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E9 The Cosmopolicast - Peter Zeihan

Mar 10, 2024
Peter, yes, it's a great pleasure to finally meet you. I've been looking the same way all week. We have been completely immersed in the work, the thought that tells the pulse of Peter Zion and I think probably my readers. I know what your books say, or if they don't say it, they aren't paying attention. So I think we can do well. I don't think you need to do the usual speech where you explain your basics. I think we can do well. to the interesting stuff, so first Welcome to The Cosmopolitan globalist, we have here with us the eminent geopolitical analyst Peter, is Xander Zion Zion right and today we are going to talk about his thesis that the world is coming to an end? which is going to be really, really bad and I wanted to start in more or less the order I've been writing about this.
e9 the cosmopolicast   peter zeihan
I wanted to start with your approach to predicting the future and I particularly wanted to know. I'm going to ask the question directly Great Men or great forces of History that is, there is a lot of both, let's start with the forces of History because there is no way around that, uh you change the way the world works in the post world war. II environment you allow everyone to play and the general idea of ​​globalization is that you don't need to militarize your economy to do things and that allows you to access the entire planet that has never existed before and that brought us everything about our globalized world. with connections and finance and energy manufacturing in several steps and it all comes from that decision that the Americans made, however, you play forward and see how the demographic situation changes, so that as you urbanize you have fewer children, you do that for 70 years, it is not like that. you are running out of children, that happened 30 or 40 years ago, now we are running out of adults, which means we are in this moment in which the old rules of the game are being revealed and the rules of what will come next have not yet been have been implemented. created and in this historical moment this decade maybe two decades everything is changing and now is the time when the great men and women of History will leave their mark because not all countries have all the assets, positioning and demographic structural resources that are necessary. just like everyone else and the ability to differentiate is huge and so as events like the Ukraine war really build Steam and break down or empower certain countries, this is when leaders can really make their mark.
e9 the cosmopolicast   peter zeihan

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e9 the cosmopolicast peter zeihan...

This transition period allows certain places to lead certain ways of establishing a new normal and I think it's too early to say that anyone in particular will succeed, fail or fail at that, although we probably will in the coming months, but I have to say, the bite that the Administration has had. They haven't impressed me up to this point, but now they're actually rolling out some things that will probably outlast them or that's a good thing where you are. What are you thinking about? In particular, one of the key principles of globalization was the idea that the United States would trade security protection and economic access in exchange for allowing it to write its security policies vis-à-vis the Soviet Union and the Cold War, so that while we By letting them make the important decisions, they will be able to have everything else that is necessary to manage a modern economic system and it is not necessary to fight for it.
e9 the cosmopolicast   peter zeihan
What we are seeing with the Administration's bite is only the first part of that. Security arrangements are back on track, but nothing about economic access is as good. I say this in a lot of places and it gets me in trouble everywhere. The two most similar foreign policy presidents we've had or Donald Trump and Barack Obama and the two most serious economic policy presences we've had are Donald. Trump and Joe Mike do it very seriously or similar, sorry, similar, similar, yeah. I mean, I certainly agree with you about the symbology between Obama and Trump and no, people don't see it, but it's definitely there in the United States.
e9 the cosmopolicast   peter zeihan
The United States, for the first time since the 1940s, we have an industrial policy, yes, we can argue if that is more or less efficient, but at this moment in history having an industrial policy to complement what is happening with the global collapse is a very good time and um. Since the Americans say that Overkill is underrated, the amount of money being invested in this is enormous and even if three quarters of it is wasted, it will be enough to remake the American industrial space in a relatively arctic direction. At a time when global supply chains are breaking down, that's great if your goal is national power, which for Biden, as for Trump, is the postwar thesis that America would be better off. in a peaceful world and that was important. secure peace for itself on the basis that the lack of peace would inevitably affect the United States in some way.
Do you think we've abandoned that idea completely or do you really think you never believed that in the first place? I think the Americans thought it was okay. I still believe that, but people who believe my way in American politics have now lost in eight consecutive presidential elections. Wow, I should say seven in a row, this last one we didn't even have anyone in the election. career um, so our time has passed and we're going to have to relearn some lessons. The reason we came to that conclusion is that the devastation of the world wars was enormous and while it did not affect Americans as much as it did.
For Asians and Europeans it was still a Syrian experience for us, well it's been two generations and there aren't many people still alive who remember any aspect of that, certainly not in a personal visceral way, so we're doing the What to do every generation or two and we are shifting foreign policy towards a more isolationist retrenchment position today is not over and I certainly agree that it can feel like there are no grandparents left to tell people why foreign policy It should be the way it has been. how it was or what it was like after World War II, but don't you think there are people who have studied it?
Institutions are built to serve that. It will continue in some form, at least, out of habit and you. It seems like the United States is just disappearing off the face of the Earth suddenly right now and I don't see any indication that that's about to happen. Sorry, there are many people who believe that way. There are many people who have been in positions of power who would like to see that continue. They were almost republicans and are now known as rhinos. So, the institution that somehow sustained that institutional Zeitgeist. the republican party is not what it was um that's not something that personally excites me particularly I mean, I'm not a Republican I'm an independent I'm not at home anywhere uh what's the best way to phrase this yeah If we look at the kind of progress that needs to be achieved incrementally to maintain this type of system, there are two global international institutions that really matter: the first is the World Trade Organization, which must continue that effort to keep trade open as much as possible.
To the extent possible, we haven't had a new WTO round since 2001 and that one failed. Now we have all the major economic groups or countries moving in a protectionist direction, so the institutional inertia that I think you are defending here, which I normally tend to think is a good thing that hasn't been there for a while and, with the exception of a couple of tactical trade agreements that were renegotiated under Trump and that were not minor, we have not had significant progress on the trade front since the W Administration. uh, the second will be NATO now NATO is taking on a subtle new life, everyone they are extremely motivated at that time uh and in the European space this has been a blessing because we just had this disintegration of security that is not entirely correct. word, but definitely a breakdown in the last 15 years, especially the Germans have just had a completely different idea of ​​what security means.
