TODAY: Attend the Supply Chains No More Webinar

Join Peter Zeihan today, November 19 for the second in a three-part series on the here, now, and soon-to-be of the American and global economies. Part II: Supply Chains No More will focus exclusively on global supply chains, providing insight to the current status of delays and disarray, and identify which sectors will have no choice but to fundamentally restructure in the months and years to come.

Scheduling conflicts? Not to worry. Everyone who registers for Supply Chains No More will be provided with a recording of today’s webinar to watch at their leisure. 

REGISTER FOR SUPPLY CHAINS NO MORE

We hope you will also join us for the Face of Inflation webinar and Q&A session. Registration information and more at the link below.
 
Part III: The Face of Inflation
Wednesday, December 1

REGISTER FOR PART III: THE FACE OF INFLATION

Those who missed out on Part I: Wither the Workforce can purchase access to the recorded webinar and presentation materials at the link below.

PURCHASE RECORDING OF PART I: WITHER THE WORKFORCE

Part III: The Face of Inflation

I look at a lot of charts, so you don’t have to. But here’s one I need to share. It’s a partial breakdown of product prices by the U.S. Bureau of Labor Statistics, that’s the group of wonks who tell us (formally) what inflation is doing. Check out the more recent data on the far right. I’ve peeled out the various energy-related trends so you can see just out of control they’ve gotten of late.

Not nerdy enough for you? You can mix and match your own factors here.  #DataIsCool

Current supply chain woes aren’t just about goods getting to Southern California, or how efficiently Southern Californian dockworkers can get those goods in I’ve got two bits of good news and one bit of bad news.
 
Good1: The good news is that as high as energy prices have recently become in the United States, relief is on the way. Oil and natural gas prices have now been high enough for long enough that America’s shale operators have steadily expanded operations and fresh production is already feeding into the system. We might not feel that relief in the form of lower prices until March, but relief is still on the way.
 
Good2: As bad as prices seem, it is way worse everywhere else. Natural gas prices in Europe are now ten times what they are in the United States, and the Europeans have zero reasons to expect their situation to improve one whit this year. Or next year. Or the year after. Europe has next to no local oil or natural gas production, and no shale sector to speak of. Instead, the Europeans have chosen to rely on solar and wind power (on the world’s cloudiest and calmest continent, no less), with a bit of bridge assistance from…the Kremlin.
 
Bad1: Good1 might make you exclaim a sigh of relief. Whew! This too shall pass. Weeeeell, not really. Just because I don’t see energy inflation holding up in the United States does not mean that I don’t see us entering one of the weirdest periods of economic transition in American history. You name the sector — finance, manufacturing, housing, agriculture, transport, commodities — we are in for at least the strongest inflation we’ve seen in this country since the 1970s.
 
Breaking down that is going to require a great deal more than a newsletter.
 
Join us for the final installment of our series on the future of the global and American economies in an age of deglobalization.

REGISTER FOR PART III: THE FACE OF INFLATION


Part II: Supply Chains No More

Join us Friday, November 19th at 1p Eastern for our webinar about the challenges facing global supply chains: 

REGISTER FOR SUPPLY CHAINS NO MORE

Supply Chains No More: The Question of California

You’d be forgiven if you though the biggest challenges facing the US supply chain was its overreliance on the state of California. While some 40% of US containerized imports come through the ports of Los Angeles and Long Beach, the ports are not the problem. 

And while the cities of Los Angeles and Long Beach certainly haven’t been quick to come to the aid of their beleaguered–and admittedly quite advanced–port terminals, the problem is so much bigger than the administration of any one port complex, or city, or state. Even one as tremendously and tremendously afflicted as California.

Current supply chain woes aren’t just about goods getting to Southern California, or how efficiently Southern Californian dockworkers can get those goods in containers off of ships. It’s all ports, it’s all transport, and it’s about a cascading series of crises impacting not just how goods get to the US from China, but how we move goods from Savannah and Long Beach and Tacoma and Houston to Topeka and Louisville and Phoenix and Duluth.

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Please join us for our upcoming seminar tackling these issues and more. 

