While I Was Gone, Part 3: Economic Status

Person using Forex trading on a laptop and phone

Today, we’ll be turning our attention towards the economic moves that the Trump admin made while I was away.

Intel was partially nationalized (10% government stake); this move supports semiconductor security but could also turn the company into a defense contractor rather than an innovator driven by profit. The Block Island wind farm project was completely halted…despite being nearly completed; this undermines US energy reliability, trust in government contracts, and the need for rapid energy expansion. And of course, Trump had to throw in an out-of-pocket personal attack with a Fed board member (Lisa Cook) over mortgage discrepancies, which is just another step towards making the Fed a political tool.

All these economic actions nudge the US further away from free-market capitalism, and closer to something where the government dominates industry, contracts, and monetary policy. However, experimenting with new economic models is inevitable, it would just be nice to let some other countries be the guinea pigs.

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Transcript

Hey all Peter Zeihan here. Coming to you from a rainy lake of the Ozarks. We’re continuing our series on. What the hell were you guys thinking while I was gone backpacking? Today we’re going to talk about some economic issues in the United States. We’ve got three things that you guys decided were good idea to do. A certain green. Got three ideas that you guys decided were good ones while I was gone. 

The first one was that Donald Trump partially nationalize Intel. Intel is, of course, America’s premier semiconductor manufacturing firm, taking a 10% stake for the government. This does not give the United States a seat on the board, but it does obligate the United States to pay for a lot of R&D. And if your goal is to near-shore semiconductor fabrication, there’s some serious logic here. 

And if your goal is to deepen the government’s involvement in design and control the technology, there’s some logic there as well. But it does come at a pretty significant cost. When you start to nationalize companies, they treat the government as one of their stakeholders, and they start to optimize their operations to do whatever the government wants that might achieve a national security goal, perhaps, but it comes at the cost of the company basically letting everything else fly, and reducing the profit motive to actually make the company better. 

They become more of a defense contractor. So pros and cons, Second big item is that the Trump administration issued a cease order for the Block Island windfarm off the coast of Rhode Island, and it’s really hard to spin this as a positive. The money had already been allotted. Things have been paid for. Remember, you have to pay for green tech projects pretty much upfront. And so the financing was all in place. 

The project was already 80% completed and was about to start wiring power next year. And now it’s just completely stopped. So number one, this is an investment issue. Number two, this is a foreign investment issue because the Danish companies were involved. And number three, it’s a power issue for the eastern seaboard. But most importantly, the federal government has now decided to kill the project specifically because Donald Trump doesn’t like wind turbines. 

He doesn’t like the way that they look now. Wind turbines in the right spots are among the most efficient ways of generating power. This isn’t like solar, where the it’s dark half the year. Wind, especially offshore wind, is a very strong, reliable source of energy. But Donald Trump doesn’t like the look of them. So from the point of view of contract law, the federal government has now established itself as a relatively unreliable partner in the power sector. 

And no matter what your interpretation of America’s near term future, whether you’re like me and you see, we need to double size of the industrial space with your tech guy and you want to massively expand AI. Whether all you want to do is replace the old infrastructure with new infrastructure. The United States needs to expand its power grid by at least 50% over the next several years, and all of a sudden, the federal government is no longer a positive contributing partner to that. 

And everyone who is involved in government contracting in the power sector is now going to be wondering if there’s any reliability at all. That’s really bad. If you’re trying to do something quickly, because the federal government will always be the single largest economic entity in the United States. And now it’s got people wondering if they can be trusted of all, because there’s no scientific reason, there’s no economic reason, there’s no financial reason. 

There’s no national security reason for this contract to be canceled. It’s just been canceled because Trump doesn’t like the look of windmills. That is very, very Latin American. The third issue is that Donald Trump has tried to fire or has fired a woman by the name of Lisa Cook, who is a member of the Federal Reserve Board. Now, the US Federal Reserve is basically the central bank of the United States. 

They say interest rates and manage monetary policies in order to manage the American economy. And under existing law, you cannot fire a board member unless there’s cause. The cause that Donald Trump cited was that Lisa Cook now stands accused of falsifying some data, on free home purchases she’s made over the last 10 to 15 years. I believe. 

In total, the three mortgages in question have a total finance value of about $1 million. Have all since been paid off. And he’s saying that she lied about it being her primary residence in order to get a slightly better interest rates. And we’re talking here about less than a half a percent. This is kind of rich because no charges have been brought. 

It’s simply an accusation. No data has been presented. But Donald Trump has been convicted in a court of law of over a half $1 billion of real estate fraud. So you know, there’s a little bit of a ocracy here. Whether or not if she were charged and found guilty, is qualifies her as a being fired for cause is a really open question. It’s really questionable whether the Supreme Court would rule that way. And this is a court that will absolutely go all the way it up. But the core issue here is Donald Trump has found a way to remake the Federal Reserve in his own image. 

One of the problems that Trump is facing is a lot of the tariff policies that are in place at the moment are highly inflationary and are driving economic activity out of the United States by making the United States a less reliable partner in things like manufacturing supply chains in addition, things like steel and aluminum, copper tariffs to make it much more difficult to construct anything, whether it’s in the power grid or your house. 

And so we are set up for higher inflationary, lower growth environment moving forward. So Trump’s idea is if we can reduce capital costs significantly, then we will have more economic activity. And faster growth that people will get credit for. The Federal Reserve would never go for that because that would be wildly inflationary. Think about what happened under the Biden administration when we had a series of federal spending projects, none of which Donald Trump has really trimmed down. 

That dumped a lot of money into the economy post Covid and generated faster economic growth, but faster inflation because we saw demand go up and up and up and up without an underlying increase in supply. What Trump is doing is constructing supply and now trying to goosed demand with interest rate policies, achieving something that’s at least as bad, for political reasons, demand scarcity or a directed demand, something like that. It’s a lot like, like wartime mobilization, where the government takes a larger role in the system controlling the production, but it’s not driven by a crisis, is driven by a change in macroeconomic fundamentals, and it’s is focused on demand as it is on supply. 

And if that sounds not particularly capitalistic, that’s because it’s not even remotely capitalistic. But as we’ve seen from the Donald Trump administration so far, that is really not a major concern. Nationalizing companies, he sees as a plus, taking over direct control, personal control of the monetary authority he sees as a plus. And the sacrosanct nature of contracts is not something he seems even remotely bothered by. 

These are characteristics that have a lot more in common with, like the Latin American flavor of socialism or even modern day China. And one thing that they do not generate is efficiency, or private ownership or private decision making. But kind of that’s the point. 

