The Self-Inflicted Downfall of Mexican Energy

Following its discovery in the 70s, the Cantarell oil field enabled Mexico to become a major oil producer. Decades of lax management and complacency by Pemex, Mexico’s state-owned oil company, together with the declining output of the Cantarell, has left the country with serious production problems.

President López Obrador has attempted to revive Mexico’s energy sector with heavy investments into refineries like the one in Tabasco. Unfortunately, Pemex’s inefficiency led to budget issues which delayed the project even further. It could be too little, too late for the Mexican energy sector.

To add insult to injury, Mexico’s preexisting refineries were designed to process Mexico’s own heavy, sour crude, not the light, sweet stuff coming from the US. So, even if the US wanted to send some crude Mexico’s way, it would be futile. If Mexico continues down this path, they’ll be forced to import refined US oil or rely on unstable regions for crude that matches their refineries’ needs. Either way, this dependency would cause major economic and political challenges.

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

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

And then there’s you.

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

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Transcript

Hey, everybody. Peter Zeihan here, coming to you from lower Ottaway Lake in southern Yosemite. And today, we’re gonna talk about Mexican energy. The story begins over a century ago, when there was a discovery called the Cantrell field offshore Mexico. And the Cantrell is unique among oil fields. It’s basically shaped like a volcano, with the tip at the very top and the pressure pushing all the oil towards the tip.

So, basically, they were able to put just a handful of offshore production platforms above that tip. You can see all the platforms from one another, and the pressure just continued to flow and flow and launch, flow and flow. It made Mexico a major oil producer and a significant exporter and supplier to the United States. However, one of the threads in Mexican politics is a degree of anti-Americanism, largely because the United States is the closest to the North, and it can get a little bit bossy.

So, the Mexicans actually put into their constitution that no energy asset could be operated or owned by a foreign entity. So Pemex, which is a state oil company in Mexico, was in charge of everything. Well, when you exist in that sort of controlled environment, you tend to get a little sloppy, especially when the oil comes easy. So, decades turn into decades turn into decades, and eventually, the Cantrell starts to give out.

Pemex never really bothered to learn how to explore or produce more difficult fields. And so, for the last 30 years, we’ve seen Cantrell basically fall to almost nothing, and Mexican oil production fall with it. While this is going on, Mexico is rapidly industrializing because of NAFTA, so its fuel needs have gone up. They finally loosened up some of the restrictions a little bit and allowed the import of refined products so that, you know, cars could run. Mexico is now the single largest consumer of American-exported fuels, courtesy of the shale revolution.

Well, in comes the president, Lopez Obrador, who is more anti-American than most Mexican politicians and decided that this was a bad idea. So he started splurging money on a refinery in his home state of Tabasco to make it so that Mexico wouldn’t have to import refined product. Pemex, being as incompetent as it is, saw the project go hugely over budget.

It’s operational now. But here’s the problem: Pemex can really only focus on one thing at a time, and they don’t really do the one thing all that well. So yes, they now have the refinery starting up, but oil production is tanking to the point that, very, very soon—probably within 2 or 3 years—it’s going to fall below the level that Mexico needs to supply its own needs.

So yes, they can refine, but they can’t produce the crude. The problem is, this isn’t something where they can just turn to American fuels. The new problem is American oil is primarily light and sweet, coming from the shale fields. Basically, shale fields are kind of like concrete, and there are little pockets of petroleum trapped in between the individual particles of the rock.

That’s why you have to frack it. You basically spider up the entire thing with cracks, and then the stuff can get out. The Cantrell field and most Mexican fields are much more traditional in comparison, so the oil can migrate through the rock strata. Well, for shale, this means there are fewer contaminants in it, which is the whole light sweet thing. Mexican crude is more heavy and more sour.

The Tabasco refinery, along with all of Mexico’s refineries, were designed to run on Mexican crude. So if they end up having to import oil in order to make their own refined product, it’s not going to be U.S. shale crude. They’d have to completely overhaul the refineries for that. Mexico has now become the one country in the Western Hemisphere that might actually be dependent upon oil politics of the Eastern Hemisphere. For the United States, which is slowly retooling all of its refineries to run on its own crude, this has become a bit of a headache, but one that can be dealt with, especially since

the United States has the capital to change its refineries to run on its own crude. Mexico doesn’t have that kind of resources, so we’re probably going to be getting to a situation within a decade when Eastern hemispheric energy flows are interrupted. The United States is fine—in fact, is doing great—but Mexico is either going to have to shut down its own refineries and then bring in American refined product again, or be subject to a crazy price environment that is subject to things like Russian shutdowns and more wars in the Middle East.

Mexico has, unfortunately, found a way to make itself far more exposed than it needs to be because of nationalism. How they deal with that? Well, only time will tell.

Will the Far-Right Take Over Germany (Again)?

German regional elections in Saxony and Thuringia saw some of the country’s far-right parties, including the Alternative for Germany, perform quite well. Don’t sound the alarm bells yet, but this is yet another reminder of the ongoing economic and political issues in Germany.

While these far-right groups saw some success in these elections, they aren’t likely to form coalitions or gain significant power. The current government, a coalition between Social Democrats, Greens and Free Democrats led by Olaf Scholz, will likely remain in power through the next general elections.

Dissatisfaction amongst the Germans is growing, especially within East Germany, and for good reason. The government struggles to make decisions and can’t get aligned on anything; combine that with all the other issues facing Germany and we can expect some eventful elections come September of 2025.

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

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

And then there’s you.

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

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Transcript

Hey, everybody. Peter Zeihan here. Coming to you from Germany. I’m not in Germany. I’m in Colorado. We’re going to talk about Germany. Jeez. Sorry. I didn’t get a lot of sleep last night. Let’s see, where were we? We’re in around the turn of August. In September, the Germans had regional elections. And in two states, specifically Saxony and Thuringia, which are provinces in the former East Germany.