I mean, we even had Angela Merkel, who considered herself relatively pro-American, arguing that we shouldn't measure defense by defense. you should measure it in development funds and from a foreign policy point of view there is something to consider there, but from a defense point of view that was a little shaky, so it has come back from the brink, so to speak , but we are just not seeing the mobilization in Europe that would be necessary for this to stick, it is not just that they are heavily dependent on the United States, but it is about the type of social change that is necessary to get back to where we were during the Cold War in In terms of mentality, we are still not over that, there seems to be a general belief, especially in places like Germany, that this will stay in Ukraine and as long as it stays in Ukraine there is the option of going back to where we are.
It was 10 years ago and I don't think it's really sunk in everywhere yet that that world disappeared yesterday, two days ago, when the nuclear threats became explicit, that that might be enough to push us, we'll see and we. I will soon learn that they have been explicit from the beginning, um and uh, in the last 48 hours. I think, from my point of view, it's really a lot better than what we had yesterday when I was flying from Vancouver, an evolution in the Russian communication in favor of the war because they thought they had expressly threatened Berlin, France, Stockholm and the rest, but most people in the West interpreted it as a nuclear threat against Ukraine, so they came out and had to clarify and that was a bit Well, I've thought it's pretty chilling from the beginning, but I wonder what exactly you'd expect to see if You will think that the message is really being transmitted.
Would you see? Oh, that's pretty simple, we need at least three NATO divisions in the Central European countries bordering Ukraine, the goal is really to deter the Russians and convince them that this is something the West is one with and the West is going to act and the West is not going to be ready. for whatever is after ukraine you have to have troops on the edge yes i agree do you think our failure to put troops there or insist they put them there is because we don't appreciate the threat or is it due to um?
Well, what do you think is happening with the Biden administration? I think the Biden administration is working with the toolbox that it has, but in the United States it becomes a little limited, not as limited as the previous three presidents, which is actually significant progress. uh, and I don't necessarily think this is a failure of the Bit Administration to act, it's a capability failure on the European side, there just aren't many European countries that have forces that are even capable of deploying right now. period, so the set of tools that we would have used reflexively in the Cold War, you know, we have slowly denigrated and demobilized that over the course of the last 30 years, Canada and Germany are probably the two best examples here.
We've largely given the Ukrainians most of the equipment that they're capable of giving right now because they haven't really developed any of their military capabilities since the Cold War ended, so if you want to go back to that old conversation . of security consumers versus security providers, they are absolutely on the consumer side right now and the kind of development that would be necessary to deploy troops in those two countries, if they were to start today, is at least a six-month process, but we are now more than seven into the war and it still hasn't happened. It's a little strange that people aren't acting more like this is a five-alarm fire.
I wonder why they don't do it. Do you have any ideas about it? Well, let's take a page from the Spanish book because of the way the Spanish have done very well in this, they are not a border state and they have sent a lot of aid to the Ukrainians. The way the Spanish see this is. That security is something the Americans take care of now, that means you can play fast and loose with international politics and let the Americans pay the price, and that's fun, but at the same time At the end of the day they are a peripheral economy on the western edge of Europe, and if something really goes wrong, the Americans will be there and there is a degree of trust and belief in that statement that permeates all of Europe.
The point is that we have had 20 years of war against terrorism, we had the war. In Iraq, regardless of what you thought was a good or bad idea, Americans weren't exactly thrilled with the way the allies stepped up. Now we all agree that the Russians are a problem and the Americans are now stepping up, but that's certainly the case. Not everything is a thing of the past, so when the institution is weaker, when the recent history of collaboration is weaker, and six months later, apart froma substantial, certainly substantial, amount of arms transfers to the Ukrainians, no one is really changing anything, they are just waiting for the Americans. act and Americans are still at rest recover the cycle of rearming and retraining after the war on terrorism this is something that does not necessarily resonate well in Washington now, from a foreign policy point of view, the United States is probably more united than at any other time since 2002, considering where our policy has been, thank you, ok, bear Putin, we needed it, but it's going to take time to develop the things we need, the Russians are seeing this clearly with their military deployments, but the same applies to us, yes, what will happen if Trump is elected again?
I'm not going to make a prediction on that at this point, the belief in Moscow was that if we had a second Trump administration instead of a Biden administration, in the first year he would be willing to functionally withdraw the United States from NATO and could simply walk in Ukraine. whatever you wanted, it wasn't until that went in that direction and the javelin started ending up on the front line that the Russians thought they should move if Trump came in a year or two the problem of predicting what Trump is going to do is thing to do is you literally make it up as you go and anyone who comes into the room with advice or background is someone you fire or don't let talk, um, if they stay true to form, if they continue with what they did in In the first quarter, you would expect arms deliveries to stop in an instant.
Now he's erratic on a good day, so you don't know how it's going to play out, but it was very clear that he personally didn't like Zielinski, so I can. I totally see him doing the normal thing and allowing his personal resentment to drive politics, yes, yes, and in a broader sense, I want to understand. I want to understand, first of all, why he believes China is going to collapse and why his prediction about it is so different. of the others and if it's a matter of the initial conditions are slightly different and you get a vastly different picture, you start with the new numbers from China and the intelligence community and the UN start with the numbers as they were ago two years and one of them China is the biggest competitor of the United States, the other has China as a very important country and it is collapsing, what is the difference?
I would say that most of the world is getting better at my thinking, especially in the last six months. I want to give you two things, I mean, there are a dozen main reasons why I don't think the Chinese system is going to survive this decade, but let me give you two that are absolutely unassailable. First, China is the third most internationally integrated country. in the world after the Germans and the Koreans are completely dependent on globalized access to raw materials and markets around the world they import their raw materials they import the technology people forget that piece sometimes and then they export the finished products that don't work without a globalized world and there is no coalition of countries that can replace the United States as the guarantor of that world and with the Americans going their own way, that's it, the whole economic model does not work.
