The United States Dominates Signal Intelligence

We’ve poked holes in the US system and talked about Russian intelligence declining, so today, let’s look at what the US dominates: signal intelligence (SIGINT).

Next time you find yourself in the Netherlands, ask the local shopkeep how many languages he can speak…I bet it’s more than a few! On the flip side, if you head to the US, the answer is likely one…or two if you’re really lucky. That dichotomy summarizes America’s human intelligence (HUMINT) problem; a small recruiting pool requires lots of expensive training.

However, the US does excel on the SIGINT side of things. This is the monitoring, deciphering, and sifting of mass amounts of data (texts, emails, etc.) and tracing it back to the source. Then the human side of things identifies and extracts the most important stuff.

Since the US is such a significant world player, it’s become extremely good at this. But do they do it alone? No! The Americans partner with many allies, but four stand out: The UK, Australia, New Zealand, and Canada. With the US, they form The Five Eyes Alliance  – a monitoring and sharing agreement that has given the US a good grasp on global signal intelligence.

Encryption has made this process a bit harder, but processing power and AI have helped the US lead the way in focused signal intelligence. This doesn’t mean that the Americans have abandoned HUMINT altogether; instead, SIGINT enhances and guides the strategy for the boots on the ground.

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

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TRANSCIPT

Everybody. Peter Zine here coming to you from just above Denver. It’s almost May, which means it’s almost hiking season almost now yet. Anyway, I am going to talk a little bit about the other side of the intelligence question. So we poked a few holes in the American system. We’ve talked about the leaks. We’ve talked about how the Russians do theirs and why they’re good at and whether maybe not as good as they used to be.

But I want to talk about how the United States does things. Now, the United States is a country that, while it is firmly bilingual, all the population as a whole is not particularly multilingual. So, you know, you go to the Netherlands and you’re a random shopkeeper who’s going to speak like six languages fluently and then, you know, be able to command a half a dozen more.

Most Americans are luckily like me, if they can spell in English. And the truly fortunate among us are bilingual with Spanish. And that’s about it. And that makes a very small pool of people to draw from if you want to do large scale intelligence operations that have a human element to it. And so all of our intelligence programs include some very, very, very intensive language training because not just not a lot of people come into the space with that, especially when you consider that one of the big pools for intelligence personnel are former military personnel.

And if you are working for four or eight, you know, two or three whatever tours. Language competency in a foreign language isn’t necessarily all that common. Or maybe you have one. And since American foreign policy changes every few years based on who the rivalry of the moment happens to be, you know, we’re always having to recreate that language, that language competency, which means that when it comes to humans, we’re not that great.

In addition, the United States is a very rich country and convincing someone to go abroad and basically work in a danger zone for danger pay is a bit of a stretch, whereas if you’re in a poorer country or a country that has a lot more geopolitical strife, less written in its immediate environment. It’s an easier sell to the population.

So small pool, expensive pool. And that pool still requires extensive training. So the United States just doesn’t excel at human intelligence HUMINT. What we do excel, however, SIGINT or signals intelligence. And that’s the idea that you intercept electronic signals, whether it’s in the form of a phone call or an email or text message or a tweet. And you trace it back to its source and you monitor it, hopefully without the other side realizing that you’re doing and you just kind of get the raw feed coming in.

This is then processed with computers, which eliminates, you know, 99.9% of everything is noise. And then that last point, 1% approximately goes through a human filter where it’s sorted out two levels of importance, because the United States is the largest first world country and the largest economy in human history. And because electronic communications are now omnipresent. The U.S. has gotten really good at this.

There was a program that the Europeans hated. A few years ago, they called it Echelon, where basically the United States use that signals intelligence dragnet to cover all global communications. And while it was never as far reaching as the Europeans thought, it was still pretty cool because all you need is a radio tower to collect the information. And if you throw in global cell towers plus global satellites, that is a lot of collection potential.

Now, do we do it alone? The answer to that is a hard no. We cooperate with any number of allies, but there are four that are far more important than the others put together. The United Kingdom, Australia, New Zealand and Canada. And collectively, these form what are called the Five Eyes. They cooperate on the gathering of intelligence, the analysis of what comes in, and then they share the findings among themselves.

And that makes these four countries the tightest allies we have. Yes, we fight. That’s what family does. But it does mean that the United States has a grip, a really good grip on signals intelligence the world over. Now, there have been some issues that have come and gone through the years that have made this more or less effective.

The general obsession with the corruption that started a few years ago certainly has made it more problematic. But a I in processing power has almost kept track with that. So the United States is able to, once it identifies a person of interest, apply a lot of supercomputer time in order to crack whatever the encryption happens to be. That means that the dragnet of covering all of humanity is pretty much nonexistent anymore.

But focused signals intelligence is wildly effective, and it remains the United States number one source of intelligence information. That doesn’t mean we don’t do HUMINT. It doesn’t mean that human intelligence is not important to the United States. It’s critical, especially for any ongoing military operation. So when it comes to locating suspects, but signals intelligence tells us where to look in the first place.

And then those fewer, though, those more rare human intelligence assets are deployed once we have a general idea of what sort of neighborhood we’re looking at. Okay. That’s it for me. Until next time.

Top Secret Pentagon Documents Leaked by a 21-Year-Old

What happens when you give a 21-year-old access to TOP SECRET documents? They end up leaking those documents on a gaming chat platform…shocking.

Most of the information that was leaked pertains to the Ukraine War and how the U.S. has low confidence in the reports coming out of Ukraine. Nothing too far-fetched, but that doesn’t mean we should take everything in the public domain at face value. Let’s remember who is blasting this info around and how easy it is to tamper with.

Russia once boasted the largest human intelligence arm, but we haven’t seen much Russian interference since Snowden. This means they’ve gotten really good, or that capability has lapsed, and I lean toward the latter.

As the US faces another leak, the real question that must be asked is whether people like Snowden, Manning, and Teixeira should even have access to this stuff.

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

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TRANSCIPT

Hey everyone. Peter Zeihan here coming to you from Colorado where spring has sprung and the frogs are chirping, which means, of course, later today we’re supposed to get a foot of snow. Anyway, I thought it would be worth me commenting on the recent intelligence leaks by airmen Teixeira. Let’s deal with the contents of what was leaked and then we can talk about espionage and leaks in general.