So, provinces that have not done well these last 30 years. The far right did very well. Two parties, or with call out, the AfD, which is the alternative for Germany. And then literally a splinter party ran by a Czech who put her name as the party name with the, you know, ego. I’m not going to bother repeating her name because she’s a flash in the pan.

Anyway, did very well. The largest or second largest parties, and a few people are freaking out, especially in Germany, when the Germans tend to elect people that are basically, you know, less organized Nazis, it’s worth paying attention. I don’t want to belittle this, but I’m not too worried. Number one, no one’s going to work with them to build a coalition, so they’re not going to take over the state governments or the land or governments, if you want to use the technical term.

But it is an indication of two things. Number one, the integration of the former East Germany into the former West Germany, into what we now consider to be the Federal Republic of Germany. It’s been a tough row to hoe. Basically, the former East Germany was the economic success story of the former Soviet Union. But when it was integrated with Germany, which was one of the most advanced economies in the world, every piece of infrastructure they had was absolutely crap.

And they made a decision, for political reasons, to allow anyone in the East Germany to relocate anywhere in Germany right away, which, you know, is kind of important. You needed to do that from a national unity point of view. But it meant that anyone who had talent in the former East Germany picked up and moved to Bonn or Munich or somewhere else, tripled their income overnight and never looked back.

And so the people who stayed were the people who were either very happy with the Soviet socialist system, or the people who were very old and couldn’t move, or the people who were happy not being very ambitious. Well, you fast forward that 40 years and East Germany is basically a bit of a basket case, with the exception of the area around the capital Berlin itself.

You also have the issue where they decided to make one East German mark work with one West German mark, which again, politically important, but that encouraged people in the East to stay put because they could just spend their money, and didn’t have to worry about actually working hard to learn how the West does things. Anyway, you play this forward 40 years, you get a lot of political dissatisfaction, a lot of economic dysfunction.

It’s not that the West Germans didn’t try. They spent over €1 trillion in order to integrate these two parts into one. It just hasn’t worked very well. And now that the German population is literally dying out because of demographic decline, it’s too late. It’s not going to get better. So while I’m not concerned about what this means for German politics at the moment, you fast forward 5 to 15 years, and I get very concerned very, very quickly.

The second issue argues both for stability and future instability. There’s been a lot of talk in Germany, even before these elections, about the failure of the current government of Olaf Schultz. Now, Olaf Schultz is a socialist. Socialist in Germany doesn’t mean the same thing it means in the United States. This isn’t Bernie Sanders. This is someone who can do math.

And he is in a coalition government with the Greens and a group called the Free Democrats, which are kind of a libertarian pro-business group, especially small and medium-sized businesses. And the three factions don’t have a huge amount in common, and having all three of them in one government has made decision-making very, very difficult at the German level and the European level, because whenever something happens at the European level, the Germans have to go home and hammer out a common position.

And the three parties don’t have a lot in common anyway. Two things here. Number one, this government isn’t going away until its full term is up. You can’t have a vote of no confidence in the German system like you can in, say, France or the United Kingdom. In those countries, if the government loses favor, all it takes is a simple majority of the Parliament to basically vote to call new elections.

For that to work in Germany to eject the government, it has to come from the government, which they don’t want to do because they would get trounced in general elections today. Or, other parties have to come together and form a replacement government with the seats as they exist in the Parliament today. So no, no, no, no vote. You just work with what you have to form a new coalition.

And the only way that would work is if the opponents of the socialists, the Christian Democrats, were to form their own coalition with the Greens and the Free Democrats. And that’s not in the cards at the moment either. So we’re stuck with this government for at least another year until we have general elections. What that means is the central government is basically slouching towards Armageddon.

All of the issues that have vexed Germans—economic dislocations, the failure of the postwar model, the Ukraine war, the rise of the far right, immigration—all of these cultural and economic issues that really are big and do need to be discussed won’t be, because the current government is locked into place and can’t fall. So this election cycle, no big deal.

The next one, that’s when things get lively.

America’s Cold War Missiles Return to Germany, Thanks to Russia

Picture of a Tomahawk cruise missile mid-flight

Well, it looks like the Germans are going to be celebrating Christmas in July. That’s due to the US and Germany’s decision made at the NATO conference to redeploy American mid-range weaponry to Germany. And yes, this hasn’t happened since the Cold War for…historic reasons.

Russia is the country to blame here. They’ve been violating arms treaties for the past 15 years, so the US got fed up and bailed on the INF treaty five years ago; this triggered the redeployment process. There are a whole boatload of reasons that this is happening, but defense against the Russians tops the list.

While the Russians may have opened this can of worms, the fallout isn’t going to be confined to them. Since the treaty that barred the US from taking actions globally is now kaput, the Chinese will be feeling some of the heat too. You can expect to see some intermediate-range American weapons in close proximity to China and throughout East Asia, which should help limit China’s global economic influence.

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

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

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

And then there’s you.

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

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Transcript

Hey everybody, Peter Zeihan here coming to you from the Lake of the Ozarks. It is Thursday, July 12th, and today we’re going to be talking about security in Europe. Specifically, the United States at the NATO conference has announced, with the Germans, that American mid-range weaponry is returning to Germany in a position that hasn’t been seen since the Cold War.

A combination of hypersonics, mid-range missiles, including the Tomahawk cruise missile system, is being deployed. The reason this is happening is because we had a series of Cold War and post-Cold War arms treaties between the United States, NATO, and the Soviet Union, like the Conventional Forces in Europe Treaty, or more specifically for this conversation, the Intermediate Nuclear Forces Treaty (INF). The Russians started bit by bit either violating or withdrawing from those treaties as far as 15 years ago and even started developing weapons systems that are expressly barred by the treaty and then deploying them.

