The Southern U.S. Border: Venezuelan Immigration

Photo of the US-Mexico border

Today, we’re peeling back another layer of the U.S. immigration onion – Venezuelan immigrants. Since Hugo Chavez took power in the late 90s, Venezuela has been spiraling into a political and economic crisis, so fleeing the failing state is the best option. (The damage inflicted was so deep, and his successor so incompetent, that Chavez’s death didn’t help at all.)

These aren’t the typical low-skilled immigrants showing up at the southern border; these Venezuelans are highly skilled and educated. This begs the question – could this be the solution to the US labor shortage? The short answer is no, at least until immigration reform occurs.

But the long and treacherous journey these Venezuelans make isn’t for economic reasons; it’s simply to avoid starving to death in their home country. The dynamics of the southern U.S. border are changing, and Mexico’s role will also evolve.

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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 chilly Colorado, where fall has definitely set in. Today, we’re going to talk about the situation on the southern border as regards a very specific group of people, the Venezuelans. For those of you who don’t follow South America, Venezuela used to be one of the most advanced countries in the developing world with excellent health care, education and infrastructure.

But in 1988, a populist by the name of Hugo Chavez won an election and took the country down the path into populist desolation, complete with a gutting of the industrial base, the destruction of the oil sector infrastructure fell apart over the next 20 years, and as of three four years ago, the country actually fell into famine, which is just bonkers because this is a country that used to export about 3 million barrels a day of crude and be a significant food exporter as well.

Today, well, as of the first of the year, oil output had dropped down to nearly a half a million barrels a day. They’ve increased that by maybe a third to half. At this point, well, but they import over 80% of their food. And while they’re in a bit of an ideological war with the United States, most of that food comes from the United States via Colombia, which is a country that the socialist ideologues in Venezuela say that are their enemies.

Anyway, the whole place is falling apart. Something like 7 million people have already fled the country out of a famine, population of over 40 million and more coming every day. Most of those people, single largest chunk over 2 million, have gone to Colombia. Most of the remainder are elsewhere in South America, and roughly a half a million have made the very long, very dangerous trip through the Colombian jungles and mountains.

Through the Darién Gap was a section of lowland jungle where Panama meets South America. Then, all the way up through all of Central America and all of Mexico in order to reach the United States. A couple of months ago, the Biden administration granted them a degree of protected status because these are not your normal migrants. When we think of migrants today on the southern border, we’re not thinking of Mexicans.

Mexicans are way too skilled and the situation at home, despite the crime economically, actually is pretty decent. We haven’t had positive migration out of Mexico to the United States in 15 years now. In fact, it’s been negative in most of those years with more people going home than the other way around or American Snowbird in, for example. Venezuelans are different.

Most of the Mexicans who migrated in the eighties, in the nineties, in the 2000, the 20 tens didn’t come from northern Mexico, which is the wealthy part of the country, or central Mexico, which is the political zone. But the southern areas that have kind of been left behind. They’re of a different ethnic stock. A lot more indigenous blood education levels are lower.

And that’s why Mexicans in the United States have a reputation for doing manual labor. The Mexicans who have doctorates for the most part, stay home or work in northern Mexico, and there are a lot of them anyway. The flows more recently have been Central American countries, most notably Honduras, Guatemala and El Salvador. All countries that are flirting with failed state status.

And so their infrastructure is poor, education is poor, economic outcomes are thin. Agriculture is limited to tropical, which is very low value added, does not require skilled labor force. And so these are people who are desperate to look for anything else. And so, ironically, America’s capacity to interdict migrants is seen as a plus because it means their state capacity here in the United States, which they don’t have at home.

And as long as their countries are failing, they’re going to continue to look for ways to come here. Venezuelans are from category. Any Venezuelan who is over age 45 is one who was educated in the pre Chavez days, and that means he or she benefited from one of the most sophisticated educational experiences in the entirety of the developing world before Chavez drove the entire place into the ground.

So these are people with tradeable skills, master’s and doctorate degrees, and they are walking 3000 miles for a chance to avoid famine. So I’ve often said that the only way to keep the Central Americans out is to basically shoot anyone with a tan who tries to cross at the border. That wouldn’t work for Venezuelans because where they’re coming from has fallen so far.

Its standard of living, arguably, is now below that of the central American states and is going to get worse. We are looking at outright state collapse in Venezuela and everyone who has something that’s portable, mostly a skill set, is on their way to somewhere else. So a few things to keep in mind. Number one, we are facing the labor shortage in the United States that will not let up for a minimum of 20 years at some point, the American political system is going to have to deal with that.

And our options are fewer goods, fewer services, especially for retirees and much, much higher inflation or a degree of immigration reform. Now, I don’t think we’re going to get that in the near term. It will coming up on a political election year. Both the Trump team and the Biden team are furiously anti-migrant because they’re trying to court the unions into their political coalitions.

And the unions are arguably one of the two top most anti migrant and immigration groups in American politics today. So we’re not going to get it anytime soon. And of course, in the short term, Congress is not functioning because we don’t have a speaker for the House. So there’s that to a. But these are the sort of people, honestly, that the United States has always said that it wants skilled labor, not unskilled labor.

