Agricultural Disruptions in Argentina and Ukraine

Despite some food scares coming out of the former Soviet space, Mother Nature helped 2022 crop production look pretty solid in most of the great agriculture basins of the world. However, this could be the world’s last food-secure year for quite a while.

As Argentina transitions from summer to the harvest season, we’re getting our first glimpse at the yields…and it’s not looking promising. Between floods, droughts, pestilence, and a dash of government incompetence, it’s shaping up to be the worst year on record for Argentinian corn, soy, and wheat.

We’re not off to an auspicious start, but Argentina’s shortages were weather-induced…we haven’t even seen the impacts of fertilizer shortages yet. Additionally, the Ukrainians face a completely different set of disruptions to their agricultural industry.

As Ukraine transitions out of winter, the Russians will likely shift their strategy from targeting power infrastructure to the agricultural system. I expect Ukrainian corn, soy, wheat, and seed oil exports to drop significantly in the coming year. With the agriculture disruptions in Argentina and Ukraine, this is only the beginning of worldwide food insecurity.

Prefer to read the transcript of the video? Click here

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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey everybody. Still Peter, still Colorado, still snowy, still foggy. Yesterday we talked about the African swine fever problem in China and how it’s turning into an issue for fertilizer. I want to talk now about the weather. We’ve got a number of major agricultural basins in the world. And last year, for most of them, greater Midwest, the Brazil and Argentina systems. South Africa. Australia. New Zealand. The Eurasian Wheat Belt and Northern Europe. We had a pretty good year, pretty much everywhere and even in secondary markets that aren’t export oriented, like India and China, things were pretty good. That helped us a great deal, despite the fact that we were having a lot of scares and supplies coming out of the former Soviet space. But there’s two issues that we have already seen are going to be boiling up. The first one involves Argentina. 

Now, as a southern hemispheric country,they’re exiting summer and going into harvest right now. And between floods and droughts and pestilence and basically all the horsemen playing a role here and a general dollop of government incompetence. It’s shaping up to be one of the worst records for corn, soy and wheat that we have seen in years with on average, about a 30% reduction in the foodstuffs. Now 30%, that is a weather induced reduction, not a fertilizer induced reduction. So it could have been a lot worse. But we’re already seen at the beginning of the 2023 harvest season that we’re getting off to a really bad start. Australia so far looks (mehhhh) and then of course India is harvesting things all the time. Now in the northern hemisphere we don’t get our first crops in for a couple more months and harvest will continue throughout the late spring for things like winter wheat and going into the summer and into the fall. So we have a lot of potential crops ahead of us, but to kind of kick off with Argentina, which is traditionally in the big six for wheat exports and typically in the big three for soy exports, this is not a particularly auspicious start.

The next major disruption I expect to see will be in Ukraine. Now, we’ve all been seen through the winter that the Ukrainians have been suffering missile and drone attacks from the Russians who are trying to take out the power system, working from the theory that if you can knock out the electricity across Ukraine in the winter, you’re going to kill as many Ukrainians as possible and damage the morale of the war effort in general. Because if you find out that your wife and kids back in Kyiv don’t have power, it’s really hard to stay on the front. You feel like you should go and do something. Well, as we get into May and especially June, when it becomes apparent that knocking out the power doesn’t make anyone freeze to death anymore, the Russians are going to switch targets to go after the agricultural system, especially fertilizer plants, grain silos, grain transshipment locations and rail centers, ports and the rest. Already we’re seeing the Russians backing away from a United Nations brokered deal that allows grain and corn and wheat and sunflower to get out of the system. Basically, ships can come in, the Russians will search them on the way to make sure that they’re not carrying weapons. The Ukrainians will load them up with whatever foodstuffs they can export and then they’ll be inspected by the Russians again on the way out. It used to be that this deal was being renegotiated every 120, 250 days, and the Russians want to shrink it down to 60 days, meaning that if this is renegotiated in March, it’s probably the last time it’s going to be renegotiated, because the Russian goal here is to wipe out as many of Ukrainians as possible to make sure that they can’t fight. And that means taking the war to the civilian population. Electricity doesn’t work in the summer. So you go after the food supplies, which means that calendar year 2022 was probably the final year that Ukraine will be a significant agricultural exporter. Pre-War, roughly 85 in some cases, 90% of their ag products were shipped out by water, with the rest going by rail. The problem is that the rail system in Ukraine doesn’t interface well with the rail system in Europe because they use different gauges and you can only replace that an upgrade it over the course of years and it’s really hard to do when bombs are raining down. So we’re going to get little trickles that go out of western Ukraine that can take advantage of the rail. And that’s about it. And that’s, of course, assuming that the Russians don’t achieve a breakthrough once they throw an extra 400,000 men into the fight come June.

So we know we’ve already had a bad Argentina harvest and we know that the Ukrainians are probably going to fall off the map in terms of food supply. And honestly, that’s just the beginning. More on this in later issues.