Under the Trump administration, five years ago, the United States formally withdrew from the Intermediate Nuclear Forces Treaty and has been moving bit by bit to redeploy these weapon systems ever since. The INF specifically bars weapons systems with a range of 500 to 5,500 km, roughly 300 miles to 3,000 miles, which basically covers the entirety of the hot zone now between NATO and Russia, including all of Ukraine.

The idea of these treaties, which dates back to Reagan and Gorbachev, was that if you take the weapons that are actually useful off the field, then you won’t have a tactical engagement or a tactical escalation. That just leaves the big strategic missiles, like the intercontinental ballistic missiles that are based in the United States. The desire to not use those is quite strong, so you take away the usable day-to-day missiles, and it forces both sides to basically come to the peace table. Well, the Russians have repeatedly moved away from that system, and now they’re going to find themselves facing weapons systems that, while maybe designed 50 years ago, are perfectly serviceable.

The United States is dusting off things like hypersonics that it developed back in the ’70s and ’80s but never deployed. Now they are being deployed. The balance of forces for the Russians across the entire theater is about to go from problematic to catastrophic. Keep in mind that one of the many reasons why the Cold War ended when it did is because NATO and, to a greater extent, the United States, defeated the Russians in an arms race. The Soviet Union simply couldn’t keep up with the economic power of the United States. While Russia today is significantly economically weaker than the Soviet Union ever was, the United States is significantly economically stronger than it was back in the ’70s and ’80s. So there’s really no contest here. The Russians have proven over and over again that while they can’t innovate, they can’t develop new weapons systems that are particularly capable, and they certainly can’t produce them at scale. Meanwhile, the United States, in many cases, is just literally dusting off things that have been in storage for 20-30 years and bringing them back online while also developing new systems.

The strategic picture for the Russians is a direct consequence of some very bad decisions they’ve made. A lot of the Russian position for the last 15 years has really been a bluff, and it worked until 2022 with the Ukraine war, which mobilized pretty much everyone in Europe. The Germans were the country that was most in support of the INF when it was negotiated because they were the ones in the crosshairs, and they were the country that was the most willing to overlook all of the Russian violations of the treaty because they lived in this kind of strategic nirvana that they didn’t want to end. Now, it’s the Germans who are actually arguing that the United States needs to deploy more and more weapon systems, not just to Europe, but to Germany specifically.

Okay, that’s kind of the big first piece. The second piece is the INF provided handcuffs on what the U.S. could do, not just in Europe, but globally. The country that has arguably benefited the most from the Americans refusing to deploy intermediate-range weapon systems isn’t Germany, it’s Russia. It’s China. If you look at a map of East Asia and consider all of the U.S. allies, especially Japan, the Philippines, Taiwan, Indonesia, and Singapore, the distance from those countries to the Asian mainland is in that 500 km to 5,500 km range.

So for the entirety of the post-Cold War period, the United States has been barred from deploying appropriately ranged weapon systems to counter the Chinese rise. Well, not anymore. Over the course of the next 2-3 years, we’re going to see a mass deployment of American weapon systems off the Chinese coast that are perfect for boxing in the Chinese. The Chinese have always argued strategically that this was the goal of the United States all along, which, of course, is horse crap. But keep in mind that unlike the United States, China is a trading power, and not having these weapon systems has allowed the Chinese to, from a strategic and economic point of view, become a global economic player.

If these weapon systems are in place, everything that the Chinese do could literally be shut down within an hour. The capacity of the Chinese to import and export could be ended almost overnight. So while it may have been the Russians who were the ones who were messing around, it’s absolutely going to be the Chinese who are the ones who are going to find out.

Photo by U.S. Navyderivative work: The High Fin Sperm Whale – Tomahawk_Block_IV_cruise_missile.jpg, Public Domain, Link Wikimedia Commons

How France, Germany and Poland Can Strengthen the Weimar Triangle

In the post-Cold War world, France, Germany and Poland concocted the Weimar Triangle as a way to foster cooperation amongst the three countries. The trio has weakened over the years – due to differing national priorities – but Russia’s invasion of Ukraine might necessitate getting the gang back together.

Thanks to their renewed military collaboration, the Weimar Triangle will be working to develop long-range weapons to enhance their defensive capabilities; the aim is to prevent Russia from falling back into its old ways. While these three countries have a good thing going, Henry Kissinger argued that a Weimar Quartet might be even better – if not necessary.

Ukraine would strengthen the triangles’ ability to ensure regional stability and effectively counter Russian threats. The bottom line is that when (or if since we’re feeling optimistic) the Russians come knocking, these countries sure as hell want all the tools and partners necessary to stop them in their tracks…

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

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

And then there’s you.

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

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Transcript

Hey everybody, Peter Zeihan here. Coming to you from the base of the serious part of West Spanish Peak in New Mexico, adjacent to southern Colorado. I’m waiting for a storm to pass before I get out on the ridge line. Being 6.5 feet tall and a Thunder Boomer isn’t really the best call. Anyway, on the topic of things that have been mehhhh, but very soon may be incredible.

Today, 27th of June, there was a summit with a group called the Weimar Triangle, which includes the leadership of France, Poland, and Germany, the three critical countries of the Northern European Plain. The Weimar Triangle was envisioned in the aftermath of the Cold War when Poland was no longer a Soviet satellite country and was on the way to joining the European Union and NATO organizations that Poland has since joined. The idea was that in the long swath of bloody European history, France, Germany, and Poland tended to find themselves on different sides of most major issues, leading to many of the major wars.

