Hey everybody. Peter Zeihan here coming to you from outside of Nederland, Colorado. The news today is that the Ukrainians have taken some long range drones excuse me, and throw them in some Russian targets, some of which are over 1000 miles from the border. The ones that matter the most is a refining complex in the city of Nazi Novgorod, which is a couple of hundred miles east of Moscow that sits on a major pipeline nexus.

They haven’t damaged the pipeline system and you’re not going to probably not going to do that in any meaningful way for drones because they could be repaired so quickly. And so they went after some of the refineries. Now, if you’re looking for a Hollywood style explosion, you’re never going to see that in a refinery. There’s a lot of standoff distance and the stuff that’s flammable is usually not adjacent to other stuff that is flammable.

That doesn’t mean you can’t do a significant amount of damage. And in this case, it looks like they were going after some of the fractionation columns and at least a couple of the storage tanks, fuel storage tanks. At least one hit was significant to the point that it caused a major fire, that at the point that I’m recording this, at the point that I’m recording this about 8 hours after the attack is still burning.

Something to keep in mind, Russia is a big ass place. And as the Germans discovered during World War Two, they have to move things further and further and further from the western periphery in order to protect it from air assaults. But in the age of drones, this doesn’t matter nearly as much because these things have ranges in the hundreds of miles, which means that everything in European Russia, which is where 75, 80% of the Russian population live and most of the physical infrastructure is is potentially in range.

So while the Ukrainians can’t shut the country down, they can cause enough interruptions to the processing capacity that and maybe even pumping stations that make it difficult for the Russians turn export income. And the impact of that could be far more than what the West has done with sanctions on the Russians so far. We’ve seen this with a few port facilities in recent weeks, and now the Ukrainians are demonstrating the capacity to strike deeper and deeper and deeper into Russia.

And they have now almost been able to reach Tatarstan, which is the most important access point that the Russians have, because it sits on the infrastructure that connects European Russia to all of Siberia. And if for whatever reason, there’s meaningful damage there, you’re talking about something like a third of Russian oil exports go off line overnight. So that is what’s to watch for in the days ahead.

Stay tuned.

Hey, everybody. Peter Zeihan here coming to you from the Chicago River Walk. I figured I owed you an update on what’s going on in Ukraine. Really? This is a weather thing. So normally, what happens when it turns from summer and fall to winter is you get a six week period kind of mud season where everything gets all gooey.

Well, it looks like that’s not really happening this year. It’s been much colder and as a result, operations can continue. But if there’s going to be a limiting factor in the war, it’s probably going to be equipment. Most of the Western countries have already provided the Ukrainians with all of the spare gear that they have and anything they provide at this point, they have to dig into their stocks of what is actually operational equipment.

And that’s a very different decision making process. So we’re probably not going to see the sort of big camera fences that we’ve seen of the attempts this year in the Big Apple operations we saw last year. Instead, this is likely to turn into a war logistics. Now, the Russians are have never been very good at that. And the Ukrainians have proven that they’re able to take basically garage project missiles and take out Russian flagships.

So expect the Ukrainians to be going after rail nodes, especially in the areas of Crimea and southwestern Russia. There was this massive storm in the Black Sea last month that did a lot of damage in those areas that the Russians are still cleaning up, which makes it’s kind of a perfect time for the Ukrainians to snarl things as much as possible.

And if you consider how poorly the Russian soldiers have fought and how badly they’ve been equipped to all of a sudden lose access to resupply is something that can really hit them where it hurts. The Russians have made it very clear what sort of targets they go after. Their guidance isn’t nearly as good as what the weapon systems are that the U.S. has provided to the Russians.

So they go after static emplacements, specifically power nodes and rail junctions. So you should expect large scale brown and black outs to be carpeting Ukraine over and over and over again. Which brings me to you. In the month of November, we had a matching program for donations to Medicare, which is a charity that provides medical assistance to communities who are under threat in some way.

Specifically, we were giving to the Ukraine fund and a number of people wrote in to help us with our matching. And ultimately we matched the first $100,000 of donations. Well, including that 100,000 donations from all of you hit us up to 500,000, which just blows my mind so much. Has it been given millions, $25 million in surgical kits and they now have the cash necessary to get these into the hands of doctors and provide training to save God knows how many lives.

So thank you. Thank you. Thank you. Thank you. Thank you. Now, do have one other announcement. There was a book fair in New York recently and it came to my attention that Cindy Crawford, of all people, has read my book. I’m Cindy Crawford. And the most recent best book I read was called The End of the World Is Just the Beginning by Peter Zeihan.

I believe, and it’s fascinating, but a little depressing. Cindy Crawford knows what I mean. So two things. Number one, call me. And second, if you like books, if you like my book personally, Crawford likes my book. There’s this bad boy. About ten years ago, Accidental Superpower, my first book was published, and we have been working in the last few months on an updated version that kind of fills the gap in those ten years and give you an idea of where it was right, where I was wrong and why and what is next.