Semiconductors are probably the best space to just see how exposed the Chinese are, they can't make high or mid-end chips and they can't make the equipment to make low-end chips; They depend entirely on technology transfers from the rest of the world to sustain themselves. that whole industry and now we have the Dutch, the Danes, the British, the Japanese, the Koreans and the Taiwanese along with the Americans saying that the Chinese will never again be able to access high-end chips and the question is what mid-range ships they can have. and if they should be able to have the equipment necessary to make low-end chips, so we're talking over the course of the last few months, their access to that space has stopped the chip space is something that they can replace. and I don't think so, I mean, if they could make the equipment to make low-end chips, then there would be a conversation to have, but they can't, they've tried, they can't, what's the obstacle?
They have to get the technology from abroad and the Chinese decision to back the Russians in this war has really changed the mindset in Europe more than on defense issues, believe it or not, if the Americans don't let the high-end stuff go and If they can't get the equipment to make the bottom end, then they are not in that space, except when we allow the technology to be transferred in dribs and drabs. What will happen if tomorrow the Chinese wake up and say: we formally condemn Russia's invasion now? If the Chinese have a significant policy change and demand peace as part of globalization 2.0, there is definitely a conversation to have there.
I don't want to suggest that that aspect of this has passed the point of not being possible. come back, of course, that and you know it would be really interesting. This is something that the W Administration tried before the 911 attacks trying to bring China into a new revitalized globalized system, obviously we all got a little distracted by them, um, but the second problem. Unfortunately it is much worse and that is the demographic situation according to the Chinese themselves, with the data that they are beginning to reveal, they have overcounted their population by more than 100 million people, all those counts of people who would have been born since the policy of only one child, which was 40 years ago, so people 40 and younger were already seeing one of the fastest declines in terms of birth rate in human history.
You know, you need 2.1 births per woman to maintain your population and their metropolitan centers are now below 0.7. I mean, this is faster than Korea's decline and they haven't developed as much as the Koreans, so if these numbers are true, they're going to lose almost two US population in just the next 30 years and the average age will be higher than the Japanese now, this is not something, we don't even have a model that can throw this against, you are sure this is something bad, but we don't even have a model, how do we know what happens when something like this happens?
Well, if we are talking about a population that falls almost by half in 30 years and the people who remain are between 50 and 60 years old. I don't see how that can work, but we are in unprecedented times. It amazes me every time you think there's any chance that technology or productivity can make up for this. Well, you might be able to. Mike. Mike could use things. such as automation to help on the production side. I think the scale of this is much larger than that, but it's at least theoretically possible. We can understand some possibilities there, but that doesn't solve the consumption problem.
The Chinese still need it. access to the rest of the world, I mean, if they can maintain their production, they still need a place to sell it, maybe they can do that. By land, by rail, to Europe, I mean Europe, that is, for the next 30 years, Europe demographically. All they have to do is get their stuff to sub-Saharan Africa and keep the economy in sub-Saharan Africa reasonably robust, that's all they have to do right, if Africans experience Korean-style growth over the next 30 years, neither They don't even take up a quarter of the way that they would have to do to be able to sustain that level of consumption, so you're really thinking that the only market that could keep the flow from China to the United States is the only one of size, without a doubt, so that in the United States is already done with that, we have all the influence in this relationship, why don't we tighten the screws to tell them that we really need their help here with Russia?
Well, we're not that organized, uh and two, industrial policy right now is only a few months old, is it theoretically possible for the United States to impose some kind of second phase globalization on the world? Yes, but what made globalization work is that most of the world was devastated and not only Was the deal with the United States good? It was actually the only one on the table. I don't think there is a belief at this point that the United States is willing to go so far or cut back so much on economic issues to achieve its goals.
The way the American political system really is in a period of downsizing, regardless of what happens with Biden and Trump and the degree of leadership that would require and the degree of acceptance that the rest of the world would have to generate, I don't think let it be on deck, well, if you could sit down, say you're an American diplomat, and lay these facts out to the Chinese, I'm sure they would sound very persuasive, so I don't think it really requires some sort of ex, doesn't it, it's correct. there we don't have to do anything to change the situation, that's the way things are, the United States has these advantages and it has this massive market and, given the demographics of China, this is your argument is perfectly convincing, it seems that I have the influence, why wouldn't we use it?
Are you saying these thoughts don't occur to anyone in management? Well, they occur to me, but I don't think they occurred to everyone in this Administration before one before that, let me give you two reasons, one why I don't think the Chinese will accept it and two, why how he would do it if he were King for a day, the Chinese had degraded themselves to a sect. of personality that makes Mao appear inclusive and have become hostages to their own ideology and is leading to a series of cascading policy decisions throughout the system, the covid policy being one of those and the Chinese system's ability to adapt and get out of your own way at least for the moment it's gone.
She's killed the messenger so many times that it's hard to get any real information from him and just this last week she finally had a face to face with someone for the first time in almost three years, so her ability to go beyond the blind ideology of the propaganda arm is seriously limited right now on the American side, assuming Americans can get their political ducks in a row at home long enough to have this conversation. The first step would be to start with the internal family so that the other Anglo-Saxon states and the Mexicans make a kind of first round of NAFTA extension that combines an economic and security agreement.
The second phase would be to incorporate the countries that are already consolidated and that have already done so. good relations with the United States, yes, just disrupt what kind of agreement Beyond NAFTA and the North Atlantic tree organization, you would need a formal version of globalization 2.0 that merges economic and security issues into a single system of government. It is not a national fusion, but it is something very much. more formal than just the NATO Article Five guarantees and the NAFTA adjudication systems, something where everything is under one roof and we would all accept the terrestrial worlds at the same time so that human rights, free enterprise, physical defense, all be part of The same Association likes what some supporters of the European Union would like to see in the United Kingdom and what the advantage would be over our current arrangements of having such an agreement at this time.
