’s largest chemical producer, and you can make it in a garage. So if your goal is to have something that destroys your body and mind and you want to grow it domestically, fentanyl is your answer. But just in case it was not clear, don’t do fentanyl either.

El Jardinero Gets Trimmed by Mexican Authorities

A Mexican solider leans against a military truck

Mexican authorities have arrested Audias Flores Silva (aka El Jardinero…not the scariest nickname I’ve heard), a senior figure in the Jalisco New Generation Cartel.

El Jardinero had been trying to forge cooperation with the Sinaloa Cartel and utilize their distribution network, but his arrest will likely kill that effort. The removal of El Jardinero will further destabilize the cartel, as a fight for power breaks out and factions begin to splinter off.

While this arrest is a positive overall, Mexico’s near-term outlook will likely be much more unstable. Oh, and drugs flow to the U.S. won’t stop until all of y’all cool it with the white stuff.

Prefer to read the transcript? Click here

Transcript

Hey all, Peter Zeihan here. Coming to you from Colorado. Today we’re going to talk about an arrest in Mexico. A guy by the name of Audias Flores Silva, also known as El Jardinero. The gardener was a high up leader in the New Generation Cartel. He was arrested on the 28th of April. And barring surprises, we will never hear from him again. 

If you remember back a few months ago, El Mencho, who was the leader of the New Generation cartel, was killed in a raid by the Mexican authorities with some Intel provided by the United States. And so the question has been who, if anyone, is going to be able to take over. So quick backstory, then we’ll look forward. Historically speaking, in the last decade, we’ve had two big cartel alliances form and dominate the organized crime space in Mexico. 

First, Jalisco New Generation which was run as a corporate entity by a guy by the name of El Chapo that became the largest organized crime group on the planet, as well as the largest one in the United States in New Mexico. Basically, he had this idea that drug smuggling is our primary business, so we’re not going to muck with anything else. 

That is not that. And in doing so, he basically bought the loyalty of a lot of local governments throughout the system. Eventually, that became a massive corporate empire, and the Obama administration made him public enemy number one. Eventually we got him. He’s serving a permanent sentence in the United States. Now, that meant that the Sinaloa cartel started to break down from the inside, and El Mencho’s Kids Los Torpedoes started running their own little factions, as well as other regional leaders and even their accountant. 

That led to a break that allowed New Generation to rise to become the most powerful organized crime group on the planet and in the United States and in Mexico, run by a guy named El Mencho. Jalisco new generation who had a very different corporate philosophy. It’s more of a franchise model, but everyone was basically told, you know, when you go into a new town, you shoot the police chief and maybe a bunch of random people just to make it very clear who’s in charge. 

And in doing so, they generate a lot more fear. Their income isn’t as strong. They are not as diversified, and they’re more likely to come up against resistance from the state, especially in the United States, because of that. But that doesn’t mean it’s model that doesn’t work. Anyway, when I fell because it’s kind of a franchise model, everyone started going the wrong direction. 

El Jardinero is one of the guys who basically tried to come up with a new path. And what made him particularly interesting is while he is a regional leader, specifically in the northwestern part of Mexico, he reached out to Los to basically cut a deal. See, new generation is more powerful militarily within Mexico, no doubt there. 

But the remnants of the Sinaloa cartel have a better distribution system within the United States. So if you put the two together just in that tactical manner, you could really produce not necessarily a super cartel, but you could shove a lot more cocaine through the system. With El Jardinero gone and with half the Chupitos either dead or in jail, that’s probably not going to happen now, and that’s probably a good thing. 

Just keep in mind when you have an organization, whether it is Sinaloa or that doesn’t have a clear leader, you tend to get a lot of competition within the factions, and eventually that turns into a shooting war. So El Jardinero was in charge a lot of the militant aspects. And now that he’s gone, he isn’t there to kind of hold a lid on everything else. 

So this would suggest a lot more violence as generation breaks down. And so, yes, the US and Mexico isn’t particular are getting some of the kingpins. And that feels really good. But it does change the personnel leadership, the personal structure of these things. And without that top layer, it becomes a lot more violent and doesn’t necessarily stop the flow of cocaine. 

So Mexico’s near-term future is probably more fighting as the most violent cartel they have ever had now falls into infighting as well. The only real solution to this is actually pretty simple one don’t do cocaine. And if everyone would abide by those three words, this would all just go away.

Why There’s No Fentanyl in Easter Eggs This Year

Photo of easter eggs in a basket

US efforts against fentanyl have been ramping up. Specifically, the Trump administration has turned its focus to one specific Mexican cartel – La Familia Michoacana.