Danger Close with Jack Carr

Last week I had the opportunity to sit down (virtually) with Jack Carr on his show Danger Close. We chatted about the troubling outlook for China, the ins and outs of the war in Ukraine, and much more!

Moving forward, I’ll share my appearances from different podcasts and shows. Most of these are longer than my usual YouTube videos, so for those looking for more of my insights…this is for you!

This is my second time on Danger Close, so if you need even more listening material, check out my original episode from March 2022.

MOST RECENT INTERVIEW – MARCH 8TH 2023

OLD INTERVIEW – MARCH 16TH 2022

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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

The Fight for Ukraine – Global Alts 2023

At iConnections’ Global Alts cap intro event earlier this year, I had the pleasure of sitting alongside Daniel Bilak, a Ukrainian Volunteer Serviceman and Partner at Kinstellar, to discuss the status of Ukraine’s fight against Russia.

This video is roughly 30 minutes long, and we touch on key battlefield dynamics, current global repercussions and long-term implications for the world. I hope you enjoy it!

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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

The Ukraine War: Operational Updates

Today we’re diving into some operational updates from the Ukraine War. First and foremost, daytime temps this winter have rarely dropped below freezing; when they do, it has not been for long enough periods for the ground to freeze. So that means local forces will be rolling around in the pig-sty for at least a few more months.

Unfortunately for Ukraine, the only viable way to stop the Russians is to start killing more of them…and if they can’t get their tanks mobile, that won’t be happening any time soon. These muddy conditions enabled the Russians to throw wave after wave of troops at targets (like in the Battle of Bakhmut) until they could win and move on.

This is, and always has been, Russia’s war to lose. Come May (or whenever the ground decides to firm up), we will see large-scale offensives from both sides that start to shift the tides of this war.

Prefer to read the transcript of the video? Click here

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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey everybody. Peter Zeihan here coming to you from the San Diego waterfront. I just wanted to take a couple of minutes to give you a quick update on what’s going on in Ukraine. The most important factor is that the weather continues to be warm. Actually, today, the 7th of February is the first day in a month that it’s actually going to be below freezing in Kyiv during the day. It’s going to be chilly for the next few days, but not enough to freeze the ground. And then back by the time we’re into mid-next week, it will be above freezing again. So it is still muddy. As long as it’s muddy, the Ukrainians cannot maneuver, especially with tanks out in the fields. And that’s a real problem.

Any conflict with the Russians was always going to be heavy on numbers and the Ukrainians simply don’t have the population in order to face down the Russians man for man. So they need to inflict massively out of whack casualty ratios on the folks that are fighting. And I’m not talking 2 – 3 to 1 like we’ve seen so far. Like 8 – 10 to 1 is really kind of the minimum if they are going to walk away from this. The Russians see this war as a battle for their existential survival, their right. They’re not going to stop. And so the only way for Ukraine to emerge victorious is to kill so many Russian soldiers so quickly that the Russian front collapses and the military system within the Russian Federation requires years to recover. We are nowhere close to that. And the only way that the Ukrainians can pull that off is if they can outmaneuver the Russians. And that requires fields that are not mud.

This has allowed the Russians to play to their strengths and just throw body after body after body into a few battles, most notably the battle of Bakhmut, which until now the main effort has been led by the Wagner Group for internal political reasons. But honestly, the internal political reasons don’t matter. As long as the Ukrainians can’t maneuver and as long as the Russians have superior numbers, it’s just an issue of throwing wave after wave of humans at them until the weather changes to a degree where the logistics shifts to a degree that the battles can move elsewhere. That’s unlikely to happen until May. Now, Wagner has been using almost exclusively convicts in their human wave tactics. And as to the number of people that have been lost, the estimates are in the process of being revised by everyone, because everyone is, you know, always changing these sort of things during a war. They’re starting to use more radio intercepts to guess how many Russians have been killed. The problem is, if you go with just visual confirmation, you’re going to wildly undercount because it doesn’t count people who are injured who then were taken away from the front and then die because the Russians’ triage system and medical system is beyond atrocious. And so probably for every person that is visually killed, there’s another half to a person that then wandered away and died. Anyway, we now know that the minimum deaths in the war so far on the Russian side is 120,000, and the estimates for Russian deaths in the battle of Bakhmut specifically are somewhere between ten and 40,000, just for one little strategically insignificant town.