So none of these steps are good. They all basically make the federal government part of the problem, in a way that five years ago we would have said something that the liberals prefer to do, but now Donald Trump is there. The reason that this bothers me so much, but the reason why I’m trying to maintain an open mind is that the models that we use to manage our economy and by our, I mean humans are changing and need to change. 

For the last century, we’ve basically had four overarching economic models. We’ve had free market capitalism, which is something the United States tends to champion. Not anymore. We’ve had a European social model that is more based on social placidity and equality, but doesn’t generate as fast of economic growth and as much economic dynamism. Europe, of course, is known for that. 

You get command communism, where you have a central authority that makes most of the economic decisions. That’s Maoist China, that is the Soviet Union. And then you have something called fascist corporatism, where there’s a fusion of corporate interests and government interests. And that’s classically Nazi Germany, but also like 1970s and 1980s Korea, maybe a little bit of, Japan and certainly China today. 

All four of these models are based on the relationship between supply and demand and capital and labor. And with the world going not just through a globalization phase, but a massive population phase, we are losing access to labor and capital in the volumes and in the ratios that we’re used to, because when people retire, they take their money with them and they are no longer working. 

So we’re seeing a change in the fundamentals that define our four economic models. And we need to try something new. What that something will be is very much in play. But what the Trump administration seems to be pushing us towards, whether it’s consciously or not, is something that’s kind of like a constrained, managed demand model where the government is the single largest player in determining who gets what, and because of problems with supply and consumption. 

They’re actively ratcheting down demand because there won’t be enough stuff to go around. But Trump is also constraining artificially the supply of product within the American market. So whether this, constrained demand model is something that is going to be a thing in the future, I don’t know, it’ll probably need to be a lot more cohered than what we’re seeing out of Washington right now. 

But it is something we shouldn’t reject out of hand because we know the old models aren’t going to work. The primary concern that I have at the moment is that the United States has the healthiest democracy of any major country in the world, which means we don’t need to make the adjustments first. We can wait to see what everybody else does first and then sort of pick and choose. 

The idea that we are needs to be the ones at the vanguard of this next phase of economic theory, I think, is a bit of a stretch. And if we are going to do it, I would like to see it be a system that is a lot more coherent and a lot more geared to American strengths and weaknesses than what we’ve seen out of the administration these last couple of weeks. 

Soooo…. 

While I Was Gone, Part 2: US Health

Doctor with a stethoscope

RFK Jr. was busy while I was away. He downgraded several vaccines to only at-risk groups and tied licensing and insurance access to compliance. He fired the CDC director, prompting an exodus of credentialed medical staff. And he triggered a clash between Health and Human Services, the CDC, and the broader medical community.

When vaccines (aka one of the greatest contributors to modern health) get undermined, it sets off some alarm bells. This has surpassed health and politics, and it’s now a national security concern. mRNA vaccines enabled rapid COVID response, but they could also revolutionize biodefense.

Should this technology remained sidelined, the US will be unnecessarily vulnerable to biothreats. And I don’t see RFK Jr. being ousted from Trump’s political base anytime soon, so get ready for a fun ride…

Prefer to read the transcript? Click here

Transcript

Hey all, Peter Zeihan here. Coming from the Lake of the Ozarks, we’re continuing our. What the hell did you guys do over the last two weeks while I was gone? And today we had to talk about the intersection of health policy and national defense. While I was gone, RFK junior, who is the secretary of Health and Human Services, has basically downgraded most vaccines, specifically with the Covid vaccine, saying that they are no longer recommended for use for most Americans. 

Really, just for people who are at risk. And any doctors who decide to buck HHS recommendations, will no longer have state certification for things like insurance. Basically saying that I have made up some new rules. I have fired all of the doctors. And if you don’t follow my rules, then you can’t get insurance. 

Topping it off. He fired the director of the center for Disease Control. A woman by the name of, Miranda’s. And when she was let go, basically all the senior staff that have medical credentials left with her, which has left RFK to basically staff the world’s premier disease prevention and to deal with people who have basically no medical experience and are basically driven by conspiracy theories. 

So we are now setting up for a direct clash between HHS and the CDC and the medical community writ large. The health implications of this are, to say, dire by making doctors choose between being politically correct and actually providing medical care, and by denigrating vaccines which have been the single largest cause of the increase in the American health system for the last century. 

And basically pushing that down to the bottom is going to have some catastrophic outcomes moving forward. This is no longer purely an issue of health or politics. This has now graduated into the area of national security. And let me just give you one reason why we should all be very, very worried. Let’s look at MRNA vaccines. That’s the relatively new technology, less than a decade old, that was the backbone of what happened with Covid, which saved at least a million American lives, probably significantly more than just in the first year. 

MRNA vaccines are what you might call a digital vaccine. So with a traditional vaccine, you’re growing the virus in something like an egg yolk medium, and then you grow enough of it and kill the virus to make a weakened or a dead virus vaccine that you inject in order to trigger an immune response. 

That’s not how it works with mRNA. You identify a specific part of the virus that you think is going to be vulnerable, and then you digitally manufacture a molecule that interferes with that specific site. So the amount of organic material in an MRI vaccine is minimal, but also because it’s basically designed and manufactured, you can produce it very, very quickly. 

You can design your molecule in a matter of days. You can bring it in for a large scale production in a matter of weeks, rather than having to just inject egg after egg after egg after egg, and it will eventually produce enough of whatever it is for 300 million people. Because of that, any bio weapons defense system that the United States might have has always been next to impossible. 

Because once you identify what the enemy pathogen is going to be, you then have to go through this months long process of producing enough vaccine to combat it. With mRNA, you can do that in a month. So we’re now in a situation where all of our bio weapons defense systems have basically stopped because we have a freak show running the HHS and now that the CDC has basically been purged of doctors at the top levels, we no longer even have a voice in the federal government that is looking out for the health of American people at the moment. 

Robert Kennedy Jr continues to be wildly popular with the MAGA base, so I see no reason that Donald Trump is going to fire him. But it also means that the federal health authorities in the United States have basically become nonfunctional and now are contributing to America’s health care problems, rather than trying to mitigate them. Remember that earlier in this administration, all cooperation with international medical communities was basically severed. 

So the United States is now basically sitting in a box and digging itself into a hole and not even looking out for future threats, much less setting up the infrastructure to deal with them. Not good.

While I Was Gone, Part 1: Trade Policy Updates

Photo of trade containers stacked

A US federal appeals court has ruled that most of Trump’s tariffs are illegal since the president needs congressional authority to declare trade emergencies or impose tariffs.

So, it’s off to the Supreme Court to decide if Trump’s entire trade policy will get scratched. And if you’re thinking, “Did Trump’s trade team ever get staffed?” The answer is still a resounding “yeah right!”

