Economic Disaster is Already Here - Peter Zeihan

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Fortune and Freedom news commentary and special reports can give you more confidence to make informed decisions about what to do with your money. Just go to Fortune and Freedom Dot Com, that's Fortune and Freedom Dot Com, and sign up for a free newsletter that will help you with your money. work for you, the link is in the description, globalization obviously gets a bad rap nowadays because of the disruption it has caused, particularly in our countries, the loss of manufacturing jobs and all sorts of other things, the fact that suddenly, in the middle of a pandemic, we will realize.

We get a lot of our drugs from China and China may not ship them as willingly as they have, etc., but isn't it fair to also say that the period you describe from the 1950s to about 2015? We have all benefited greatly from this process, so the end of globalization is not all good. The end of globalization is going to be a

disaster

for most of the world. Most of the world cannot feed itself or feed itself without direct imports and inputs. that is necessary to allow them to feed themselves and feed themselves from another continent, you break it down, you are talking about global scale food shortages affecting billions of people, you are talking about ending manufacturing trade in the way we know. that basically strangles technology in the cradle and you're talking about a collapse of the energy capacity of one region to reach another region that Europe is discovering right now means the lights go out, these are not positive things, it does not mean that t

here

will be no winners as in any system t

here

will be winners and losers but we have had many victories in the last 75 years that is about to disappear hello and welcome to trigonometry I am Francis Foster I am Constantine Kissinger and this is the program for you if you want conversations honest with fascinating people.

Our excellent guest today is a geopolitical analyst whose latest book has a positive title. It's called the end of the world. It's just the beginning. Peter Zahn. Welcome to trigonometry. Thank you so much. It's great to have you on the show before we get into this and you know you're a fascinating person to talk to about geopolitics,

economic

s and all that tells everyone a little bit about who you are, how you are, where you are. They are what has been the journey through life that leads you to be sitting here talking to us. I've always been interested in how things work, so whether it's geography, demographics, politics, or

economic

s, I need to understand how the pieces fit together, which means I absorb information voraciously and have worked in DC for a few think tanks.

I worked for a private intelligence company and now I take my vision and explain it to companies that are trying to figure out what is coming, which means that I am always absorbing from everywhere and I get a lot of migraines and when I go on vacation I have to go somewhere my phone doesn't work, so in 21 days I'm going backpacking in Yosemite and won't leave for another month. I don't blame you for everything that's happening and speaking of looking to the future, one of the things we wanted to talk to you about a few months ago was the conflict in Ukraine, the Russian invasion of Ukraine, but actually since then I think a lot of people In particular, people in our audience in the UK and US are waking up to the fact that we are all likely to be much poorer than we have been and they are all scratching their heads and wondering: why ?

Peter, well the world before globalization was a patchwork of small local economies and if you didn't have what you needed locally you just got by without it, so if you didn't have oil you didn't industrialize, if you didn't have food you had a very small population and the companies, excuse me, the economies, the countries that had more could use that power and take advantage to become empires, those empires collided which brought us the Second World War, the entire system collapsed, but with globalization In the late 1940s and 1950s, Americans created a strategic rubric in which the little guy could actually get by and the little guy could access the inputs and outputs of other economic systems, so instead of thousands from tiny little systems, we finally migrated to a single huge one where anyone could import or export anything to anyone at any time, which gave us global agriculture, gave us global energy and finance, gave us global manufacturing supply chains and ultimately created the world we know, but now we are deglobalizing for a combination of reasons and We are moving backwards in the direction of thousands of small disconnected systems, which means that the force of the whole is now failing and we are seeing it with the war in Ukraine and we are seeing it with the Chinese disintegration and we are seeing it.

With some of the problems that the Western world is having as they try to disengage from Russia, this is where we are headed and obviously globalization gets a bad rap today because of the disruption it has caused, especially in our countries, the loss of jobs in the manufacturing sector. All kinds of other things, the fact that suddenly, in the middle of a pandemic, we realize that we get a lot of our medicines from China and China may not ship them as willingly as they have, etc., But isn't it fair to say so? Also, in the period you are describing, from the 1950s to about 2015, we have all benefited greatly from this process, so the end of globalization is not all good, oh, the end of globalization will be a

disaster

for most of the world most of the world cannot be fed and fed without direct imports or the necessary inputs to allow them to be fed and fed from another continent.