It is very bilateral, it is very ad hoc and if you are talking about something that is designed in the end to be a global system, it needs to be united and if you are talking about something that can attract the Chinese, it has to be powerful, you are not going to do. that with a simple bilateral agreement you are thinking of including the Chinese in this agreement as a trade and security agreement, not in Phase One, it sure sounds very unlikely. I mean, as far as I understand all the Chinese, it should be incentive enough to give the Chinese access to our market, why would they need anything?
You need to have a law enforcement mechanism and we have learned time and time again that the Chinese are not willing to do that unless they are forced to be unwilling to do what to trade. we have the ability for entities outside of China to resolve disputes with the Chinese outside of China and have this stand right now under the pre-existing systems we sue the Chinese, even at the WTO, the decision is imposed and the Chinese just move on , that's not how it works, if you're going to have a system that really works, you have to end what has been a relatively exploited position that the Chinese have taken vis-à-vis the rest of the world, so you're thinking about access to market.
We're creating the security and trade nut to create the institutions that would then discipline the Chinese, which seems like a somewhat inefficient way to get to the point you want, which is for the Chinese to say yes, we want to continue to have access to your market. No, we are not going to continue calling Russia our little brother. I'm not sure I'm still here. The system that we have had for the last 25 years, the Chinese have been able to take advantage of it, that is part of The problem is that they are able to drain the economies of many of the less developed countries at the same time that they are ableof emptying the manufacturing base of the most advanced economies and, in return, the rest of the world has become cheap. goods and that's it and that's one of the reasons we've had this independent Chinese rise.
They have basically been able to transfer parts of the global system due to lack of institutions to the Chinese system and that is what is undermining everything. otherwise, that's what will stop. I don't think they've done that because they're breaking the rules, they've done it because they've been able to exploit the rules, um not necessarily and I don't see how to enforce them. Rules on, for example, intellectual property would change that. The general trajectory generally the Chinese can compete with cheap labor. I mean, I guess we could insist that we can't anymore, but they have been able to, yes, so I mean with this change.
They won't be able to do that anyway, yes, I'm serious, like I said, no, I'm not sure there is any policy change that can save the Chinese right now, but if the United States is going to come back. in a position and de facto subsidizing much of the world, the basic understandings have to evolve and part of that means establishing institutions that the United States may not control but certainly strongly influence and are enforceable, so if so, suppose that He sits down in front of the Chinese ambassador and says: look, this is how things are, if you can't sell your goods to the American market, you completely collapse, all we want is for you to stop stealing our intellectual property and we are going to create a special court to judge this, are you willing to accept the decisions of this court?
Do you think they would say well, I daresay the United States is going to have a long list of things that go beyond intellectual property, yeah, stop stealing our property and stop using slave labor and, um, and open your market in all economic sectors and stop intimidating your neighbors. I mean, it would be the end of the CCP in its current form. Well, if you're right, the alternative for China is total collapse. Yeah, do you think they understand that? I think most of the people who were making that argument have been removed from government, I was part of the purges, well, that makes things a little more difficult for the negotiating party, which, you know, brings us back to the human beings instead of forces, that is the worst.
I know you never know what they are. Is there any chance you're wrong about China's demographics? Is there any chance these new numbers don't make any sense either? I mean, that's definitely the question, the fact that the new numbers come from the Chinese themselves. and it's not a third party estimate, I think that's really revealing. Chinese statistics have always been a bit questionable, even on good days. And the fact that there are people like the Shanghai Academy of Sciences openly discussing these issues tells me that it is real. uh, but there is so little data that we can rely on from the Chinese system in general, when they start talking very negatively, it suggests to me that the reality is probably, excuse me, actually significantly worse, but we are completely dependent on them for the Meeting. interpretation and dissemination, so let's assume for the moment that it is as bad as we thought it was in 2020.
We still have the second fastest aging society in human history after Korea, and we still have the most distorted demographic structure, does TRUE? that means they could be 20 years old instead of 10. When you say collapse, you're imagining the state dissolving, disintegrating, and the starving people in China joining a conspiracy of warring tribes of some kind. There are many examples in Chinese history, yes. it happens over and over again I think that's the most likely outcome. Yes, it does not seem to me, in reading any document produced by any of our government's foreign policy or intelligence bodies, that this is high on their list of anticipated scenarios.
Is this just because it takes them a while to catch up with the new numbers or is there some reason why they can't consider this speculation? I think it's both, excuse me, sorry, I definitely caught something on the plane yesterday, oh, I'm so happy. There is Ocean among us. I already made a greed check this morning to make up for that one. You can take a little to show it. Yes, I know anyway. So, first, the data is new and not fully vetted and no. fully released so it's hard to make long term predictions especially when you look at it from the government's point of view until you know what you're working with so I completely understand.
I don't envy them at all, eh, the second one. one is a little less um it's a little less than balance one of the many results of the war on terrorism is that many of our long-term intelligence efforts um dissolved yeah, we've spent 20 years trying to figure out which side of the Las Door hinges were on this or that building in Fallujah, so we stopped paying attention to what's happening on the horizon with long-term economic trends. You do that for 20 years and you lose the ability, so one of the things I'm working on with the US government is to at least provide a sounding board, even if they don't agree with everything I have to That is, which many of them do.
There are not many people in the United States who are even thinking 10 15 20 years later and a kind of show and tell situation has evolved, the institution that maintains the greatest overall capacity for thinking is by far the Department of Defense and for To them, China is the boogeyman justifying their budget, so when I come in and say, yeah, you know they won't be there in 10 years, you're probably preparing for the wrong enemy, they just get a little scared because that's how it's been done. become the way they go to Congress to justify their existence. Right now I see that a lot of things will be needed in the United States military, so I don't take this too seriously, but when I see weapons systems being developed for a very specific conflict, I don't think so.