Second, no matter what happens on the border, no matter what our policies are going to be, these people are going to keep coming because their state is literally dying behind them. And what limited capacity we have to fly them home just starts the journey again because the alternative is to starve. So that’s not great. Perhaps third, most importantly is that the nature of Mexico has really evolved in the last five years.

The Mexican birthrate started to fall 35 years ago when NAFTA was operationalized, which means that the Mexican birthrate has been falling steadily that entire time and now is only just barely at replacement levels. That means Mexico has become a net destination for inward migrants. And so for the first time and all of these conversations about the border, we actually have the Americans and the Mexicans more or less coming to the table with a similar point of view.

And that is going to provide some interesting opportunities, especially since we can’t get any sort of legislative change when it comes to managing the flows. I don’t mean to suggest for a second that the situation on the southern border is about to solve itself. Hardly, but it is about to change pretty significantly in ways that are going to have a hard time wrapping our minds around.

We’re seeing more and more skilled migration coming up from the South and that’s not what we have set in our mind. So changes to come. We’ll see where it leads.

Deglobalization: The US Navy’s Withdrawal as Global Protector

If you’ve read my latest book, The End of the World Is Just the Beginning: Mapping the Collapse of Globalization, you know that a driving force behind deglobalization is the US Navy stepping away from its role as patroller of the world’s oceans. So why is this happening, and what will it change?

The key thing to note here is that the US never did this for themselves (sure, it came with some perks, but there was a greater purpose). At the end of World War II, the US knew something had to be done to stop the Soviets. So, the US created a global trade network to incentivize enough countries to “stand up” against them.

As the Cold War ended, the US ran a cost-benefit analysis, and something wasn’t checking out. The globalized system that once worked in favor of the US alliance network has started to shift in favor of countries outside of that group.

The US Navy still has a global presence, but it is nowhere near the scale it once was. As this presence continues to taper off, what will the repercussions be? The ultimate result will be the collapse of globalization, but the path there is undecided.

If there were a perfectly ironic ending to the globalized world, it would have to be the Russians causing the total collapse of supply chains and bringing this globalization endeavor full circle.

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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US Discovers Huge Lithium Deposit: What It Means…

Well, it sounds like the US finally decided to join in on the fun and make a lithium discovery of their own. This deposit is – supposedly – the largest ever, and it is located in the McDermitt Caldera near the Oregon-Nevada border.

I want to make clear that these are only estimates, so don’t pop the bubbly quite yet. On top of that, permitting and infrastructure buildout will take years to complete. Even when all that is done, lithium’s battery chemistry remains sub-optimal and has several limitations.

Despite these challenges, the McDermitt Caldera lithium deposit has the potential to shake up the industry. The US needs to balance this discovery with investments in researching better battery chemistry alternatives.

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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 Colorado. A lot of you have written in asking me what I think about this new supposedly lithium deposit that has been found near the Oregon Nevada border. That’s in a place called the Mcdermitt Caldera, which, if you’re familiar with plate tectonics, is where the Yellowstone supervolcano used to be. Basically, the Yellowstone supervolcano is a hotspot, and this is where it was ages ago.

Anyway, volcanoes bring stuff up from the mantle and even the core, and they tend to be a little interesting from human point of view. And so the minerals in the caldera are undoubtedly interesting and supposedly they found a whole lot of lithium. But if the estimates prove true, it will be the world’s single largest deposit, bigger than what is in Chile or Bolivia or Argentina or Australia for that matter.

So, you know, potentially groundbreaking. And I think this is great, obviously, but for things to keep in mind, number one perspective, estimated potential real exploration has not yet been done. And until it does, you know, don’t count those chickens. Number two, let’s assume that it’s as good as we think it is. Well, you still have to build the mine.

And from the day that all the permits are approved to the day that you get first large scale production, it’s still going to be in excess of four years out in the permitting process. You’re going to add another 2 to 3. And a lot of this is on Native American land. So there’s a whole nother level of politics and negotiation that goes into it.

So I would be surprised, even in the best case scenario, if we saw a meaningful output out of this thing in less than eight years, ten is probably more likely. So the chicken counting is going to have to wait third. Let’s say we manage to get all this out of the ground and it looks really promising. Well, then you have lithium or it still needs to be processed into some sort of intermediate form, like concentrate.

And only then can it be refined into metal, and only then can it be turned into things like batteries. So there’s an entire manufacturing supply chain that has to be built up. Now the United States is starting on this. We’re working with the Australians on some of this, but this is again something that takes a minimum of 2 to 4 years to get going at scale.

I would argue that we should work on the processing regardless that way, even if this new source of or doesn’t work out, we can still tap water from places like Chile or Argentina and have more and more of the supply chain within the Western Hemisphere. Okay. What else? Oh, yeah. One more thing. Lithium sucks. I mean, we use it as our dominant battery chemistry because we don’t have anything better, but it’s not particularly energy dense.

It can only work for so many recharge cycles, and it tends to swell and heat up when you use it. So it can start fires, which is one of the many, many, many, many, many reasons why on flights they tell you that if you have a lithium battery, don’t put it in your checked bag because no one’s down there to check on it.