The US has increased financial sanctions on the fentanyl trade, specifically targeting the cartel’s foothold in Lázaro Cárdenas – Mexico’s largest Pacific port. This position allows La Familia Michoacan to import the precursor materials direct from China and India. In case that wasn’t enough, a bounty has been placed on the cartel’s leaders, the Olascoaga brothers.

Fentanyl will remain a problem for the US, but at least there won’t be any in your easter eggs this year…hopefully.

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Transcript

Hello, Peter Zeihan here. Coming to you from Colorado. Happy Easter. Let’s talk about drugs. Specifically fentanyl. Last week, the Trump administration. These are courtesy of my niece, by the way, and my sister. And they have no taste. Anyway, last week, the Trump administration upped enforcement of, basically financial sanctions against folks involved with the drug trade in Mexico, specifically a group by the name of La Familia Michoacan, which is a cartel in the southern part of the country. 

Music. Milliken state. Why does this matter? Well, Sentinel is a really difficult drug to move against because it’s a synthetic. It only takes a few seconds per dose to produce, basically do 100,000 doses in a garage and in the course of a week, as opposed to cocaine, which has a long agricultural supply chain stretching it back to South America. 

And so most of the things that the United States has done, before and during this current Trump administration has almost been pointless, because if you’re dealing with dozens, hundreds, thousands of mom and pop operators that are building this stuff, a traditional military or law enforcement approach just doesn’t work. The volumes are too small or too easy to smuggle. 

And since it’s synthetic, you basically can put it anywhere. So even if Mexico, working with the United States or on its own, was able to get rid of fentanyl production, it would just move to Oklahoma or Nevada or somewhere else. There has been a recent breakthrough with the de minimis shipping exception being closed, and that will greatly reduce the volumes of the precursor materials that make it in from India and China. 

And that will complicate the drug production, but it doesn’t solve the problem. Ultimately, it’s small scale and it’s hard to fight, of course, within every general trend there is an exception and la familia Michoacan is the exception. They are a cartel that instead of built around the smuggling of cocaine, is built a blurring the mass production of fentanyl. They are the only one of the major, narcotics trafficking groups in Mexico that has followed that business model. 

And because they control the part of Lazaro Cardenas, which is the largest Pacific port in Mexico, they have easy access to the raw materials that they need to basically produce fentanyl at an industrial pace. And they are largely immune to anything that happens with the de minimis exception or law enforcement in the United States. In many ways, they’re powerful enough to be a state within a state, and they control all of the corruption that goes along in the port as well. 

So rooting them out is going to be very, very difficult. In addition, some of the military options that the Trump administration really are inappropriate for this, not just because this is a major commercial port that would have a lot of complications and problems, but it’s on the wrong side of the country. It is on the southern coast of Mexico. 

It is nowhere near the U.S. border, so it’s just not in the sort of place that, the Trump administration or the United States in general can act. That said, the Trump administration has definitely named and shamed the brothers. Alaska Bagwell, who are in charge of the cartel, are now bumped up on the most wanted list. And I believe the new bounty is $8 million, in addition to a whole series of financial sanctions and indictments from US federal prosecutors. There is no good solution here. If there was, fentanyl wouldn’t be a problem. 

But because there’s an industrial scale production in this part of Mexico, U.S. authorities working in league with the Mexican government might actually be able to do something. It’s one thing to go door to door through every Mexican and American city looking for a drug lab. It’s quite another when, you know, the largest fentanyl labs in the world are in one specific city. 

That happens to be a port doesn’t make it easy, but it does mean that the sharp end of American power is a little bit more appropriate for this specific fight than for the rest of the drug war.

Trump, Cartels, Terrorism and…Increasing Migration

Photo of man in gloves opening cocaine package

Trump had a fat stack of executive orders waiting to be slammed down onto his desk as soon as he took office. One of those was his designation of Mexican cartels as terrorist groups, which will have some unintended consequences.

This new designation does little to address the networks which smuggle drugs into the US, and is largely irrelevant to the deepening fentanyl crisis. But perhaps the biggest hmmm of Trump’s order is that certain victims of terrorism can qualify for asylum in the US, which means millions of Mexicans and Central Americans could now immigrate. Legally.

This kind of “oopsie” is nothing new for Trump, as his border wall inadvertently facilitated illegal immigration by creating new routes to access the US. While Trump claims one thing, his actions may be doing the exact opposite of what he intended (TBD whether it’s deliberate ignorance or incompetence). As we all expected, Trump’s time in office will be nothing short of a wild ride…and I’m going to need some more popcorn.