This is going to happen sometime. I question whether that's the best use of their time and their resources, but this is an organization of millions of people and they need to keep the basic story very clear for Congress because Congress doesn't deal well with complexity, so China China China China is how they do it right. The argument you are making is not really advanced. You're saying there simply won't be enough people. You're too old and the moment you look at those numbers you think, yeah, there's something to that, so what you're describing is an organization with a million people where no one is saying whether you're sure we're running all of this. in the right place it sounds like a brontosaurus, you know, huge body, no brain, could it really be functioning like that?
Could this be how America works these days? Isn't there anyone that I would say any large institution is going? have at least some elements of that, so yeah, uh, and I don't want to say this to insult the intelligence of the DOD people, far from it, they're coming out of a strange conflict where they were fighting wars of wildfires and occupation . conflicts for 20 years, uh, which are now coming back to the general theme of great power competition, this is a good thing, I just think they are looking at the wrong time period, the wrong country that is foreign, any of his books and I .
I'm just curious, no, if you can explain the way we got out of Afghanistan, if you have an idea of ​​what we were thinking, oh, it's actually not that sophisticated, I mean, obviously, it wasn't done in the best way, but It is a landlocked country with poor infrastructure and The only way we could access it was through other countries that we did not trust mainly Pakistan and Russia, so with the establishment of institutions it was never going to work, the Afghan government we tried to create was always going to work. To beg the question was how soon, now I don't think anyone saw it coming.
In what six and a half minutes, huh, but I don't think anyone thought it was going to last more than a year, so it was ugly when we retired. and it just dissolved, yes, but some version of that was always going to happen and we've known that for 20 years and that's one of the reasons we were there for 20 years; no president wanted to be there when the band-aid was torn. because they knew it was going to be an embarrassment the next day or the next month or the next year, so I'm actually one of the few people who think that Biden did the absolutely right thing in the absolutely wrong way and just cut off the because this is something we were never going to be able to salvage now, some things tactically could have been done differently in the last few days, weeks, maybe, but it was always going to lead to collapse and embarrassment now that the rest of the world followed the two general categories , in category number one, there were people who wanted to bite the Administration specifically or Americans in general with ill will and they saw this as an American weakness and that is one of the reasons why Putin felt he could act because he thought that the Americans would do it. being distracted and incapable for months, if not years, the second category where the allies that really cooperate strongly with the United States, especially countries like Taiwan or Poland, who said, oh thank God, the Americans finally ended that adventure and really they can focus on real things now and that juxtaposition is part of the explanation of why we've seen the demonstration and some of the mistakes in terms of the Western allies, a lot of horror among our allies as well, although oh yeah, I mean, no one wanted to see your security camera guarantor, yes, being publicly humiliated, true, however, what was disintegrating was not the American position that was being abandoned, that was nothing different, what was disintegrating was the Afghan system and now that the Afghan system is broken beyond any hope of repair and the Americans have been completely disabused of any moves that could have made the place look like Wisconsin, we are actually now focusing on real places, so for the Allies who They are willing to look at this from the big picture, this has been a pure net gain.
Do you think Biden is thinking regarding Ukraine right now? Why is the pace of arms transfers not as fast as it could be? It seems to me that you want to do this as quickly as possible. There's no point in prolonging this. what you think is the thought is that we just don't have them is that he's worried about triggering Putin's sense that he's in an existential situation that he's in, but I think it's both, so let's start with the red line. The point is that the Russians have created a series of red lines that have been very Obama-style, they have not reinforced them, so we are doing it step by step, upping the ante in terms of volume, in terms of training, in team terms. uh equality uh to make sure we're under that red line uh when the failed assault on Kiev when it became obvious that the Russians were completely incapable of doing that uh everyone got very excited in the United States, especially in the Department of Defense, until who thought about it. and now they realize that the Russians see this as an existential war for their survival and they are right, but they are completely incapable of Modern Warfare, so if they lead us into a fight, we know that they will be destroyed and we will know that nuclear weapons They are their only resource, so we have to keep the level of conflict below a point where a direct fight can occur, so the Ukrainians have to do it themselves.
You have to train the Ukrainians with the equipment, so we start with the javelins. We started with Stingers, things you can carry on your back and shoot with minimal training, and we've slowly increased the sophistication of the weapons as they can prove they can absorb them. Now we have tens of thousands of Ukrainians training in NATO countries in more advanced things, they are very studious, they built the pipeline and it is getting better every day and now, excuse me, we are now in a situation in parts of eastern Ukraine where the Ukrainians have a numerical training and team advantage now means that the Offensive Secretary can be repeated the 20 times necessary to drive out the Russians.
I think it's too early to come to that conclusion, but now we are seeing the Ukrainians with more, better and more accurate artillery support in some of these duels where only two. Months ago they were outnumbered five to one and ran out of artillery ten to one, that has changed, so I think the pace here, even if we go back to World War II speeds, is quite fast now that you initially thought that Kiev was going to fall in a few days. I said kyiv probably within a month to three and all of Ukraine from three to six.
Where were you? What would you look at in retrospect if you wanted to predict what really happened? Where do you think the forecast went wrong? IsA long conversation, but we will do our best. Well, let me start by saying that it wasn't just me. She was probably one of the most optimistic people that the Ukrainians could hold out for a few months. the sense of nationality was weak the training was weak corruption was high the equipment was poor the equipment was outdated uh everything we thought we knew about Ukraine they have done better and it is good for them on the Russian side the second largest army in the world capable of carrying out multiple military operations not on a US scale but still on different continents simultaneously and you can literally walk from Russia to Ukraine.