You have to carry it with you. Hopefully over the next decade we will figure out a and easier battery chemistry, maybe even one that’s a little bit more, I don’t know, environmentally friendly because the mining and refining that’s necessary to do lithium at scale is pretty messy. We need several hundred billion dollars into new materials science research for GreenTech and in none of the subfields is it more important than figuring out something that works for batteries better than lithium?

But until that happens, lithium is the best that we have. So this Mcdermitt Caldera, the Thacker Pass mine area, looks promising.

What Happened to the Arms Control Treaties?

If you’re looking for something to ponder over a glass (or two or three) of nice whiskey, you may want to save this newsletter and video for then…

Now that you’ve returned with your spirit of choice, we’ll be looking at the history of arms control treaties and today’s lack thereof.

Towards the end of the Soviet period, arms control treaties with the US peaked under Gorbachev, but each US President has handled these differently. Treaties fell off under Clinton, had a bit of a resurgence under George W. Bush, and have since fallen off. Today, the post-Cold War arms treaties have all but vanished (at least in practice).

Now, onto the really stressful stuff – cue the 2nd glass of whiskey. Without these treaties, several concerns arise…can Russia maintain its nuclear arsenal? What happens if things go nuclear? What if they launch a nuclear weapon and it fails?

There are too many moral and strategic dilemmas to even think through, but we should probably have some sort of roadmap to guide us through these scenarios. Unfortunately, policymakers have no established procedures for specific situations like a failed nuclear strike attempt, which is quite a conundrum.

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

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Transcript

Hey, everybody. Peter Zeihan here, still in Arizona. Last Friday, we talked about the pending deal for weapons transfers between North Korea and Russia, with the Russians getting North Korean artillery and most likely the North Koreans getting Russian launch technology, probably long range missiles. I thought it might be worth to do a little walk down memory lane today about arms control, most meaningful arms control that the United States has participated in, the shape the world was between the Americans and the Soviets at the end of the Soviet period under Gorbachev.

Things like the anti-ballistic missile Treaty, the start and the SALT treaties and such. They hit their height under George Herbert Walker Bush, which under that administration, and then Gorbachev and Yeltsin negotiated down the ceiling for nuclear weapons from 30,000 to under 6000, well, roughly 6000. And then things kind of stalled under the Clinton administration. Clinton saw himself as a domestic president, really was not interested in foreign affairs much at all.

And after it became apparent that Yeltsin was, well, let’s just call him mildly corrupt, the desire to be affiliated with the Yeltsin government was relatively thin anyway. Al Gore kind of was subcontracted out to handle foreign affairs. But once Clinton got involved in domestic scandals involving interns, pretty much all foreign policy just kind of melted away. And so we didn’t have much progress under that administration.

The administration came in and hit the ball fairly well with Vladimir Putin in the early days. In fact, many things that the United States did in the global war on terror in Central Asia wouldn’t have been possible without a partnership with the Russians and under that sort of environment. There is a bit of a renaissance in relations and there was another phase two arms control which negotiated down the level further.

It wasn’t perfect because the level went from roughly 6 to 7000, down about 1500. But the missiles I’m sorry, the warheads in between weren’t necessarily destroyed. They were simply removed and stored separately. Still better than being on the hair trigger, but it wasn’t perfect. Under Obama, Obama didn’t like to leave the Oval Office unless it was for the campaign trail and nothing happened under Trump.

What was left of the treaties kind of fell apart as the Russians fell into this narcissistic fascism that they’re in today. And then obviously under Biden relations of torpedo completely because the Russians are on a genocidal warpath. Where this leaves us is that the Cold War, post-Cold War treaties, for all intents and purposes, are gone. As of a few years ago, no one was really abiding by them, and now everyone’s pretty much officially withdrawn from them.

About the brightest spot we’ve got in that is that the Russians very clearly are having industrial issues in maintaining their conventional weapons. That’s an open question whether or not they’re capable of maintaining their nuclear weapons. Now, this puts the Biden administration really all administration’s for countries that have nukes, which includes the French and the British as well, in kind of an awkward spot, we now need to entertain scenarios where the Russians would actually be willing to hit the big red candy button.

They probably wouldn’t do it. And less regular Ukrainian or God forbid, NATO forces crossed the international recognized border into Russia proper. Which case would be defensive use or if the Russians do manage to subdue Ukraine, that doesn’t really solve their security issues. They have to continue on into Romania, Estonia, Latvia, Lithuania and Poland in order to narrow the apertures of approach for foreign forces to Russia.

Russian Alliance. Also, this has always been about, but we now know that Russian forces are kind of crap. And in that scenario where they’d face off against NATO’s irregular forces, they’d probably be obliterated. Casualty ratios would be extreme on the Russian side, and that would only leave them with nukes in order to compensate, which is one of the reasons.

What’s the primary reason why? Washington, London, Berlin, Paris and the rest have been so gung ho on helping Ukraine in order to forestall that possibility. But it also raises what could potentially be the nightmare scenario. We know that the Russians are having problems maintaining everything, and we know the Russians have lacked the industrial capacity to build new stuff.

So everything they have is old. In the case of these missiles, things that were built in the seventies in many cases. So what happens if Putin hits that big button and nothing happens? What do you do to someone who just tried to kill half a billion people but failed? No criticism of the Biden administration here. That’s a tough call that no one has ever faced when they’re sitting in the big chair before.