This deep uncertainty is wreaking havoc on businesses that operate across borders; many of which are now shifting production out of the US. These policies are inadvertently accelerating American deindustrialization and whatever the Supreme Court decides, it’s going to be rough on the United States for at least the remainder of the year.

Prefer to read the transcript? Click here

Transcript

Hey all, Peter Zeihan here. Come to you from the Lake of the Ozarks. I just got back from backpacking in Yosemite for a couple of weeks and holy crap, you guys have lost your mind. So I’m doing a series of videos this week, basically on, what’s happened while I was gone and what it means. This has a very, frog and a boiling pot sort of situation. 

The water has been heating up, and I don’t know how many people ever actually notice what’s been going on, but a lot of things are breaking pretty quickly. So let’s start with trade. Just before I got back, an appeals court and the U.S. federal level ruled that most of the tariffs that Donald Trump has been executing over the last few months are illegal under current law. 

Specifically, the Trump doesn’t have the ability to declare a trade deficit as a emergency. He can’t use fentanyl as a justification for a trade war. And he can’t just establish tariffs however he wants, wherever, once and for as long as he wants. Which, you know, honestly, it’s not a particularly strict reading of the law. According to the Constitution, Congress has the authority to set tariffs, and Congress has in bits and pieces over the last several decades, given some of that power to the president, but never to the degree of expansiveness that Donald Trump has asserted. 

This is a second court ruling on this issue against Trump. It will now go to the Supreme Court, probably before the end of the year. And it throws everything about the Trump tariff policy, which is the core of Trump’s economic and foreign policy into doubt. Part of the problem that Trump is going to experience here is that once you get past the tariffs, there really isn’t anything else under the hood. 

The federal government is still not staffed out. The US Trade Representative Office, which is supposed to negotiate and trade deals, still hasn’t been stopped out. The Commerce Department still hasn’t been staffed out. It’s so bad that the Treasury Secretary has been involved in some of these trade talks, and none of the trade talks, none of them, none of the deals we’ve seen so far deal with any of the traditional irritants in economic relations between the United States and the rest of the world, or just about a tariff number. 

So if this number goes away, Trump is not simply starting from scratch. He has yet to build the team that is necessary to start a new policy. And we basically need to go all the way back to January 20th and start over. So big defeat for the president. As for corporate America and the American experience. 

Everything is in flux. We still don’t have a meaningful deal with Canada, Mexico or China, three of our four largest trading partners. And the deals we have with places like South Korea, Japan and the United Kingdom are wishy washy at best. And we’re almost designed to allow the other countries to avoid the tariffs in many ways. So these are sloppy deals that are very light on details that have yet to really be determined. 

And now we’re looking at probably having to start the entire thing over, which means if you are in the business of working in the United States, you still have no clarity. And the closest clarity you might get is on the other side of the Supreme Court ruling, which is at the moment unscheduled. So what we’re seeing is the beginnings of a deindustrialization of the American complex, because companies are now moving their facilities and their production capacity outside of the United States, knowing that they’ll have to pay tariffs when they bring stuff back in. 

But there’s no advantage to participating in a multi-state supply chain. Normally, with manufacturing, especially more advanced manufacturing. Different countries, different companies produce different pieces of whatever the final product is. And those pieces fly back and forth or ship back and forth across international boundaries as value add is added at every step with the United States with this tariff policy. 

You get taxed every time something comes in, even if it’s not a finished product. And so the solution is just to avoid the United States completely, make it entirely an international system, ship the final product to the United States consumer and pay the tariff once. So in its current form, we’re seeing a significant breakdown of American manufacturing. And that will continue until we have some clarity on what trade policy will produce. 

If the Supreme Court decides to reinstate the tariffs that will accelerate the industrialization of America. It’s the Supreme Court decides to ban the tariffs. Then we have to start over and we have all the uncertainty all over again from the beginning. So no matter how you look at this, this is not a great situation for the United States for at least the remainder of this calendar year.

Smokey Bear’s Best Friend: fire.airnow.gov

Wildfires with smoke and a car in the background

We’re talking about every hiker’s worst nightmare. No, not the feeling of slipping into wet boots that didn’t dry out overnight. We’re talking about smoke!

There’s a growing wildfire smoke problem across North America and there are three main drivers. The Western Rockies had an unusually dry year, causing large fires that could smolder well into the winter. Canada’s muskeg region is vast and swampy, but long-lasting and hard-to-control fires break out as the region dries out, sending waves of smoke across the US. And of course, Pineapple Express (no, not that kind of smoke); the atmospheric rivers that leave the PNW parched and fire prone. Surprisingly, the West Coast has fared much better than most years thanks to heavier rains.

The smoke situation is a recurring and hard-to-predict, but using FIRE.AIRNOW.GOV can help you track air quality and plan ahead.

Prefer to read the transcript? Click here

Transcript

Hello, Peter Zeihan here coming from Colorado. And today we’re going to talk about smoke. This is a topic that is very near and dear to my heart as a backpacker. As you may have noticed, whether you’re living in Minneapolis or Chicago or Des Moines or Kansas City, we’ve had some crazy smoke outbreaks already this year. So I thought it’d be worth showing a tool to you, as well as talking through the three biggest things that shape the smoke forecast for the United States. 

First of all, the tool fire.airnow.gov tracks a several thousand air quality sensors scattered across the country and maps out the smoke plume. So you know what to anticipate. Also gives you an idea of the danger level based on the particulate matter in the air, so you can judge your day accordingly. A tool that I use every day, all summer long. Use it to plan my trips, because I don’t want to be in the middle of that smoke choke, when I’m backpacking. Anyway, that’s the tool. Let’s talk about the three big things. Number one, moisture conditions in the Rockies, specifically the Western Rockies. As you move up elevation, the land becomes more arid because the air density is lower, so it can hold less moisture. 

What that tends to mean is that as you move up, you get into a more and more arid environment where conditions can change very, very quickly from maybe adequate moisture to completely inadequate. And you introduce a spark weather through, some asshole with a cigarette or a lightning strike, and you can get a big forest fire very, very quickly. 

Now, this year, the Western Rockies did not get as much moisture as they normally do. So they started out the season pretty dry. And already in western Colorado, we have a series of fires that collectively are about 200,000 acres and going. And most of the air quality issues we’ve had in the Denver area so far this year are because of those fires. 

About the only good point I can say about these fires is because of the nature of the topography. Mountainous. Sometimes it’s difficult for the fires to jump from one valley to another, and they tend kind of, sort of to be somewhat self-contained. However, these are rugged areas. There’s low population density. It’s very difficult to fight fires in these areas. 

