Why U.S. Deployments in Germany Matter

German military doing exercises in the field

Relations between the U.S. and Germany are quickly deteriorating. German Chancellor Merz has criticized the U.S. for lacking a coherent negotiation strategy. President Trump responded by floating the idea of reducing U.S. troop deployments in Germany. It’s one big mess.

The issue with Trump’s proposal is that it assumes the only reason for the bases is to defend Germany. These bases aren’t just some peace offering; they are the backbone of U.S. global power projection.

Without key facilities like Ramstein Air Base and Landstuhl Regional Medical Center, U.S. operations in the European theater (and beyond) would cease.

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Transcript

Hey all. Peter Zeihan here. We recorded this video on German relations with the United States and the future of U.S. military power. Back on the 1st of May. That was Friday for release today on May 4th. But events have kind of accelerated. So we need this little topper. Very, very short version is Donald Trump announced the imminent withdrawal of 5000 US troops from Germany. So it’s not a threat to more. It’s actually happening. This is the beginning of the end of the alliance with Germany specifically, which has huge implications for everything the United States does. But we’ll get to that in the video. 

Hey all, Peter Zeihan here. Coming to you from Colorado. Today we’re going to talk about the most recent leg of the American alliance system that looks to be breaking. That is the relationship between the Americans and the Germans. The key issue is that last week, Mertz said  Mertz is the chancellor of Germany, said the quiet part out loud that the United States doesn’t have a negotiating strategy and doesn’t even really have negotiators. 

And it’s just kind of embarrassing to watch how the Iranians, who have both are humiliating the Americans at every turn. It’s an assessment that is not particularly controversial outside of manga circles. The State Department has been gutted. The prime point person for American negotiations is Jared Kushner. Not that he’s incompetent, but his assistant is Steve Wyckoff, who is incompetent. 

And the only other person who’s been involved at this point is JD Vance, who has never negotiated anything. So, yeah, it’s going really badly for the United States in these talks. And in the meantime, the global economy is starting to sag. Something impressive. Anyway, Donald Trump being a little sensitive, a little sensitive snowflake decided that now is the time to talk about cutting the American troop deployment into Germany. 

So I thought it would be useful for everyone to understand what the United States gets out of that. There’s this feeling in some parts of Washington, the American political spectrum, that the American deployments to Germany are about protecting Germany. And there is a degree of truth to that. But keep in mind that Germany has not been a front line state since the expansion of NATO in the early 2000. 

And now there’s this whole Poland thing between them and the Russians. So the two main facilities that the United States has are an air base in the hospital. Ramstein is one of the largest air bases in the world and allows the United States to project power throughout the European, the former Soviet spheres, directly and then indirectly into the Middle East. 

We basically ferry troops and equipment through there. And then there’s Landstuhl, which is the military hospital that over the course of the war on terror, serves as the primary evacuation destination for any forces operating throughout the broader Middle East who were injured and in the end, probably saved 100,000 lives. If you’re going to slim down the American position to either of those facilities, and collectively they are, one of America’s top three deployments, kind of moves around with Korea and Japan. 

That is it for American power projection in Europe, in the former Soviet Union and in the Middle East. If we were to try to project power to any of those three regions, without those German facilities, we would have no logistics support and no backup should something go wrong. And as we’ve seen in every single military conflict the United States has ever been involved in any of those three regions, something always goes wrong. 

That’s just the nature of war. We would also, and perhaps this is the one that will resonate more with some people. We will also have significantly higher death rates. Landstuhl is a crisis center for medical needs. And so if you get hit by an IED or shrapnel at the time it takes to fly you back to the American mainland, you’re probably not going to make it. 

But if you only have to make the Germany, that’s a different question. Anyway, bottom line is, with the possible exception of American military forces in Okinawa, in Japan. This is arguably the most important footprint the United States has anywhere in the world for power projection. And if a real effort is made to slim that down, you honestly can’t slim it down too far before it simply becomes nonfunctional. 