If you break it down, you're talking about food shortages on a global scale that affect billions of people. People, they are talking about the end of manufacturer trade as we know it, which basically strangles technology in the cradle, and they are talking about a collapse of the ability of energy from one region to reach another region, something that Europe is discovering correctly. Now it means the lights go out, these are not positive things, it does not mean that there will not be winners, as in any system, there will be winners and losers, but we have gained a lot in the last 75 years. that's about to disappear and what are the main reasons behind this d-globe this effect of d globalization what are the things that contribute to it there are two big pieces uh the first globalization didn't happen by accident when uh the second world war system was being born, the Americans proposed that we would use our navy, the only one to survive the war, to patrol the global ocean, so that anyone could assess trade with anyone at any time.

This is normally the type of benefit that would only be obtained. If you were on the winning side of the war and you were

already

in imperial power, then we basically made the world open to everyone and that allowed everyone to take manufacturing and service jobs and diversify and specialize and access anything in a world. and again. that became an option, people started taking those jobs, but all those jobs are in the cities and that changed who we are because in the preindustrial preglobalized world most of us were farmers and small farmers, but once we were able to move going to the cities and taking those higher value added jobs changed the way we thought about families on the family on the farm kids are free labor you have a lot of kids in the city they are really expensive habits you have very few move fast 75 years and it is not that we are running out of children, as happened 40 years ago in most of the world, we are now running out of adults and therefore we are in an increasingly accelerated demographic decline, so even if the Americans were willing to continue a 20th century strategic policy in a world where there is no longer a cold war, we no longer have the population structure for consumption that allows globalization to work, so whether at the beginning or at the end, this period of the story is over and it's just a question of how we move on to what's next, so I've always been told, Peter, that we have too many people, that the world is overpopulated, that we need to have less people, but here you are telling me which we don't really have. enough young people, the demographic decline in the advanced world began in the 1950s and 1960s and spread to the advanced developing world in the 1980s through the 2000s with Japan, sorry, with China more aggressively in the 1990s, so it's just It takes a long time for you to realize that a population, sorry, a drop in the birth rate is leading to a demographic drop that takes 30 to 50 years.

Well, that has now happened in spades, so populations throughout the advanced world are aging at a rapid rate. At the same time, they're shrinking and another thing, when you first industrialize, you don't just get roads and railways and electricity, you also get antibiotics and healthcare, so the death rate collapses, so China is probably the best example that they industrialized in the late 1980s, their death rate collapsed, their birth rate did not increase but also decreased, but because everyone was living longer, the population continued to grow. Well, you fast forward 40 or 50 years and now you have so many people who are so old that they can't.

I don't even have kids anymore so this belief in the population rubric looks at the core numbers, just pure numbers and by that number over the last 40 years, yes the population has gotten bigger and bigger and more unsustainable, but yeah If you look under the hood and look at the younger generation, it's been steadily disappearing for so long that we've run out of people of reproductive age to generate the next generation in much of the world, including China, so assuming nothing else comes out wrong, assuming globalization holds, we are still seeing a population crash, so we will probably reach eight billion next year, we will never reach nine and there will be an accelerated decline from this point and that will contribute to deglobalization, as You said, what else is going to happen to this population? crash, uh, pick a topic, we can go anywhere with that one, uh, let's start with the one that's really not sexy.

Finances if you are 55 55 60 64 something like that, your kids have moved home, your house has been paid for, your income is high, your expenses. are low, you are the richest you will ever be and then you retire and liquidate all your investments and make very routine investments, like treasury bills and cash, because if there is ever another currency or market crash, you will be out of luck, you're homeless, well that's happening to baby boomers this year, at the end of this year, that's happening in most of the world and our richest generation, which is providing all the financial balance that has allowed it all to happen, They're going to basically take their marbles and go home and in most of the world there is no generation to come and behind them, generation x in the United States is very small but it is even smaller relative to the boomers in the advanced developing world, sorry. in the advanced world, so we know that the cost of capital will quadruple at least in the United States;

It will probably increase six to eight times in most of the rest of the world and it will not improve now in the United States within ten years our millennial generation, which is a large generation, will enter that capital-rich demographic, but most The rest of the world doesn't have a millennial-sized generation, so we're going to get this split in capital costs with the Americans going one way, the advanced world going the other, and most of the developing world has never been able to become rich enough to play its own role, so we can do all this in a period of capital scarcity that lasts several decades.