And so if a fire does start up, they tend to burn until winter. And sometimes they’re not completely out until after Christmas. So these are kind of a chronic issue that kind of needles air quality throughout the Rockies. That’s number one. Number two Canada. Okay. So Canada is a very weird place, topographically speaking, is a huge country with lots and lots of climate zones. 

But the one to watch the most is an area called the muskeg, which is a zone in northern Saskatchewan, in Manitoba, going over into the Canadian Shield, into western Ontario. These are areas that are almost completely unpopulated. And in the wet months they’re basically swamps. But if you have several months of low rainfall, the swamps start to dry out. 

And as soon as that happens, all it takes is a spark and you can basically get some sort of surface peat fire almost that can burn, burn, burn and burn. At the time that I’m recording this in the middle of what is this August, there are over 200 fires burning in this section of Canada. In many ways, it’s more dangerous and more problematic than what we have in the Rockies, because these zones are not mountainous. 

And so if you have an area that has become parched, it can just burn and burn and burning, burning, burn. And if you remember back in July when we had really poor air quality as far south as Kansas City and as far east as New York, almost all of that was because of these Canadian fires and because it’s swamp part of the year, and because it’s basically frozen tundra part of the year. 

These are not things where any sort of mitigation can really help. In the Rockies, you can go through foot by foot, acre by acre, clear out the Deadwood cut down the dead trees, haul it all off, put it into piles or whatever. That’s something I’ve done on my property for sure, because I live in a fire zone. You can’t do that. 

And the great untouched barrens of northern Canada, you just have to suffer through the fires and it’s going to be a bad fire. You’re up there. So for those of you in the Upper Midwest and the northeast part of the United States, expect more and more waves of smoke. All right. What’s the third one? Pineapple express? There are things called atmospheric rivers where you basically get channels of high altitude winds that suck moisture out of the oceans, and they just push them across the planet. 

And when these channels hit a mountain range, they rise and they drop a lot of moisture. So what we see in California, Oregon, Washington and British Columbia is the atmospheric river whips around like a fire hose at the firemen has lost control of, and it will spray the area with massive amounts of rain in some years or in other years, it’ll miss you completely and you’ll just kind of get the suction effect. 

And as the wind goes down the other side of the mountains, you get a compression effect, which actually increases air density and temperatures and makes you more prone to fires. So you get these two extremes. You get sprayed down by the atmospheric river hose, or it avoids you completely and just sucks the moisture along in its wake. Drying you out this year is absolutely a hose year, and so we’ve seen almost no fires up and down the Pacific Northwest. 

But if you remember back to say, the year 2000, when it seemed the world was going to end, that time we actually saw the Amos River avoid this region completely desiccated. And we had some of the worst forest fires in recorded history. So for me personally, going to Yosemite and a couple of days, this is perfect because while there are fires in Canada, I’m not going that direction. 

There are fires in western Colorado. I’m leaving that area. I’m going to California, which has now experienced some of its best moisture conditions in several years. The chances of fire are minimal for the rest of you, fire air now.gov and keep ahead of it.

American and Indian Relations Sour

Made in India. Cardboard boxes with text made in India and indian flag on the roller conveyor. Licensed by Envato Elements: https://elements.envato.com/made-in-india-cardboard-boxes-with-text-made-in-in-8X3N3JR

The global rise of right-wing populist governments has complicated the relationships between many of the dominant countries and leaders. The latest is America and India.

That trade deal everyone was optimistic about hasn’t quite played out so smoothly. India is facing steeper tariffs due to its ongoing or persistent trade relationship with Russia. Trump and Modi both expected special treatment for…being themselves; obviously, that didn’t play out for either of them.

Whether India decides to lean into its ties with Russia, form a stronger relationship with the US, or remain independent, its decision will carry huge implications for the global order. As these populist leaders continue to reject the old ways of doing things and seek to build new ones, small disagreements are more likely to intensify.

Prefer to read the transcript? Click here

Transcript

Hey, all. Peter Zeihan, I’m here coming to you from Colorado. And today we’re going to talk about relations between India, the United States, which have apparently just dropped into the crapper in the last couple of weeks. If you go back a few weeks, you know, maybe two months, there were very positive signals coming out of both Washington, DC and New Delhi that a meaningful trade deal was imminent. 

And it’s all falling apart. And not only is there no deal, India is now paying some of the highest tariffs of any country selling the United States. Right now it’s about 50%. And Trump has said it’s probably going to go up based on how relations with the Russians degrade. The Indians are saying this isn’t fair because lots of countries trade with the Russians. 

And so why should India be the only countries paying a penalty? And I’m not saying that there’s nothing to that point, but it kind of misses the point of how this works and where it’s leading, the United States and India right now, as well as a number of other countries that include China and Turkey and Russia, have rightist populist governments that focus on what makes their country special versus everyone else. 

These are not the sort of governments that normally get along. Normally, these are the type of countries that find themselves duking it out on the battlefield with one another. The reason that hasn’t happened is because we’ve been in this weird moment in the post Cold War environment where the old consensus has basically prevented it from happening. 

One of the things that, right wing governments, right wing populist governments hate is the idea of a transnational group of liberals who impose some sort of policy on things. And, you know, maybe there is something to that. But keep in mind what that means. If you have a multiple of countries that include, but are not limited to Japan, Korea, Taiwan, the United States, Canada, Britain, Germany, France, Italy, Spain, and on and on and on that broadly agree on the rules of the game and things like individual liberty and things like international cooperation and things like economic integration. 

Then there’s no reason for them to have an antagonist military approach to one another. There’s too many other things in the system that stabilize the relationship. But if you have countries that don’t see things that way, that focus on what makes countries different and unique, as opposed to on the same side, then you don’t have those are resting factors and you can get more conflict, not necessarily of the military form, but of any kind of form. 

And those are exactly the types of governments where you have rising in the world today. In the United States, we have Trump, in India, we have Modi in Turkey, we have a guy by the name of Erdogan who’s been dragging the country this direction for 25 years. In Japan, we are seeing a cracking of the post-World War Two consensus around centrist politics in, China. 

We’ve got chairman G who is now basically a tinpot dictator of a second world country. In Canada, we’ve had a bit of a hiccup where we looked like the government was going to go a different way in the last elections, in polls right now in Britain and in Italy and in France and in Germany, the hard right is the more popular than has ever been before. 

And of course, the Russians have been run by nationalists for quite some time. What this means is that consensus around liberal international values is breaking down in a way that we have not seen since the days before World War Two. And if you go back and look at your history, especially for the first half of the century and the period before World War one and World War two, we had a lot of governments that kind of fit the mold that we’re moving towards right now. 