So most of the documents that were leaked relate to the war in Ukraine in some way and involve internal U.S. assessments of how the war is going and how the Ukrainians are doing. And they’re broadly less than fully complementary. Basic indication from the leak is that the Ukrainians have been suffering higher casualties than are reported and more importantly, that the confidence in the numbers provided by the Ukrainians is very low. So the U.S. really doesn’t have a good view. In addition, there’s concern that by engaging in a static defense in places like Bakhmut, the Ukrainians are losing their combat firepower, which is going to make it more difficult for them to launch future offensives. There’s nothing about either of those assessments that is particularly controversial. But before you say that everything that is now out there in the public domain is true, keep in mind that it has been the Russians now that have publicized this stuff far and wide, and they have undoubtedly changed a lot of the details in order to make their propaganda machine a little bit stronger than it otherwise would be.

But three things to come from this. First of all. Teixeira, the guy who did the leak – the U.S. airman – from all appearances, was not recruited by the Russians. And that’s something that’s kind of had me curious for a while now. Not since Edward Snowden in 2013 have we had any of our leakers have a very firm and obvious Russian connection. Snowden apologists, of course, are going to reject that out of hand. But, you know, screw them. The Russians used to maintain the world’s best human intelligence arm. And in the last decade, either they’ve gotten so good that no one has detected them functionally working really anywhere, or that capacity has languished along with everything else that we’ve seen in the Russian state services of late, whether it’s the military or their cyber capabilities or anything else. That’s probably really good news. Second, Teixeira himself and why people do things like this, it’s really an issue of foreign recruitment. Even if they’re not a foreigner involved. People are often motivated by the same factors, with the big three being ego, ideology and sex. And in the case of Teixeira, it looks like it was probably a combination of all three. He was on a gamer’s forum. He had these documents. He had access to these documents. He brought them home. He photocopied them. He took PDF photos of them, and then he published them on the gamers platform, Discord, like the whiny bitch he is.

In the case of a couple of previous big leaks, I’m thinking here of Chelsea Manning and Edward Snowden. Ideology was certainly part of it for Manning in terms of Edward Snowden clearly was paid by the Russians, clearly fled to Russia, clearly married a trophy bride as soon as he got there. So, you know, I’m sure it’s for love, but let’s be a little bit more honest here. And then ideology, of course, intertwines with Snowden as well. I think the criticism here, if there is one, is we’ve now had three leaks of significance in the last 13 years that get into the files that are top secret and above. And if you look at the three specific cases of Snowden, Manning and Teixeira, they all have something in common. They probably should have never had access to these documents in the first place. Snowden was a part time contractor, and yes, he was definitely a spy. And yes, he definitely hacked into the system. But somebody at his level should have never been near a terminal, and given access in the first place. Manning was a private at the time and definitely should have not had access to the high end stuff. And Teixeira was a 21 year old airman. Now I am not the sort of person who’s going to go in and pick apart American security policy when it comes to information. But there is a pattern here and probably something that should be addressed in the not too distant future. But the biggest bit of encouragement I had is how fast Teixeira was caught. I mean, it really only took a few days for the FBI to find them. At the same time, a bunch of independent journalists found him and then publicized his information. So at least on time, on target, we are getting better from the law enforcement side of this. But maybe we should work a little bit more in information security on the personnel side.

Okay. I think that’s it for me. Take care.

The Water Crisis in the American Southwest

The American Southwest is primed to be one of the largest beneficiaries of the changes caused by deglobalization – mainly the reshoring of manufacturing. They owe this to years of in-migration bolstering their demographics. They also account for a significant portion of the nation’s foodstuffs. However, everything in the American Southwest depends upon one thing…WATER.

To put it lightly, the water situation in the Southwest is fickle; rivers can go from rushing to bone dry in a matter of a year. Up to this point, the Colorado River Compact has been the saving grace for the Southwest: a treaty outlining how much water from the Colorado River will be allocated to each state in the region.

The issue with the compact is that it operates on a priority system. So states that were urbanized when the treaty was signed have priority over states that developed later on. Fast forward to today, and we have an archaic system that benefits places like California over places like Arizona.

So what happens if the states upstream decide to walk away from the compact and start using the water as they see fit? It would be an ugly few years of political and legal chaos, but if the Southwest wants to be the beneficiary it’s poised to be…they better figure it out quickly.

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 Vegas. And today we are going to talk about water and drought and all the things that come from that. Specifically here in the American southwest, we have a water problem. Now, for those of you who know your paleontological history. That’s a mouthful. You will know that the Southwest has a history of mass extinction and civilizational breakdown events that have on time descended into cannibalism. The issue is the terrain. It’s an arid area with a lot of elevation, and that means that most of its water comes from orographic precipitation, which is a fancy term that says that when you get moisture moving across a landscape, if it hits an elevation center or a mountain, it will rise. And if the temperature at the higher elevations is cold enough, the water will condense into vapor form clouds and then rain. And most of the rainfall that hits the American southwest has that sort of origin. The problem with orographic precipitation, though, is it’s fickle. And oftentimes you will not get enough cold temperatures at elevation or not sufficiently humid air currents in order to generate the moisture in the first place. So rivers literally come and go and that is caused the collapse of civilisational systems as you get mega droughts from time to time to time. We are in one of those periods now. So that’s probably one.

Problem Two, when the American Southwest realized that they had limited amounts of water. The states back in the 1920s, 1922, I think, set up a legal structure called the Colorado River Compact, in which they agreed to share the water. The problem was that the year that they used to evaluate how much water they had to share was one of the wettest years on record. So we’ve known for decades that in time the volumes that were written out in the treaty just weren’t going to be there. In addition, this is all heavily litigated and legalized, all written down in law. And at the federal level, it’s an issue of senior water rights. So the urban centers that existed at the time of the treaty in 1922 have priority. And anyone who has built infrastructure since then to tap into the waterway network is at a lower priority. So if you were an urban center in 1922, you have senior water rights and everyone else who has added is lower and lower and lower and lower. And so if you were at the very bottom in, say, the seventies when your system was built, you’re at the very, very bottom. The first state mentioned in the compact is the one that had the highest population then and now, and that’s California. But Los Angeles has 15 million people. The entire Southwest only had that many people in 1922. So you can see as part of the problem, the last state to build out its infrastructure to tap the waterway network was Arizona. It only finished the the Central Arizona project in the late sixties and into the seventies. So they’re at the very bottom. And when there was a dispute over water a few years ago, Arizona and California ended up in court. And the Supreme Court ruled very, very clearly that California has severe water rights and Arizona is at the bottom of the stack of junior water rights, which means that Arizona water demand can go to zero before California has to cut at all. And with that ruling in California’s back pocket, California has simply refused to engage in negotiations with the other states of the Colorado River basin. So we even had a deal last year where all of the other states got together and agreed to slash their demand. If, in exchange, California were to make a moderate decline. And California refused. The California position officially is you all go to zero and die and we will just keep having our golf courses.

