Talks of the Trade with James Fraser & J.P. Morgan

I recently had the opportunity to sit down with J.P. Morgan Payments’ Global Head of Trade and Working Capital, James Fraser, for episode 2 of “Talks of the Trade.”

In this episode, we discussed how global markets and cross-border trade flows are vulnerable to geopolitical risks; these factors can have oversized impacts on costs, access to capital, and overall economic stability. We do a deep dive on a handful of these factors, including deglobalization, international tensions and crises, world financial markets, urbanization, manufacturing, and supply chain risks.

Click the link below to watch other episodes or to learn more about Trade and Working Capital at J.P. Morgan Payments…

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.

Economic Warfare in Siberia

There’s been a series of explosions along one of the main lines of the Trans-Siberian rail network. To fully understand the significance of these attacks, we must look at Russian exports, alternative options, and what maintenance looks like.

These explosions could cause disruptions to Russian exports, specifically those bound for China, but the lack of alternative routes and limited maintenance capabilities could be the nail in the coffin.

Ukrainian officials have claimed responsibility for these attacks – unofficially, of course. Regardless, Russia’s economy could be facing a severe blow if these explosions continue.

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.

TranscripT

Hey everyone. Peter Zeihan here coming to you from chilly Colorado. The news is that last week, on Tuesday the 20th, I believe, a series of explosions hit a couple of pieces of Russian infrastructure in the Far East in southeastern Siberia. Specifically the Sarah Mosque tunnel, which is part of the Trans Siberian network, specifically the Buckle Aylmer main line were hit.

And then a few hours a day later, details are a little fuzzy. A similar line in the vicinity of the tunnel was also hit, which is serves as the backup for the tunnel, a place that they call the Devil’s Bridge. Some anonymous Ukrainian security officials have claimed responsibility for the attack. I can’t tell you if that is true or not.

What I can say is that we’ve got three things going on here. Exports, options and maintenance. So first, exports. Since the Ukraine war began, the Russians have only found it more and more difficult to get their product to market. The Europeans were the natural market. They were the closest for most oil and gas, even a lot of the minerals.

And so when they decided, for whatever reason to stop buying it, a lot of this stuff ended up in China. And for that, the Koreans Siberian rail system is critical. It provides probably 80% of the cargo capacity for land based stuff. And more stuff is going on lands than ever before. Also, all of these lines of which there are basically five, you’ve got one that’s the least important that kind of goes down into Kazakhstan before going over into emersion, Zhejiang.

That’s the least used and the most Frankenstein, the other for all parts of the Trans Siberian system that does cross over the mountains on the passes into China at different places. But all of them collectively are the only way to get things to China. And they’ve all been running at more than 100% capacity, which, you know, we’ve been kind of waiting for a safety situation to boil up, to knock things off line.

And now it’s been done, at least in part by an attack. And when a blight is being used at more than 2% capacity, that means you can’t just ship it to alternatives, even if you’re willing to turn your train around for off people, can you back up the trains you depot? Anyway, point is that one of the four lines, at least for the moment, is off line completely.

Second options. You’ve got these four lines, one that crosses through Mongolia, two that go into northeastern China and one that goes all the way over to the Russian Far East, where things can be kind of repackaged and put on ships. No one lives in Siberia because they want to. I mean, there’s a reason why this is where all the prison colonies were.

Some of the more stable lines, like the bomb line that was hit, are on permafrost, which is not particularly stable. Something happens to the permafrost. The whole thing just kind of sinks in. And it looks like, at least on one of these attacks, a rail car that was full of fuel was hit. So we’ve seen in other parts of the conflict in Ukraine how that can go bad really, really quickly.

Because of this. There are not a lot of population centers along this entire route. In fact, less than 10% of Russia’s population lives along this line. Everybody else is on the western Russia where it’s, you know, warm. And because of that finding, repair crews in the first place might be really difficult. You’re dealing with a lot of tunnels, a lot of bridges, a lot of canyons, a lot of permafrost, a lot of territory where if there is damage, you don’t just slap down some fresh line and start up.