I don't even have an economic theory that describes what interesting things will look like, Peter, but you know you talk about the demographic situation and you mentioned winners and loserswho will be the winners of this situation, well, the United States is the first world country in the best demographic and structurally economic position, it never invested its economy in globalization because it was a bribe, we basically created this environment so that people were on our side. side against the Soviets, so if we had invested our economy in it, we would have been just another empire and there probably wouldn't have been many takers, which means that the United States can walk away from this system and not suffer too much pain.

France had a very similar vision of globalization because they saw it as an American strategic move, they say oh, that's what we would have done, so of course they didn't invest their economy either in the world of globalization or even in the European Union. . They think of the EU as a strategic project, not as an economic project. one and so they invested in the European system more or less the same way that the British did little late, they regret it, they never left completely, but there are countries that can join one of those systems or maybe start a small echo of his own turkey.

It looks pretty good. Japan clearly has the military force to get out. and secure the things she needs and has transferred a large amount of manufacturing base to countries with better demographic structures. Argentina, despite its creative policymaking, has all the inputs it needs to succeed if it so chooses, and then other countries have

already

achieved it. somehow enter the American inner circle, whether Mexico, Canada, Colombia or Chile, already have the legal structure and trade agreements in place. Australia looks good because although they are going to suffer a terrible recession as they adapt to some of the excesses of the last 30 years they have a stable population they have the resources they have the raw materials they have an agricultural system that is hugely export-oriented and They are America's best friends, so you can see countries clinging to some of the most successful systems and others trying to go their own way with varying degrees of success.

Well Peter we are sitting here in Britain which I suppose would be on the winners list being under the umbrella of the we is that that is completely up to you um one of the problems that Britain has at the moment is that You still haven't figured out what the hell you want to do about Brexit, I mean, come on guys, it's been five years, tell me about whether the smart thing would be to go to Washington and ask for a deep free trade agreement and maybe inclusion in NAFTA, The problem with that strategy is that we will treat them, we have treated them exactly the same in these conversations as we did during the loan. lease, so we gave him and lent him lease 40 obsolete, poorly built and mothballed destroyers in exchange for every military installation he had in the Western Hemisphere, that is the scale of the capitulation that Washington is going to demand, that means all his agreements with Ireland and Northern Ireland.

We have to stay because we like them, that means you have to surrender to American agricultural regulations, which means most of your farms will close and that means the financial center has to move from London to New York. I mean, these are non-negotiable. from the American point of view and that is one of the reasons why the trade agreement has not been finalized. The rhetoric from Brexiteers that they could simply go to Washington and get a better deal is not true, but what Americans are demanding is the best you are going to get and until, unless the UK reaches that conclusion about himself, then he is caught on the edge of the European system.

Now the European system is facing its own deadly problems, but you can no longer be part of whatever it is. the planning is for the next stage and that leaves you alone and long range manufacturing supply chains are no longer viable anyway so you need to partner with someone and that means going back to the EU which I don't do. I no longer think it's a viable option or dragging myself to Washington, which is unpleasant at best. What we're going to call is your point, we're already on our knees to be fair, but Peter, one of the things you're clearly someone with a lot of experience.

A lot of the people who watch our show aren't as educated on these topics, but what they're trying to do is understand what's going on in the world and what's going on in the world. their lives right now and we talk a lot about the cost of living, we talk a lot about rising fuel prices, all these things, how have government policies influenced this? because a lot of people will say, well, look, the pursuit of net zero is one of the reasons why all our prices are going up, someone else will say it's the war in Ukraine and people come up with all these different explanations, what do you think about all that?

Well, let's start with conventional wisdom, because that's not the case. everything is wrong normally I'm the guy who implies that but this time it's not net zero with current technology until we've discovered a low cost mass electricity storage system and that means storing electricity not for four hours but for four months to that you can produce it. going through the winter until we have that net zero technology is really stupid from an environmental point of view to forget that from an economic point of view it is suicidal from an economic point of view but from an environmental point of view there is not enough lithium on the planet To For that to work now in the UK, you have advantages over almost everyone else in your hemisphere because the UK has some of the best wind resources in the world and if you put a tile or wind turbine high enough you can take advantage of stronger currents that are more reliable and can generate base load.

We are seeing that in the North Sea in the United States we are seeing that in Texas and we are seeing that in Iowa it is not foolproof, but wow, it is better than what we had five. or ten years ago, so I don't want to say that an ecological system cannot be made. I'm just saying that getting to zero today is not possible and if you try and do it by dismantling more reliable energy production systems, which almost by default means nuclear or fossil fuel, you will have high prices, brownouts and blackouts that we are seeing all over central Europe right now the technology just doesn't exist so it's real that doesn't mean you should give up but

peter

just Interrupt well if that's the case why does everyone insist we do it?