So the debate now among the other states, especially the upstream states, is about just walking away from the compact completely. Now, this would lead to California suing them in a court case that they would probably lose, but that would take years because it would get tied up in court. And in the meantime, California would go completely dry. And Southern California gets roughly a third of their water from the Colorado River. So massive economic dislocation. Now, aside from the whole human tragedy of this, why does this matter? Well, let me give you three reasons. Number one, the world is deglobalizing and the United States is discovering if it still wants stuff, it needs to build out its own industrial plant. So there is a competition among the states right now about where that stuff will go. Texas is probably going to be the single biggest winner of the American South. Looks really good. But there’s parts of the Southwest that are very, very high value added. And getting semiconductor fabrication facilities in places like Phoenix are a great idea. But it requires water. In addition, we need to reshore especially the electronic supply chain system. And the Southwest is probably the best part of the country for that for labor reasons. In order to do manufacturing of electronics, you need a differentiated workforce with a lot of different price points. That means the person who does the lens for the camera is not the person who does the memory board, is not the person who does the plastic molding, is not the person who does assembly. These are all different skill sets. They all have different price points for the labor. And so you need multiple skill sets, multiple price points, multiple labor forces in relatively close proximity. This is one of the reasons that East Asia has done so well in this space for decades, because you have your technocracy in Korea and Japan and Taiwan, you have your mass assembly in places like Vietnam and China, and then you have your mid-range in places like Malaysia and Thailand. The only place in North America we have that sort of variation is in the US-Mexico border. And for the Southwest that’s a really good selling point if you can keep the water flowing. And another big reason is agriculture. Now, one of the big problems, one of the reasons why the Southwest is in this problem is that they are growing a lot of food in the desert. And, you know, if you look at that on its surface, you’ve got to wonder if that was a very good idea in the first place. And the answer is no, it was not a very good idea in the first place, but it is now part of our food security system. And so places like Yuma, Arizona, which are about as far south in the country as you can get, get all of their water from these water courses that are governed by the compact and of Colorado just walks away. Then in the winter, we’re talking about losing a quarter to a third of most of her fresh vegetables because it’s got the perfect climate for it if you got the water. Now, unlike, say, interior Washington, where you’ve got the Columbia River, which is the continent’s biggest water flow by volume, and you take water from that for, say, the Yakima and the Walla Walla, the Benson systems. You know, it’s not a big deal, but you can’t do that at scale over time in a watershed like we have in the Southwest. And so we’re talking about losing a significant amount of food production that is important, not just locally and regionally, but across the national system.

Now, California don’t get too smug. The Central Valley is facing this exact same problem, and you can’t blame that one on any one upstate. That is your homegrown ecological and agricultural crisis. That’s a problem for another day. And then third, taxes. One of the things that we’ve seen in the last few years is Americans are moving in a way that they haven’t in quite some time. The baby boomers want to move someplace where it’s warmer. The millennials want to move to someplace that has more elbow room where it’s cheaper to expand the cities and therefore they can afford yards. And not a lot of people want to be dependent on mass transport because they’re afraid of diseases. Well, the American Southwest scratches all of those itches. And it has been the fastest growing part of the country from in-migration in the country now for roughly 50 years. And all else being equal, there’s not a lot of reason to expect that to change unless there’s a persistent water crisis.

Now, the good news is there are a lot of things that America can do in order to get by a lot better. You remove a lot of the water intensive agriculture from the region. You make things like golf courses go away. You don’t have fountains in Phoenix, for example, and you just manage your water resources with the best technologies of the 13th century, we can probably have a population increase of 50% without a problem.

But above all, the Colorado Compact has to be renegotiated for a more realistic environment. And since California will not choose to do that willingly, they are going to have to be forced, which means either we do have a crisis first triggered by the upstream states or Congress steps in and abrogates the pact and imposes a replacement. This is going to be an ugly, ugly political issue for the next few years. That is absolutely unavoidable, but is absolutely critical if the United States in general, this region in specific, is going to take advantage of the demographic and geopolitical shifts that are wracking our world right now. This region should be one of the biggest beneficiaries of the changes going on, but they have to be able to get the water situation right.

Alright. That’s it for me. See you guys next time.

The Winner of the 2024 US Presidential Election Is…

Photo of the US White House

By the time you see this, I’ll already be on the other side of the world, so I figured it was the perfect opportunity to talk politics…specifically, who will walk away with the 2024 US Presidency.

This will piss everyone off, but the only way I see this election playing out is with another Biden v. Trump showdown. The cult following that Trump has garnered practically locked him in as the Republican nominee. And there’s really no one else that the Democratic Party is willing to let replace Biden. So get ready for a 2020 rematch.

Issues like age and vice presidents won’t move the needle on this election. To understand how this will shake out, we need to break down the voting behaviors of the Republicans, Democrats, and Independents. Most Democrats and Republicans vote within party lines, and a large majority of Independents always vote one way or another.

So this election really comes down to 10% of Independent voters who actually give a s*** about who wins. And based on the midterm turnout, Biden has all the numbers stacking up in his favor. All he has to do is stay alive and keep from drooling on stage, and he’s going to win the office for another four years.

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 Francisco airport where I am getting ready to be going on my first real big boy vacation since COVID started, they’ve all kind of stacked up. So I figured as long as I was leaving the country and you weren’t going to see this until after I was on the other side of the international dateline, now would be a good time to talk about American politics and tell you who’s going to win the next presidential election.

Now, the person to understand, if you want to see how this election is going to play out is Bernie Sanders. Because I think most people in America agree that he’s a bit cuckoo and his ideas are crazy. And if you sit down and actually force him to go through the math, how some people have done, he will admit that the math doesn’t make sense and he’ll just raise taxes until it does. And if that raises the marginal tax rate to the point that it destroys everything, he has no problem with that. And people who support Bernie Sanders, once you walk them through that, will come to the same general realization. But they will not change their minds because they are committed to the cause. Put another way, Bernie Sanders is not a political leader. He’s a religious leader, and he has a cult following as a result. And so does Donald Trump. Now, what that means is somewhere between one quarter and one third of people who self-identify as Republicans don’t care what Trump does or what he says. I mean, hell, he could livestream the abortion of his trans lover and they would still support him, which means that if only three other people run against him for the Republican nomination, he’s going to win the way the Republican Party works when it comes to delegates, as is in most of the races, as long as you get one more vote than whoever comes in in second place, you walk away with every single delegate. So it’s really easy for someone to come in from the outside, just like Donald Trump did, because by most metrics, he’s not a conservative in the American sense, certainly not the Republican sense. But he was able to mobilize a group of people who had been left to the outside of the populace and has catapulted not just to the presidency, but to control the Republican Party as a result. So in the environment that we’re in now, since we already have another three people have declared for the presidency, it doesn’t matter if someone like Florida Governor DeSantis runs at this point. The vote is already sufficiently split that Donald Trump will walk away with the Republican nomination. That’s pretty much hardwired in at this point. So that’s the Republicans. 