And a road takes years. When this line was built back in the seventies and eighties, the Russians wouldn’t even allow any foreign observers to see it because it was so shoddily put together and it could only operate reliably over about a third of its length. And this was when the Soviets actually had engineers. post-Soviet Russia really doesn’t. And as we’ve seen with the Kerch Bridge, which connects the Russian mainland to Crimea, you know, that was hit over a year ago now, and it’s still not running at full capacity.

So doing repairs in this area is no minor issue. Of course, getting information out of this area is no minor issue as well. Anyway, third maintenance. The Russian educational system collapsed 35 years ago and so there aren’t a lot of people who are, I would consider to be fully capable of claiming the term engineer. In fact, the younger of them turn mid-sixties this year.

Also, everyone that the Russians have who can repair physical infrastructure is in the Ukraine theater right now because the Ukrainians have been blowing up rail depots and rail lines in bridges and roads and everything for a year and a half now. So there just isn’t a lot left that the Russians can use if all of a sudden they’re getting hit on a very, very exposed, vulnerable place 4000 miles east of Moscow.

If this was the Ukrainians or really if this was anyone who really means the Russians ill will, this is an excellent strategy because the Russians barely have the military capacity to patrol their own lands in western Russia abutting Ukraine, much less 4000 miles. The other direction, 5000 miles, the other direction. This is something that can really hit to the heart of their economic plans in a postwar scenario, because if they can’t get the stuff to the Chinese, the Chinese aren’t going to pay for it.

And there’s really only three other lines now that this stuff could be shipped. And so if this is real, we’re going to find out about it really, really fast because there’s just so many points of exposure and so many failure points throughout this part of the Russian system. It would be an easy way to take down the Russian economy far more effectively than anything we’ve seen with sanctions so far.

All right. That’s it. Stay warm.

Transport: The Economics (and Politics) of Railroads

Today’s video comes to you from Needle’s Eye Tunnel on the Rollins Pass Railroad.

My walk along the railroad tracks inspired some pondering on why rail gets such a bad rap. Yeah, I know it’s not as fast as planes OR as versatile as vehicles OR as cheap as water…but that doesn’t mean there’s no place for it.

The rail conversation comes down to is where and how it is used – i.e., don’t send trains up and over huge mountain passes like the one I’m on. However, most rail lines aren’t really built for “economic” reasons; instead, they are used to project political power over large swaths of land. The US did this with the transcontinental railroad, and the CCP is still doing it today.

While rail might be the redheaded stepchild of the transport industry, it is still very much an integral part of the family.

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.

Why Fiat Currencies Will Always Beat Gold

Apparently, the wind on the saddle between Mt James and Mt. Bancroft is pretty bad, so apologies for the audio today.

After today’s video, all the leprechauns out there might be mad because we’re talking about GOLD. And unfortunately, there’s no treasure at the end of the rainbow this time…

At the start of the Ukraine War, many of the world’s advanced central banks placed sanctions and embargos on Russian financial assets. As Putin tries to repatriate gold reserves from these hubs worldwide, what does this mean for the leprechauns who think we should switch to an asset-backed currency?

If you know your history, the answer is obvious. Every time we’ve used an asset-backed currency, it’s resulted in collapse. There’s just no asset, especially not gold, that can keep up with economic growth and expansion around the world. And when the currency becomes a brake on economic activity, you end up with a sharp crack in the system; which leads to depression and often state collapse.

You can argue that fiat currencies aren’t perfect, but don’t say an asset-backed currency would be better. This isn’t financial advice, but if gold continues to be pulled from these hubs, its use case will only get smaller and smaller.

Prefer to read the transcript of the video? Click here


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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY


TRANSCIPT

Hey everybody. Peter Zeihan here. Coming to you from the saddle between Mount James and Mount Bancroft. That’s Lake Oman just below me. I’m about 12,500 feet here. Today, we’re going to talk about other high minded issues such as golddd.