Anyway, the idea was that if you get them all on the same side, then the Northern European Plain, instead of being the most blood-soaked part of the planet, can become something better—a path of trade and cooperation.

And you could argue that the idea of the Weimar Triangle has been realized, but it’s not because of the triangle. This is how it all started in the 1990s, but by the time we got to the 2010s, the three countries drifted apart. France tried to be an independent pole in international affairs, which is always a mixed bag. Germany tried to forego the politics and security talks and simply focused on trade by exploiting labor and infrastructure in Central Europe, taking a completely amoral position on everything that mattered. And Poland was in and out, in and out, with every possible interpretation of what it means to be Polish. Remember that Poland had its first democratic elections in the early 1990s.

So here we are, really only one generation later. There are a lot of deep divisions within Polish society about the role of government and where Poland fits within Europe and the wider world, and it’s not going to reach equilibrium anytime soon. By the time we got to about 2002, especially with the Iraq war in 2003, the Weimar Triangle had basically fallen apart until Russia invaded Ukraine in 2022.

Now, the three states are starting to talk a lot. Instead of collaborating on economic issues, they have decided to start working on joint military acquisitions and development, specifically for long-range cruise missiles with a range in excess of 2000 km. The reason is simple: as the Germans will tell you, if you go to war with the Russians and take a defensive position, the entire wealth and resources of the Russian Federation, Soviet Union, or Tsarist Imperial Russia, whatever it happens to be, can be collected into a single fist and punch at you wherever it wants. If you are left playing defense against that, you are going to lose. You have to have a deep strike capacity that shatters the infrastructure and logistical capability of the Russians far from the front. Throughout the Cold War, this is basically what NATO did by practicing things like the North Cape exercises, which weren’t necessarily designed to plug the Fulda Gap but instead to prevent the Russians from reaching the gap in the first place.

Now, where to go with this? It’s a realization, especially in Germany, where the defense minister is heading up this effort, that we are in a fundamentally different world. The foreign policies of the French and the Germans in recent years simply don’t work anymore. Getting that sort of weapons capacity in Europe gives the Europeans the ability to forestall a Russian invasion if Ukraine falls. The Poles know they’re next, and the Germans are fearful they’re after the Poles. So it makes sense to do this as soon as possible.

The question, of course, is whether it’s going to work as well as my hike. The answer is probably not, because even if the triangle can come up with the perfect weapon system, launching from the eastern half of Poland, you’re still a long way from huge parts of the Russian industrial base. Remember, during World War II, with the German invasion of the Soviet Union, Stalin built a lot of industrial plants on the other side of the Urals. We’re talking about a big place here, which is why that greenie peacenik Henry Kissinger always said in the post-Cold War era that no matter what your goal is vis-à-vis Moscow, it can’t be achieved by the Weimar Triangle alone—it has to be a Weimar Quartet. Ukraine has to be involved. If Russia is hostile, then you get a civil war among the Slavs, and you can launch an assault from 1500 miles further east, throwing a huge amount of Russian territory open.

Remember, from the Ukrainian border to Moscow is only about 350 miles. That’s not that far. More importantly, Ukraine is not technically part of the Northern European Plain; it’s actually in the Eurasian heartlands itself. So you split that territory between Russia and Ukraine, and instead of Russia being able to focus all of its attention on the Polish Gap, it suddenly has this massive frontier to worry about.

That’s in part why Putin launched the war in the first place. But second, the better option, as Kissinger put forward, is to assume that Russia gives up its genocidal irredentist ways and decides to join the family of nations. Splitting the territory ensures that you can never have a retrenchment that would be sustainable. If there is a way forward where Moscow is a decent place and Russia becomes a normal country, it will do so with Ukraine on its side. The only way to ensure that works is to have the Weimar Quartet fortify Ukraine, not just economically but also militarily, so there can’t be any backsliding.

Of course, the question then is: will that work? Well, that’s why we call it making history. All right, see you on the next mountain.

Photo in header by Občanská demokratická strana | Civic Democratic Party in the Czech Republic | Wikimedia Commons

Russia and the Changing Nature of the Spy Game

If you ask a fifth grader what the key to being a good spy is, they would likely respond with some variation of being sneaky or concealing your identity. Well, on today’s episode of “Are You Smarter than a 5th Grader”, we’re placing Russian Spies in the hot seat.

Since the start of the Ukraine War, Russian spies throughout Europe have been disappointing those 5th graders’ expectations. With most European nations collectively deciding to share information and expel Russian spies from their embassies, Russian intelligence operations in the West have been experiencing quite the disruption.

In places like Germany, the Russians are replacing their spies with bribes and payments to individuals for information. Obviously this isn’t a great strategy, but a little info is better than none. As for those spies who had their identities revealed, they’ll still be of use to Russian intelligence…just on domestic assignments from now on.

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

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

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

And then there’s you.

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

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

Transcript

Hey everybody. Peter Zeihan here, coming to you from Colorado. today we’re doing a little spy addition. the news is that Thomas, all the wearing of the very fast on Schultz. No, very fast on Schultz for forcing Schultz. That’s basically the, German equivalent of the FBI responsible for domestic security. Anyway, he has said that, most Russian attempts to achieve espionage operations within, Germany in the last few months have been basically the Russians just paying people. 

there’s at any number of ways that intelligence service can get at their information. And paying people has always been a classic, but it’s usually less effective because then you’re reliant on the people, being continuing to give you good stuff. And if you pay them, they will come up with stuff to give you, even if it’s not good stuff. 

And if you stop paying them, there is a chance that they will turn you in. So it’s generally pretty far down the list in terms of reliability. a better way is just to have your own assets in place and the way that the Russians have normally done this, the way most countries do this is by taking their intelligence assets and giving them diplomatic cover. 