So let’s talk about the Democrats. The Democrats select their candidates a little bit differently. They don’t have that winner take all mentality when it comes to the delegates. So if you get a number of strong candidates, they were going to break up the delegate count among them and it’s going to come down to the convention. And at the convention, there are a significant number of what they call superdelegates, which are people who are not representative of the primary, the caucus system, but instead represent kind of the party’s institution, which are primarily centrists. And the superdelegates came into play in the last presidential cycle when for a brief, shining, terrifying moment, it looked like Bernie Sanders might actually get the Democratic nominee. And since most centrist and center left Democrats were like, Oh, that would be disastrous by any number of manners. They all rallied together and used the party apparatus to make sure that Bernie did not get the nomination. And as a result, Biden was able to squeak through and then ultimately ran for president and ultimately gained the White House. Now, the centrists and the center left within the Democratic coalition have made the decision already that they’re not going through that again. And so if Bernie or more likely when Bernie decides to once again run for president, the centrists will swing into action to make sure it’s nipped in the bud as quickly as possible. In addition, the Democrats have always had a problem, I shouldn’t say always. The Democrats in the last 25 years have had a problem that it’s really hard for them to bring in fresh blood, because you’ve got these charismatic people at the top who are politically and maybe even economically powerful, who kind of suck all the oxygen out of the room and make it very difficult for young up and comers to make it into the system. Republicans don’t have that particular problem. And so you get a lot of people who are in their seventies, people like Biden, people like Pelosi, people like Schumer who dominate the scene. And there really isn’t a cadre of people below them. There is no deep bench. In that sort of environment, it’s really, really hard to get a primary system that runs on actual competitive candidates. You just get these freaks that come in from the outside, freaks like Bernie Sanders. Well, since the centrists have already decided what they’re going to do this time around, that means Biden is a shoo in to get the nomination, which puts us into a weird race. You get Republicans who are cult dedicated to Donald Trump and you’ve got Democrats who are willing to shut out everyone else so long as Biden doesn’t have a complete meltdown and start drooling effusively on stage, barring those two extreme events, we’re talking about a redux of the last election of Biden versus Trump.

And I don’t think that any of the things that people are talking about right now as having an impact on the election would really matter at all. So, for example, the age issue, I mean. Yes, yes, yes, yes. Biden is older than dirt by a wide margin and he would be the oldest president ever if he wins again. However, if Trump beats him, Trump would then be the oldest president ever. So the age issue is really a non condition for any voter who says it is. It may be a compacting factor, but since the runner up in this case is almost as old, it doesn’t play. And the same comes for replacing the vice presidency with somebody besides Kamala Harris. Has she risen to the occasion? No. Has she turned out to be a good VP, probably not by most measures. But replacing her isn’t going to really change anyone’s mind. Nobody votes for the vice president, so we’re left with Biden versus Trump. So the question then is who walks away with that? From my point of view, it’s pretty straightforward.

Roughly 20 to 25% of the electorate is either hardcore Republican or hardcore Democrat, and they might not like the candidate, but they’ll hold their nose and they’ll pull the lever on no vote for whoever their party’s candidate is. They are locked in. There’s no negotiating room there. Then you have another about 20% on each side that says they’re independent. But, like in 85% of races, they vote for either a Republican or a Democrat. So they’re really only independent. And they really they’re just subsidiaries of the left and the right in the American system. There’s not a lot of wiggle room there. There’s only 10% of the American electorate that is truly independent. And they’re wishy washy and they’re judgmental and they get buyer’s remorse. And the votes of this last 10% is the primary reason why in mid-terms, usually the party in power loses because they’re having buyer’s remorse. And I know this very, very clearly because I’m part of that 10%. We’re never happy with what we are and we’re not part of the decision making to determine what the candidates are. And so we get handed this pallet that we just don’t like but we have to make do with. And that usually manifests as us voting against whoever happens to be the guy in charge at the moment.

So that is how it normally runs. That’s how it’s always run. It’s how it ran until we got to the 2022 midterms, because in the 2022 midterms, almost exclusively, the independents were polled as not liking Joe Biden, particularly on economic affairs. They saw his continued governance as being against their own economic best interests, and yet they decisively sided with Democrats in all the races that really matter. And so for the most part, independents polled as not liking the Biden administration’s economic policies. And they saw a continuation of those policies as against their own personal economic interests, and yet they decisively voted against Republicans. Why? Well, it is not too hard to understand. A lot of this talk about what’s going on with the election system is real, but you have to look at it from the independents point of view to really understand if the Republican Party under Trump is able to change the electoral system in the way that they say they want to, then swing voters don’t matter anymore and independent voters don’t have a party. That’s the general election is the only way that they play in American democracy. And if you remove that, they are powerless. So the United States government under Democrats and Republicans has this interesting saying when it comes to democracy in the Middle East, we want one person, one vote, but not just one time. And if we go down the path of Donald Trump wants to, you know, that’s compromised. That and Donald Trump has made personal loyalty the predominant issue in any political system in which he touches, which brings us crap candidates like Oz or Walker who are very, very easy to vote against. And so from the point of view of the independents, the people who have decided the last seven general elections, there’s nothing to decide anymore.

And so it’s pretty safe to say that if the midterms were decided by independents who usually don’t even show up to midterms and they were willing to vote against what they see as their own economic best interests, you can bet your ass they’re going to show up in the general election in two years and vote against Trump and everything that he stands for. So for that purpose, primarily, I see this election as a shoo in for Biden. Round two. All he has to do is not die and he’s going to win.