Now, does that mean that we are doomed to have another major international conflagration on the scale, the World War? No, no different world? A couple big things to keep in mind. Number one, there are no countries, with the exception of the United States right now, that could fight in more than one theater. But if you don’t have things like trade and integration tying countries together, then it is really easy for small flaps to turn into big ones. 

What happened with India in particular is both Trump and Modi assumed that because the United States and India were so special that any deal would be done their way, and that’s just not how it works. Also, India has never really had a free trade agreement with anyone, so anyone who thought that a deal was imminent really hadn’t been paying attention to modern Indian economic structure or history. 

Where does this take us right now? Oh, India has to figure a few things out. During the Cold War, they were neutral, but broadly pro-Soviet. In fact, they were pro-Soviet. Even when the Soviets went away. And India now is a country that has agency in capacity. There are major refinery center. They are major stop on the path of all merchandise trade and energy trade between the Middle East and East Asia and between East Asia and Europe. 

They have a military that is capable for their needs. It can easily interrupt those flows, and they have an economy that is increasingly wealthier and increasingly diversified, increasingly technologically capable. What they don’t have is projection power, either economically or strategically. Their military is designed for the problems that they have. It’s designed for Pakistan, it’s designed for Sri Lanka and Bangladesh. 

It can’t project to the Middle East. It can’t project to East Asia. It is a unit to itself that defines how the Indians see themselves. They don’t see themselves as part of any coalition. They see themselves as their own thing. And if you put someone from a populist right in charge of that, if you accentuate that mindset, then the potential for arguments with everyone become very, very real. 

So India is one of those countries that matters, but it matters which side it doesn’t fall on because it empowers whoever is opposite. In the environment that we’re in today. We’re in this weird little situation where the country that the Indians are most dependent upon is China, which obviously makes Indian politics a little colorful these days. The Indians were thinking that their moment had arrived, that they had become strategically special and could have a leg in the American coalition without actually having to do anything that was never going to fly. 

But the Indians also, wherever they do put their foot, are going to matter. One way or another. So the debate right now is whether or not they should buddy up with the Russians again. If they do, they’re bearing almost all the risk. The Russians would get almost all of the reward. But this is what happens when you have a rightist government that sees themselves as special in a way that maybe doesn’t necessarily jive with strategic reality. 

Modi is learning that, Trump is learning that. And in time, pretty much all of governments like this will learn it. And when that happens, decision making becomes a lot more hostile because no longer are they rebelling against the existing order, they’re looking to build their own. And when that happens, we start getting new strategic relationships and hostilities. And that can boil up into something a lot more substantial.

The Alaska Summit: Putin and Trump Talk War

Putin and Trump shaking hands on the red carpet. Photo by Wikimedia Commons: http://www.kremlin.ru/events/president/news/77790/photos/82627

Putin and Trump are planning to meet in Alaska in the coming days. Trump’s plan is to emphasize Russia’s losses in Ukraine (economically, strategically, and militarily), in hopes that Putin will pull back from the war in Ukraine.

Unfortunately, Putin doesn’t view the Ukraine War through the same lens as Trump. Putin knows Russia is facing terminal collapse, and Ukraine is just the first step in securing a future for the Russians. If Trump points out all the losses, along with stating that the US will be aligning closer with Western Europe, I wouldn’t be surprised if Putin responds with an even harsher war effort.

Prefer to read the transcript? Click here

Transcript

Hey, all. Peter Zeihan here coming to you from Colorado. Yeah. Humid. Cloudy with. Anyway, today we are going to talk about the upcoming summit between the Russian President Vladimir Putin and the American president, Donald J. Trump. We’ve had a lot of evolution in the American White House through the Ukraine war. And now we see the Americans starting to come around to what I could best call to be the the Western European opinion of things. 

Everyone has their own view on how the war is going, why it’s going the where it the way it is. I’ve recently recorded a video. We’ll send some links out here for how this looks from the Russian point of view, and what people who are new to the topic should think about when they’re evaluating. Short version is the Russians see this war as part of an existential fight for survival. 

They know their borders over the long run are completely indefensible. They know their demographics are collapsing, and they know that if they don’t change the rules of their neighborhood now, they’re going to lose all hope of doing that in the future. So for them, it’s almost impossible to contemplate stopping the war, because that means paying all of the costs of a conflict without getting any of the benefits. 

And that is signing up Russia for midterm national dissolution. That’s something you try to avoid. What the Trump administration’s talking point seem to be, forming up or to try to convince the Russians to look at all of this from an economic and a structural point of view. So the the argument goes like this. Mr. Putin, here’s your problem. 

You’re not winning this war. You’re grabbing territory not by miles, but by inches. You’ve already lost at least a half a million men, some people say it’s closer to a million. And that’s before you consider the economic damage from sanctions or the economic transformation of going to a war economy. This has just been a huge cost. You’re not doing well. 

You’re not going to win. And from a strategic point of view, you’ve actually made your situation worse. If you look at the period from 1989 until 2022, when the war started, the Europeans were basically disarming, with a number of countries spending not just less than 2% of GDP on defense, but in many cases functionally less than 1%. 

You basically the entire continent was allowing itself to hollow itself, out strategically. Now, things have changed by launching this major war, by engaging in all of these atrocities, by bombing everything that you can. You have motivated the Europeans not simply to rearm, but to rearm to a level that could potentially exceed what they did in the Cold War. 

And Russia is many things, but it no matter what it is, it’s weaker than the Soviet Union was. In addition, while the Europeans may disrespect look down on loathe Donald Trump, they are now, from a strategic point of view, tighter to the United States than they’ve ever been. With bigger defense budgets. So you’re getting autonomous European decision making in defense, which is a nightmare for Russia. 

At the same time, the United States is threatening to re-up its military support for Ukraine directly. There’s no part of this where you appear to come out a winner. So let’s find a middle ground where you can back off and save some face and not just completely wreck your system. There’s nothing wrong with that line of approach. 

It is perfectly reasonable. It’s broadly accurate. But that’s not how the Russians see it. The Russians see this as an issue of demographics and borders. They know that they cannot defend the borders that they have with the men that they have. But they know if they expand by roughly 1,000,000mi², then instead of having wide open borders on the Ukrainian steppe, they actually reach things like the Carpathian. 

The Baltic Sea and their external lands shrink to something that they could manage. Right now they’ve got roughly 3 to 5000 miles, based on very where you draw the lines of open terrain. But if they expand to absorb Ukraine and a handful of other countries, all of a sudden they can concentrate their forces between geographic barriers and their external barriers shrink down to 500 miles. 