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Transcript

Hey, all. Peter Zeihan here, coming to you from a Lake Wakatipu in Queenstown, New Zealand. It’s a 21st locally, which means it’s the 20th in the United States, which means that Donald Trump was just inaugurated. And we’ve had several dozen, executive actions, quickly thrown in there. There’s a lifetime of material for me to work with in there, but I’m going to focus on the one that I think is actually most significant to how most Donald Trump supporters view the world. 

And it has with, designating the Mexican cartels who traffic illegal narcotics into the United States as terror groups. 

Okay. Let’s talk about what it does. Let’s talk about what it doesn’t do, and let’s talk about where it’s going to lead us. So what it doesn’t do is strictly loosen the tools of the US military can use on foreign soil, because Mexico is not a country that we are at war with. 

So designating the cartels, sponsors of terror doesn’t really do much unless you also designate the Mexican government as a sponsor of terror. What it does is allows the US government to very easily move against any entities who are associated in any way with the cartels, especially from a financial point of view, especially if they’re victims. So, like if there’s a 

Taqueria in Mexico City that pays protection money to the cartels, this action would target them because of the financial transfers, but it’s not actually going to encourage us Apache helicopters to be flying south of the border and blowing shit up. Keep in mind that, the number one drug that is of concern from my point of view is no longer cocaine. 

It is fentanyl. And fentanyl as a synthetic has a very different supply chain. What happens with cocaine is it starts in Colombia. It’s turned into a leaf. It’s pressed into a brick, it’s refined with gasoline. It’s turned into the white powder that we all recognize. Well, hopefully we don’t. All cocaine is bad. Don’t do cocaine. Anyway, it is smuggled by plane, train or automobile north and eventually makes the jump by water or air to Central America, where it gets on land and it goes into Mexico and up north. 

So interrupting cocaine flows. This is a good thing. We like this. That is not what we’re dealing with. We’re dealing with fentanyl. Fentanyl is a synthetic. And what happens is in China, you get a chemicals company that makes a precursor, which is then processed into another precursor. That precursor is put in the mail and is mailed to the United States. 

And then it is smuggled south across the border to a mom and pop shop that processes a few kilos of this stuff a month, and then that stuff comes north. That is where the money is. That is where the danger is. And this does nothing for that, because the mom and pops aren’t big enough to justify classification as terror groups, because there’s literally thousands of them, as opposed to just a few, cartels anyway, so it’s going after the wrong thing. 

More importantly, when you identify a group as a terror group, you have also identified the people that they prey upon as victims of terrorism. Right? We all agree with this, right? Well, if you identify someone as a victim of terrorism, then they automatically qualify for asylum status within the United States. So what Trump has done with this designation is designate 130 million Mexicans and 50 million Central Americans as automatically qualifying for U.S. immigration protection. 

Now, if you dial back 4 or 5 years ago, I said that Donald Trump will long go down in history as the most pro illegal migrant, president in American history because by building a wall, what he has done is built 50 roads, construction roads that bypass the most robust natural barrier on the North American continent, the Chihuahuan and Sonoran Deserts. 

And lo and behold, it came to be true. And we eventually got 2 million illegal migrants a year. What he has done now is generated the largest inflows of illegal migration of the asylum clause of any American president in American history. Now, normally I would argue that this would mean the end of him, because his supporters will immediately abandon him because he’s done exactly the opposite, or achieved exactly the opposite of what he said he was going to do. 

 But this is Donald Trump, and he defies convention all the time. But it will set the stage for a very different conversation in the United States. And I can’t wait to see how that comes out. 

Oh, one more thing that I would be remiss and saying, this is my last day in New Zealand. I have been drinking, I’ve been doing some wine tastings, and this is not what I would call great analysis. There’s nothing that I just communicated with you that would be any sort of secret to the national security community, the law enforcement community, the folks who are interested in immigration at Pro or Con, or anyone interested in generally security of the border in general. 

But clearly the new president, the president is unaware, otherwise he would not have done it. Because this is going to generate exactly the sort of crisis that he says he wants to solve. The reason for this is very simple. Donald Trump has made sure that there is no one in his inner circle who is capable and competent in the issues that really matter. 

And his cabinet nominations reflect that, the only other two leaders in modern history that I can think of that kind of fall into this category of deliberate blinders, reshaping of China, who is rapidly leading his country into a full out national collapse, and Barack Obama, who hated having conversations with other people to such a degree that he basically hermetically sealed himself into the white House for his eight years. 

Donald Trump now joins those other two as one of the three most deliberately unaware leaders in modern history, which means that of the dozens of executive orders that were just handed down, there is undoubtedly more that fond of his general category of going directly against what Donald Trump says that he stands for, which means that we are in for an incredibly interesting period over the next four years, as, Donald Trump’s leadership or more accurately, the lack of competence in his circle leads to some wildly interesting outcomes. 