So you basically say this person is a diplomat when really they’re trying to steal industrial secrets. the Russians have always, always, always excelled at this and used it heavily because they don’t have the technical skills to maybe do something like electronic eavesdropping, like the United States tends to prefer, and they can’t attack it from a mass approach like the Chinese can, because they just don’t have the people. 

So you focus on a handful of highly trained people that you put into every single embassy you possibly can. That strategy worked very well for the Soviets and worked even better for the post-Soviet Russians until the Ukraine war, when the Europeans collectively decided that the Russians were persona non grata in Europe. They took some steps. Now, normally there’s this ongoing cat and mouse game among, the Russians and the western states and everyone else when it comes to diplomatic espionage. 

Basically, you’re always try to keep track of the personalities that are involved, the potential spies. And every once in a while, you do a little bit of purge, but you don’t purge everyone that, you know, making the other side wonder if their agent was really exposed or not. And it’s a grand old game. but one of the problems you have with the strategy is you don’t necessarily share your list of spies that you’ve uncovered with everybody else, because maybe you don’t trust their information control systems. 

And if it got out, that, you had identified one and not the other, then all of a sudden your counterintelligence operations are a bit bonk. Well, with the Ukraine war, basically, the Europeans decided all at the same time that all spies in all embassies everywhere would not only be determined to be persona non grata and sent home the list of everyone who fell into that category would be shared not just with the Europeans, but with everyone across the world. 

So basically, you had 25, almost 35 years of Russian efforts to infiltrate Western institutions and governments, and everyone was exposed all at the same time. And then there was list of everyone who was exposed went global. So in the past, if you were to purge 3 or 4, they would end up at someone else’s embassy within a year. 

Doesn’t work like that anymore. I mean, the Brazilians might not have hostile relations with the Russians, but when the Europeans and the Americans come with this list of 5000 diplomatic personnel who were actually spies, and then all of a sudden they all end up in the Brazilian embassy, the Brazilians get a little cheesed off, too. So what we’ve seen is the most effective way the Russians have of hacking into society, has been gutted. 

It’s not that these people can’t do anything, but if you’re training someone for covert operations in diplomacy, you can’t just turn around and turn them into assassins or analysts. there’s an extensive period of retraining, and the Russians aren’t as young as they used to. And one of the big reasons for the Ukraine war is the demographic collapse. 

And all that good stuff is all very relevant. the most likely use for most of these people moving forward is to back up the Intel system within Russia. Russia has far more spies operating within the Russian Federation than beyond, because Russia isn’t a nation state. It’s a multi-ethnic empire. And the way it holds, it’s everything together is by basically shooting through its own population with spies to make sure that there are no rebellions forming. 

So it’s not that the Russians have no use for these people. It just has no use for these people abroad. 

Things I (Do) Worry About: A Post-Germany Europe

Germany has had a streak hotter than the ’96 Chicago Bulls. The German economic model has contributed to European political, economic, and industrial success, but problems are on the horizon.

Germany’s industrial success can be attributed to three trends: a high value-added economy focusing on skilled labor, access to cheap energy and inputs from Russia, and a global trade system facilitated by the US. Now take away all three of those things, mix in an aging population, workforce shortages, and swath of geopolitical challenges, and you’re left with a very scary picture for the Germans (and Europe).

Germany’s role as the hub of multinational manufacturing means that collapse could send ripple effects across Central Europe, with political, economic and strategic implications.

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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, coming to you from the Pacific. Today we’re adding another entry into things that I do and do not worry about, and this one is one that I mostly do worry about, and that’s what happens to Europe, is the German economic model fails. Well, for those of you who don’t live and breathe things German, you basically have three reinforcing trends that have made Germany an industrial superpower, especially for the last 30 years. 

The first one is an extraordinarily high value added economy that is focused on the ultra skilled labor and precision. The problem with that is the German population is aging out and over the next decade they’re going to lose the bulk of that workforce and the retirees are going to start drawing in pensions in health care, instead of paying taxes and providing the capital that’s necessary to keep that high end manufacturing base working. 

So the entire base within the German system is breaking. In addition, number two, relatively cheap, relatively bottomless supplies of energies and inputs from the Russian system, not only those obviously been constrained by sanctions in the Ukraine war, but it was the Germans who did a whole lot of the work in places like Siberia and keeping that production flowing. 

And since the Germans stopped doing that because of the war, we now know that there’s going to be maintenance issues in the Russian system, even if there’s no war damage, even if the sanctions allow the stuff to flow. Now, that’s a little bit loosey goosey. We don’t know how long it’s going to take for this up to go off line, but we know it’s coming. 

And then the third issue is the United States. The Americans have provided warble cover to the world. So that anyone can ship anything anywhere. And the Germans use this before 1990 to ship product primarily to the United States. And more recently, they’ve been using it to ship to China. Well, that’s another country that is facing demographic issues. And there’s a competition between Joe Biden and Donald Trump over who can be more economically protectionist. 

So the entire model is in danger. But the real reason I worry about this is not for Germany per say, but Germany is the hub of a multinational manufacturing system, of which it may be the central and most important part, but it’s hardly the only one. German technology, German training, German infrastructure in German manufacturing supply chains are not contained within Germany. 

They are arguably the single biggest piece of the manufacturing systems in Belgium, in Austria, in Poland, the Czech Republic, Slovakia, Hungary and Romania, and probably a close second in places like the Netherlands and Denmark. So as the German system fails, even if everyone else demographically is okay and they are not, you’re still looking at the broad scale failure for the entirety of the Central European manufacturing system, and that is going to have any number of rattle on effects politically, economically and strategic. 