Okay, in Queenstown now let’s see. What were we talking about…Biden and Trump? Oh yeah. Why it matters. Now, obviously, if you’re obsessed about who wins the US presidential election, it matters independently. But beyond that it raises the possibility that the United States is going to have the first extended period of agreement in its foreign policy across administrations. Now, let me explain that a little bit for Obama was infamous for never having conversations with anyone. So for seven of his eight years as president, we basically had no foreign policy at all. Then Donald Trump comes in and Donald Trump would tweet something bold and assume that that made it policy. But then nothing would ever be done with it because he could be bothered to have a constructive conversation with anyone in the government or the bureaucracy or Congress. In fact, at one point he said that his tweets were notification to Congress of certain policies, which clearly legally is not kosher. So for his four years, very little happened at the federal level. Biden has come in and Biden almost to a tee, shares Trump’s approach to foreign economic policy making. Extraordinarily populist, extraordinarily nationalist. But the difference between the two is that Joe Biden actually believes in the power of government. And can sit through a meeting in a way that Barack Obama could not. And so he is actually going back through Donald Trump’s tweets and turning them one after another into foreign economic policy and then embedding them into governance and into the American government bureaucracy. So if you are a Biden supporter, you should be furious because he’s taken all of his cues from Trump. And if you are a Trump supporter, you should be furious because Biden is getting all of the credit for Trump’s economic decision making and policy statements.

So there’s plenty in this video for everyone to get pissed off at. Now, if you disagree with my assessments on where this election is going and who we should blame for why, that’s fine. That’s fine. Go ahead and reach out and contact me. You can reach me at [email protected]. That’s [email protected]. I’m going to be here in New Zealand for the next three or four weeks and I will be doing a number of videos and reporting back to you. It might not be on the most current of current events because for most of this I’m going to be backpacking and I’m not going to have information access, but I will be back in time and we’re going to do a lot of deep dive stuff while I am gone.

So everyone have a great month and I will see you near the end of April. Bye.

Austin’s Role in the Texas Triangle

I may have ditched the “howdys” and “y’alls” for the high mountains of Colorado, but Austin remains part of one of the fastest-growing economic and urban zones in the western hemisphere. However, Austin can’t credit all of its success to the “Keep Austin Weird” bumper stickers…

The key here is in the neighborhood. It’s a blue city in a red state, so they get low taxes and a high level of city services. More importantly, Austin falls right in the middle of the Texas Triangle – a zone comprised of San Antonio, Houston, and Dallas.

Houston is an energy hub and heavy into manufacturing. Dallas is an auto and aerospace hub. Both of those are financial centers in their own way. San Antonio offers a low cost of living and low labor costs. Austin happens to be the missing piece in the Texas Triangle, high-end tech. Austin can operationalize the research the other cities need and disseminate the plans from there.

It doesn’t look like Austin’s growth will be slowing down anytime soon. As the world faces deglobalization, Texas (the triangle specifically) will play a critical role for the US.

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TRANSCIPT

Hey everybody. Peter Zeihan here coming to you from the Lamar Passenger Bridge in downtown Austin. As some of you remember, this was my home for 20 odd years. And I am proud to say that the city is still doing strong.

Austin is at the middle of what is called the Texas Triangle, which has been the fastest growing economics and urban zone in the Western Hemisphere for about 25 years now. And the story is in the neighborhood. So Texas is a red state. So the taxes are low. In fact, in the state of Texas, there is no income tax at all. But this is a relatively blue city, so it has a reasonably high level of city services. That sort of combination has really helped urban areas in a similar match, places like Lexington, Kentucky or Atlanta, Georgia.

But there’s more than that. The Texas Triangle, as you might expect, has three major urban zones of which Austin is not technically one. The big three are San Antonio, Houston and Dallas. Houston is obviously an energy and heavy manufacturing hub. Dallas is an automotive and aerospace hub. Both of them are financial centers in their own way. And then San Antonio has lower cost of living and lower labor costs, and so is great at mass manufacturing, especially in automotive.

Where Austin plugs in is on the higher end. There’s an area to the northwest of town called Silicon Hills, which, as you might guess, is kind of an echo of Silicon Valley, but where Silicon Valley focuses on the base research and being a hotbed of core tech innovation. Austin takes a lot of that research and then turns it into operationalized development plans, which are then applied throughout the rest of the Texas Triangle. So it’s not that Austin could do this by itself, but Austin, plugged into the triangle, makes it the perfect interlocutor for everything, for turning modern manufacturing into reality. And if you see kind of behind me, you know, there’s quite a skyline here. This is a city that as recently as 1985 only had about 600,000 people, and now they’re over two and a half million in the entire metro. And all of the buildings in the immediate background were not there when I moved to Austin back in 2000. And the ones a little bit further back now, maybe two thirds of those are new in the last 20 years. So Austin has been one of the top ten fastest growing urban centers in the Western Hemisphere now for almost 30 years straight. And even though it is the most expensive city in Texas, and even though the cost of living has now risen above the national average, it has a long way to grow because it can physically grow to the northwest, the north, the northeast, the east, the southeast, the south and the southwest very easily. And the land just to the west where I used to live is called the Hill Country and as you might guess, it’s hilly but not mountainous. This is an advantage that a lot of the Texas cities have. They can just physically expand with reasonably few restrictions.

Talk to you guys later. Bye.

The Financial Crisis of 2023?

No, we’re not headed for another financial crisis…although, to those with more than 250k in one of the three failing banks, it may seem like we are. Silicon Valley Bank is the largest of the three, but it’s still only the 16th largest in the nation.

The problem for Silicon Valley Bank and the smaller Silvergate and Signature Bank is that they all took on a questionable amount of exposure to illiquid assets. For SVB, it was a variety of long-term bonds and securities with long durations. Then interest rates started to go up–way up. And SVB was not left with many tools to manage interest rate risk it had not hedged for. When its primary customers–the tech industry–found out, they sounded the alarm. Being the tech world, they’re all relatively well-connected and active on social media, triggering a stampede of customers wanting to pull their cash out more or less simultaneously, or what we’d call a good old-fashioned bank run.

The real thread connecting all of these banking mishaps, however, is one that’s not going to go away anytime soon. Rising capital costs. Many of these banks and their customers have been operating in a world where money has been as close to free as it has ever been in human history. Over the past year, we’ve seen interest rates rise–sharply–and there’s little reason to believe that we’re anywhere near done yet. The fundamental operating paradigm for banks and the financial paradigm of the past decade and a half is shifting, and we’re going to see which financial institutions are able to deal with the change and which ones won’t be able to keep up.

The Biden administration has now stated that the FDIC will make all depositors whole. That’s great for ending any potential bank runs, but those CFOs who thought it was a good idea to put all of their company’s capital into one bank won’t be learning their lesson this time around.