It’s not destined to happen. But I would say from an arms control nuclear power point of view, that is my single biggest concern right now. What do you do when the intent is there, when all the pieces are there, but on the day that you hit the button, it just doesn’t happen to work because you know they’re going to hit that button again, again and again and again, again, very, very quickly.

And we no longer have the procedures in place to try to diffuse that situation, largely because the Russians have ended them. So if you want to stress about something, I give you permission to stress about that. Take care.

Autoworkers Strike: The Union’s Rising Influence in America

If your kids need poster boards for an upcoming school project, you may want to visit the supply store before the autoworkers hit the picket lines. With a strike looming, let’s break down the economic and political consequences.

An autoworker strike – even if it’s short – could disrupt the largest manufacturing sector in the US and potentially send us into a recession. If the economic threat wasn’t significant enough, the unions are also gaining political influence and acting more like swing voters as the availability of labor decreases.

These ongoing negotiations and potential strikes are all part of the evolving political and economic American landscape. Whichever political party can gain the union’s favor will reap the benefits of a boost in overall influence.

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

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Transcript

Hey everybody. Peter Zeihan here coming to you from above Spanish Square in New Orleans. And it is the 13th of September. And the big news that is not a 747. Well, that’s kind of fun. The big news is when you see this tomorrow, we will be within hours of a potential autoworkers strike, the first one of significance in decades and potentially a very economically and especially politically consequential one.

Let’s start with the economics. Manufacturing is not one of the huge sectors. The United States, we’re much more of a services country, but manufacturing of automobiles is the single largest subcomponent. So the autoworkers are threatening to strike if they don’t get their way, which could take the largest section of manufacturing offline, which would have massive economic ramifications if they were to strike for as little as three weeks.

It would be more than enough to throw the United States into a recession from the quarter and considering that this quarter, we’re probably going to see economic growth north of 5%, which is almost unheard of for an advanced country. The economic impact obviously would be huge. The impact on specific types of automotive could be particularly bad. A lot of American automakers are attempting to launch new EV lines, and this was supposed to be the year that all of it hit the market and this would just stop it in its tracks.

So I can’t tell you whether the strike is going to happen. They’re asking for more than a one third increase in pay, but the damage they could do, the economy would be immense. So kind of even odds there. But in terms of, well, it’s there’s some sort of party going over there because, of course, it’s New Orleans. And it doesn’t matter that it’s only Wednesday.

Anyway, let’s talk politics now. For the last several decades, unions have been part of the Democratic coalition, and they’ve kind of been the economic core of that coalition. The people within the coalition who can do math, if that’s an easier way to think of it. However, they feel fairly put upon under Clinton, the Democrats shifted to the right on economic issues, especially especially on issues such as globalization, which led to a steady decline in union membership.

And as NAFTA took hold, a lot of union jobs vanished into Mexico and as manufacturing then expanded in value added terms in the United States. Most of the new jobs in manufacturing and auto went to places that were not union states, most notably Kentucky, Tennessee, Alabama and especially Texas. So when you’re looking at what’s been happening with trade and with the reshoring of trade, unions really haven’t benefited from about at all.

And that’s part of the reason why unions are no longer really functionally part of the Democratic coalition. Donald Trump was very effective at bringing them over to his side during his term. Joe Biden has been partially successful in bringing them back, but it’s best to think of them as swing voters right now. And this is something we’re just going to have to get used to.

The fact that the unions are becoming more of a linchpin in the American political process and not just because they’re in the wind right now, but it’s a lot of votes in the world were evolving into in the country. The United States is evolving into. There are not enough workers. The boomers are the largest generation we’ve ever had.

The extras that are replacing them at the top of the pyramid of worker skills have a lower worker participation rate, and the new generation coming in are the zoomers, and they’re the smallest generation we’ve ever had. So we’re looking at a significant reduction in the availability of labor writ large in the system. And in that sort of environment, you would expect organized labor or just labor in general to have more and more pricing power and more and more political power.

And that’s before you consider that the problems in East Asia and the problems in Western Europe suggest that if the Americans still want stuff, autos or otherwise, we’re going have to double the size of the industrial plant. That’s going to take a lot of workers. That’s going to take a lot of blue collar workers. Exactly the sort of workers that are more likely to unionize than not.

So what we’re going through today, what we’re likely to be going through through the next few weeks as these negotiations drag on. Don’t think of it as aberration. This is now part and parcel of the American economic and political experience, and whichever party the unions ultimately fall in are going to have a significant increase in their overall fall.

But in American life, the end.

Processing: The Greatest Threat to US Economic Security

As we continue down the path of deglobalization, the US has checked most of the boxes needed to thrive in a disconnected world. Between shifting supply chains and moving manufacturing closer to home, there is still one box that the US hasn’t checked off – processing.

That unchecked processing box just so happens to be the most significant threat to economic security for the US. The US needs to flesh out its processing capabilities in three major areas of concern: industrial materials, agriculture, and oil.