Germany Becomes (Terrifyingly) Normal

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In a departure from its post-WWII stance, Germany plans to establish a permanent military deployment in Lithuania. Looks like it might be time to bust out the caution tape…

Germany’s willingness to participate in security matters signifies a shift in military capabilities and idealogy. With mounting concerns over Russia’s attack on Ukraine, Germany’s renewed military posture could spell trouble for Putin’s master plan.

I would expect to see more and more European countries taking independent actions as the US steps back as a regional power. So, while it may not be a comfortable experience, it’s time to get used to Germany being back in the game.

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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.

And then there’s you.

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TranscripT

Hey, everyone. Peter Ziehan here. Coming to you from Colorado. A short one today, but that doesn’t mean that it’s not really, really, really important. The news is that the Germans are making a permanent military deployment to Lithuania. This is not part of a U.N. mission. This is not a rotating program. This is roughly 5000 troops that are being deployed to Lithuania as part of their naval commitments on a permanent basis.

Why is this important? Well, you’ve all heard of World War Two. The world has gone out of its way. The last 75 years to make sure that the Germans do not have a deployment capable military. They’ve been enmeshed within the NATO’s system, and the United States is largely underwritten German physical security. And the Germans have been security consumers.

Now, this has been a financial drain on the United States and some of the other allies and some people from time to time bitch about that. But the advantage of having Germany without a functional military, I cannot underline enough why that is important. Germany’s borders are broadly indefensible and it is surrounded by a series of countries that, while they may be allies, now historically have never been.

So we’re in this one beneficial moment in time where the United States has forcibly rewritten the rules of European security, and that has helped keep Europe united and at peace now for 75 years, especially in the post-Cold War era. But underlining that is that the Germans have agreed to never have an opinion on security matters. That now seems to be going by the wayside.

And the Germans are finally developing capabilities. Now, 5000 troops in Lithuania is not the end of the world, but it does mean the rehabilitation of Germany as a more normal country that has military tactics and strategies as part of the toolkit. Just like any other country. And because of that, the Germans will start having opinions on security issues.

Now, in the short term, this is a broadly good thing for the European alliance, because the most of the concerns are around Russia and Ukraine and everyone’s more or less on the same page there. But the Russians starting to pick up guns and do things with guns that other countries do. This reminds me of the last seven major wars that the Germans were in.

There was a period of disarmament if they lost and then it ended and the Germans started using military tactics again and stuff got real really, really fast. So are the Germans our enemies? No, not today. Will the Germans start to see the world a little bit differently? Oh, yeah. And has that ever ended well? Oh, no. The two biggest losers from this sort of transformation.

The first one is Poland. Poland is in the process of a massive rearmament program to make sure that it will never fall to Germany or to Russia again. And part of that is predicated on the idea that the Germans don’t shoot. So all of a sudden they’re going to actually have to pay a little bit more attention to the western border.

Even though the German deployment in Lithuania cannot function without hand-in-glove cooperation with the Polish government, this is something that no matter who you are in Poland, what’s the part of the political spectrum you’re in? You’re going to be a little nervous about this because you know your history. But the far bigger loser here is Russia. The Soviet system in the post Soviet Russian system have benefited from something very clear.

The Americans have been in charge of regional security. So you never had to worry about Sweden or Finland. Germany or France basically going off on their own as long as you could have a working relationship with Washington. The rest of it would be kept under control by Washington. That’s no longer the case with the Ukraine war. Even though it’s brought the alliance closer together, it’s forced a lot of the regional powers to take some certain amount of matters into their own hands.

And while NATO’s is certainly all reading from the same book when it comes to countering the Russians, no one’s on the same page and everyone’s taking their own independent action in order to counter Russian influence. For the most part, this is all going in the same direction, but I don’t know if I’d exactly call it coordinated. And for Germany, the largest economy in Europe, to start to develop the tools that allow it to do things, that’s ultimately Russia’s worst nightmare, because the country that has always given it the biggest run for its money in the modern era is Germany.

And now they’ve got tanks again.

The End of Germany as a Modern Economy

I’m sitting along a cliff band around 12,000 ft in the high alpine, and I’m hoping the scenery might soften the blow I’m about to deliver to my German readers…the future of Deutschland is not looking bright. Three unsolvable problems will lead to Germany’s collapse as a modern economy over 20 – 30 years.

The Germans chose two of the worst trade partners around, Russia and China. While cutting ties with these countries is a good strategic move, it has resulted in detrimental losses. Any success the Germans once saw in their trade relations has now collapsed.

German labor is staring down the barrel of a collapse as well. With highly skilled laborers aging out, the industrial base of the German ecosystem will have no one to prop it up. The Japanese were able to mitigate a similar situation, but they started that process decades ago.

To complicate things further, Germany has managed to run their energy portfolio into the ground. The Greens have ditched cheap energy solutions for wind and solar, but even when combined, those fall well short of energy demands. So the Germans are stuck with lignite, and if anything happens to that…yikes.

No matter what angle you look at Germany from, the combination of all these factors is a death sentence. While their decision to resist Russian blackmail early in the Ukraine War was the moral high ground, they may have driven the last nail into their coffin.

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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Germany Green-Lights the Tanks

After months of discussion, the Germans have opted to allow the Leopard Tanks to be sent into Ukraine…and while it may seem like this resolution took far too long, anyone that has read a history book can at least understand the reason for the delay.

There are two main factors to understand in this situation. First, the Leopards within the countries near Ukraine can get there and into the fight for the spring offensive. That’s huge. Second, the Germans put a clause into their policy that states the Americans must also provide some of their tanks – the Abrams. That one’s a bit more problematic.

The Abrams is less tank and more “armored weapons system” – and some of those systems are still classified. On top of that, just imagine all the heavy lifting required to create Abrams-specific logistics and service infrastructure stretching from the USA to Ukraine…it’ll be a while before those Abrams hit Ukrainian soil in any useful manner.