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

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TRANSCIPT

Hey, everybody. Peter Zeihan here, coming to you from Bloomington, Illinois. Sorry, I forgot where I was there for a second. It is the 14th of March. Tuesday. And for those of you that have been following the news, you, of course, know that the United States is facing a little bit of a banking hiccup right now. Over the course of the last few days, three banks of note Silvergate Signature and Silicon Valley have either been closed by regulators or just simply collapsed. And this is something that honestly, I don’t think anyone should really overly worry about. The biggest of them, Silicon Valley, is like number 16 in the country. So this is nothing like the financial crisis of 2007 when all of our Big Ten banks were in trouble all at the same time. Now, normally when you have a financial crisis, it’s because of a problem with loans. Whenever the business cycle turns, the cost of capital goes up and loans that may have made sense in the past don’t anymore. So in the 2007, the issue was subprime. We had, based on how you measure the math, somewhere between a half trillion and two and a half trillion dollars of questionable loans in the real estate market. And that meant that touched almost every single bank within the entire system. So when the real estate market turned and we realized that a lot of these people were baristas who had no incomes and had qualified for 100% mortgages on million dollar homes, and those loans went bad. We had problems across the entire space. Nothing like that is going on this time. We’ve had a very strong expansion and certainly capital has probably been overly cheap and there is some rot in the system that does need to be worked out. And what basically what’s going on is the financial system is going through the process of taking out the trash right now. You would expect some banks to go down. That’s not necessarily a signal of a broader contagion, systemic risk sort of thing.

In addition, the United States has something called the FDIC, the Federal Deposit Insurance Corporation, which is a system by where all banks pay a monthly fee into the system in order to get insurance for their depositors. So as long as your deposit is under a quarter of $1,000,000, you are federally guaranteed to get your money back without the federal government having to do anything. That system has kicked in and depositors will be made whole. It makes sense that these three banks are the ones that went under first. They won’t be the last, probably. Although that doesn’t mean I’m concerned about something like eating through the entire system like a cancer. It’s just that they’re all related to tech and tech tends to be a capital intensive industry, and especially when you’re talking about newer firms and startup firms and research firms, which are what these banks cater to. You’re talking about institutions and companies that don’t make money today. They’re hoping to make money next year or the year after, the year after that, or invest in the next big thing. So they tend to be more perspective. They don’t have to have any income. And so when capital costs go up, they face problems. And so these banks are the ones that are facing the issues. So there’s nothing about this that is any more than a run of the mill bank failure, that matches most of our understandings about macroeconomic trends. I don’t want to say it’s nothing to worry about, but I’m really not concerned about an overall national bank contagion or broad bank run. And I think what the stock markets have done in discounting all things financial is a gross overreaction. So there’s that.

Now, there are three reasons why this time it is a little bit different. First of all, tech has been on a tear for the last several years and not just because capital has been cheap, but because of COVID. When we all found ourselves living and working at home, we needed better cameras, we needed ring lights, we needed computers. We need to update our phones. And so in the year 2020 and 2021, and to a lesser degree in 2022, we were all buying all kinds of tech related products, generating a bit of a boom. Well, once you buy the newest and greatest computer and phone, you probably are going to wait before you get the next one. And so we were always going to have a little bit of a tech bust independent of what was happening with the overall economy. So that’s one. Number two, this is a little atypical for a bank run or a bank crash because normally the problem is on the loan side. It really isn’t this time. It’s not that there hasn’t been a capital crunch, but in the tech start up space, these companies usually don’t go to like the Small Business Administration to get a business loan. They get their capital directly from a venture capitalist. And it’s the venture capitalists who are finding themselves with less capital to throw at situations. So they’re not as able as they have been to throw money at these small startups. And so the startups have been drawing down on their cash, which means the problem from the bank point of view hasn’t been with the money that they’ve lent out. They don’t lend out very much. It’s been with the money that they thought they had. So as deposits have been drawn down, they haven’t had enough operating capital to continue normal operations.

Now, this is mostly good news because it means the overall exposure to the financial sector, which is normally what happens when you sell loans among banks, just isn’t there. But it is a very big problem for the tech sector.

And then we get to our third problem, which is how the Biden administration has chosen to deal with it. Now, if you are dealing with a deposit that’s under a quarter of $1,000,000, the federal government doesn’t have to lift a finger because the FDIC will take care of it. But a lot of these small startups, they put all of their money into individual banks, most notably Silicon Valley Bank. So it was a lot more than a quarter of a million now more than a quarter million is not insured. So what the federal government has done under the Biden administration is step in and say that all depositors will be made whole by the FDIC.

What will happen is banks will have to pay a little bit higher. All banks. Into the FDIC system in order to ultimately make up for this so that taxpayers don’t have to pay for the actual bailout. Now, this does put a hard stop on any risk of a bank run. So it’s definitely the right tool for the job there. But what it does is, is it encourages companies that have done stupid things like this to continue doing them, because now all of us have to pay through lower bank interest or more difficult loan conditions for a handful of startup companies who had CFOs who were just too dumb to realize that there is a limited limit to the deposit insurance system. And so this has injected a permanent level of stupidity into the financial system that was really not necessary. And by backing all depositors, the federal government, the Biden administration specifically has chosen to introduce what we call moral hazard into the system at the base level, which in my opinion, was really not a great idea, although it definitely does put a bit of a backstop on the financial maybe kind of sort of itty bitty crisis.

Okay. I’d like to give a little shout out here to Marci Rossell, who is an economist that I actually just saw on stage, who is fantastic. So if you ever have a chance to see her in person, she is definitely an entertaining show and will constantly give you new things to challenge your assumptions and think in new directions. Alright. That’s it for me. See you guys next time.

Cartels Part 2: Origins of the Drug Trade

Flashback to the 80s with me for a moment…we can leave out the big hair and leg warmers…but let’s talk drugs. Most of the cartel activity came from one place, Colombia. If you’ve ever seen Miami Vice, you get the idea. But once the US caught onto the cartels’ “distribution strategy,” new ways of getting “product” into the US had to be created.

Money started flowing through Mexico, and the drug trafficking business was the place to be; it wasn’t long before the cartels we know today began to form. It’s important to note that not all of these cartels operated the same.

To most cartels, violence was a necessary aspect of the drug trade. The Sinaloa Cartel worked a bit differently; they treated this like a business, and El Chapo was the “CEO.” They partnered with the community, bribed law enforcement, and crime stayed relatively low while they were around.

Once El Chapo was captured and the Sinaloa Cartel started to fall off, groups like Jalisco New Generation surged back onto the scene. Unfortunately, this new wave of cartels brought back the violence and crime levels we see today.

For the US, carrying out military strikes on these cartels across the border just doesn’t make sense…it would be like shooting a fly with a handgun. However, beefing up border security to prevent these cartels from crossing into the states is probably a good idea.