The US must develop processing capabilities and partnerships for materials like lithium, copper and iron ore to support the industrial buildout. To improve food security and avoid famines down the road, finding ways to add value and expand food production close to home will be essential. The US is already a significant oil refiner and exporter, but there is a mismatch in the type of crude produced domestically and what US refineries can process; to reduce import dependency, the US will need to retool its refineries to process domestic crude.

Overcoming these processing challenges will prove crucial for the future of the US and its continued economic security. Regardless of political, ideological, or environmental stance, developing these processing capabilities will allow the US to prop up various industries and avoid catastrophe down the road.

Prefer to read the transcript? Click here

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

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

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

And then there’s you.

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

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Transcript

Hey everyone. Peter Zeihan here coming to you from the road in Colorado. Yesterday I gave you a quick talk about what I saw as the greatest national security threat to the United States for the next foreseeable future. I’d like to do the same thing now for economic security and in a word, processing. Before I explain what I mean by that, let’s go back a little bit.

The whole idea of globalization is that any product can go anywhere, take advantage of whoever can produce that product, the lowest cost and the highest quality, or at least that’s the theory in practice. As soon as countries realize they can reach into any economic space. They take steps to benefit themselves. Maybe they put in trade restrictions or in the case of processing, maybe they subsidize.

So different countries around the world are throwing a lot of money at making sure that certain industries are headquartered, or at least heavily emphasized in their own places. So Taiwan, Korea, Japan, they do this heavily with semiconductors to the tune of hundreds of billions of dollars of subsidies. The Russians use a lot of the d’etre is from the Soviet system, which used to supply a an empire which now only supplies them.

And, you know, they’re pretty economically backward. So they use all the extra stuff to produce things for export or in the case of the Chinese, in order to ensure mass development and mass employment. They throw basically bottomless supplies of capital at industries, really anything that they think that technologically they can handle. They want to be able to produce and if they can, cornered the market.

What this means is that other countries, United States, are reliant on countries that have put their thumb on the scales in order to participate by anything else. And now the globalization is breaking down. The United States is facing a double threat. Number one, a lot of manufacturing that used to be done here or could be done here or, you know, from an economic efficiency point of view should be done here, is done other places.

And so a lot of that has to be reshore at or near shore to French. Second, none of this works unless you have the processing. If you have iron ore, but you don’t have the processing to turn it into steel, you can’t do construction. If you have silicon, you don’t have the ability to process it in the silicon dioxide.

You can’t play in the semiconductor space and on and on and on. So things kind of fall to three general categories. The first are industrial materials like lithium and copper and iron ore and the rest. The United States in most of these is a bit player in the production and nearly a non-player in the processing. And since the United States is now attempting a mass industrial buildout, it needs to get good at that again.

It needs to make partnerships with the countries that have the raw materials. Australia is at the top of that list. Brazil’s probably close second. And then it needs to work with those countries either to do the processing in them or at home. Now, one of the things that I do like about the Biden administration’s economic policies and there aren’t a lot, is that the Inflation Reduction Act prioritizes this and says that in order to qualify for certain subsidies for things like EVs, the materials that go into them must be processed within a NAFTA country or an ally that is identified by negotiations such as Australia.

So we are moving in the right direction there, but we need to think of a much broader net. So for example, aluminum not only to the Russians and the Chinese dominate about three quarters of aluminum production in the world. Aluminum as a byproduct, generates a lot of trace materials like, say, gallium, which are really useful for solar panels.

Same thing with silver. Silver processing or copper processing generate a lot of the stuff that you need for rare earth metals. All of this stuff needs to be recaptured in some way. Otherwise, the industrial rail building that the United States is attempting really isn’t going to go anywhere. Because if you don’t have the materials to do it in the first place, it’s going to be kind of a pointless endeavor simply to build up what you would need to make them every single day.

That’s number one. Number two is food. The United States is the world’s largest food exporter and is the number one exporter of any number of materials and food products. But we don’t do a lot of the value add as part of those exports. This is missing a lot of really low hanging fruit. And if you look at the world writ large, the same thing that applies to globalization and processing applies to agriculture.

Lots of countries for food security issues, national security issues, protection issues whose have made it very difficult for the United States to export, say, soybean meal. But they still allow the import of soy by expanding the footprint in American agro industry so that we do more of the processing here. Not only do we get a higher value added product, but as global fertilizer markets around the world get problematic, a lot of major food producers are simply going to vanish because most food production outside of certain areas that have been producing it for centuries can only do so with massive applications of fertilizer.

Again, in China is the case in point. The EU’s about five times as much nitrogen fertilizer as the global average. So not only with the United States earn a little bit more money and have more food security. If we did this, we’d also be able to step in and help other places that are suffering from famine more quickly because we’d actually have semi-finished or even finished food products rather than just the raw material.

And then the third one is one that the Biden administration is not going to like to hear about, and that is oil. Oil by itself is useless. It has to be refined into diesel and gasoline and naphtha and the rest. And the United States is the world’s largest oil refiner and the world’s largest exporter of refined product. However, there’s this huge mismatch within the American energy sector.

Back in the seventies, in the eighties, when we were all running out of oil, American refiners became convinced with good reason, that the future of global crudes were very heavy, very sour, very polluted crude streams. And so what they did was they refined the entire American refining complex to run on the crappiest crude you can imagine, stuff that’s just goo or even solid at room temperature.