And I am here for it.

My Recent Interview On Borderlands + Patreon Info

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From the video description:

In this episode of Borderland, Vince sits down with renowned geopolitical strategist Peter Zeihan to dive into the complex realities of immigration, U.S. policy, and Mexico’s uncertain future.

Peter breaks down what both the left and right get wrong about America’s immigration debate, and offer his perspective on the models that could reshape U.S. policy. He also takes a hard look at Mexico’s new president and the growing threat driven by cartels.

He is also the New York Times bestselling author of The Accidental Superpower, The Absent Superpower, Disunited Nations, and The End of the World Is Just the Beginning.

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If you sign up for our Patreon page in the month of October, the proceeds from your subscription for the remainder of 2024 will be donated directly to MedShare. So, you can get our all of the perks of joining the Patreon AND support a good cause while you’re doing it.

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The Civil War of the Sinaloa Cartel

The Sinaloa Cartel, once the dominant organized crime group in Mexico, is turning on itself. This is just another notch along the downward spiral of the Sinaloa Cartel since the arrest of El Chapo years back.

The most recent fighting started after “El Mayo”, a top cartel figure, was betrayed by one of El Chapo’s son and arrested in the US. This newly vacated position caused a power struggle and each of the cartel’s factions is hoping to grab control. The fighting is currently the worst in the Sinaloa state, but is expected to spread throughout Mexico and even spill into the US.

As the fighting ramps up and chaos ensues, we can expect to see disruptions to the distribution network and perhaps the worst news for those who love the white powder…higher prices.

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

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Transcript

Hey everybody, Peter Zeihan here. It is the 22nd of September here in Colorado. Well, I guess not just in Colorado. Anyway, the news today is coming out of Sinaloa state in northern Mexico, where there have been at least 100 murders and a whole bunch of abductions as the Sinaloa Cartel is basically devolving into civil war.

Now, the Sinaloa Cartel is rather unique among organized crime groups in that it’s not simply about power or money. It’s run as a business. There was a guy by the name of El Chapo who used to run the place, and he essentially brought together all his chapter leads to compare best practices and figure out how they could run drugs to the United States with less friction and disruption to local law enforcement and local populations.

The concept was pretty straightforward: “Don’t shit where you sleep.” The goal was to maintain good relations with the people where they operated, so they wouldn’t turn on the cartel or go to the government for help. This strategy allowed Sinaloa to become the largest organized crime group in Mexico by far.

However, they were so successful that the United States made El Chapo public enemy number one. Eventually, the U.S. was able to capture and extradite him. He’s now serving multiple life sentences in the American prison system, where he’ll never see the light of day again.

That left his organization in the hands of others who aren’t as competent as he was. El Chapo was, without a doubt, a murderous thug, but he was a murderous thug with a business degree and some managerial skills. Since his capture, the factions he used to control have started to go their own way.

Things really started to unravel back in July, when Ismael Zambada, also known as El Mayo, who used to be the accountant and has taken over most of the operations, was lured to Texas by one of El Chapo’s sons. The second he landed, American law enforcement arrested him. It appears that El Chapo’s son betrayed El Mayo and turned him over to the authorities.

Now, El Chapo has more than one son, and each of them controls a faction of the organization. With El Mayo out of the picture, they’re now fighting among themselves for his share of the cartel.

Cartels aren’t monolithic, especially in a place like Mexico where internal transportation is difficult. The cartel is made up of several dozen groups, mostly locally defined, where local chapters might even use different names, have different organizational structures, and only give lip service to the central leadership. It’s like Canadian politics, but with a lot less politeness.

As long as there’s a strong leader who’s skilled with words and has a firm hand, this system can work and hold together. But when the leader is in prison, his deputy is in prison, and his kids are fighting over what’s left, things fall apart quickly.

Now we’re seeing the largest organized crime group in Mexico break down, and Sinaloa, the heart of the organization, is where the splits are occurring. Over the next few weeks, we can expect to see this violence expand, not just beyond Sinaloa into the rest of Mexico, but also north of the border.

El Chapo’s business-minded approach didn’t just make Sinaloa the largest drug-running group in Mexico—it made them the largest organized crime group on the planet, including in the United States. As the leadership fights among themselves, we’ll see similar breakdowns in their local distribution and retail operations, especially in the U.S., where many of their operations are carried out by local gangs.

This will likely lead to higher drug prices due to distribution disruptions and more violence as the organization fractures at the regional and local levels. Whether that’s good or bad, I’m not sure.

The Mega-Prison of El Salvador

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

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

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

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

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

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