Scheduling concerns? No problem. Webinars will be recorded and shared along with presentation materials to all registrants to watch at their convenience. 

Part II: Supply Chains No More
Friday, November 19

And coming soon, 
Part III: The Face of Inflation
Wednesday, December 1

REGISTER FOR PART III: THE FACE OF INFLATION

Supply Chains No More: Semiconductors

The American economy faces shortages of every conceivable product, but few widgets have captured the public imagination as much as semiconductors. Ubiquitous and powerful, these little silicon bits are what separates the modern digital world from the rest of human history. We need them. Lots of them. In everything.

Unfortunately, manufacturing semiconductors isn’t nearly as easy as flipping a few switches. Each facility costs about $10 billion in funds, at least two years in time, and necessitates a small army of specially trained labor. Even worse, as our needs change, fab facilities must be retooled. Even if that could be done overnight — and it cannot — there’s a lengthy lead time between a fab beginning work and the first new chips coming out. Months. And that’s just to get the chips our the door. You still need to get them delivered to manufacturers who will put them into the components where we’ll use them: into flash drives, wiring harnesses, phones, microwaves, household appliances, televisions, computers, and so on. The months necessary to make the chips is just the beginning–they are only a part of completely separate, complex, and global supply and assembly chains.
 
And therein lies the rub. The long delay for getting a semiconductor supply system tuned just right is just the first thing that has gone wrong in our world of globalized manufacturing.
 
Join Peter Zeihan November 19 for Supply Chains No More, the second of a three-part series of seminar exploring the challenges facing the American and global economies.

REGISTER FOR SUPPLY CHAINS NO MORE


Also in this series:
 
Part I: Wither the Workforce
November 17

REGISTER FOR WITHER THE WORKFORCE

And Part III: The Face of Inflation
December 1

Please Join Us: Wither the Workforce

Peter’s back from chatting with dozens of firms across the manufacturing, finance and agricultural space and one topic kept popping up: what’s up with COVID vaccine mandates? The answer — from the business community — might surprise you!

The impact of vaccine mandates is only one of a plethora of issues impacting the American workforce. Join us Wednesday, November 17 for Wither the Workforce, a wide-ranging discussion of everything from COVID to manufacturing trends to technology to security to demographics, all from the point of view of the labor markets — with a heavy emphasis on the workforce of the United States and those of America’s partners and competitors.

REGISTER FOR WITHER THE WORKFORCE


Part I: Wither the Workforce is only the first of a three-part series on the life and times of current major economic trends. Also in this series,

Part II: Supply Chains No More
Friday, November 19

REGISTER FOR SUPPLY CHAINS NO MORE
 
And coming soon, 
Part III: The Face of Inflation
Wednesday, December 1

Part II: Supply Chains No More

Anyone try to buy anything recently? Like, anything?

Throughout northern Mexico, parking lots full of finished automobiles (that are just waiting for a few semiconductors) have become common. Year-on-year prices for used cars are up 25 percent — a hands-down record. New models of televisions and consumer electronics are simply not happening this year. If you haven’t finished your Christmas shopping already, then ha! It is probably too late.

Let’s make this about me for a moment:

  • Last May a jihadist dove attacked one of my windows. I immediately ordered a replacement pane, which still hasn’t arrived.
  • I installed a heating system over the summer, but the control module that enables me to turn the heat on has now been on backorder for four months.
  • The publication of my next book, The End of the World is Just the Beginning: Mapping the Collapse of Globalization, might be delayed because of difficulty importing the materials needed to produce paper.

There are any number of factors feeding into these problems: COVID complications, labor shortages, changing regulations, whipsawing demand patterns, container shortages. One that is a bit louder are port bottlenecks.

The issue is that most of America’s product imports come via container, and ports’ abilities to handle containers simply cannot ramp up to meet demand. Not that they can’t ramp up fast enough, they cannot ramp up at all. Every port specializes in specific sort of cargo, and when they are at 100% capacity, they are at 100% capacity. California’s regulatory and efficiency issues notwithstanding, if you don’t have the infrastructure in place, you don’t have the infrastructure in place.
 