The Russians first conquered Ukraine 300-odd years ago, they never gave up from that until 1991 when their system collapsed, the idea that this was going to be was an easy fight, I didn't think it was that controversial and so In fact, at the time it wasn't and they were able to capture Crimea without firing a single shot just eight years ago, so that was the basic understanding we have now. I have a much better appreciation of the degree of decay and the post-Soviet system and it seems that in the military there is actually stronger ER than in civilian infrastructure.
The person who is primarily responsible for that is Defense Minister Shoigu, who has been a personal friend of Putin since his time in East Germany. He has probably diverted a quarter of defense funds to himself and his crony specifically and created a culture of corruption that reaches down to the enlisted officer. We now know that most of the money the Russians have put into the rearmament program was simply stolen, so now they are using equipment that dates back to the 60s and at this point they seem so incapable of making even artillery shells that this is a artillery forest that is supposed to be the largest in the world and they are bringing equipment from North Korea that in many cases is more than 40 years old.
I don't know how familiar you are with physical chemistry when it comes. to explosives, but that's really bad, but an artillery shell is an explosive strapped to a second explosive, which is a propellant that is placed in a tube at high pressure, so the old stuff just explodes in the barrel and we're seeing a lot so possibly we're seeing Russia revert to a pre-industrial military now you think their nukes still work oh my god I have no idea that's part of the problem here eh you'd think if anything works it would be artillery in their nuclear weapons, well, their artillery doesn't work anymore or at least not like it used to and we just have this huge Soviet arsenal that they are mothballing out that hasn't been properly maintained and many of the nuclear weapons also fall into that category eh.
The high end nuclear weapons were supposed to be the iskanders and now we have seen that the Russians have already used more than two thirds of what they had and most of them failed so it has become a black box when it comes of high-end nuclear weapons. -Tech stuff, they usually don't have a lot of it and what they're using doesn't really work very well, so yeah, nukes are a question point. Does this mean that the Russians can't win, no, no? no no no no no no no no no just the sheer amount of forces that the Russians can potentially mobilize is enormous, but none of them are trying to pull it off, they're not trained, um, the logistics aren't going to do it. get better just because there are more human beings involved, but all of those problems are totally legitimate problems that have defined the Russian military from the beginning, they throw bodies at something until it breaks half of their wars that work and half of their wars that doesn't work I think it's too early to say which one we're on now.
I agree it's too early to tell, but some early signs may just be optimism on my part. Some early signs suggest it's the other guy, the World War I guy. of the situation, yes, I mean, is this Crimea in World War I or is this World War II? Right now it looks a lot like the Crimean conflict and the Russians lost almost a million troops in that fight before they finally surrendered, yes, yes. When you look at a situation like this, how much time do you spend wondering what's going on in Putin's head? Do you feel that the situation is determined by physical factors such as geography and military capacity?
Or do you spend some time trying to decide what kind of person Vladimir Putin is, what does he think? I think we've had a pretty good idea of ​​how the Putin supporter thinks, going back to the beginning. I mean, this is a guy whose first action as prime minister was to triple the war in Chechnya believes that violence is a means to an end he doesn't like a rebel in violence for violence's sake you know this isn't Stalin, uh, he Nor is he as intelligent as Stalin, but the idea that the coherence of the Russian system is his first and only priority is something he has not hesitated from the beginning and will now use tactics to achieve it, which of course makes most of Russia's neighbors in great danger.
It's not unique to him that it's been part of the mindset of the Russian government since the tsars and, like the first tsars, so when it comes to details and tactics, I don't spend much time thinking about it. My view is the general strategy because while he hasn't isolated himself to the extent that XI and China have, he really only has six people who have access to him and three of them Medved and prove that you are completely incompetent , that only leaves three people who are the three people who you think have access to it, uh, Igor Sachin, who is the president of Rosneft, who is, you know, energy and influence, uh, Patricia Chef, who is the ideologue and, sorry, I'm trying to clear my mind. suddenly, oh, the Minister of Finance, that's it, so there is no one in the security services, except Patricia indirectly, who can have an open and honest conversation with him.
He has become in many ways a bit like Donald Trump and insists that his people lie to him and so, even if he is brilliant and even if he never makes a mistake, he is not getting the full set of tools necessary to run this war well, right? Who is bringing you the news that the Russians army has collapsed into a curse? and that's shoigu's job, yeah, um, I also wonder if he thinks well, there's something wrong with my operating assumptions here or if he has someone to blame for it, that would be what the logical responsible adult in the room would say.
I would think, eh, me. I don't have access to knowing if that's what he's going through, but one would hope that if he came to that conclusion, there would be a Purge at the top and, at the very least, a significant staff shakeup that we haven't seen. wondering if he believes his own to the point of thinking that this is not a problem with the Russian military, this is because the collective West has flooded the region with its, you know, its voodoo weapons and of course the Ukrainians they couldn't do it. something like this alone there must be tons of western, it's probably Patricia whispering that in his ear and, um, how it lends itself to the idea of ​​an escalation, a de-escalation, because that would just be part and parcel of their strategy there, especially a time they declare that the so-called independent republics are actually part of Russia.
I don't think de-escalation is in the cards anytime soon. The Russian periphery is very difficult to defend unless it is an advanced defense and so from the Russian point of view, it is not just that they need Ukraine and all of Ukraine, but they need the next group of countries beyond and the only thing that would be worse in a situation of demographic collapse that the Russians are dealing with. So not launching this war would be launching it and failing, so they launched it, it's not going very well, they are going to double, triple and quadruple until they have nothing left.
Russia historically fights until it can no longer fight. He has never backed down. of a war without at least half a million deaths in Battlefield and at most we're looking at 70,000 right now so okay, if you're the American president, what do you know? I have always not been a fan of The Last Five Guys in the White House I have to say that on this issue I think Biden has been beaten, it is right to rally allies as much as possible, put delicate but endless pressure on the country that matters most , Germany, uh, to embarrass him even with a minimum of seeds and the Germans are getting, he would like them to get more involved, but I think Biden is old enough to read German history well enough and he doesn't want to put too much pressure on them because that it's a different problem um and little by little you increase the flow you increase trade uh and whatever absorption capacity the Ukrainian forces have you fill it as quickly as you can and I think that's what they're doing if we say Biden has I agree with you, who has handled the biggest foreign policy crisis since at least since the Cold War, possibly since World War II, with a reasonable Plumb.