Now, one of the things that we saw last year with the beginning of the Ukraine war is that most of the world’s more advanced central banks started putting massive sanctions on. That included the embargo of Russian financial assets held abroad, whether it was foreign currency or gold reserves themselves. Now, the way the currency markets normally work is there are a number of nodes, places like Tokyo and London and New York, where trillions of dollars of currency are exchanged every single day. And by locating these things in these hubs, everything becomes a lot more efficient, especially when you’re talking about gold. It’s traditionally traded electronically, and the stuff is just kind of held in a big vault. There are pluses and minuses to that. The pluses, it means it can go anywhere at any time and interact with any one kind of like digital currency in general, or your ability to move money around via your bank account without actually going in and getting physical cash to hand someone. The downside, of course, is that, well, it’s in New York or London or Tokyo, and if New York or London or Tokyo decide that you’re a bad, bad person, then all of a sudden they can say, You know what? This isn’t moving anywhere. Not today, not ever. We’re just going to close the vault and your stuff is stuck. Because of that, a lot of central banks in the world, not among the countries that are doing the sanctions, but everybody else have been trying to physically repatriate their gold from those hubs back home. Now, there’s nothing to stop them from doing this. The question is whether or not there’s any utility in it, because if their gold is physically at home, the digital aspect of duty and transfer is much weaker unless you can find another hub. And at the moment, the only theoretical, and emphasis on the word theoretical, large scale place for that would maybe be the United Arab Emirates. The UAE just doesn’t have the experience right now or the credibility to be that sort of hub. And remember, any sort of secondary hub is not going to be using gold from the United States or Japan, Canada or Italy or anyone in the European Union, any of the First World. So you’re talking about something like 80% of global currency exchange, all of a sudden there’s not going to be using this new hub at all. Makes it very hard to get it going in the first place. Anyway, for other people, non-central banks, people who are using gold or other currencies as a matter of course, I wouldn’t get too excited about the idea of gold coming back as countries are looking for options that don’t use the hubs and don’t use the U.S. dollar and don’t use the euro or the yen or the pound. You’ve got to think about why we have a currency system the way we do. Now, back in the bad old days before 1970, we did use gold back asset backed currencies. And every time, every single time we ever had one, it ended in collapse. Because one of the things that you generate whenever you have trade, whenever you have economic activity, is you have to have some means of exchanging it that preferably is not barter. And usually, historically speaking, we have used asset backed currencies for that. But as growth picks up, as economic activity picks up, you need more and more and more and more and more of the currency until eventually you gobble up everything that is available. And when that happens, the currency itself starts to become a source of massive inflation, independent of the normal issues of supply and demand and logistics of labor and capital. When the currency itself becomes a brake on economic activity. You get a sharp crack in the system, usually a depression and oftentimes state collapse. This has happened with every single asset backed currency throughout human history. Now you can make the argument that the fiat age, where countries like the United States government just say, you know, this is what the dollar is worth and we’ll maintain it. And you can see that that is a flawed system that is fine, but it is by far better than all the other systems because the U.S. Federal Reserve, our monetary authority, has the ability to regulate the supply of the currency on a second by second basis. So if there’s strong economic growth, if from the 1990s until now, the U.S. economy expands by a factor of three, than there’s no problem for the Federal Reserve to triple the volume of the currency that is available for use. You can’t do that with gold. There’s another problem, of course, the daily currency daily global currency exchange is about four or 5 trillion U.S. equivalent. The U.S. economy is now $20 trillion. Global merchandise trade is over $25 trillion. All of the gold that the human race has mined in total, in the last 6000 years of history, it’s only about 10 trillion and only a few single digit of percentages of that is available for use in the day to day. Because most of the world’s gold is in things like wedding bands and museum exhibits and semiconductors. So not only theoretically is there not enough there, even if it was all pooled somehow, if we did go back to some sort of gold based system, you would have a crushing impact on economic growth because you would have hyperinflation triggered by the currency itself. And this is one of those things that most of those people who think that we should move on to something beyond the dollar tend to dismiss or think that we need to go back to a asset backed system, tend to miss. The human race in its current position with over 8 billion people at a combined global GDP pushing $100 trillion. Cannot function without fiat currency. Oh yeah, as I was climbing I thought of one more thing. And that’s Icebound Lake behind me. I know a lot of you are going to ask, or you’re going to translate it into financial advice anyway…I don’t give financial advice. Let me start by saying that. But number two, I’m not necessarily saying that you shouldn’t invest in gold. I mean, you do it for your own reasons. I would just point out that with many of the world’s secondary central banks physically repatriating their gold, it is being removed from currency exchanges, becoming a non-factor. No movement up, no movement down. They are basically repudiating the open exchange system that underpins most financially liquid markets. Now, does that mean that gold has no use? Of course not. In addition to its industrial uses and its jewelry uses, it can still be used as a method of exchange. But by removing gold from the digital system, it means you have to do so physically. So one of the ways that the Russians, for example, are getting around the sanctions regime is to physically load gold up into a plane and fly it to a country that they’re buying stuff from. That is neither bullish or bearish for gold because it never sees the light of day. It never gets exchanged in a traditional sense that can push the market up or down. So does that make the case for gold more or less viable? I’d say neither. It just makes it smaller.