Anyway, for the next couple of months, this is just where we are. It’s probably too late in the season at this point to hope for a really hard freeze. So we’re going to have to wait for things to dry out in May before the Ukrainians might be able to move. By the time we get to May, the Russians will really move a lot more troops into the front. They started the war with somewhere between 100 and 150,000. Today they probably have about 250,000. And with the second mobilization already deep underway, we’re probably going to be around 6 to 700,000 by the time we get to May and June. Now, they will be badly led and they will be badly equipped and will be badly supplied and they will have poor morale and they’ll be badly trained. And you know what you call troops like that, Russian. There is nothing about the conflict to this point that is atypical in Russian history. They rarely win on quality. They almost always went on numbers. And we’re almost to the point where we’re going to see just how well these new infusions of NATO equipment help the Ukrainians on the front line and just how many massive waves and assaults the Russians can sustain at the same time. And this is going to put the battle in a bit of a pickle for the Ukrainians because they’re going to be facing two or three major assaults from the Russians at different points of contact. And if they allow themselves to get bogged down, deflecting each and every one of those, they’re going to lose. They need to free this up into a war of movement and allow their tanks and artillery and the rockets to do an offensive in a place where the Russians either can’t resist or can’t maneuver or to counter them.

So by the time we get to May, we are going to be in a very fluid strategic environment, most likely with the Ukrainians just kind of backing off, putting the minimum forces they can in this or that front just to slow the Russians down. While they try to do lightning strikes and blitzkrieg style assault on some other point in the front in order to try to get behind the Russian formations, cut them off from logistical supply and then just dice them up. It’s a risky strategy, but considering the numbers of people and the volume of equipment that Ukrainians control, that’s really the only game in town at this point.

This is still, always has been Russia’s war to lose. And we’re getting close to the point where we’re going to see a strategic logjam break one way or another. And it’s just about three months away.

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

NYT Best Seller & MedShare Donations

Today is the day! Join me at 2:00 pm CST for the Webinar – Global Outlook: One Year Into the Ukraine War. You don’t want to miss this one!

The people have spoken, and apparently 17 hours of my voice is exactly what they want…

The audio version of my 4th book – The End of the World Is Just the Beginning: Mapping the Collapse of Globalization – is back on the NYT Best Seller List.

For the entire month of February, all sales of all of my books in all formats will be donated to MedShare. You can learn more about MedShare and their efforts at the link below.

Prefer to read the transcript of the video? Click here

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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Good morning, everyone. Peter Zeihan here coming to you from Colorado. And the news that you can use today is that my fourth book, The End of the World Is Just the Beginning: Mapping the Collapse of Globalization – is back on the New York Times bestseller list. Specifically, the audio version, which is 17 hours of this.

Anyway, for the month of February, all sales of all books in all formats are going to MedShare, which is a charity that provides medical assistance to communities who lack the ability at the moment to provide it themselves. So, for example, if your neighbor is Russia and it’s throwing missiles into your electrical grid and the power goes out your hospital, MedShare helps with diesel and generators and medical equipment, all that. So buy a book and all the proceeds will be going to Medicare. Or you can just go directly to the link at the end of this email. And that goes directly to the Ukraine fund.

That’s it for me. Thanks for all the support and looking forward to doing more of these over the course of the next couple of months. Take care.

The Ukraine War: Just Getting Started

Perhaps the scariest takeaway from the Ukraine War is that it’s just beginning. To fully understand what is at stake here, we must look at Russia’s motivators and the possible outcomes.

Russia is looking to reclaim enough land for them to reach the geographical strong points that were once part of the Soviet Union. Beyond that, Russia is essentially fighting for its existence. So the only viable option for them is…winning…at whatever cost. That is a terrifying reality.

If the Ukrainians hold Russia off, we’ll see a long, drawn-out war over disputed land until Russia makes enough progress to launch another large-scale assault. For Ukraine to prevail, they would have to destroy sufficient Russian industrial and logistical capacity WITHIN RUSSIA to render another assault impossible.

If the Russians get past Ukraine, they won’t stop there. Poland and Romania will be next, but the Russians know that facing off with NATO isn’t going to end well. And that’s when the nuclear question comes up.

Regardless of how this plays out, we know Russia doesn’t give in lightly. What we’ve seen so far is just a warm-up and the real war is only now starting.

Prefer to read the transcript of the video? Click here

Join me on Feb. 17th for the webinar – Global Outlook: One Year into the Ukraine War.

We’ll dive into the global impacts the war has had on supply chains, agriculture, and much more. After my presentation we’ll have a Q&A portion to answer all those burning questions.

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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey everybody. Hello from Colorado. I thought today would be a great day to underline for everyone what’s at stake with the Ukraine war and why the war to this point really is just the very beginning of what’s going to be a long, protracted conflict that is going to stretch well beyond Ukraine’s borders. Alright. With that in your back pocket, let’s launch in.

This is a map of the Russian space, and that green area is the Russian wheat belt. That is the part of Russia that is worth having where the weather is not so awful. It’s still awful…That you can’t grow crops can’t grow much. You get one crop of relatively low quality wheat because the growing season is very short. Summers are very hot and dry and windy and winters are very cold and dry and windy. If you move to the right, you’re in Tundra and Taiga. That’s the blue. If you go to the left, you’re in the desert. So north to tundra, south to desert.