It takes 30,000 American forces to keep these things open to the degree that’s necessary to facilitate American military power. Now, if you just want to abandon the entire Eastern Hemisphere to its own devices, then yeah, by all means, close it down. Just be prepared for spending a lot more than $2 trillion a year on the defense budget, because at that point, doing everything alone means having to have the equivalent of carrier stationed around the world at all times simply for logistical support. 

That is by far the most expensive way to do.

Israel Is Defending…Germany?!?

Israeli button on top of a German flag

2025 has been full of surprises. And honestly, given today’s headline, I wouldn’t be surprised if pigs started flying next. We now have Israel defending Germany.

The Germans have acquired and activated the Israeli-made Arrow missile-defense system. Effectively, we have Israel protecting Germany. All of you have seen my bingo card, and this was most definitely not on it.

With the threat of a Russian invasion still looming, and the pesky little exclave of Kaliningrad, the Germans have been forced to rearm and prepare to intercept Russian missiles. So, we’ve got non-NATO tech coming into NATO’s defense architecture, and the least likely of partners are the ones responsible.

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Transcript

Hey, all. Peter Zeihan here. Coming to you from Colorado, where it’s cold. The news today is that we’ve got a change in defense parameters in Europe. Not because of anything the Americans or the Russians have done. Or not directly anyway. But because of the Germans. Recently the Germans have turned on, what’s called an arrow defense system. 

It’s an anti-missile anti-air system. They spend about 4 billion U.S., 4.2 billion US on it. And it doesn’t come from the United States, and it doesn’t come from Europe, comes from Israel. So we now have this oil situation where the Jews are protecting Germany. A quick backdrop. So the Holocaust was a thing. If you say otherwise, just turn this video off now and never watch my stuff again, because we’re never going to get along. 

And Israel was founded as part of the whole Western guilt for allowing it to happen. As a result, German post-World War Two German Israeli relations have always been tense, but paternal, if that makes sense. Postwar Germany, once the Nazis were gone, has always looked back on that chapter of their history as something that they’re ashamed of and would like to make up for. 

And so even when the Israelis are doing things that most Germans really, really hate, like carrying out some version of a genocide in Gaza, for example, the Germans have always stood by to a degree, out of historical guilt. This is the first time it’s gone back the other direction. Germany in the post-Cold War environment became convinced that history was over and trade was the future, and no one needed a military anymore. 

And they basically demolished their own. And it got down to the point that I would say that an even fight the Netherlands could probably could have invaded Germany five years ago. That’s not the case anymore. The Germans are going through a really big rearmament, and they’re facing down the Russians, which they know are coming. with the Ukraine war, the Germans have finally admitted that history is not over. 

And if you look at a map where Ukraine ends, Poland begins on the Polish plain. And every single war that has been fought between the Russians and the Germans in the past, and there have been a lot have always involved troops going through that corridor. So the Germans have to be a land power, but they also have to worry about missiles. 

the tool that the Russians have used in the post-Cold War environment is when they are annoyed with the Europeans or the United States, they for position their missile batteries, specifically a system called the Iskander. And they don’t just put it in western Russia, they put it in a little enclave called Kaliningrad. And Kaliningrad is this little spot of territory on the southeastern shore of the Baltic Sea, sandwiched between Lithuania and Poland. 

So it is surrounded by NATO countries because now Finland and Sweden are also in NATO and of course, Germany, Poland and, Denmark as well. So if you take this little exclave and you put missiles in it, all of a sudden you can reach all of Germany with relatively short range missiles. Now the Germans have a multi-layered missile defense system, or at least one that they are attempting to build with some degree of success. 

The issue is a combination of technical barriers. You see, you’ve got your boost phase when the missile launches, you get your mid phase when it might be out of the atmosphere. If it’s a long range one, and then you’ve got your terminal phase and you need different weapons systems to intercept different types of missile systems at different parts of the arc. 

So the most efficient would be to take it out in the boost phase. When it’s launching, it’s going slow. But to do that, you have to be almost on top of the missile, which means you’re already in the country that’s launching the missiles. There’s a reason why that doesn’t work. In the mid phase, you’re talking things like Star Wars hitting a bullet with a bullet. Especially if you’re talking about ICBMs that are going around the world. no one really has a great mid-face system. All the U.S is working on it. And then you’ve got terminal phase where things are screaming back into the atmosphere. And that’s going to be things like your Patriot systems. 