And it publishes and it is available for you the day after Christmas. So, you know, everyone by 14 copies, that would be great. But mostly I want to make sure is Crawford gets one.

Hey everybody. Peters Zeihan here coming to you from a home office in Colorado. I haven’t done a Ukraine update in a while because there’s been a lot of cross-currents. The front hasn’t moved very much. And in most people’s minds, that means a stalemate. And there’s definitely some truth to that. We’ll get into that a little bit, but there’s been a lot of change in tactics on both sides.

This is the first year that the Ukrainians have brought tanks into the fray and tried to do combined arms. However, the American style combined arms, the NATO’s style also includes air power and at least air parity. And the Ukrainians have nothing like that. So they’ve discovered that sending in lots of armor without air cover is, well, is going for them as well as you would expect it would.

So they’ve kind of devolved back to some older strategy that we’re using in the first part of the war. We’re using a lot more small units and that means the pace of activity has been necessarily slower. They have achieved a number of points of breakthrough in the first, second, and sometimes even the third line of Russian defense. But the Russians have been through and able to put up more and more and more mines to slow the Ukrainians.

So they’ve never actually been able to achieve any sort of breakthrough. So we’ve had a lot of incremental changes in the front, but nothing like the big breakthroughs in places like ISM or Kherson like we saw last year. For their part, the Russians have been innovating their strategies as well. Maybe innovating this the wrong word. They’ve done this silent call up of a couple hundred thousand more troops and just threw them right into the meat grinder and a place called Ivica.

Sorry for the pronunciation there, which is not too far from other places that the Russians were basically doing human wave tactics last year. And they’re having very similar results, very, very, very slow going, dating meters a day at the cost of thousands of lives. But in the last two weeks, the Ukrainians seem to be trying something new. And it would normally be something that I would just say is suicidal.

But let me give you an idea of what they’re doing and then maybe you can choose for yourself. So let’s do a foreign screen share. Go to Google Earth because it’s awesome. All right. We’re looking here at southern Ukraine, and this is an oversimplification, but if you zoom in just a little bit, this river here, this is the Dnieper.

It’s basically the front line for a large portion. Basically, everything south of this line is now in Russian hands and everything. The north line is in Ukrainian hands. And for those of you who remember too, earlier in the year, the Russians thought that the Ukrainians were to be pushing across the river. They blew up all the bridges and especially this dam right here, which is the Nova Kharkov Dam.

And what that meant is the entire upstream reservoir, which is one of the world’s largest, drained over the course of just a few days and flooded everything to the south of this point. So this whole area became flooded. You can call that a war crime. You can call that deliberate destruction, call that whatever you can call it, Max, call whatever you want.

But what it did do is turn this entire Southern section and be kind of a no go zone for most vehicles because you had exposed Riverbank above here, which was muddy or late at I guess it was about. And then down here you had flooded Riverbank that was muddy. So the Ukrainians would wanted to hit the Russians in two or three different places, suddenly found this entire swath became non-viable.

Well, what we’ve seen in the last couple of weeks is the Ukrainians have been probing across this river in worse and actually holding ground, not just using small units, but larger groups, troops. It’s unclear just how many, but the point is they haven’t been going over at night making things up and then running back before dawn. They’ve been going in a it is seen there for days and the Russians have seemed to be incapable of dislodging them.

And my first thought that this is just suicidal because if if you’re Ukrainian and you don’t have a bridge that you can retreat across any time that the Russians are able to bring any sort of artillery or even just infantry to bear on your position, there’s nowhere to go. Your backs against the river, you’re just going to die.

That’s not what’s been happening because further to the east, the Russians have been throwing human waves at a very specific location that adeyinka again, again, apologies for the pronunciation, and that’s all of the available troops in the area. The Russians are hitting that spot to prevent the Ukrainians from having a breakthrough further east in Japanese province. And what that means is it’s been difficult for the Russians to get reinforcements and materiel and just fuel into this zone right here.

So let me zoom in a little bit more. You can see how the geography is working against the Russians and for the Ukrainians in this point. You’ve got these sand dunes area, the nature park, where there’s no infrastructure at all. And then you’ve got clusters of Russians over here at this junction point of the transport system and at this junction void of the transport system.

And so what the Ukrainians have done is land all the way across the river throughout here to keep these two groups engaged. And then they’ve used their artillery from the other side of the river to just decimate the parts that are in here. Basically making this a no go zone for the Russians, which has allowed the Ukrainians to build up a bit of a bridgehead isn’t quite the right word because there’s no bridge.

But you get the idea. Any forces that are over here in the east, any Russian forces that are over here in the east, are under pressure because of that massive battle further east. And it’s difficult for the Russians to get anything through that zone to then resupply their troops further to the west. And then the groups that are here on the west side of the sand dunes get their supplies through Crimea.