But what really drives the Russians to drink is the beige territory. Territories that even by Russian standards are useless. But they’re flat and they’re open and you can totally run a mongol horde through those. So what the Russians have always done is reached out past the green, tried to expand, get buffer space, get past that beige, that area that’s useless, and reach a series of geographic barriers where you can’t run a Panzer division through it and then forward position. They’re relatively slow moving, relatively low tech forces in the access points between during the Soviet period, the Russians controlled all of those access points. It was the safest that the Russians have ever been, and then they lost it all. And what they’ve been trying to do under Putin and Yeltsin both has been to re-expand back to those footprints so that they can plug the gaps, plug the places where the invaders would come, get static footprints, lots of troops right on the border where you can’t avoid them, you can’t outmaneuver them.

And this has been what they’ve been trying to do. This is the Kazakh intervention in the Karabakh war and the Georgian war and the Donbas war and the Crimean War. This is what it’s all been about. Ukraine, unfortunately for the Ukrainians, is not one of these access points. It’s on the way to the two most important ones in Romania and Poland.

So this war was always going to happen and this was never going to be the end of it. The Russians have launched eight military expansions since 1992. This is the ninth and it wasn’t going to be the last one. Eventually they would come for Poland and they would come for Romania. But we now know that the Russians are militarily incompetent at fighting a conventional war. So we know if they succeed in Ukraine and they reach the Polish border, they know that there will be a 1000 to 1 casualty ratio if they face off against NATO forces. So we know that when they do eventually come, if they make it past Ukraine, they will use every tool that they have. And that includes nukes. The Russians feel that they are fighting for their existential existence and because of the demographic collapse they are. If they fail to capture Warsaw and northeastern Romania in the vaults, they will shrivel in an open zone wracked by internal disruptions and interfered with from outside powers. And over the next decade or three, they will cease to exist as a functional country. Winning here is their only option, and since its death or winning every possible tool that they have will come into play. And that includes the nuclear question when it becomes their only option. If the Russians win in Ukraine, we will have a nuclear exchange.

But if you’re Ukrainian, obviously you have a different view on how this should go. What we’re looking at here is an old industrial map of industrial assets in the former Soviet system box there indicates approximately the Ukrainian borders. And you’ll notice that there’s a whole cluster of these little industrial circles just beyond Ukrainian space. We know if the Russians win in Ukraine, where they come in.

But think about what it means if the Ukrainians win, if they succeed in ejecting Russian forces from their entire territory, the Russians aren’t going to stop. Remember, this is for them an existential fight for their survival. They will continue doing cross-border raids until they feel they have an advantage. They can make another try of it. So the only way that Ukrainians can win and then live in peace afterwards is to disrupt the logistics that prevent industrial plant in those circles from contributing to a war effort on the Ukrainian border zone. And that means the Ukrainians have to cross the border into Russia proper. Whether they do this with planes and missiles or artillery and rockets or general army that will determined by the facts on the ground when this finally happens. But we’re talking about deep strikes in excess of 100 to 200 miles into the Russian space to deliberately destroy industrial plants and especially connecting infrastructure.

So we know now that if the Russians win, we’re going to have a nuclear crisis. And if the Ukrainians win, it’s the beginning of a long slog that will take years to resolve one way or the other until either Ukraine loses the capacity to function or Russia loses the capacity to function. Russia’s never backed down from a war without a series of mass casualty events that were so severe that they’ve lost the ability to maintain a military position at all. They fight until they can’t, especially now considering what is at stake.

This is going to get a lot more intense before it gets resolved. And 2022 was honestly just the warm up in the skirmishes. Fighting in 2023 is going to be a lot more severe because the Ukrainians are finally getting some real heavy equipment and tanks and the Russians are doing a second mobilization and they’re going to have three quarters of a million troops in Ukraine by the end of May.

The real war is only now starting.

Demographics Part 6: The Orthodox Predicament

It’s time we talk about a region that has long held the title of “worst demographics”…The Orthodox Christian countries.

The big dog of the region – Russia – has entered a point of no return for its demographic situation. Ukrainians are even worse off. Regardless of the outcome of this war – they’ll end up with a s*** stew of demographics. 

Other countries like Bulgaria and Romania aren’t any better off. They’ve basically sent out all of their youth to other countries for economic opportunities…and even if they do return, they’re not adding to the population once they reach their 40s and 50s.

Serbia had the opportunity to flourish into the most rapidly growing economy in the region. Still, they’ve made every wrong policy decision in the book…so no dice for them either.

Each of these countries will likely come face-to-face with its inevitable demise within the next 20 years, and there’s not much they can do about it. 