This is a very solid endorsement for Bison Button. In reality, there are many other things that the blind Administration is doing. to do that I think is that stupid, huh, but in this case, yeah, well, it doesn't sound like an America checking, it actually sounds like there's some kind of reserve, some kind of residual capacity to handle this, but it looks different. The whole idea of ​​globalization was that security and the economy were in some kind of package, everything was seen right now with the bite. Administration is the security aspect. All of Trump's trade sanctions are not only still in force, but have been. duplicated, they have been institutionalized with the exception of the dispute between the EU and the US over Airbus, all those trade disputes are still there too, so we just realized that I don't even have my name, you are not.
When we talk here about a globalized world, we are talking about a unipural or security arrangement in which the United States holds almost all the cards and makes all the decisions and goes its own way in economic matters, although in many ways for the rest of the world . that is potentially even worse than a US that is simply kept in check if the EU is actually pressuring the US to tear down protectionist barriers. Well, of course, the commission is doing what the commission does and they're negotiating it, but they're not getting anything. any traction and there hasn't been a huge amount of political capital spent by any of the member state capitals to do so at all, the two countries that matter most of course would be Berlin and Paris.
Paris is functionally We are comfortable with a certain degree of economic nationalism because that is their standard operating procedure and the Germans may have taken a different position, but remember that this government only started in January and the war started in February, so they have been a little busy in the country we are in. normally we would turn if our goal was to reduce trade tensions it would have been the UK, but with Brexit that disappeared, yes, that just leaves the Dutch and the Dutch don't have the leverage to force the rest of the EU. to return to a topic, much less continue with it, do you think the Biden administration has the serious intention of maintaining these barriers or is it just a matter of having decided to eliminate them?
Do you know they have been encrypted? As I said, Trump and Biden from an economic point of view are very similar, they are both economic nationalists. This is the new normal for American politics. I wonder, I wonder, people who believe my way, we are lost, well, I don't see it. that this so far is catastrophic for Europe, I mean, it only affects certain industries, winter has not yet arrived and Europe can still trade a lot with other European countries. I don't think they are that dependent on these in these industries in the United States in the US market maybe they are the vulnerability is there, but you are right that right now the center is holding back how about the energy situation?
I was intrigued by the suggestion that Norway might somehow manage to pump out enough oil to prop up the UK. Do you see that is possible? The United Kingdom yes, Europe no. They found some new deposits in recent years that are moving toward Pace. The problem is the moment in which these objectives are set. These projects take years to get going and the ones from five years ago are now starting to produce, so you can get incremental increases and if you double the investment, which is probably what we will see in the next five years, you can see .
Those flows continue and even in large quantities, that is not enough to replace what we are going to be losing in the Russian space and remember that in energy we have seen a two-thirds drop in global investment in oil and natural gas production. that takes years to manifest, we are now seeing the first stages of that in Europe. If we flip the new investment switch today, we won't feel that in any meaningful way three years from now, probably closer to eight, so the drop I've seen in suppliesglobalization of the war in Ukraine this is only the beginning of a decade of transition.
What would the United States have to do to replace Europe's missing fossil fuels? United States, the main problem for Europe will not be oil. It's going to be gas now that the United States is in a flooded natural gas system. Historically it is due to the Shale Revolution, but we have increased our demand for natural gas by half in the last 15 years to absorb it all. That's one of the reasons why natural gas prices are higher in the United States than they have been for a long time if you start talking about shipping another 1520 BCM of natural gas to Europe, which is the scale we would have What to do to make a difference, that is almost unifying natural gas prices in Europe and the United States and that is not on the table, simply building the infrastructure to avoid that type of price increase in the United States, which would be completely politically unsustainable , it's not something we can do in less than a decade, I'm not sure I fully understand why it would cause prices to skyrocket that way.
I mean natural gas, anytime you have an inelastic commodity market like natural gas, where you know if you get 90 of it, 10 of you are screwed. and you have to decide what to close, if you take the price of the marginal supplier and the marginal demand point and in the case of Europe they have lost one of their basic suppliers in the Russians and they are replacing it with all the marginal ones. suppliers, so any of these marginal suppliers are now setting the price and that's why you're seeing natural gas prices that are five to ten times what they were in January in the United States, our material supplier reference was so big that it was a waste.
The gas coming out of the shale fields that we've traditionally had for the last 15 15 has been 15. since 2007. Yes, 15 years, we've had natural gas in the two to four dollar range. One in Europe has been in the range of five to ten. dollar range they are now dealing with 70. uh we are now dealing with death because we are becoming a marginal supplier to the European market. To become a go-to supplier it simply takes more than what we have without massive price exposure or a huge infrastructure build that you won't do in two or three years, so basically the way it's working now is that we're practicing a bit of a form of gas autarky, yes, yes, that's interesting, because I've been wondering why we haven't been trying to compensate for that to keep the alliance together, but it seems like there are very good economic reasons not to do so. .
Yes, you can't replace such a large supplier in a short period of time unless you become less and less willing to consider other forms of fuels in general. Scaling up, so really the solution, if that's the right phrase here, is to build at least two or three years from coal and nuclear power across the country. Well, the solution is nuclear, the solution for everything is nuclear, it is excellent for electricity, but natural. Gas is not just for electricity, it is also an industrial input, it is the basis of the entire German economic model, so chemicals, unless you can find a way to produce them at low cost, I don't see how that is physically possible and much less.