Alright. I’m done for real. Bye.

“The Global Disorder Ahead” Metawealth Livestream

Metawealth Professional Training has contracted with Zeihan on Geopolitics for some geopolitical and demographic work. They have chosen to share this piece of that work with all takers. So thanks much to the folks at Metawealth, and enjoy the listen while you sharpen those pitchforks!

It’s been a scary year. The Fed seems determined to crash the economy. The reality for some is going to be far worse than a “mere” four banks collapsing. Not only have four banks collapsed, another 185 banks are hanging on by a thin thread. Plus, the war in Russia and geopolitical tensions are escalating with no end in sight, and we’re starting to witness vast economic and political consequences.

If you’re like most people, you’re worried about what it all means… and unsure about what to do to best protect yourself from what’s unfolding.

That’s why I’ll be speaking on a special livestream, where I’ll share what my latest research unveils about the future and a startling new set of predictions…

Join me on Wednesday, June 7th at 8pm EST

I believe the era of prosperity we’ve enjoyed since World War II is ending and Russia’s invasion of Ukraine has speeded up the process. The world is entering a new phase of “de-globalization.” The 2020s will see a collapse of consumption, production, investment, and trade…almost everywhere. Instead of a cheaper, better and faster world, it will be pricier, worse and slower.

There is a global disorder coming, in which countries will have to make their own goods, grow their own food, secure their own energy, and do it all with dwindling and aging populations.

In short, we will remember the last 75 years since the end of World War II as a golden age and no economic system can work in the future we’re about to face.


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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

Is Saudi Arabia Ditching the US Dollar?

The Saudis have relied upon the US for military protections for years, but as the US reduces its naval presence in the Persian Gulf, Saudi Arabia will have to find those protections elsewhere.

As the world’s largest oil exporter, Saudi Arabia has learned a few tricks to curry favor from different countries. Their most recent endeavor is accepting the Chinese Yuan as payment for a few hundred million barrels of oil…and that’s not an insignificant amount.

This move isn’t happening because the Saudis are worried about de-dollarization; it’s solely a move to win the Chinese over and establish a new external military guarantee. Still, this remains the only meaningful shift away from the USD, even though it’s from one country, for one commodity, and for one reason.

I’ve said it before, and I’ll say it again…the US Dollar ain’t going nowhere.

Prefer to read the transcript of the video? Click here


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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY


TRANSCIPT

Alright. So the country that matters here, the only country that, in my opinion, is doing anything meaningful when it comes to moving from the dollar to something else. Is Saudi Arabia. Now Saudi is the world’s largest oil exporter, and they have started to accept payment from a number of Chinese government entities in yuan. And we’re talking here about, you know, a few hundred million dollars of cargo. So it’s hardly an insignificant issue. There’s no sign that they’re changing the reserves. And I wouldn’t expect that to happen because there’s a specific rationale here.