Prefer to read the transcript of the video? Click here

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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey Everyone, Peter Zeihan here coming to you from snowy Colorado, where, as promised, we’re going to be talking about the next chunk of our demographic series, specifically talking about the Orthodox Christian world, which is a huge swath of territory stretching from Russia to Belarus and Ukraine and Moldova, Bulgaria, Romania and Serbia. Now, these countries have three characteristics in common that have really shaped their demographic destinies, and none of them have been great.

The first is broad scale economic dislocation. These were the parts of the former communist world that didn’t do well, even at the height of communism. They weren’t very advanced. And especially when the post-Cold War system erupted, they didn’t have anything really to contribute aside from raw commodities. Their industry was outdated. They weren’t producing steel like the Czech Republic or I.T., stuff like the Latvians. They were only doing grains and raw materials and energy. And you can get growth from that. You can get wealth from that, you can get infrastructure and development from that. But unless it is really, really well-managed, the population just doesn’t see a whole lot of it. So these countries were in and out of horrible recessions for really 30 years.

It’s less bad in places like Romania and Bulgaria because they did ultimately get into the EU in the late 2000s, but they were the last ones in line. Serbia took a kind of a double hit because they don’t have a lot of raw materials that they can export to the world. And in the aftermath of the NATO bombings in the Yugoslav wars in the early 1990s, Serbia never moved on. So even with the Russians under Putin going from win to win, in terms of global policy and generating a lot of income from oil in Serbia, there was a whole lot of nothing. And politics basically became locked down in the aftermath of the Yugoslav wars, and the country really was never able to advance to whatever is next. And that holds true even today.

Okay. What’s second because of the economic dislocation, because so many people didn’t see a lot of opportunity. You had huge immigration from all of these states, mostly to Western Europe, some to the United States and Canada in the cases of Romania and Bulgaria once they got into the EU. If anything, the outmigration accelerated because there were then fewer restrictions.

The Russians easily lost 10 million people in the 1990 and early 2000s to the wider world. And in the case of Moldova, perhaps as much as one quarter of the female population under age 50 left never to return, some of them going, a lot of them going into the sex trade because there really wasn’t a lot of an option because education in Moldova during the Soviet periods was even very low.

Serbia is probably the country that has suffered the most from this outmigration because again, the government just has never moved on and there’s never been a plan economically for what’s next. 

The third one kind of flies under the radar and is probably going to piss a few people off. But here we are. Birth control in this region. The primary method is abortion.

So on average, more than seven out of ten pregnancies across this space are terminated. And if you have one abortion, I know I’m a dude. I really have no right to say this, but, you know, I’m going to go out on a limb and guess that it’s not critical to your health. But if you have ten, you’re probably endangering your future fertility.

So between a very low death rate, a very high abortion rate and very high infertility rates because of the weird intersection of health care and birth control and economic collapse, it’s arguable that a lot of these countries, probably Russia, right at the very top of that list, simply could not repopulate, even if the economic conditions were to turn around. So this is the part of the world that is duking it out with Northeast Asia for the lowest birth rates and the fastest national mortality, if that’s the right term in the world. So that’s kind of the overview.

Those are the three big issues that shape the region as a whole. But we do need to give additional attention to the Russians and the Ukrainians.

Now, the Russians have had a series of stacked geopolitical disasters World War One, World War Two, Stalin’s famines, Brezhnev’s mismanagement, Khrushchev’s mismanagement, and then the post-Cold War collapse. All these kind of stacked on each other. And so that the current generation that is now in their twenties is the smallest one they’ve ever had.

The Russians say they’ve got a metric ton of teenagers and that the demographic turn has been made and they’re going to be fine if they are telling the truth about that. That would be the only of their data that they’re telling the truth. More likely that we actually have fewer teenagers than 20 somethings. And you’ll see that in the demographic graphic that we’ve patched into the show.

More likely, their data is more similar to the situation in Ukraine. One more thing about the Russian demographics. They’re not equal. Just as in the United States, where places like Utah, Texas have higher birth rates in places like New York or Connecticut because they’re less urbanized or have different cultural norms. The same is true in Russia. Russia is not just Russian. The Russian state was originally founded in the area in Moscow, and they discovered that they really had no borders that were secure. So the way they decided to deal with that was to expand, conquer all their neighbors, consolidate and expand again, conquer all of those neighbors and so on and so on and so on until they get to the Russia that we more or less know today and during the Soviet period.

That means that there are dozens of conquered peoples living within the Russian system. Some of them have demographic stats that are just as bad as the Russians, but not all of them. A lot of the Turkic minorities, most notably the Chechens, the Dagestanis, the Basqueirs, and the Tatars actually have very robust demographic structures and are doing very well from a health and a growth point of view.

Well, the last decent number that we’ve got from the Russians was done by the 1989 Soviet Census. And at that point, the best guess – Soviet numbers, after all, was that 20% of the Russian population within the Russian Federation was non Russian. So 80% Russian, 20% non-Russian. Well folks, that was over 30 years ago. It’s probably closer to 25 to 30% today.