But then we had the shale revolution. And the shale revolution is different in that the crude that is produced from it is super light and super sweet. So right now, American refiners prefer to import the heavy crap stuff from the white world, leaving the light sweet stuff. We produce ourself available for export. So the smart play here would be to retool or even better expand the American refining complex in order to process not just the crappy stuff in the world, but also the stuff that we produce ourselves.

So we are less dependent upon the inflows and outflows of exports and imports in order to keep our refining complex alive and keep fuel the tanks. And for those of you who are super ultra mega greens, who are convinced that the internal combustion engine is not the way of the future, that’s fine. Consider that the most aggressive, realistic plan.

And it’s not very realistic for getting the EVs on the road and and stopping the production of internal combustion engine vehicles is now before 2040, which means as late as 2050, the majority of the vehicles that are still on the road are still going to be internal combustion. So even in the most aggressive plan, we are still going to need tens of millions of barrels of gasoline and diesel and the rest for decades to come.

If we’re going to avoid an energy shock where the whole system just cuts down. All right. That everything. Yeah, I think that’s everything. So processing it. Lots of processing. Oh, yeah. And even if you don’t buy into the green transition or even climate change, we still need to do this because without the Chinese and the Germans and everyone else in global manufacturing, North America has to at least double the size of its entire industrial plant.

That’s a lot of steel, a lot of aluminum, a lot of copper and all the rest. So really, it doesn’t matter what your ideology is. We don’t have enough of the intermediate stage of process stuff that we need to even attempt to do everything else. So let’s focus on that first and then.

The Greatest Threat to American National Security

If I told you that high-ranking military personnel were losing security clearances and access to critical information, you’d probably expect to hear some sound rationale. Unfortunately, that’s not the case because the current greatest threat to our national security is an Alabama Senator up in arms over abortion policy.

Senator Tommy Tuberville has placed a unilateral hold on nominations and confirmations of military officials because he doesn’t like the Biden administration’s current policy of allowing officers to travel for abortion services. Consequently, the affected military personnel cannot access the classified information necessary for strategic planning.

Abusing power to manipulate outcomes is nothing new for American politics; however, political deadlocks that impede military operations are detrimental and problematic for the country’s security interests. Given the context of the Ukraine War and rising tensions with China, this poses a substantial risk that should not be taken lightly.

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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 Toronto, where I finally found something that is taller than me. And to commemorate September 11, I thought it would be a good idea to talk about the largest significant national security threat facing the United States. It’s not terrorism from the Middle East. One of the things that we have learned over the 20 years in the war on terror is that most of the militants, most of the Islamists are interested in fighting what they call the mere enemy.

Does it mean that the risk to the United States is zero? But most of these folks are far more concerned with the war that is right in front of them, taking the conflict to sectarian opponents or groups that they think are apostates, who are right there throwing a Hail Mary through a transcontinental flight. That is something that is simply difficult to do and most don’t have the capacity to try.

I also don’t think it’s China. China is dependent on the international system as maintained by the United States. And even if Chairman Xi Jinping’s cult of personality decides to pull the trigger on a war with, say, Taiwan, the United States is not going to engage within sight of the Chinese mainland. It’s going to pull back and shut off Chinese trade.

And since the Chinese import the vast majority of their energy and the inputs necessary to grow their own food, the result would be a massive famine and a de-industrialization with honestly would crush China as a country within a year. That leaves Russia. Now, Russia is obviously a concern, especially with the war in Ukraine. But as long as the war is bottled up in Ukraine or in Russia proper, that it’s not coming for NAITO.

So while this is definitely something to keep an eye on, it is a big concern and has huge implications. I don’t see, at least in the mid-term, as the single largest threat the United States faces. I think that’s closer to home because in the United States right now, we’ve got over 300 top military professionals who can’t even qualify for their security clearances, make it impossible for them to get the information that they need to plan for whatever’s next.

We have hobble ourselves or, more to the point, a specific individual in Congress has done the hobbling. Senator Tuberville of Alabama has put a blanket hold on the nominations on the confirmations of all military personnel as part of a tiff within the culture war. Now, where do you stand on that culture war? That is your prerogative. But in blocking officers from participating in their jobs, if you can’t get confirmed, you can’t get the information, you can’t get clearance and you can’t make a plan.

So we have taken he has taken the single most powerful military force in the world and gutted its leadership’s ability to lead. Which means that either Senator Tuberville is one of the most skilled Chinese agents ever, or he’s the dumbest person in Congress. And if you think of the personalities in Congress, that’s a pretty strong statement. All right, everybody, take care.

Saudi Arabia and Israel Want a US Security Deal

Mohammed bin Salman, the Crown Prince of Saudi Arabia, has seen the ongoing engagement and security guarantee that the US has with Japan, and he wants a similar deal for Saudi Arabia. MBS will have to offer something pretty attractive to get the US involved in the region again.

As of now, the only offer on the table is formal relations with Israel (in exchange for some undefined concessions to the West Bank Palestinians) and the ~high honor~ of having troops stationed in Saudi Arabia. That’s probably not going to cut it, but it does highlight how concerned the Saudis are about the US pulling out of the region.