So the economic argument doesn’t make sense to the Russians because they’re looking at economics from a different point of view. In addition, the general idea that the West is starting to pull together more and even under the leadership of Trump, if anything confirms the Russians worst fears, dealing piecemeal with the Western countries, making sure that the Germans don’t support militarization, making sure the French are at Arms Lake, making sure that there’s a breach between the United States and the Europeans. 

These have all been the goals of the Kremlin. Going back to initial communist days in the 1920s and 1930s, and to have the American president say that this is basically what we’re looking at now. This confirms every concern that the Russians have ever had about the strategic nature of the western borders. And so if this is the Trump administration’s approach, basically the Western European approach, talking about numbers, this is something that isn’t simply going to fall on deaf ears. 

This is going to something that is going to ring every alarm bell that exists in the Russian system and do so very, very loudly and guarantee that the Russians are going to take a much harsher approach to the war in the future. 

A couple things from this. Number one, it’s interesting watching the Trump administration learn things that administrations in the United States have known for decades. 

The Trump administration basically fired anyone with any historical knowledge how negotiations with the Russians really work, and now they’re learning it bit by bit from the ground up, and seeing what is basically the French German position on the war now coming out of the white House is kind of colorful from my point of view. It’s better than it was, because if you go back just three months ago, the, the Trump administration’s position was basically the Russian position. 

So this is this is much improved. But that doesn’t mean that it’s any more realistic when it comes to evaluating what motivates the Russians. We’ll see what the next step will be. That brings us to number two, the next step. We know that Putin is going to flat out reject everything that Trump says if this is the approach. 

So the question is then what does Donald Trump do next? Because there are other views of what is actually going on here beyond France and Germany, for example, if you go with the Swedish view or the Polish view or the Romanian view, it’s an understanding that the Russians, this is who they are, this is how they see the world. 

And the only way you can stop that is forcefully, and proactively. And that means a much more American military involvement than we have seen under, say, the Biden administration. Is that the next step for Trump? I have no idea. He hasn’t figured that out yet, but he’s going to be presented with either a flat refusal or another bald faced lie from Putin at the Alaska summit. 

And then he will have to decide what his next step is. In the meantime, the military picture in Ukraine is evolving fairly substantially, but we’ll deal with that next time. 

Featured Photo by Wikimedia Commons

Trump Trade Talks: NAFTA Deals Stall

A USA-marked shipping container on a truck, illustrating American international trade from Envato Elements: https://elements.envato.com/a-usa-marked-shipping-container-on-a-truck-illustr-HMKHD83

To nobody’s surprise, trade talks with Mexico and Canada have stalled. Reminder that these are America’s top two trading partners and export markets, so securing a favorable deal isn’t just a nice-to-have, it’s a necessity.

With US manufacturing on the line (and severe economic damage), I suspect a deal isn’t far off. North American production is growing in importance as China declines. Mexico offers a nice growth opportunity and some potential for political wins as the fentanyl trade is disrupted. To the north, deal progress has been slowed by some unrelated speed bumps.

If there was ever a trade relationship that needed to get hammered out ASAP, it’s NAFTA. Since Trump has already stamped his name on NAFTA 2 during his first term, I’m hopeful we’ll see some progress here soon.

Prefer to read the transcript? Click here

Transcript

Hey all, Peter Zeihan here coming to you from Colorado. We’re going to continue with our open ended series on the nature of the trade relationship that the United States is building with the rest of the world under Donald Trump. And today we’re going to talk about trade deals that have not yet happened. And that’s Canada and Mexico. According to the Trump administration, both of these countries are going to require significant additional time to negotiate at least 90 days with Mexico and a kind of an indefinite hold on everything with Canada. 

These two matter more, I would argue, than all of the other deals put together. Mexico is our top trading partner. Canada is number two. Both of them, a few years ago surpassed China and are not looking back. Both are also our number one and our number two export markets. 

So unlike China or Europe where the trade imbalance is pretty significant here, while there is a trade imbalance, it’s not nearly as large because we send them lots of stuff. Basically these are integrated economic spaces. And if we sever our relations with either Mexico, Canada, it would be like severing our relationship with California or Texas. What that means in real terms is roughly 14 million jobs in the United States are directly, dependent upon trade with our immediate neighbors. 

That’s about 10% of the total labor force. So if we can’t get a deal that favors Canada, Mexico versus the rest of the world, we’re going to not just see a significant drop off in local economic exchange. We’re going to see a significant hit to U.S. employment in manufacturing in general, unlike products that come from Europe or East Asia, which are largely completed when they hit U.S stores, products that come from Canada and Mexico are part of an integrated manufacturing system, with different pieces of the end product being made in different parts. 

Of the three country union that is NAFTA. And if you cut that out, then the American manufacturing model fails from the inside. And all that’s left is to import things from further abroad. Now the smart money remains on a meaningful deal for a couple of reasons. Number one, the economic catastrophe that would hit the United States if there wasn’t a deal would be horrendous. 

And Trump will definitely go down in history as the worst negotiator we’ve ever had on trade. Number two, the Chinese are dying. And if we can’t build out manufacturing in North America, then we just won’t have product. So we really are on the clock here. And every day that passes that we don’t have clarity in the Mexican, Canadian and American tri relationship is a day that we fall a little bit further behind and basically set up China to succeed in the short run. 

But us to fail in the long run. The third issue, of course, is employment. We will build this very, very quickly. And the fourth is growth markets. Canada has a very similar economic and demographic to us where we’re steadily aging. And so consumption is probably approaching peak levels. Mexico is not in that category. It already has $1 trillion consumption market, and it has a population bulge for people aged roughly 5 to 35, which is exactly where you want it. 

If you want people buy in more and more and more and more. So of all of the consumption led economies in the world outside of the United States, Mexico is the one that has the strongest growth trajectory, not just for employment and stability, but for product consumption, which is something that in a world that is rapidly aging, is something you want to get Ahold of. 

Another big reason to think that this is probably going to go somewhere is when Trump made his 90 day delay on the Mexico announcement, he specifically mentioned that there’s a fentanyl tariff in place. Well, fentanyl imports into the United States have been dropping for the last couple of years. Thank God for a mix of reasons. It has very little to do with policy. 

But Trump has inadvertently adopted a tariff policy that’s actually going to speed that process along and give Trump the opportunity to call a win. And that has to do with something called the de minimis exception. So when you purchase something on line that is less than $800 and is sourced from another country, it comes into the country without basically customs declaration or taxes. 

That is now over under the Trump administration. We now have a really steep tax. So everything that used to get from China say, is basically over. And that is how most of the precursor materials that are used in fentanyl made it to North America. They’re shipped via de minimis to the United States, and they’re repackaged and trucks to Mexico be to be turned into fentanyl. 