That’s non Russian. And if you fast forward another 20 years, you’re talking about probably 30 to 35%. Now these are all guesstimates upon guesstimates because this is Russia and getting good data is next to impossible even before there was a war. But we do know for sure that even if you include all of the minorities, the Russians, only have 8 million men aged 20 to 36 months from now.

At least a million of those are going to be committed to the war in Ukraine. We already have over 100,000 dead. We already have about a million who have fled the country. So one way or another, the Ukraine war is the last conventional war that the Russians are ever going to be able to fight because they simply won’t have enough people.

Now, the Ukrainians have no reason to lie about their demographic data, aside from the fact that it’s absolutely atrocious. And if you look at it and you look at just the collapse from the fifties to the forties to the thirties to the twenties, to the teens to kids, you’ll notice that this isn’t just a demographically spent country. This is a demographically dissolving country.

So unfortunately, even if the Ukrainians achieve runaway success in this war this year, it’s already too late. Even before the Russians started kidnaping children in the thousand, perhaps hundreds of thousands from Ukraine, this was a country that simply didn’t have enough people under age 40 to even theoretically repopulate themselves. So within 20 or 30 years, we are looking at the Ukrainian ethnicity vanishing from this world and probably the Russian ethnicity, no more than 20 or 30 years behind that.

Like I said, they are duking it out with Northeast Asia to see who vanishes faster, which means we have to turn to Northeast Asia next, because that is going to be the part of the world where from an economic point of view, these demographic turnings have the greatest impact. Okay, take care. Until next time.

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.

The 2nd Holodomor

In the 1930s, the Soviet Union attempted to crush the Ukrainians in a genocide known to history as the Holodomor. 

Key to the strategy was deliberate efforts to destroy agricultural production to ensure famine. In all, 4 million Ukrainians perished. Today’s Russia is about to switch gears in the ongoing military conflict and attempt a second Holodomor. 

Here’s how we should expect the next chapter to begin…

Prefer to read the transcript of the video? Click here

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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey, everyone. Peter Zeihan here. Coming to you from Calgary on the Bow River, just outside of downtown. Today, I wanted to talk very briefly about what’s going on with Ukraine and the path of the war, not necessarily from a military point of view, but from an economic and strategic point of view. 

One of the key things to remember about the war right now is that the Ukrainians are wildly outmanned. The Russians have a population of roughly 140 million, and it has no problem throwing bodies and nearly limitless numbers into the war effort. Right now, we have had a first stage mobilization of about 300,000. There’s another stage of at least 500,000 coming probably within a few days, which means that by the time we get to May and June, the Russians will have a minimum of another half a million men in the field. And it’s not clear that the Ukrainians have enough bullets to take them all out. In this sort of conflict where the Ukrainians simply can’t trade a body for a body. It’s more than training, it’s more than morale, it’s more than equipment. It’s about speed, it’s about mobility. So as important as rockets and missiles and jets and tanks are and they are all critical to Ukrainian survival here, ultimately what the Ukrainians really need is the ability to move when the Russians can’t.

Now, in this, they’ve won at least half the battle. Russian forces historically and currently can really only resupply by rail. That is how the Russian system has always worked. They don’t have a Russian road network, so they have to move things by train. And when the Kerch Bridge was taken out last year, the Russians lost their primary method of supplying to the southern front. They’ve had to make do with trucks. But the Ukrainians have been attacking the truck fleet, the tactical support truck fleet of the military ever since the very beginning of the conflict. The Russians began the war with 3000 military support trucks. They’re probably down to only about 500 now. And so they’ve been going back to Russia and confiscating things like vans and city buses in order to ferry troops and even artillery shells around the front. And I got to say, when a city bus loaded with artillery shells hits a bump, things get a little exciting. But that’s not enough for the Ukrainians. They have to inflict casualties on the Russians in excess, minimum excess of 5 to 1. And we’re just not there yet. If the pace continues, if this 3 to 1, 4 to 1 ratio, that we’re seeing of Ukrainian fatalities versus Russian fatalities continues. The Ukrainians will lose in time. They have to turn this into a war of movement. And in that, the weather has really not been very cooperative. You can split the seasons in Ukraine to basically four chunks. You got your summer when the ground is hard and dry, you’ve got the winter when it’s hard and frozen. And then in the spring and the autumn, you have what are called mud seasons where it’s just not cold enough to freeze the ground, but it’s wet enough that everybody gets stuck. So if you’re on foot, you get stuck in mud. If you’re in a vehicle, all that mud turns your treads into just mush. And that is exactly the scenario the Russians found themselves in in the first part of the war. This is the primary reason that the assault on Kyiv failed and the primary reason that the Russians ended up abandoning their entire position in the northern part of the country. Their troops, their army, their tanks were limited to just being on the road. And that made it very easy for infantry to pick them out with things like javelins.