But what works for one missile system doesn’t necessarily work for another one. So the missile system that the Germans are concerned about, the Iskander only has a range of 515 hundred kilometers. And if it’s coming from Kaliningrad, then what they really need is a mid phase interceptor before it gets into the range of the Patriots. There’s something called the third that the United States uses, but it’s usually for longer range systems. 

But the arrow system out of Israel is perfect because it was designed for things coming from Iran and its record is very, very good. It just hasn’t been tested against modern Russian weapons. So having, for lack of a better phrase, Jewish missiles in Germany to defend against Russian missiles, I mean, my mind kind of spins at using all of those words in the same sentence is really interesting. 

Development. In addition to the oddity of the pairing, in addition to the Germans waking up, both of which are very strategic scenic situations, what I find really interesting here is we now have non NATO weapons in NATO, starting to integrate with NATO defenses to defend NATO against the Russians. So we’re taking an entirely new technical and military tradition. 

That’s the Israelis. And putting it into a NATO system. Arrow is a system that was partially funded by the United States specifically, so the Israelis wouldn’t go on the war path. And for the most part, it has worked to what Washington wanted. But now incorporating that into NATO and, of course, American, defense systems over the long run is going to be really interesting because this is a really robust technical test bed. And the Israelis have a great reputation for taking this system from the drawing board to operationalization in a very short period of time. And now that’s going to be implanted into Germany, where the Germans are. How should we say a little bit more, process minded? So, lots of things that are going to come out of this in the days and months ahead, because the Germans really do need to have something fully up and running, not by 2030, but by the end of next year. 

Because they know in their bones that if the Ukraine war breaks because the Americans backing away, that, Poland is next, and then the Germans are going to be in the thick of the fight, and they have to be ready.

A (BIG) Change in Germany

Photo of German flag in front of their parliment

Following the March 4th elections, the Germans are poised to see a significant political and military shift. The ruling Social Democrats suffered a heavy loss, and the Christian Democrats gained significant ground. These parties are now negotiating a coalition, with constitutional amendments allowing for increased deficit spending at the top of the docket.

This marks a dramatic shift for the Germans, as they’ve had decades of limited military spending (for good reason). We can thank Trump for this change, as his stance on Europe, Russia, and NATO left no real alternative for the Germans. These new plans include at least doubling defense spending and creating a massive fund for military-industrial expansion, placing German military expenditures in the 5% of GDP range.

The historic significance of this shift is not lost on me. To add insult to injury, the US government is empowering Germany’s neo-Nazis. I’m not saying that this is the end for democracy and pacifism in Germany, but there are a lot of factors at play here.

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Transcript

Hey, everybody. Peter Zeihan here coming to you from a crisp, Colorado morning. Today we are talking about something that went down in Germany on the 4th of March. Quick backdrop. We had elections in Germany a little over a week ago. The ruling party, the Social Democrats, they lead a three party coalition. Did very, very badly, came in third. 

And the main opposition, the Christian Democrats, did very, very well. Came in first and the next government will undoubtedly be in a coalition of those two parties, with the Social Democrats in a significantly worse position than they have been in any government to this point in the post world War two environment. But it is enough to make a majority in the Bundestag, and that’s what you need in order to form the government. 

Anyway. The two of them got together to basically hold early coalition talks. It’s only been a week since the election, and the only topic on the agenda was how to amend the constitution so that the German state can issue more government debt, do more deficit spending, specifically to build out its military. This is, this is transformational for any number of reasons. 

Let’s start with the center. Right. That’s the Christian Democrats. They’re socially conservative, economically conservative, a little stodgy, but very, very pragmatic. They don’t like issuing debt. They love the United States from defense point of view. And for them to do this is a catastrophic shift in circumstances for them. Donald Trump has basically said, that Europe is, if anything, more of a threat to the United States and the Russians, which is as backwards. 