Anything that interrupts that process, anything that puts friction in that process, is going to raise the relative cost of fentanyl. It’s still wildly profitable, but, you know, every little bit helps. There is one complication in all of this, and that is ironically, Gaza. Oh my God. So there are a number of countries that include France and Britain and Australia and Canada that are talking about imminent recognition of the Palestinian state. 

As a formal country. Now, there’s a number of reasons why I think this is silly. We have a video we did on that relatively recently in case you want to review. But Trump has singled out one of those countries as this being a problem for trade relations. And that’s Canada. So there’s supposedly a deal with the European Union. 

There’s supposedly a deal with the United Kingdom, a supposedly one with Australia is coming in. Trump doesn’t seem to care about any of those, but Trump really has a bee in his bonnet when it comes to Canada about pretty much everything. And so he’s chosen to make the Palestinian recognition issue a subject that falls now under trade talks. 

And that has basically put relations with Canada on hold again. It’s very arbitrary, which means it could be going away arbitrarily tomorrow. But for the moment, it’s another issue that Trump has picked up on that has stalled relations that in the past is something that U.S administrations wouldn’t even blink out because they really don’t matter anyway. 

That’s the bottom line here. The two relationships that we need most for now, for the future, for American growth, for North American stability to beat down the drug war, to ensure high levels of American employment, to prepare for a post China world, they are still in limbo. One other reason to think that it might work out NAFTA two was negotiated by the first Trump administration. 

So it really wouldn’t take much for Trump to say I’m putting my name on something because he already has.

Trump Wants a Second Opinion on Labor Statistics

Businessmen figurines standing and sitting on top of colorful plastic blocks forming a bar chart from Envato Elements: https://elements.envato.com/businessmen-figurines-standing-and-sitting-on-top--2YBGNE8

Imagine you go to a doctor and run some blood tests. A few days later you get the results and don’t like them. What do you next? Maybe you start eating more Cheerios to help with your cholesterol. Well, Trump would just dump that doctor and find a new one who would tell him he’s perfectly healthy…at least that’s what he did to the commissioner of the Bureau of Labor Statistics (BLS).

The US is known for having the world’s most respected, apolitical data systems. Trump’s undermining of this system could jeopardize US policymaking for decades and is eerily reminiscent of what Hugo Chávez did during his rule in Venezuela.

Getting rid of the BLS commissioner is scary enough on its own, but couple that with the echo chamber in the White House and you have a full-on horror movie brewing.

Rewatch the video on Economic Indicators here

Prefer to read the transcript? Click here

Transcript

Peter Zeihan here, coming to you from Colorado today. We’re talking about the U.S. economy from a numbers point of view. The issue is that a couple of weeks back, Donald Trump fired the commissioner of the Bureau of Labor Statistics, which is basically the institutional in the US government that generates a whole lot of the data that guides policymaking from a global point of view. 

U.S. government statistics are generally considered to be above world class. They’re by far the best on the planet because they’re differentiated, they’re apolitical, and the United States government collects touch points from local, state, and national policymakers in order to build a really good picture that businesses and government can use to help make decisions. Well, a number came out on new job creation that Trump hated, so he fired the head of the BLS within hours and says he’ll replace her with someone who can actually do the work, which is anyway, the idea are three things here. 

Number one, the idea that one person just decides what the day is going to be is beyond asinine. The only place that happens with any reliability is places like Russia, where they decide what the numbers are going to be before they publish them, and then just make them up. And they don’t even have a functional statistics section in the government anymore. 

The statistics are the end results of not just dozens of people, but thousands of people across the country. And the only way you can get a politicized justice stick is if you don’t just go after people at the head, but you go after the rank and file statisticians, which is something the Trump administration has already started, not just for jobs data, but GDP data. 

And that’s something that’s going to make it much harder for the US government to target policies for decades to come. It will take us a generation to rebuild that expertise. That’s problem one. Number two, if you’re going to get cheesed off about a statistic, this isn’t even the one you should be angry about. The jobs report is an estimate based on a series of estimates based on a series of surveys, which are in themselves estimates. 

It’s not a very realistic picture of the economy from my point of view. And it goes through phases of, revisions over three months. And so the idea that the number that Trump didn’t like is what it’s going to be like three months from now. I think it’s kind of silly in the first place. Anyway, if you’re looking for a more accurate statistic, you want to look for first time unemployment claims. 

So the jobs report indicates jobs that have been created, but based on estimates and estimates and estimates, the first time unemployment claims is based on people who have lost their jobs because they file for coverage. And that is a hard number. That’s a real number. So here’s the QR code. If that is a statistic you’re interested in. 

The fact that Trump doesn’t know this is concerning, because anyone who is working in, say, the Commerce Department is going to know which statistics are better than others, and the Commerce secretary is a guy by the name of Howard. Let make it will basically tell Trump anything he wants to hear. And so we have just gotten a very good example of the echo chamber that is developed in the Trump White House, where it’s not just that no one is speaking truth to power, it’s just the truth. 

Can’t even make it in the room in paper form. Okay, third thing, the president that is most similar to Donald Trump and going after the statisticians, isn’t g of China. Those people are dead. It isn’t Putin of Russia. Those people were let go 20 years ago. It’s Hugo Chavez, the deceased leader of Venezuela. When he became president in 1998. 

He basically went through the entire institutions of Venezuela, which at the time was generally considered to be the best well run of the Latin American states. High standard of living, good educational system, good infrastructure, pretty good policy. They basically had an oil largesse and they used it on the people. You’re crazy idea. And he basically went after the entire set of institutions that supported that system, root and branch, until the only information he got was the information he wanted to hear. 

It’s very similar to what we’re seeing right now. And if you look at some of the things that Donald Trump is doing with, say, energy policy, wanting to produce more crude, say, from public lands and only sell it to countries that he has a handshake deal with. This is very Hugo Chavez. Hugo Chavez would sell the crude at a discounted rate, only to markets that he was ideologically aligned with wherever they happen to be. Cuba, of course, with the top of that list, 

Donald Trump personally is basically setting up, trying to set up something similar where the crude is only sold to specific markets, where he feels he’s beaten them into aggressive submission with European Union. Be at the top of the list. That means less income by a significant amount and de facto subsidization of those countries for personal and political reasons. 

So this is not simply an issue of a few numbers. This is something that allows the US government to function, and allows it to function in a way that benefits the president. But until some people in the white House grow some spines and speak truth to power, which means I’ll probably be fired the next day, we’re probably not going to get a lot of that. 