Now, the Saudis military on paper is great. They’ve got a lot of top notch equipment, but they have demonstrated over and over and over in recent decades that the Saudi military is incapable of operating its own equipment at scale, much less in any sort of coordinated manner. I mean, they can fly their planes and bomb things, and that’s about it. They have always, since their independence, relied on an external security guarantor in order to keep them alive. At first that was the Brits. And for the last several decades, especially under globalization, it has been the Americans. Now, the Saudis think a little bit differently. They basically have modeled themselves off of a medieval fiefdom. And so they think that bribes work really well in order to get what you want. This is one of the reasons why they got along so well with former American President Donald Trump. They saw the world through basically the same lens when it came to operating procedures.

So what they’ve done with the United States is they’ve bought a number of refineries on the U.S. Gulf Coast and shipped crude from Saudi Arabia to the U.S. Gulf Coast. And if there’s a time when the Americans look like they might be facing high energy prices or some pressure in the market, they sail additional cargoes and just let them park off coast until they’re called for. Now, it’s not like the United States, you know, thinks this is bad thing, but the United States gets the vast, vast, vast majority of its oil always has from the Western Hemisphere, with traditionally Canada and Mexico being our largest suppliers. Now, of course, with the shale revolution of the last 15 years, the United States is a net exporter. So the Saudi angle here is very, very small from an American point of view. But for the Saudis, this was never about the economics. It was about currying favor with the guy who’s supposed to defend you. Wellll, in the last few years, the United States has moved more and more of its forces out of the Persian Gulf, and we no longer even have a carrier group that’s there on a regular basis. So the Saudis are a little scared. They are concerned that without the Americans guaranteeing their security, that they’re screwed. And, you know, that’s a reasonable position. So they’ve been looking about for a replacement and they’re discovering that there isn’t a really good, clean one. 

The French and the Brits could theoretically project power into the Persian Gulf, but definitely not as reliably as the United States. Turkey certainly could, but they would have to conquer Iraq first. And, you know, the Saudis have a lot of opinions on a lot of things going on in Iraq, but they’d really rather not have a regional superpower right on their border. India is probably in the long run the most likely outcome, but they’re not Muslim. So the Indians tendency to meddle in political events in places where they have military forces, especially in like Afghanistan, has really soured the Saudis. Japan’s a possibility, but Iran has other options as well. Most notably, it has gotten in bed with the United States and can access the energy of the Western Hemisphere. That just leaves China. Now, the Saudis aren’t all that hot on China. The Chinese navy really can’t project power, and the Chinese have no experience projecting power and military terms beyond their own neighborhood, much less going the 5000 miles it would take to get to the Persian Gulf. There’s also low confidence in Saudi Arabia that if a fight broke out that the Chinese would side with the Saudis against their primary regional rival, Iran. But if there’s one thing the Saudis have, it’s money to spare. So they have gone into China and bought up a few refineries, entered joint ventures with Chinese state energy firms, and are shipping crude to China like they used to ship it to the United States. Now, from the Saudi point of view, this might actually work better in terms of currying favor than it ever did with the Americans, because the Chinese actually need the crude they import three quarters of their total, of which roughly three quarters comes from Africa and the Persian Gulf. And so they’re paying for that in Yuan and in order specifically in their mindset to bribe the Chinese to come to their aid when the rubber hits the road. This is not an economic decision. This is a political decision being made not because they don’t like the dollar, but because they think the dollar doesn’t give them the military guarantees that they thought it once did. So this is Saudi making the decision because of military strategy as shaped by their own culture, not because they think the U.S. dollar is going anywhere.

But still, this is the only example I’ve seen out there of a meaningful shift away from the dollar. And it’s only for trade with one country for one commodity. Alright. That’s it for me.

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

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

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

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

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

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

Prefer to read the transcript of the video? Click here


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

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TRANSCIPT

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

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

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

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

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

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

The Debt Ceiling Issue: Will the US Gov Default?

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

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

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

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

Prefer to read the transcript of the video? Click here


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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY


TRANSCIPT

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

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

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

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

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

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

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

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

Economic Growth Is Collapsing Around the World

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

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

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

Prefer to read the transcript of the video? Click here


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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY


TRANSCIPT

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

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

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

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

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

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

The Economics of Green Energy

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

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

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

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

Prefer to read the transcript of the video? Click here


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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY


TRANSCIPT

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

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

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

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

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

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