The results are not simply bottlenecks at the ports, but backlogged shipments going back onto the ships as well as snaking through the entire road-and-rail system. Each problem has generated more which have merged together into an interlocking mess of meh. Crazy thing is, even if all of this could be magically fixed, we would still be facing supply shortages until at least mid-2023.
 
Join Peter Zeihan Wednesday, November 19 for the second in a three-part series on the here, now, and soon-to-be of the American and global economies. Part II: Supply Chains No More will focus exclusively on the products shortages plaguing us all.

REGISTER FOR SUPPLY CHAINS NO MORE


Also in this series:
 
Part I: Wither the Workforce
Wednesday, November 17

REGISTER FOR WITHER THE WORKFORCE
 
And coming soon, 
Part III: The Face of Inflation
Wednesday, December 1

A Bungle of Boomers

If in recent weeks you’ve gone to a restaurant or boarded a plane of shopped in a store or remodeled your house or been in a hospital or done anything that Today, the United States faces its tightest-ever labor force. It is about to get substantially worse.
 
Every country has its own demographic profile, a balance across its entire population structure from children all the way up to retirees. Learn to read that profile and you can parse out lessons about a country’s economic present and future.
 
The group that matters most are America’s Baby Boomers, a group born between 1946 and 1964.
 
There are no end of stories to tell about America’s Boomer generation. They are the ones who came of age during 1970s, creating what passes for American culture. Disco? Their fault. They are the ones who crafted the American welfare state, and from it their in-progress retirement has broken the federal budget. They are the ones who grew up in the shadow of the new manufacturing complexes that sprouted up after World War II when the rest of the world was wrecked, and then watched bitterly as those same facilities relocated as the rest of the world recovered under the American-led, global Order. From Vietnam to Afghanistan, from Johnson to Trump, from civil rights to long commutes, from the sexual revolution to technological invalidity, their collective decisions and foibles have determined precisely what America is.

The world — the entire world — is literally running out of workers. In most sectors in most places, the workforce which exists today is the most robust it will be And now? Now they are leaving us. The majority of the American Boomers will have retired by the end of 2023. Unlike any other group that might leave the work force only to someday return, Boomers are leaving because of age. They will never return. The American system will never recover from that.
 
Join Peter Zeihan Wednesday, November 17 for the first in a three-part series on the here, now, and soon-to-be of the American and global economies. Part I: Wither the Workforce will focus exclusively on labor markets, providing insight as to just how deep and how long these shortages will last, and identifying which sectors will have no choice but to fundamentally restructure in the months and years to come.

REGISTER FOR WITHER THE WORKFORCE


Stay tuned to this list for upcoming information on Parts II and III.
 
Part II: Supply Chains No More
Friday, November 19
 
Part III: The Face of Inflation
Wednesday, December 1

Part I: Wither the Workforce

If in recent weeks you’ve gone to a restaurant or boarded a plane of shopped in a store or remodeled your house or been in a hospital or done anything that requires a degree of assistance from a warm body, you’ve noticed it. Where are the workers??

As the economy haltingly recovers from the COVID lockdown days, every industry under the sun faces protracted staffing shortages. Part of it is indeed COVID. Part of it is America’s ongoing reindustrialization. Part of it is internal population movements. But the biggest piece is demographic.

A baby bust started saturating the world in the late 1960s. In many cases countries never recovered. And now, decades later, that baby bust is generating a worker bust. Italy is the poster child for this phenomenon.

The world — the entire world — is literally running out of workers. In most sectors in most places, the workforce which exists today is the most robust it will be in our lives.
 
Join Peter Zeihan Wednesday, November 17 for the first in a three-part series on the here, now, and soon-to-be of the American and global economies. Part I: Wither the Workforce will focus exclusively on labor markets, providing insight as to just how deep and how long these shortages will last, and identifying which sectors will have no choice but to fundamentally restructure in the months and years to come.

REGISTER FOR WITHER THE WORKFORCE


Stay tuned to this list for upcoming information on Parts II and III.
 