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 Peter Zeihan here, still in Vegas, still talking about cartels. The thing to remember is if you go back to the 1980s, most cartel activity was not Mexican, it was Colombian because that’s where the cocaine came from. And it would flow up into the Caribbean. It would avoid Cuba like the plague, because the Cubans would just kill everybody who was associated with the drug trade at that time and would flow into Miami almost exclusively. And this is literally the setting for the show. Miami Vice, all the drug wars, continental in scope, going into a single place. But by the time we got to the 1990s, the United States started to shoot down small planes that were flying ten feet over the water at night with no lights on because those were not scuba divers and the cartels were forced to change the way they shipped. And so they started sending shorter hops not to the United States directly, but into Central America, where they go on land and then go up through Mexico to the U.S. border where there’s a 2000 mile border. And before you say, building a wall will help with drugs. No, no, no, no, no, no. You can put a half a million dollars of product in your backpack. A wall is not going to impede you, especially since a wall requires 50 construction roads going down to the border to build the road in the first place. Which means you have no obviated half of the physical border of a Sonora in the Chihuahuan Desert. So if anything, the road has made it a lot easier for illegal migrants and drugs to get into the country. So remember Donald Trump, most pro narcotic, most pro illegal migration president the United States has ever had. Now, where was I? All right. Okay.

So when the cartels were going on land, that meant that the Colombian cartels had to either find middlemen and or bribe the locals in order to help with transit that generated the money flows that ultimately led to the rise of drug trafficking groups within the Mexican system itself. Now, if you fast forward to about 2012 to 2015, one of these cartels took a fundamentally different view of drugs from the rest. The other saw it as a means to power, and they were basically gangs at scale. But the Sinaloa cartel rose up and thought differently. It saw drugs as a business, and anything that interfered with the core business was something to be ruthlessly rooted out from within the organization. So you don’t steal ladies purses, you don’t shoot up the cops, you buy them off, you make them your friends. Because as long as you can bring drugs through a community, you are making money. And that is your primary reason to be. And that sort of attitude allowed them to put roots deep into Mexican society and expand north of the border fairly easily, where they interfaced with the American gang infrastructure.

If it was a Hispanic gang, you had the choice of joining them or dying. Most died. And if you were a black gang, you were probably just killed. One of the reasons that the murder rate in the United States dropped so precipitously in the 2000s is that the Sinaloa in the United States killed the people who were doing the killing. So use that to inform our general assessment of how much progress we’ve made. Now in the United States this allowed Sinaloa to not just become the largest cartel in Mexico, but in the United States and the largest organized crime group in the world. So the Obama administration worked with the Mexican government to capture the leader of that cartel, El Chapo. And then he got out and we got him again. And this started the disintegration of the Sinaloa cartel. El Chapo’s former accountant has tried to take over a chunk of it. Some of his lieutenants have tried to take a chunk of it. Some of his sons have tried to take a chunk of it. One of his sons is on the process of being extradited to the United States right now, but they all lead their own factions. And so this umbrella organization that was Sinaloa really doesn’t exist anymore in the way that it used to. And whenever you’ve got factions in a system, you’ve got violence. And it’s going to sound weird. But when El Chapo was in charge and when Sinaloa was a top down organization, Mexico was reasonably peaceful because there wasn’t infighting within his own organization and Sinaloa was able to cut a series of deals with the Mexican government to go after the other cartels.

Now, on the other side of the equation, the cartel that suffered the most from that alliance with the Gulf or the Zetas cartel. Two different groups that have kind of interwoven history. One group was the enforcers to the other. But once the government and the Sinaloa both turned on them, they basically shattered. And if you go to the eastern third of Mexico, you’re in a situation which is gang on gang violence, nominally under the name of Gulf and Zetas. And the Americans who disappeared and were kidnaped and killed this past week were people who fell in with the Gulf and the Zetas. So if you want to go with this idea of wanting military strikes south of the border against the Gulf, that’ll do nothing, because that’s basically going after the Crips or the Bloods with military hardware. It will do nothing to change the environment because there is no hierarchical organizational structure to disrupt in the first place. You’d literally be going after street thugs, and that’s just not the right tool for the job. And this group, it’s breakdown. That is the primary reason why Mexican murder rates are so high, because you just have gang on gang action, not just at the regional level or the city level, but the block by block level. And they’re fighting over the income that comes from the drug trade.

Now, in the middle, you have another group that used to be at least partially affiliated with Sinaloa that calls itself a Jalisco New Generation. They were led by a dude named El Mencho. Now, El Mencho does not have the same view of El Chapo. So El Chapo, you could basically sum up his position as don’t shit where you sleep. Well for El Mencho the violence is the point.

We’re a gang that gets money from drug trafficking, not we’re drug traffickers who happen to be a gang. So the first thing he tells his people to do when they move into a town is go shoot up the mayor’s office, the police office and any gang headquarters that you can find. Make it very clear to everyone who’s in charge and who has the guns and what the penalty for noncooperation happens to be. And that has made Jalisco New Generation very hierarchical, very violent, and has contributed massively to the violence south of the border. Now they are in the process of attempting to go north of the border to challenge Sinaloa in basically what is the the great fields of income generation opportunities in the United States. They haven’t succeeded yet and if there is a fight to be had in the United States, it is at the plazas and the border cities to make sure all this go. New generation does not cross in because if they do, wow, we think our murder rate went up because of COVID. Holy crap, Jalisco would go into Phoenix and Dallas and El Paso and Houston and Austin and San Diego and just start killing people to prove to everyone that they can. And if you want a 1930 Chicago level of violence in the United States and every city within 500 miles of the border, that’s exactly what will happen if Jalisco New Generation punches forward.

So military strikes south of the border. This isn’t going to fix anything, but perhaps an increased security presence in the city specifically to prevent Jalisco from crossing north that might be a pretty good idea.

Alright. Next time, we’ll talk about some of the economics of drugs and those things have changed.

Cartels Part 1: Americans Caught in the Crossfire

On March 7th, two of the four US citizens kidnapped shortly after crossing the border into Mexico were found dead. This raises several questions, but perhaps the most significant is how this will change the United States’ policy on Mexican cartels.

The cartels have a long and deep-rooted history of flushing the American system with drugs, laundering money, and other illicit activities. However deserving of the designation as a terrorist group, we have seen in recent history how our actions on terrorist groups have played out…just look at Pakistan.

Any action taken against the cartels would ultimately damage American and Mexican relations. As the US moves away from its ties with the Chinese, that’s the last thing anyone wants. It’s a tricky situation, and the solution isn’t black and white…but maybe everyone should lay off the white stuff for a while.