But the Germans have no choice but to take Trump at his word. So we’re talking here about at least Dublin defense spending over the course of the next couple of years, as well as building a €500 billion fund to build out the industrial plant necessary to support it all. It is the largest expenditure of funds in, postwar German history on a single project. 

And for Christian Democrats to feel that they have to break with the United States is telling, from the social democratic point of view, they don’t have nearly as much of a problem with the deficit spending, although they’re still German and they still like to keep debt under control, but they don’t like defense spending at all. 

And that the doubling of the defense budget came from their negotiator. So you should probably think of it as a floor rather than a ceiling. So very rapidly, we’re going to see the Germans go from something like 1.2 to 1.5% of GDP, going on defense to 4 or 5% of GDP, which will easily put them above the United States by most measures. 

Now, two things here. One, from a pragmatic point of view, one from a run for the hills point of view. First, from the pragmatic point of view, the Germans have underinvested in defense spending for decades under all governments. So throwing 5% of GDP, if that does turn out to be the number at the problem helps. But they are so far in the hole they have to rebuild things from scratch. 

They have to build the industrial plant and build the educational systems to then build the stuff they need and train the people they need. This doesn’t happen at six months, and at the same time, there’s a very high likelihood that the Germans are going to be in a hot war with the Russians in the not too distant future, as the US basically abrogate all of its NATO responsibilities, withdraws all assistance from Ukraine and looking increasingly likely simply leaves NATO altogether. 

The Germans are going to have to do something that they haven’t had to do, since 1945. And let’s think about defense policy as a leader, as opposed to just doing whatever they are told. Which brings us to the run for the hills part of the situation. The Germans never are going to have a preponderance of power in any war. 

They don’t have the population to stand against all of their potential foes. And about the only bright spot in all of this is at the moment. The rest of Europe is holding together in whatever NATO or post NATO structures form as the United States exit stage left. 

But the last time that the Germans went through a rapid rearming like this, it was the transformation of Weimar Germany to Nazi Germany. And that is a historical parallel that should be lost on no one. In addition, we now have the US government actively supporting the German neo Nazi Party, which is the second largest party in Parliament. Now because of U.S actions, at a time when the Germans are redefining what it means to be a normal country and are massively building up their military in preparation for a major war. 

We have seen this movie before. There are a lot of details that still need to be worked out. I am hoping that I am worrying about nothing, and I am hoping that the last 80 years of German near pacifism and democracy has very deep roots and can’t be disrupted by anything as minor as a major war or a major shift in the geopolitical environment. 

But I know my history. And when countries are under stress like this, crazy things happen in their domestic politics. And we have seen this movie before in Germany. And it’s not just simply about the rise to the Nazi era. I was very comfortable as an American pain for smug German socialism and pacifism because, historically speaking, I know what the alternative is. 

We’re going to find out if there’s a third way here real soon.

The German Failure & Volkswagen

Photo of the Volkswagen logo

The Germans are on a steep uphill climb trying to figure all their s*** out. On the chopping block today is Germany’s automotive and industrial sectors (with Volkswagen being our guinea pig).

VW is struggling for several reasons…and no, it’s not because hot-boxing it in the Scooby-doo vans has gone out of fashion. VW could blame increasing energy costs, competition from China, or electric vehicle challenges…they could even blame it on my favorite scape goat – demographics. Germany has a shrinking workforce which makes things more expensive, but global car demand is also shrinking, so it’s a double whammy. A combination of all these factors has made doing just about anything in Germany hopeless.

This isn’t just a Volkswagen issue though; these are problems that plague the entire German system and infect everything within it. Without some serious change, the flocks of skilled German workers emigrating will only grow.

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Transcript

Hey everybody. Peter Zeihan here come to you from the Witte Museum in San Antonio. And we’re going to talk today about what’s going on in Germany specifically. We have several thousand mechanics and machinists that are striking as part of a renegotiation and a cancellation program done by Volkswagen. The German automaker, very, very short version is Volkswagen has had a really tough time in the last several years. 