In this sort of situation, what do you do? Well, you wait for it to be winter and then you attack when the ground is hard and you use your superior air mobility to cut Russian logistic lines. I’ve been expecting to push south, not necessarily to reach the sea, but simply to get all of the roads within artillery range so that the Ukrainians can cut the supply line once and for all. That has not happened because it has been freakishly warm in Ukraine for several weeks now. Now here in Calgary, it has not been above freezing for over a month and so the river is frozen for the most part.

But in Kyiv, it hasn’t gotten below freezing during the day for over a month. And in that sort of situation, they’re experiencing a wildly, unexpectedly, unprecedentedly extended mud season. Now, this could change in ten days, although the extended forecast doesn’t suggest it. And we could get a hard freeze before the end of January, in which case February, which is normally part of the frozen season, could still see a lot of dynamism out of the Ukrainians. But that is not in the cards at the moment. 

And that means it’s time to start thinking about what the next stage of the Russian assault happens to look like. At the moment, the Russians are waiting for spring so they can throw those extra half a million men and just come at the Ukrainians from multiple angles. And if they do enough with enough, then it really doesn’t matter if the Ukrainians are mobile, they’ll be overwhelmed and that could be the end of the war right there. So right now, the Russians are just biding their time. They know they lack the logistical support to do any sort of broad scale, multifaceted, complicated assault right now. So they’re just throwing some bodies at a few places. If you’ve seen Bakhmut in the news, that’s exactly what’s happening there. But mostly the Russians are kind of sitting on their hands and waiting, but they are doing what they can to destroy morale and destroy the Ukrainian economy and kill as many Ukrainian civilians as possible. They’re using drones. They’re using fighter launched missiles. They’re using cruise missiles. And they’ve started to use ballistic missiles to target specifically Ukrainian physical infrastructure, most notably electricity generating plants.

They’re thinking is if they knock the electricity off in the depths of winter, you will, number one, kill a lot of civilians. Number two, you will demoralize the soldiers because if they see that their families back home are losing power, they’ve got to wonder why they’re on the front line if the front lines aren’t very dynamic. It’s an utterly despicable and inhumane strategy, but that doesn’t mean it’s stupid. And right now, the Ukrainians are suffering over and over and over again from these assaults. But once we get to spring, the Russians are going to change targets, not strategies, but targets. In addition to pushing for a broad based assault on multiple axes. They will then shift their targeting from electricity infrastructure to something else, because in the summer, taking out the power doesn’t have the same impact that you do it on the winter. Ukraine is just not that hot, that it needs mass electricity, electricity for air conditioning. I mean, this isn’t Alabama or Texas. In the winter, you have to have it for heating. But in the summer, it’s not so important.

So at that point, expect the Russians to change their targeting from electricity infrastructure to something a lot more insidious. Agricultural infrastructure targeting the factories that make the parts that repair the tractors, targeting the tractors themselves, targeting cold chain systems, targeting grain silos, targeting ports.

Right now, the Ukrainians have a series of deals that have been brokered by the U.N. with the Russians for getting grain out of their ports. It’s mostly been corn because it’s denser, both in terms of weight and in terms of economics than wheat. Wheat exports have fallen to almost nothing. But if the Russians start targeting their ability to produce and transport grain at all over the summer, then any country that is dependent on what has historically been the world’s fourth largest corn exporter and fifth largest wheat exporter is going to have a really, really tough year.

We should probably expect to see targets shifting in May and into June, and there’ll be obvious the impact that this is having by the time we get to September and October. And then the countries that would normally import from Ukraine come October, November, December are going to realize it’s just not there. Most of those countries are in Africa, some are in South Asia, and the one I am by far the most worried about is Egypt.

Egypt is poor. They import over half the grains they need to survive, mostly wheat. The wheat is already offline. And so we should expect to see significant upheaval, economic, humanitarian, political, across the Arab world and into South Asia and in sub-Saharan Africa, all later, in the second half of 2023. And at this point, there’s just not a lot that anyone can do about it.

Fertilizer supplies are already constrained, and the Black Sea is probably going to become a no go zone once the Russians start targeting the ports altogether. I don’t have a cheery note to end this one on. This is just pretty dark. I’ll see you guys later.

A Toasty Winter in Europe

Prefer to read the transcript of the video? Click here

As much as we analysts like to make predictions and forecasts, Mother Nature is always right there to throw all of it into a tailspin. The crazy temps across Europe are no exception to this.

While this abnormally warm winter season has been a godsend for energy prices across Western Europe, its also thrown a wrench into Ukraine’s plans for a winter offensive.

I’m not saying Europeans should get used to shorts and mai tais all winter long, but this season could hold lasting impacts (good or bad) for the year ahead.