Part II: Supply Chains No More
Friday, November 19
 
Part III: The Face of Inflation
Wednesday, December 1

Where in the World: Home, and Cruise Missiles

The United States and United Kingdom have shouldered out the French in a deal to supply submarines to Australia. And not just any submarines, potentially nuclearpowered submarines.  France was poised to ink a deal worth more than $65 billion for sale of its diesel-electric subs. The deal comes as part of a new alliance among the three anglophone states—AUKUS—and will see either US or British-supplied subs to boost Australia’s role in upholding maritime security in the Indo-Pacific.

China, the unstated but obvious target of such a movie, has responded with the expected frustration and condemnation of “outdated Cold War” thinking. But it is France who has provided the most popcorn-worth apoplexy. Which makes sense. A new global order is underfoot, and the French are not front and center. Also, it’s several tens of billions of dollars their industries lost out on. Also, they were supposedly only given a day or so of advance notice. The French have even recalled their ambassadors from the US and UK for consultations. It’s all a delicious soap opera.

As fun as it is to be on the outside looking in, the submarine deal and the destruction of the deal that preceded it are not the real story here. The bigger story here is that the Australia broader exchange in military technology and expertise between the Australians, the US, and the UK. I’m thinking particularly of the fact that Australia is slated to receive some pretty capable ship-and-submarine launched cruise missiles. Some with a range exceeding 1500 miles. Australia having the ability to strike Malacca from its own territories, and giving it some nuclear-powered teeth against Chinese maritime ambitions is a huge geopolitical development, and not just in the broader Indo-Pacific basin.


If you enjoy our free newsletters, the team at Zeihan on Geopolitics asks you to consider donating to Feeding America.

The economic lockdowns in the wake of COVID-19 left many without jobs and additional tens of millions of people, including children, without reliable food. Feeding America works with food manufacturers and suppliers to provide meals for those in need and provides direct support to America’s food banks.

Food pantries are facing declining donations from grocery stores with stretched supply chains. At the same time, they are doing what they can to quickly scale their operations to meet demand. But they need donations – they need cash – to do so now.

Feeding America is a great way to help in difficult times.

The team at Zeihan on Geopolitics thanks you and hopes you continue to enjoy our work.

DONATE TO FEEDING AMERICA

The Way Out – and Forward

The seven-day moving average for new COVID deaths in the United States is back up above 1,000 – a figure the Americans have not suffered since before COVID vaccines became widely available back in April. To that end, a series of new government and private sector policies addressing COVID have popped up in the past few days. Collectively, they suggest the United States finally can see an end to the COVID tunnel.
 
From least important to most:
 
First, Biden has directed OSHA to force all firms employing at least 100 people to get their entire staff fully vaccinated. This is on top of his pre-existing orders for all federal workers, all military personnel, and all federal contractors. In all, it potentially impacts two-thirds of the American work force.
 
The law is firmly on the government’s side here. A 1905 Supreme Court ruling – which has been reaffirmed multiple times in the decades since – makes it exceedingly clear that any U.S. legal jurisdiction can force mass vaccinations. The precedent has already been cited by multiple federal judges in flatly denying petitions filed by those challenging COVID vaccine mandates. Chief Justice John Roberts actually has a portrait of the judge who penned the 1905 decision on his office wall. None other than Trump Supreme Court appointee Amy Coney Barrett has brushed off similar challenges from even reaching her bench. Legally, challenging this (successfully) is a dead letter.
 
But this is OSHA and OSHA isn’t quick. Between the standard rule-making process, the fact that this is not an act of Congress, and the inevitable legal challenges, this will take months. The biggest impact for the remainder of the year is that firms who were afraid of their own vaccine holdouts now have all the political and legal cover that they could want to implement their own mandates. This does move the needle. This is going to impact millions of workers. But not the 100ish million workers the headlines would suggest.
 
Second, the new Biden announcement forces the staff of any firm which who provides any services that use any funding from Medicare or Medicaid to get vaccinated. This covers all employees of any relevant medical facility from the surgeons to the janitors.
 