But the Kerch Bridge has lost both a thrill connections and a half of its road connections. So the Ukrainians are able to play fast and loose in this area and they’re increasingly poking left and right, west and east, especially to the east, because if they can dislodge the Russians here or simply enter into a bit of a war of a move moment, then this entire zone over here, that which is occupied territory becomes in play.

For those of you who’ve been following the war since the beginning, the silly city of Mariupol is right over here, and Mariupol can really only be supplied by road now. And the places where the Russians are and Ukrainians are attempting to basically have a mutual break through of each other’s lines were around it here. So all of the Russian forces are going into this zone, leaving this entire southern swath potentially with very limited supplies.

And so if the Ukrainians can break the connection here, then these little connections that are all that allow stuff to go from Crimea north, all of a sudden are pinched off and you could have theoretically a bit of a breakthrough. Now, there are a lot of moving pieces on this. I’m not suggesting this is where we’re going, but this is the sort of tactic that you normally wouldn’t expect to see.

And we’ve now been seen it for about two weeks. So it’s something to keep your eye on as more things develop, of course, get back to you. But that’s where we are today.

Hey everybody. Peter Zeihan here coming to you from Colorado today. The topic is going to be the next phase of the war in Ukraine and from an economic point of view. For those of you who’ve been watching for a while, you know that last winter the Russians went out of their way to hit the power grid in Ukraine wherever and whenever they could, because that was the way they could generate the most casualties and have the most political impact on decisions in Kiev.

And then in about May, once it had warmed up enough that you didn’t necessarily need heating in Ukraine, they switched targets to the agricultural supply chain system with a very, very heavy emphasis on the infrastructure that collects and especially exports the grain take it out. Things like grain silos and ports first in places like Odessa, and then later moving on to the Danube River Delta, which is where the Ukrainians and tried to get the stuff out.

In this, the Ukrainians have kind of faced a triple bind. Number one, they import most of the materials that are necessary, like fertilizer, in order to grow crops in the first place. Number two, there isn’t a lot of storage in Ukraine that was available because of last year’s efforts in the war. Most of the storage was full completely.

So the Ukrainians were focusing on getting that out so they could make room for this year’s harvest. And in some degrees, there has been failure there. And this stuff has nowhere to go because number three, almost 80% of this maybe even a little bit more, goes up by water, primarily through the Odessa region. And with that kind of off line, the only other option is to rail it out.

And that means you have a limited number of rail cars. You have to ship it through other countries that are already grain exporters like Bulgaria, Romania and Poland, who don’t like the idea of that stuff being dumped on their market. So most of them have barred Ukraine from having terminal arrivals for their grain and you have to keep on going.

So for every kilometer you have to go further. That’s a kilometer that that railcar has to be committed. So all in all, you’re talking about over an 80%, nearly a 90% reduction in Ukraine’s ability to get the stuff out. And now that a lot of these ports on the Danube have been damaged, there’s just no place to put the stuff from this year’s harvest.

So from the Russian point of view, mission accomplished. And now they’re switching targets. This past week, the week of the 18th of September, they’ve started switching targets again because we’re now getting into fall and they’re going after the power grid again. And over the course of the next month, I would expect that general shift to be almost complete.

They’ve destroyed the Ukrainians ability to play in international grain markets any in any meaningful way. And now they’re going to have the power grid to cause mass casualties again there. So definitely, you know, the Russians have absolutely won this round. The only way that the rest of the world might be able to help is to massively, massively expand the rail connections between Ukraine and their neighbors.

And then the next line of countries beyond. It’s not enough just to get the stuff to say, Poland or Romania. You’ve got to get it on to the water. And that means you also build out the lifting infrastructure for transferring something from rail onto a ship, because these countries were already grain exporters. That stuff is already used to capacity.

You can basically need to double the entire thing. Normally you would expect something like this to be really bad for grain prices are good, I guess. Depends on your point of view. Send them up. But miracle of miracles. The Russians have had a bumper harvest so they have increased their wheat exports by over a third and that by itself is nearly enough to compensate for all the Ukrainian grain that has left the market.

So wheat prices are actually down. Now, I am not a grain trader and I’m not trying to give you anybody price recommendations, but just a couple of things to keep in mind. Number one, the Russian climate is incredibly erratic. And so just because they had a bumper crop this year doesn’t mean they’re can have a bumper crop next year.

Keep that in mind. Number two, the Russians have said that any vessels, civilian vessels anywhere in the Black Sea going anywhere near a Ukrainian coast, they reserve the right to attack. The Ukrainians are trying to convince people to come anyway and they’ve had very, very, very limited success. But that war risk is always there. And for their part, the Ukrainians have said and have demonstrated that they can strike Russian ports as far away as never seasick, which is their major green loading facility for the Russians.

Now, they have not gone after civilian vessels yet, but again, there’s still the possibility that we can have a widespread war on the water, in which case all civilian shipping in the north eastern half of the sea is in a degree of risk. So for the moment that there’s enough grain out there, I’d not get used to it.

But at the moment, that’s where we are. Okay. Talk to you later.