Israel is on board with any US involvement, as it would take some weight off their struggling coalition government. But the absence of the Palestinians in all talks up to this point brings into question the seriousness of these negotiations.

This region of the world has been a thorn in the side of the US for decades, and jumping back into the thorn bush won’t be on the calendar anytime soon. If Saudi Arabia and Israel really want to make a deal happen, it’s time to head back to the drawing board.

While some speculate that Xi is moving away from G20 in favor of BRICS, he didn’t even show up to the opening ceremony of the BRICS business forum. So, this announcement doesn’t indicate any political angle; it’s just a reminder of Chinese leadership’s ongoing and accelerating failure.

Xi has purged the Chinese political system of anyone who can form thoughts and potentially challenge his power, leaving him as the judge, jury, executioner, and everything else of importance in China. Even if Xi happened to be the smartest person in the world (which I won’t even comment on), he is still human.

Xi can only do so much alone, and the lack of competence across the Chinese system means that policy stalls wherever Xi is not. While Xi will send a replacement to the summit, concerns over China’s leadership capabilities are mounting, and the question remains – what is next for the Chinese people?

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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 Colorado. And a lot of you have written in asking about ongoing conversations among the Americans, the Israelis and the Saudis about some sort of broad spectrum political and security deal. At the moment, there is it one. It’s not imminent. It’s not even clear what it would be. But the talks are absolutely going on.

So I would just wanted to kind of give you an idea of what is so much at stake, but what the players are thinking. So this is all Saudi Arabia’s idea specifically. Remember Mohammed bin Salman, who was the crown prince? He’s the guy who’s in his thirties who’s running the place. His father, King Salman, is the one who’s probably mentally a vegetable at this point.

So the crown prince really is already in charge of everything. There’s a lot of generational disputes going on which are shaping the talks. But ultimately, what the Saudis want is ongoing American engagement to give them a security guarantee that is on the scale of what the Americans have with the Japanese. The idea is that you station some forces in-country.

Therefore, an attack on the country is considered an attack on the United States and will raise the ire of the military forces of the United States in order to take off and destroy the attacker, who in this case would most certainly be Iran. It’s not clear that the United States is interested at all after 70 years, the United States is finally getting out of the region.

Global war on terror is over. The U.S. is broadly happy with that situation. So in order to get brought back in, the U.S. would have to be offered something fairly significant. And what the Saudis are offering is normalization of relations with Israel. And it’s not that that’s not interesting, but that’s just not anywhere near enough to justify the United States putting its soldiers in harm’s way and beating Iran into a war.

In addition, the Saudis are thinking that just the honor of having military forces in Saudi Arabia would be so high that the Palestinians could get tossed in as a side benefit, with Israel being forced to recognize some sort of shift in authority when it comes to things like the West Bank. This is a long shot. The United States is largely done with the region and the Saudis are basically etching out a position where most other players are the ones who have to give something just for the honor of having a deal with Saudi Arabia.

It screams of Saudi arrogance, specifically by Crown Prince and by himself. Remember that NBC has basically established himself as a bit of a cult of personality, and he’s steadily edged everyone with experience and the older generation out of the system. The talks are being managed by, I believe, one of his brothers. But this is Saudi Arabia. He has like a billion brothers, so that doesn’t necessarily mean anything.

In fact, it means that if the talks go sideways, he can always execute his brother and just move on as if nothing happened. So I don’t have particularly high hopes that this will happen. But it is interesting from a few points of view because it shows how insecure the Saudis are as the Americans are pulling back from the region.

Now, on the Israeli side, they think that this is all great. Anything that brings the Americans more enmeshed into the region to something that Israel’s broadly going to support, because that means that their troops don’t have to do it. And Israel is a country of less than 8 million people. So having the superpower do things for Israel is something that Israel’s always been a big fan of, but the U.S. hasn’t.

Now, specifically with the Israelis and the Americans right now, relations are not great, largely because the Kurd government of Israel is a little wackadoo. It’s made up of a series of populist and nationalist and religious parties that are somewhat either hateful or stupid. And the Prime Minister Netanyahu is fully aware of that. He had to make a lot of compromises in order to cobble together this coalition.

He knows it’s not working very well. And if he can get a deal with the United States on anything, it would relieve some of the pressure that Washington has been putting on his government versus Palestinians of housing issues and military deployment and economics and and intellectual property theft. There’s a long list of irritants in the relationship right now.

Anyway, that’s where everyone kind of stands with one other a little bit that indicates that you shouldn’t expect this to get resolved very soon and that it’s not clear from the Saudis just how serious they are or are not about looping the Palestinians into the abyss. The older generation, the one that’s in the process of being shown, the door by members.

They’re the ones who are reasonably dedicated to the Palestinian cause. And if in whatever final communique comes out of this deal, Senate, it works. The Palestinians are included. Then you know that in the U.S. is not nearly as powerful as we all thought, and the older generation still has some breath and life left in them. If the Palestinians get at most a cosmetic concession or not mentioned at all, then you know that NBS is large and in charge because he doesn’t care about Palestinians at all.