First, they lied about their emissions, then they lied about lying about their emissions. And then they started losing clients around the world. Demand for the cars are down sharply, and the company is trying to rightsize, which means closing several facilities. And so the people who work in those facilities are striking unless the facilities are kept open. If that sounds like a not particularly good plan, that’s because, this isn’t a particular good plan. 

The people are desperate because the company is going under. In fact, the entire German auto industry is in the process of dying, along with the bulk of the German industrial plants. And understand that, five big points. First of all, energy, the Germans used to get almost all of their natural gas and the stuff that they used to source the electricity system from Russia, prices that were probably be safe to consider at below the global average. 

With the Ukraine war, the Germans took a moral stance and decided to stop using that stuff, which drastically drove up not just the price of power, but of the price of the raw materials that they used to fuel their chemical system. And without a chemical system, it’s kind of hard to do any manufacturing down the stream. And so we actually see German chemical companies physically dismantling their infrastructure and shipping it over to places with better economics and cheaper energy, places like Louisiana. 

It makes it really hard to have downstream manufacturing if the core stuff isn’t even there. Second, China, the Germans have made a huge amount of money building industrial plant in the Chinese system. Well, you do that for long enough. And eventually the pork backwards country that you’re sending stuff to starts making stuff. And now the Chinese are making cars that are competing with the Germans on price around the world because, you know, Volkswagens are great vehicles, but not everyone can spend 50, $60,000 on a car. 

If you only have 20 or 30, a Chinese vehicle will do just fine. And so the entire bottom of the market has been taken over by the Chinese. And that leaves the Germans with a smaller pie, a third piece of technology. The Europeans thought that electric vehicles were the future, invested very heavily in it. Volkswagen is no exception to that. 

And it turns out it hasn’t really worked. Not only are consumer preferences going in a different direction, people are starting to do the math on the production and the full cycle cost of an EV, and they’re discovering in most cases, it’s at best a wash. And in places like Germany, where solar and wind are very poor sources of energy, you actually have increased your carbon footprint. 

So sales of those products are down, which has hit Volkswagen very, very hard. But the bigger issues have to do with demographics. The birthrate in any country tends to drop as you urbanize. And Germany was the first country in the world to urbanize over a century ago. Well, you fast forward to today. And it’s not that they’re running out of children that happened in the 70s and 80s. 

They’re now running out of people in their 50s. And we’re looking at a collapse in two ways. First of all, on the demand side for vehicles, some version of the German story is happening throughout the advanced world, most notably in Europe. And so demand for cars has gone down. If you’re a car company, you can see the problem. 

The other half is a collapse in workers worker supply, because we’re looking at a mass retirement of the German system in real time over the next several years. If you fast forward just about eight years from now, there’s not going to be a workforce left. So labor costs are skyrocketing in the interim. So if you’ve got fewer people buying your cars and fewer people available to make your cars labor costs go through the roof, the vehicles get more expensive, you become less competitive. 

We are looking at some version of this happening throughout, not just the German automotive sector. With companies like Mercedes in a very similar position. We’re looking at it throughout the entire German economic structure, which means the Germans are going to have to find another way to manage their system. That is not based on how we currently understand supply and demand and labor and capital, and they’re going to invent that before they can transition their system away from it. 

In the meantime, if you’re a highly skilled German worker and let’s be honest, the Germans are still among the best in the world at doing everything that they’re good at. Germany is not the place for you now. The last time the Germans had this level of dislocation politically and economically, we saw a massive outmigration of more than 5% of the population of the country, within just a few years, the single largest beneficiary of those highly skilled workers was the United States. 

It was the 1840s, 1850s. We took in over a million Germans and eventually settled the places that we currently call Wisconsin and Texas. So there is a amazing play here for the United States, which is already having crippling labor shortages, being able to extend an offer for Germans to make a new home. It’s a brilliant idea. 

But first, Americans have to get their politics in order and realize that their desire for fewer migrants doesn’t really match up with their labor needs. But, you know, one miracle at a time.

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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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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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
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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

Photo of German flag in front of their parliment

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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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 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.