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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 a hotel room where I am in a hurry to get ready for a presentation. I have to be mic’d up in 20 minutes, so we’re just going to do this as we go. The big news on the 24th of January is that we seem to have a deal between the Germans and everybody else in the Western Alliance about the Germans providing leopard tanks to Ukraine.

Now, this is a main battle tank. It is the primary battle tank for most members of the NATO Alliance. It is obviously German made and there are export clauses that you can’t share your tanks, your leopards, with anyone unless the Germans give it the official approval that has been withheld until this moment. The Germans have been saying that they don’t want to be the ones taking the lead on this and they will only provide leopard 2s in the instances where the Americans provide the Abrams battle tanks, which are the American primary system.

It appears that there has been a compromise between the Scholz government of Germany and the Biden government of the United States to do some version of that. Now, there’s a few things here. First of all, why the Germans have been so hesitant. I don’t know if you know your history, but the last couple of hundred years of history has not been well, based on your point of view, it doesn’t necessarily put the Germans in the best light.

And so the idea that the Germans would ever, in a peaceful environment, decide that they should take a leadership position on military affairs is something that is antithetical, not just to the German population in general, but the government of Scholz specifically. His party is the Social Democrats and they have basically made their bones in geopolitics about making sure that Germany is never an offensive power at all.

Now the Ukraine war is forcing everyone to reassess what ideology shapes strategy and vice versa. But the idea I got to say, the idea that the Germans are beyond hesitant to be a leader in military and affairs in Europe and in the former Soviet Union. This is a really smart move. If the Germans just started providing weapons to one side or another in any war, regardless of what you think of the belligerence, I think we should all get a little bit nervous.

So while the Ukrainians are the ones who are paying the price for this reticence and I can understand why they’ve been upset to this point, you’ve got to admit, if you take an honest look at history, this is an a-okay situation. The second issue has to do with the Americans, specifically the Abrams tanks themselves. Now the leopard’s – they’re good hardware.

I’m not going to tell anyone that German engineering, especially when it comes to weapons systems, isn’t top notch. The Abrams should be more accurately thought of as the pinnacle of armored equipment development. This is a system that is not merely a tank. It’s a weapons system that has several integrated programs within it, some of which the Americans still consider top secret.

So anything that the United States sends from its arsenal is going to honestly have to be dumbed down a significant amount, and that is going to, at a minimum, take time. There’s also a question whether or not these weapons are going to be getting to the Ukrainians in any sort of reasonable time. Now, in the case of the leopards, there are over a dozen countries in Europe that use them. And everyone except for the Germans has been arguing for sending these things for weeks now. So the leopards can actually be on the front lines in Ukraine probably within two or three or four months, which means that can actually make a difference in the coming spring offensive, which will happen in May and June. And so from the Ukrainian point of view, that is absolutely essential.

Now, from the American point of view, that is equally essential and is part of the reason why the Biden administration to this point has not provided the Abrams, because it is not battle ready in that way. Even if the Biden administration could just turn them over tomorrow, which it honestly can’t. No one in Europe at the moment operates Abrams at all.

And because so many systems on the Abrams are cutting edge and have not been replicated anywhere else in any country, the maintenance and supply, the logistical tail that’s necessary to operate. Abrams doesn’t exist anywhere in the world except for in the United States itself. So the United States does have to build facilities in Europe, probably some in Germany, certainly some in Poland, which is in the process of purchasing some Abrams, but that is going to have to stretch all the way to Ukraine. And if you want to talk about something that might cross a red line or two with the Russians, a NATO logistical tail going all the way back to the continental United States for everything from arming to repairs, we’re going to do a lot of gray areas there.

But most importantly, the infrastructure does not yet exist. But for the leopards, it’s right there. Not only is Germany the manufacturer, it’s operated by Finland, and the Balts and Poland. All countries that border the conflict zone. So you can get leopards on the field of battle very, very quickly. ABRAMS Even if the training requirements were identical, which they are not.

You’re talking a minimum of a year, probably closer to three, to build out the physical support and infrastructure to get an appreciable number. Abrams In play now, there’s some people who are saying, you know, you know, by getting an Abrams into Ukraine, that is a vote of confidence in the Ukrainians. Absolutely. That is a signal that the United States is not going to quit.

Absolutely. Those are relevant conversation points. But an Abrams in theater without that support infrastructure is a target that the Russians will try to take out. You do not use an Abrams battle tank for a photo op. You use it to ruin someone else’s photo op. So do we have a political deal now to get Abrams into Ukraine? Sounds like it. That doesn’t mean they’re going to be on the battlefield anytime soon. And that’s okay.

Alright. That’s it for me. Got to go. Bye.

A New Wave of German Strategic Defense Policy

When your country’s history has more than one tally mark next to the category – “World Wars Started” – it makes sense to avoid any form of strategic defense policy. Former German Defense Minister Christine Lambrecht did just that. She wasn’t a skilled defense policymaker. She wasn’t a military strategist. And that’s exactly what Germany needed…until now.

Germany’s slide into pacifist/socialist oblivion has been a somewhat viable plan, especially since their neighboring countries are neutral or part of NATO. That’s until Putin had to ruin everything and plop Russia back on the warpath.

So now Germany has to come face-to-face with the question they’ve been putting off since the Cold War and perhaps WWII – Do we get involved? Lambrecht’s resignation is seemingly a signal that we will see movement in Germany’s strategic policy very soon.