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

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey, everyone. Peter Zeihan here. Coming to you from my hometown of Marshalltown, Iowa, where I’m visiting the ‘rents for a few days. Today, we are going to be talking about winter. It has been a really weird winter, specifically in Europe over the course of the last few weeks. In the second and first weeks of January, temperatures have been and are expected to continue to be in the fifties in Paris and the forties in Berlin and Warsaw, and in the high thirties in places in Ukraine, most notably Kiev.

Now, this is throwing a lot of my forecast into a bit of a tailspin. But, you know, weather does what weather does. Temperatures are based on where you are somewhere between 20 and 40 degrees above normal and have been relatively consistently for almost a month at this point. In the case of Western Europe and Central Europe, this means that energy demand has plummeted because normally these guys would be approaching zero degrees Fahrenheit. And in those sorts of environments, they simply need to use a lot of energy in order to keep the lights on and especially the heat going. But there have been times that Berlin is broken 50 in December, and in that sort of environment, keeping everybody warm is really easy. And that means that energy demand has plummeted and the need to cope with the cut-offs that have come from the Russian space because of the Ukraine war simply are very manageable.

And in that sort of environment, you have to play it forward because it’s not just about electricity and heating. In the European space, they use a lot of natural gas for a lot of industrial needs. And when the war began and the Europeans began weaning themselves off of Russian energy, they discovered they had to shut down a whole lot of industry in order to keep people alive.

Well, now, with the weather warmer and energy freed up for other uses, we’re seeing everything from industry to specifically fertilizer production, nitrogen fertilizer production coming back at scale. This is something that is wildly unexpected. This is the warmest winter on record by a very large margin. We shouldn’t expect it to last. We shouldn’t expect it to be repeated.

But at least for this moment, Europe is having a great time of it and considering the obstacles in front of them and the situation with energy supply in general. You know, enjoy it while it lasts. The problem, of course, is it’s weather. It could change tomorrow, probably will change within a couple of weeks. And then we’re going to be back in the same place.

The issue is that energy demand tends to be inelastic. And so if you only remove 5 to 10% of energy inputs and with the Europeans I’m sorry, with the Russian stuff going off like we’re talking 40%, you can easily see a doubling or tripling, quadrupling six tripling of energy prices like we saw consistently last year. But it also means that it goes the other direction as well. So you reduce demand by 10% and prices absolutely plummeted. And that’s where we are today. Won’t last. This is not the new normal. All the forecasts are still in place. But if we can hold warm weather throughout, say, January, then you can see the end of the winter on the other side. And we might get to a better position for the Europeans and for global food supplies this calendar year. And that would be unexpected, but very, very welcome.

The other big weather thing is further east in Kiev where temperatures are in the thirties. Now, normally you have certain seasons that you can and cannot do things in Ukraine. You have your deep freeze in the winter, which is normally mid-November through late February, when temperatures have been so far below freezing for so long that the ground freezes solid and tanks can move around in fields just fine.

But then you’ve got the shoulder seasons in October and early November and then in March and into April that are kind of mud seasons. And in those sorts of environments you can really only drive on roads. Well, my standing forecast for Ukraine is that the Ukrainians were going to try to do a broad spectrum offensive south in the Zaporizhia Province, aiming roughly for the Sea of Azov.

It’s not that they needed to reach the sea itself. They just needed to get close enough that their artillery can target the trucks that are the primary supply line for equipment being shifted from Russia proper to the southern front and Kherson. Remember that the Kerch Strait Bridge was blown up a couple of months ago and because of that the Russians can no longer use rail connections from Russia across the Kerch Strait and into the Crimean peninsula.

That option is gone so everything has to be supplied by truck. The Russians don’t have a lot of tactical military support trucks left, so their only option is to use basically city vans and Scooby-Doo vans and city busses in order to ferry artillery shells. And, you know, every time you hit a speed bump, everyone’s like – ehhhh – and when those things go up, wow, they really go up.

But if we are in the thirties in Ukraine for temperatures, mud season has been getting a second lease on life here. And in that sort of environment, the Ukrainians can only operate on the roads and that makes it much more difficult to do any sort of artillery or especially mobile warfare based assault in Zaporizhia because they can’t put things into the fields and into the dirt. They have to stay on the roads or they get stuck in the mud.

So this has provided a bit of an operational pause, which is really working against the Ukrainians. The Ukrainians don’t have as much equipment and men as a rule than the Russians do, and if they can’t fight a war of movement, then the Russians, with their better air force and especially their better missile forces, can just keep pounding Ukrainian cities over and over again, doing a lot of economic and humanitarian damage. And there’s not a lot the Ukrainians can do about it in the short term if they can’t operate.

So for the Western Europeans and the Central Europeans, this has been a godsend. For the Ukrainians, they were probably hoping that they were going to be able to have a big offensive right about now. And that’s just not an option if the ground isn’t solid.

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