In theory, sorry, I don't see how it is theoretically possible, much less physically, we are talking about the end of the German economic model in the next 12 months, that will have its own set of consequences, yes. Downstream everywhere in Europe, um, in the United States one thing they don't really spend much time dwelling on, maybe because it's too depressing, is the political dysfunction of the United States and I wonder to what extent they find it so politically dysfunctional to, in some way, make your prediction about the United States is less optimistic political hyperpower political and economic hyperpower without a functional government, surely, in many ways, culturally the United States is very well adapted to change and that makes our Economic transitions are constantly adjusted, so we normally don't have these big shocks like we will have in Europe, but in politics we do the opposite, we don't have party lists, you don't vote for a party in the United States, you vote for a specific candidate who is applying in a specific country. district to represent a specific set of voters and they need one more vote than whoever comes in second place, that means that our parties are relatively weak but the individuals within our parties are relatively strong and that manifests itself in a series of factions within each individual party and those factions.
Rise and fall based on changes in demographics, technology, and economic exposure, well, okay, which means that from time to time factions not only rise and fall within the party, they abandon ship or new factions emerge or factions die in the In the last 30 years we have had the rise of globalization in the fall of globalization the rise of China now the fall of China the rise of the Baby Boomers now the retirement of the Baby Boomers the information revolution social media makes sense factions are going to be moving around a lot right now every time that happens, it seems like America is about to fall apart, but all it is is that politics is being reorganized into a new way that is more stable and appropriate for the era we really are in.
The seventh time we do this I have no doubt we'll get through it, but damn, it's an uncomfortable experience and if you look back at the times we did this before, say the 1920s, we'll still be wigs from The Rise of the democrat republicans always seem like it's the end because it's the end of the party system, but then a new party system emerges, so I haven't gotten to the point yet where I feel confident enough to predict what the new one will be. game. The structure is going to look like this right now: The Democrats are in a state of disintegration and the Republicans have shed their national security voters, their business voters, their fiscal voters, and it's just a conservative cultural core, it's big. , is significant, but it's not particularly stable, so We may get a third briefly, but one of the three will die within a couple of presidential cycles. uh this is the seventh time we've done it, it usually takes seven to twelve years.
We're now in year six, so we know we have at least one more presidential cycle to suffer before we get to what's next. At that point, it is difficult for the United States to focus on anything else, especially abroad, so the fact that the Bite Administration has been able to do anything coherent on foreign affairs, particularly on the scale of what is necessary to the Ukraine war again has my consistent respect over the Mexican border or our immigration policy, which I agree with you. I think it's the most important issue and the one that Americans seem least able to think about. do it in a sensible way, where do you think it will go?
Do you think there will be a point where we can talk about this in a reasonable way? We'll get there but this is an issue that has inflamed Americans regardless of the political system for quite some time but I'm actually hoping that this time it's different now why don't Donald Trump I'm not a fan there's a lot of things that I think he did that were just atrocious and I think he, as a former president, is not a particularly good human being, yet one of his fundamental achievements, not just economically, strategically or as a president, but Also for American culture, it was the renegotiation of the NAFTA Agreements and the redefinition within the American political right of paper. that Mexicans play in the United States, what most people forget, I mean, let's say it's abroad, is that Mexicans are social conservatives and they are quickly coming around to Trump's interpretation of the Republican Party, which which means that on the American right, Mexicans are now part of the party. family and that change of identity is difficult to do, but Trump made it possible, so when people look at the border now there is a recognition in the United States that Mexico is not part of the problem here, that these are Central Americans and they are not . part of the family and you know that that is its own issue and its own problems, but when you have the group in the United States that has been most opposed to immigration suddenly thinking of Mexicans as normal people, that is a big step forward culturally and that's where now I see what you mean, I see what you want to say, right now, final words on political forecasts in general, how well we do it and what you need to know to be able to do it.
Political forecasts are difficult, so yes, excuse me. I try not to get into geopolitics too much. I deal with issues where the reference materials and reference information haven't changed in decades and sometimes centuries, sometimes millennia, so there's a pattern to follow, so you know the infrastructure is going to be It is easier to build on flat areas than on mountains. You know that water transportation will be more efficient than land transportation. You basically build a map and then look at other maps and use it to deduce what needs to happen in the difficult moment. Part of the geopolitical forecast is determining when it's going to happen, so the rise of the United States is easy, the breakup of the European Union is easy, it's going to happen this year, it's difficult.
That's one of the advantages of books is that they are a repository. and not everything has to happen next Tuesday disintegration of the European Union, why do you think it is inevitable? We will start with the demographic situation of all the countries in Europe. It has aged beyond the point of demographic reconstitution, with a few exceptions. France. at the top of that list, the second, because of that, the EU has become a kind of export Union, so it is now dependent on the ability of almost to a degree Chinese to bring in raw materials and take out exports physical, and then, thirdly.
Because of the way the Americans handled globalization, we actually encouraged the European continent for the most part to give up security as one of their guides because in the past that had led to a series of wars in which we eventually had to to intervene. and reach an agreement, so when I say that the Europeans have not really stepped up for Ukraine I do not necessarily mean that, as a condemnation, in many ways it is a feature, not a bug, of the way in which the Americans designed the post-Cold War order. but that means that the Americans have to remain committed day to day to maintain the European system in its current form strategically and economically and I don't think it's a good bet to continue going ahead, Peter, you are disgusting in my eyes, I can see it, your eyes are getting more glassy and red, I think I'll let you rest.
I could go on talking. I have to be on stage here in about an hour and a half, so I'll have to wait, it's nothing but cough syrup. and coffee can't be fixed, yeah I think you need an antihistamine. I think you're visibly hanging around and I want to be responsible for killing you. Thank you very much for joining us, thank you, no problem, it's been a pleasure, fascinating, um. I could go on asking you questions for a long time, but maybe just tell me you'll come back and answer the rest of our questions. I think we can make that happen.
Okay, thank you very much, no problem. and take care that you are well until next time goodbye

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