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

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TRANSCIPT

Hey everyone Peter Zeihan here coming to you from Colorado. I’m inside today because it’s way too cold to be outside. Actually, humid, which is weird. Anyway, this is Pandora. She’s my copy editor (aka my cat). Today, the big news is that the German defense minister, a woman by the name of Christine Lambrecht, has finally resigned her position now. Lambrecht is not somebody with defense experience. She is a politico. She has been up relatively high in Germany’s social Democratic Party, which is a center left party for decades. So it’s not that she’s a nobody. She doesn’t have a lot of skills that are appropriate to her current portfolio.

This has not been a problem. In fact, her specific, deliberate, intentional incompetence in defense matters in many ways was seen by the SPD as a plus because until we got to the point that the Germans were reformulating (my cat gets up and leaves) Oh taking off Pandy? Okay, until we got to the point that the Germans were reformulating everything because of the Ukraine war, the general position in Germany as a whole and specifically in the SPD was that the Defense Ministry itself is unnecessary, that in the aftermath of the Cold War, the threat to Germany is gone. And while we may find that a little bit, you know, naive, you have to look at it from the German point of view. 

Whenever Germany has had to act in order to protect its own interest, things have gotten a little out of hand. The German state is in a bit of a geopolitical pressure cooker. It is surrounded by rivals and potential rivals. And in any era where the Germans have felt it’s necessary to have a defense ministry, they’ve discovered that being surrounded and having a defense force that’s worthy of the name generally triggers a lot of angst everywhere. And so you get one of two things.

Either all the countries surrounding Germany gang up on it in order to put it in a box, in which case Germany loses a catastrophic war, or the Germans act preemptively in order to remove some of those potential rivals from the scene, in which case you get a war that ultimately puts Germany in a box. And whipping back and forth between these two extremes has been absolutely horrible for the Germans.

So for the Germans, the post-Cold War environment in Europe has been the best it’s ever been. You’re talking about a golden age because NATO’s provided defense, but all the countries that border Germany are either neutral like Switzerland or are members of NATO, which is basically everyone else. And in that sort of environment, the Germans can kind of dither and become pacifist socialists, which to be perfectly blunt, looking at the long stretch of German history, is much, much, much, much, much better for everyone than the alternative.

Now, Lambrecht anyway was put in charge of the Defense Ministry, which is basically continuous, slowly sliding it into functional oblivion. The Germans have been spending less and less on defense for years, ever since 1992, and basically the unofficial goal with Lambrecht is to make the military a non thing. Well, that doesn’t work in an environment where the Russians are back on the warpath and the Germans need to be starting thinking not just about 20th century military strategy, but 19th century military strategy.

And Lambrecht was completely unprepared, professionally, personally and ideologically for this sort of shift. And so when the government decided to basically double the size of the defense budget, she had no personal experience, professional experience of how to do that. And the result was a series of policy mishaps. She also had a lot of the built in distrust for the United States that comes from the German Center-Left, which really doesn’t like the idea that the United States writes German defense policy to a degree, which, you know, obviously clashes with the goal of getting rid of the defense ministry altogether.

So there wasn’t really anything about the current environment where she was an appropriate candidate anymore. The strategy had changed, the reality had changed, the geopolitics had changed. And she hadn’t. So obviously, she had to go. The question now is what else goes with her? The Germans have been very reticent to provide top tier military technology to the Ukrainians, not because they don’t want the Ukrainians to ultimately win the war, but because the German position in this space has been specifically to avoid a military conflict.

And that goes back to before 1992. The Germans have always known that if there was a military conflict of size, they would obviously be drawn in. And in a world where they are trying to make up for the sins of the past, having any sort of proactive military policy just grates against everything that they have been raised to believe since 1946.

They’re dealing with a change in circumstance, and that’s uncomfortable and that is grating, even without the ideology. But now we’re nearing an environment where the Russians are not just mobilizing, but mobilizing in force. They’re finally beginning significant industrial upgrades. They’re finally starting to churn out missiles and ammo and tanks in numbers, and they are finally doing a full scale mobilization. This isn’t the 300,000 that they did a few weeks ago. We’re talking about at least another or half a million men likely being in the theater within a very few number of months. And so by the time we get to May and June, the Russian military is going to look very different. And in that environment, especially with this lead up, where the Russians aren’t quite ready for big offensive operations, where they’re lobbing missiles and drones into civilian infrastructure, it’s really cracking through the ice and the German political discussion on what a strategic policy means, and that means more and better equipment is going to be going to Ukraine. And Lambrecht, the former defense minister, was part of an obstacle system that prevented that from happening. Now she’s gone.

So we’re probably going to be seeing movement in Berlin on things like leopard tanks. Now, the leopard tank is one of the top two tank systems that exists in Europe, the other one being the M1 Abrams from the United States. And there are a large number of NATO countries, specifically in Europe, that have a relatively large fleet of these tanks in storage or in use. And they are probably the easiest ones for the Ukrainians to absorb in numbers. So there are a number of countries, specifically Denmark and Poland, who have been pressuring the Germans in order to allow them to take these export of tanks and then send them on to Ukraine. That requires Berlin’s approval. And Berlin, to this point, has been demurred. But the coalition now involves almost every single country that the Germans have sold the leopards to. And so all of a sudden, with Lambrecht gone, all of this is in motion. And I think we’re going to see the Germans relent on at least letting other countries send their leopards within a very short number of weeks because these tanks have to be absorbed by the Ukrainian military before we get to that May and June offensive. And so time is running out. We’ll then have a conversation in Germany about strategic policy. And so probably in February and March, the Germans themselves are going to publicly decide whether or not they are going to contribute their own leopard and spin up their own industrial complex so that more leopards can be made and refurbished to get into the fight as well. But that’s a conversation for another day. First step is simply removing the obstacle that prevents other countries from sending their tanks on. I think we’re going to see movement on that very, very, very soon. 

Alright. That’s it for me. Until next time.