This directly impacts several million health care and support workers, and is far from small, but the real impact isn’t direct. What’s truly at stake is the health insurance industry now has the full federal cover they need to cut the cord connecting them to 2020’s emergency measures. The collective decision made last year – both in health care and government – was that COVID was not a “preventable disease” and so sufferers should not be responsible for COVID-related medical bills. Not simply the big tickets themselves, but even “normal” things like health insurance deductibles.
 
This norm has been loosening since June, when it became obvious there was going to be a substantial vaccine hold-out population. With Biden’s Medicare decision, the cord will now be cut. Private insurance will now consider COVID a “preventable disease” which means unless there’s a mitigating factor, unvaccinated COVID patients will largely be responsible for their own medical expenses. The average COVID-related hospital stay runs $17,000 – that goes up to $50,000 if you end up needing ventilator time.
 
Delta Airlines has proven that such financial disincentives work. Less than a month ago Delta told its employees that if they could not prove they were vaccinated, they would have to pay insurance premium surcharges of $200 a month. Just one paycheck later, some one-fifth of the holdouts had already joined the ranks of the vaccinated.
 
Third and most importantly, this week the Los Angeles school board adopted plans to force all students eligible for the vaccine – that’s everyone 12 and over – to get vaccinated if they are to remain in school in-person for the spring 2022 semester. The rationale isn’t difficult to justify. Children are now the single largest block of unvaccinated, and while young COVID sufferers tend to have less severe symptoms than adults, the Delta variant hits them far harder than the initial China strain. Fully one-quarter of all cases are now in children.

The chief reason why the United States is not a disease-infested dystopia is that all children under 18 are subject to a rolling series of vaccinations as a precondition for attending school. Think tetanus, chicken pox, and mumps. This system not only vaccinates a large chunk of the population directly, but establishes lasting immunity to a host of diseases that regularly plague less advanced countries.
 
With COVID, this standard process has not been an option. Initial vaccine trials focus on healthy adults, and only over time move into younger population cohorts. In addition, we’ve been vaccinating the population in reverse, starting with populations with the highest mortality rates (the elderly) and working our way backwards. This was done to prevent deaths, but it also means the normal bulwark against long-term disease spread hasn’t been built. Hasn’t even begun to be built.
 
There will be legal challenges to the LA board’s decision. (Honestly, I’m sure that in the time it took me to write this, the first ones have already been filed.) All of consequence will fail. Not only because the legal precedent is with the board, but because all the board did was add one more vaccination to the existing list – a list that the board has full legal authority to expand as it sees fit. Others will follow LA and its six hundred thousand students.
 
To be direct, this sort of mandate is how the United States beats COVID.
 
Why do I care? Why am I considering a health issue to be part of my geopolitical bailiwick?
 
Two reasons:
 
First, demographics. The healthier the population, the more economically productive a population, the less dependent upon foreign factors a country is. COVID has already resulted in the single-greatest reversal in the average American’s lifespan since the country’s last major health crisis: the Spanish flu epidemic of 1918-1919.
 
Second, the world is in the midst of the greatest geopolitical transition of our lives, and arguably the largest one since the onset of the deepwater navigation era in the late 15th century. Globalization is in a state of collapse. Ten years from now, the countries that have proven able to secure their means of production, their manufacturing supply chains, their internal consumption, and their labor force from the vicissitudes of global disorder will be the ones who rule the future. America’s unvaccinated population is now the single biggest threat to each and every step of that process.
 
Mass vaccinations are how the United States retains its population and its position and its potential and its freedom for action – for decades to come.
 
So get the damn shot already.


If you enjoy our free newsletters, the team at Zeihan on Geopolitics asks you to consider donating to Feeding America.

The economic lockdowns in the wake of COVID-19 left many without jobs and additional tens of millions of people, including children, without reliable food. Feeding America works with food manufacturers and suppliers to provide meals for those in need and provides direct support to America’s food banks.

Food pantries are facing declining donations from grocery stores with stretched supply chains. At the same time, they are doing what they can to quickly scale their operations to meet demand. But they need donations – they need cash – to do so now.

Feeding America is a great way to help in difficult times.

The team at Zeihan on Geopolitics thanks you and hopes you continue to enjoy our work.

DONATE TO FEEDING AMERICA