The Revolution in Military Affairs: Recruitment

Cadets marching in the military

Most of the conversations in this series will revolve around technology, but recruitment is a large component of keeping a military productive. We’re not talking about the high school pull up competitions that the recruiters do, but more of the systemic ideology around recruitment itself.

As military technology evolves, we’re seeing the equipment on the battlefield change overnight. However, finding the people to operate this tech and fill out the ranks needs a refresh as well. Considering that 2/3 of the American population are not straight white dudes, the DEI conversation is about to get a new angle.

Prefer to read the transcript? Click here

Transcript

Hey, all Peter Zeihan here. Coming to you from Capitol Reef National Park. We are continuing our series on the future of military technology. And today we’re going to talk about staffing and recruitment. What is the United States or really any country need if it’s going to succeed in this changed era of warfare? 

Well, the short is that we really don’t know yet because we haven’t invented the future. 

What we know for sure is that the military is going to have to be more flexible. And if you look at the Ukraine war, it’s easy to see why, as little as a year ago in the Ukraine conflict, it was all about fighter jets and bombers and artillery and tanks. But in that time, it’s evolved completely, with most of those platforms no longer being able to hold their own against evolutions in drone technology. 

And drones are just leading edge of this revolution that combines new types of digitization and energy transfer material science to completely new packages. We now have, for example, our first rocket drones, which have a range of over a thousand miles that can easily take out a refinery. The world is changing. What we do know is that the old style of doing war, which is basically throwing a bunch of bodies at something else and see who comes out on top, isn’t going to work. 

One of the biggest problems that I have with the current administration, most notably Defense Secretary Pete Hegseth, is he doesn’t seem to understand how the numbers work. Hegseth is on a roll, basically on the warpath against something that he calls Dei diversity, equity, inclusion and the idea that one group should have favoritism over the other. I agree is silly, but in the military context, that’s not how Dei has ever been implemented. 

Dei in the military is a recruitment tool based on how you look at the numbers. At most, 30% of the American population are straight white males, and on average, straight white males are older than the average American population. 

So no matter what your definition is of what a good soldier, marine sailor, airman happens to be. The bottom line is, if you’re drawing from a small pool that it’s getting smaller and you’re fighting a war of numbers, by your own definition, you’re going to lose and lose badly. And that’s before you consider the changes that are coming to the technology. 

We need better skill sets embedded within the system, and that means recruiting people there in a different way than how we do it now. right now we generally bring in people in the age bracket of roughly 17 to 25, and we break them down. 

We indoctrinate them into the system, train them on systems that have existed not for years but for decades. Well, that’s not going to work when the technological time to target is measured in weeks to months. We also need to change procurement. The idea that the military goes out there and says what it wants, and then private military contractors go out and design the system, basically parade it in front of the military to see what works. 

And then years from now, we get a prototype, and years after that we get mass production. That won’t work because this all has to go from the point of imagination to the point of deployment in less than a year. So everything about how we fight right now needs to evolve, 

And that means a broader skill set with as wide of a diversity of backgrounds as possible. 

And so why, while we’re going through these transitions, will you tell anyone in the United States who is a woman or who is black, or who is Hispanic, or who is gay, that they have limitations on how they could choose to serve their country? It just doesn’t make any sense from a strategic point of view. 

About the only argument that I have seen that argues for a different direction in order to maintain power is basically the Elon Musk approach, which is to basically go out for everyone who is a white, straight male who has employees go out, sleep with 12 of them and start generating a new white race. 

Well, you know, I don’t know if you knew how math works, but if that all happens today, you’re not going to get your new crop of your new race for 18 years. And we will be on the other side of this military transition by then. We need to work with what we have, and that means using the skill sets of absolutely everyone who has an interest of being in the US military.

Keep an Eye on Industrial Construction Spending

View above an industrial construction site

We’ve got another economic metric for y’all to keep an eye on. Today, we’re looking at total construction spending for US manufacturing capacity.

This metric helps us understand how quickly the US is preparing to rebuild its industrial base. Which, as we’ve discussed extensively, is going to be essential as the US faces deglobalization…and China going bye-bye.

But things are stalling. Trump has created a construction purgatory, and businesses are holding investments until they know the rules of the game. And as we prepare for the next chapter of the global order, a drop in construction spending could spell serious problems.

Link: https://fred.stlouisfed.org/series/TLMFGCONS

Prefer to read the transcript? Click here

Transcript

Hey, all. Good morning. From the Front Range foothills above Denver. Today I’m going to talk about one of these other economic statistics that I’m following very closely in the current environment. And it is something that is collected by the Federal Reserve. It is called total construction spending for manufacturing capacity. Basically, it tracks how the United States is spending to expand its industrial plant. 

Now, if you’ve been following me for any time whatsoever, you know that I am concerned that we are not getting ready for the Chinese collapse fast enough and that we only have a certain number of years left, probably no more than eight. And that’s before you consider the trade war and some of the policies of the Trump administration, which are greatly accelerating China’s fall. 

So basically, if we still want manufactured goods stuff, we’re gonna have to make a lot more of it here locally. And that means a lot more factories. This statistic tracks exactly what we’ve been doing for the last several years. And if you start at the beginning in 2019, 2020, it’s Trump one. You’ll see that it was really low. 

And honestly, that’s pretty historically normal. But that number makes it Trump look worse than he is by far. And part of it is simply Covid. We didn’t know what the rules of the game, where we didn’t know how long it was going to last. We didn’t know if was gonna be a lockdown. We didn’t know how many people were going to kill, because if you remember back to the early days, something like 3 to 4% of the people who were getting infected were dying. 

And none of the treatments we had, especially in that early outbreak in New York, were working. It was it was awful. And nobody knew what to invest for. Then we have the Biden years where we had a lot of government spending to boost industrial production. And this makes Biden look better than he is, because while things like the Chips act and the IRA did put money into the system and did build industrial plants, only about 20% of that rise can be attributed to government spending. 

Most of that was actually American corporations realizing that something was happening with globalization that was not just a one off. It was a trend, and they needed to build more capacity here. And so we saw a steady increase for those four years. More lately, you’ll notice that it has flatlined again. And this you can blame on Trump. This is the tariff policy. 

At the time of this recording, we’re now at our 149th tariff policy since the 20th of January. And the rules of the game are changing every day, sometimes every hour. And so while everyone is completing the greenfield projects that they started, very, very few new projects have actually began. Any sort of construction and all of the deals that Trump likes to brag about. 

None of them have moved at all. So this is the number that matters from my point of view. Here’s a QR code so that you can watch it yourself with live releases. Whenever the fed updates its data. This number goes up. You know we’re moving in the right direction. We’re getting ready for a future that is inevitable, 

And if it goes down, then we are well and truly screwed.