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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.
 
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TRANSCIPT

Hey everybody. Peter Zeihan here coming to you from Las Vegas. Today is the 7th of March. And if you’ve been following the news, you knew that there were a few Americans who went down to Mexico to get some tummy tuck surgery. And shortly after they crossed the border, they were assaulted, kidnaped. And some of them have now turned up dead. And so the discussion in Washington is whether or not we should designate cartels in Mexico as terrorist groups and start doing cross-border strikes. I’m not saying I’ve got a solution to this problem because I do not. Well, actually, I do. We’ll get to that. But military strikes on Mexico are not not not the solution. It’s not that the cartels are not deserving. I mean, these are people who have basically been preying on civilians now for decades, shoving drugs into our system. First cocaine, now fentanyl. And they’re into any number of criminal enterprises and they’re trying to launder their money through other licit sectors in Mexico, in the United States, which has made the money go deep and go far.

However, we have seen exactly this sort of situation in recent American history. We know exactly where it leads. So during the Afghan war, we discovered that there were militants operating in northwest Pakistan in a place called North-West Frontier Province that were launching assaults against American forces and Afghan forces backed by the United States north of the border in Afghanistan. And then they would retreat back south of the border. And so we ended up carrying out a number of military operations on both sides of the border to chase them down. The problem we rapidly discovered is that Pakistan is a weak state and they do not control North-West Frontier Province. And by launching strikes south of the border we were inflaming local passions of Pakistanis, even if they were not in support of these militant groups. And we ended up weakening the Pakistani state, which made it even easier for these groups to operate.

So in this case, strikes across the border just poured fuel on the fire. If we were to do this in Mexico, two problems. Number one, Mexico is a weaker state than Pakistan. And so anything that inhibits its ability to function would probably make the situation even worse. And second, the most pro-American portion of Mexico are the northern tier of states where we would be likely to launch these strikes. So we’d be taking our regional allies who are not just political allies, but economic partners. Remember that the United States and Mexico are now each other’s largest trading partners, and especially if we decide we want to move away from the Chinese system, we need help with mid-skill, mid-range manufacturing. And that is a sector in which Mexico absolutely excels, is arguably the world leader. And launching military assaults on what is the location of our most important and most tightly integrated supply chain networks would be a disaster for aerospace and automotive and manufacturing in general. So I really would encourage you to think otherwise.

This is a thorny problem. The solution is not to not get tummy tucks in Mexico, although I would argue that maybe common sense would tell you that you don’t need to do that anyway. The solution is to stop using so much goddamn cocaine, because as long as we are providing the financial existence of the system, it’s going to persist.

Now, this is far too big of a topic for me to do in a single video, so I’m going to be breaking this into a few different topics where you talk about some of the individual cartels and the economics of the drug war and how it has evolved in recent years. So think of this as a starter, and in the days to come, we’re going to be turning this into a full on series. So stay tuned. See you soon.

Can the US Military Fight Russia and China?

With the potential for the Americans to get caught up in simultaneous wars with the Russians and Chinese, do I think the US can handle it? The short answer is that the US will be fine, but if you had asked me this during the Cold War – it would have been a cakewalk for the Americans.

While I don’t think it’s likely (and it is most certainly not recommended), simultaneous wars with the Russians and Chinese wouldn’t be overwhelming for the US military. That is because those two wars would boast extremely different circumstances.

War with the Russians would be a war of supply, providing munitions – specifically the decommissioned and outdated stuff – to the Ukrainians. On the flip side, war with the Chinese would be fought on the seas; the navies would be doing much of the heavy lifting.

The military assets needed to fight these wars would strain different structures, allowing the US military to operate at a manageable and sustainable level.

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 coming to you from California. A lot of people have written in some questions about U.S. military strategy in light of the Ukraine war and perhaps hostilities with the Chinese. Back during the Cold War, the United States maintained a military policy of being able to fight two and a half wars. The idea that there would be two major conflicts with the Soviets. And, you know, we still need enough dry powder to fight like a small brushfire conflict and in the post-Cold War era that’s basically shrunk down to one. The idea that the United States assets are now more concentrated than they used to be, and that means they need to be more focused. And so if we end up into a conflict with the Russians and the Chinese at the same time, am I concerned that we can’t pull that off?

And the short version is no. Now, the nature of the conflict in Ukraine is one where the United States feels it can’t become directly involved because the risk of a nuclear escalation will be huge. And that means we’re supplying the Ukrainians to fight the war for us…from a certain point of view. And in doing so to this point, the military assets that are being transferred are things that we don’t use. Most of this is equipment that dates back to the seventies and the eighties that was decommissioned in the nineties in the 2000s. And honestly, the United States doesn’t think of that as part of its balance sheet in terms of its order of forces. It’s stuff that we had to dispose of, actually. So in many ways, the Ukrainians are saving us money in a weird sort of way. That means that the army is still available to do whatever with all of the equipment that it would use anyway. There hasn’t been anything taken off the top except for maybe some ammo, and we’re already producing five times as many artillery shells a day as we did before the war. So I’m not really overly concerned there.

In addition, if we do get into a clash with the Chinese, which I don’t think we will, but if we do, that is going to be primarily a naval fight. So it’s entirely possible, if not necessarily recommended, that the United States could be involved in a land war on the western end of Eurasia, while being involved in a naval war on the Eastern End. And the sort of military supplies that go to those two different types of forces are ones the United States is perfectly capable of providing simultaneously.

So while I’m not advocating for a war with either power, and I don’t think a war with either power is likely, the United States actually is capable of doing both of those at the same time. This is not chewing and walking. This is doing two radically different things with radically different command structures and especially military assets that don’t necessarily need to be in the same place at the same time.

Alright. Hope that makes a few people feel a little bit better about a few things. See you guys next time.

US Policy: Russia Gets Blacklisted 

Senator Lindsey Graham captured the essence of what today’s video is all about – “If you jump on the Putin train now, you’re dumber than dirt.”

Between President Biden’s visit to Ukraine and VP Harris’ comment on Russia’s crimes against humanity, it’s clear that the US has drawn a line in the sand, and Russia is on the other side. This means that Russia (or at least Putin’s government) is on the blacklist of world affairs.

According to Secretary of State Antony Blinken, the Chinese are considering providing lethal aid to the Russians, so that blacklist might be getting a little bigger. Unfortunately for the Chinese, any disruption to the already crumbling relations between the US and China could prove catastrophic.

The breaking point has been on the horizon for years now, and we all should have seen this coming. The ramifications will be huge, and a complete reordering of the global economic system is just the tip of the iceberg.

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