And weird because this is the Middle East and this is how it works. At this point, the Palestinians haven’t even been consulted or invited to the negotiation table, which is ironically how, you know, that this may be a serious series of talks. All right. That’s it. If something more comes of this, I’ll let you know. Take care.

The Recruiting Crisis: US Military Adapts to Zoomers

I’m about halfway through the Geissler Peak Traverse, and the plan for the rest of the day is to head down to Aspen, find the nearest bar and shoot the shit with some strangers…if that sounds like your worst nightmare, then today’s video is about you.

The US military has had recruitment issues for a while, and the next generation reaching the recruitment age (aka those who hate any and all things social) won’t be making it any easier. But this isn’t just a US military issue; this is the leading edge of a recruiting crisis for everyone.

The good news is that we already have a solid understanding of Zoomers. Not just from an inflow to the labor market perspective but also culturally. They are ethnically diverse, open-minded, good with tech, highly educated, loyal workers…but very anti-social.

Adapting to the expertise and preferences of Zoomers will help shape what the US military looks like over the next few decades, and it’s likely a sign of things to come. Making accommodations and adjustments for the next generation will be necessary for anyone looking to attract talent.

The US military lucked out here too. The areas where Zoomers excel are areas that the military wants to expand into. So it’s kind of a win-win. As long as nothing goes wrong…

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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Why Is a US – Cuba Deal Inevitable?

Most people would scoff at the idea that Cuba could end the US as a major power, but that small country has something no one else does…

Looking back at the Cuban Missile Crisis, you might think JFK overreacted. In reality, JFK saw the Soviets’ move into Cuba for what it really was – a direct threat to America’s existence. Cuba straddles the access points to the Gulf of Mexico, and if they had the military power to shut it down, the US would be in big trouble.

Since the Cold War ended, I’ve expected a warming in relations with Cuba, and to some degree, they have. Obama struck a (shitty) deal with them, which Trump later repealed. Don’t focus too much on the deal, but consider these actions by opposite presidents an indication that Cuba is top of mind.

Cuba is still grasping onto any major power that will give them the time of day, aka Russia or China, but we all know how those countries are doing. Cuba’s position is simply too critical for the US to ignore, so a US-Cuba deal is inevitable, but that doesn’t mean it’s imminent.

Prefer to read the transcript? 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.

Support medshare's ukraine fund
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Transcript

Hey everyone. Peter Zeihan here coming to you from the Collegiate Wilderness Forum in a bag a few 14 hours this week. Today we’re going to talk about Cuba. Now Cuba, the island pinches. Access to the core territories of the United States. What makes the United States a world power is not just the fact that it’s basically a continent in size, but it’s got the greater Mississippi right in the middle of it, which overlays the world’s most productive arable land.

Water is the most efficient way by an order of magnitude, to move things around. And so as long as you have a long waterway in an area where you actually have things to ship, you can’t really help but not mess it up. And believe me, we’ve been trying for decades. If you look at the last four presidents who and yet we’re still here.

Now, Cuba, because it straddles the access points to the Gulf of Mexico, has the possibility to end of that to enter the United States as a major power. But that would require a lot more military force than Cuba is capable of producing itself. So the biggest threat to the United States going back well over a century has been that some foreign power will build a partnership with the Cubans that will break American power.

And that’s one of the reasons why JFK reacted so strongly during the Cuban missile crisis, because he saw it rightly as a Soviet effort to on the cheap and the United States. Now, since the Cold War ended and Cuba lost its Soviet sponsorship, I have been expecting a warming of relations and a change in the bilateral relationship for some time.

Under Barack Obama, we got a ham fisted attempt at that. That was basically negotiated over a short period of time with very little buy in from the president because he didn’t like to have meetings with anyone. And what we got was a deal of limited economic opening, minimal political connections, and it was a bad deal. Start to finish.

It was sophomoric. It was lazy, but above all, it was stupid. And so when Donald Trump came in, he killed that deal, saying that, you know, we should have gotten a better deal. And he is right. But then he proceeded to not do a damn thing. And that was sophomoric and that was lazy and that was stupid. But consider in today’s political climate that the two most polar opposite presidents that we’ve had both recognize the opportunity, even if they proved completely incompetent at building something out of it.

So there is movement, there is possibility within diplomacy and economic diplomacy to shift this. Now, the window of opportunity we had after the Castros died is obviously gone. And the new regime, which is the old regime just with like the third stringers, has definitely thrown in its lot too a little bit with the Russians, but the Russians won’t have the money that they used to.

So now the Chinese. Now, if you’ve been following my stuff, you know that I don’t think that the Chinese and the Russians are going to be around all that much longer. It’s certainly not an ability to project power hemisphere away. So this is going to come up again and again and again, again. And hopefully the next time around we will have a competent president who is capable of making a basic deal with a country that has less than 1% of America’s economic and military heft that is right on our doorstep that can’t possibly reach for support.

Gives you an idea of just how little I think of both the two previous administrations. I don’t think that’s going to happen under the Biden administration. However, there are a lot bigger fish to fry right now, and at the moment the Chinese are still there. And as long as the regime in Cuba feels that it has a foreign lifeline, it’s going to grab on with both hands.

So a deal on this is inevitable. Doesn’t mean it’s imminent. All right. That’s it for me. You guys take care.