It's a great slogan. I mean, people have bought into the ideology, unfortunately, without looking under the hood. We're just not there yet and Europe is now setting an excellent example for us. After 40 years of politics of what exactly not to do because it sounds good and it's a great slogan and the politicians seem virtuous and moral, we embark on this policy that is fundamentally unworkable hey, hey, you're the ones who basically said I wanted a cheese submarine in the shape of Brexit and you agreed to it, so this is not an isolated incident, okay, people have ideas, people have bad ideas and politicians of all stripes latch on to them, we certainly have seen that in my country in the last five years, you're not alone in that, so whether that makes you feel better or worse, I don't know, but I certainly agree that net zero in its current form with technology current is economically and ecologically suicidal, but that's only part of it, so it's okay.

We have the Ukraine war, so the Russians recently shut down Nordstream and we know that all the pipelines crossing Ukraine into Europe are going to be blown up one way or another this calendar year, so you can count on about five or four for six million barrels per day of crude oil and about uh oh gosh I have to translate this sorry I'm thinking bcf it's 9 to 12 bcf so what is that 90 to 120 million billion cubic meters of gas natural per year that they go offline before the end of the year and that will obviously repeatedly hit everyone in Europe again.

The UK has a slightly different system. You are further away from the Russians. You hardly use any of their stuff. You have the option of taking things from the North Sea first. You have closer access. to lng from the states so you can see Europe and when you don't laugh because that would be rude, hopefully you'll learn a few things about what and what not to do like you. We are adjusting their own energy plans, but all of that is going to be inflationary, no matter who it is, we are losing potassium fertilizer that used to come from Russian Belarus.

We are losing phosphate fertilizers that used to come from China and we are losing nitrogen. fertilizer that is made from natural gas all over the world, so we know that food prices have to go up again. I don't see the UK starving, but that contributes to inflation, but what's really happening in my opinion is a UK jobs story in the US. The biggest generation has been our baby boom generation, they're all retiring right now and the 0-20 year olds that are now entering the workforce are the lowest, the smallest generation that any of our countries have ever had. seen in the United States.

There is already an annual shortage of 400,000 workers in my country that is going to increase over the next 12 years to 900,000, so we are seeing that labor inflation here will be higher than inflation in energy, food and manufactured goods combined for a decade, so Peter, again, that's the case, how come politicians haven't looked at this and thought there's a problem brewing? Let's give people incentives. Let's give people incentives to produce children. Let's make it better for families and make it more sustainable. less expensive that is much more difficult than it seems now the advantage that we have had in the United States is that we have the room to maneuver we are the largest producer and exporter of food in the world we are the largest producer of energy products in the world and we have more arable land per person than any other country in the world and that has kept the costs of all inputs low for families.

Without government policy the UK has lower productivity and agriculture, its energy reserves are not depleted but are past their peak and most of you live in a relatively dense urban environment which will by nature be more expensive , so if you decide you want to fix this with a policy, the country will have a conversation with Sweden and there is a lot about what to do and what not to do. Sweden has maintained a higher birth rate than most countries, certainly the Most countries in Europe have a cradle-to-grave social safety net, but it comes with some of the highest tax rates. in the world, which actually makes Sweden a very expensive place to live, if it weren't for the support, no one would be able to have a family, plus there are a lot of negative social aspects that come from it, so for example, I got this great program in which a young mother with her first child has so many months off work that, with the payment, if she has a second child, it adds additional time plus something for a third or fourth step, What that means is that if you're under 35 in Sweden and you're a woman, it's impossible to get hired because you could go to your first day of work, say you're pregnant, and then not work a day for eight years, like that.

Yes, a higher birth rate, but it is coming. at the cost of simply shouting economic inequality between the sexes this is difficult social engineering is incredibly difficult it will always have side effects the united states has been fortunate in that geography takes care of most of it for us very interesting that is very very interesting

peter

because you would think that someone must have already been able to solve this puzzle because, as you have explained and we are starting to see now, the labor shortage is having a huge effect, we will know well by the time the time comes.

This comes out, we would have flown to the United States and there is a part of me thinking: are we really going to be able to make the flights? No, let's make it the suitcase, not so much because I have two in the wind right now I feel your pain because it seems that all industries are paralyzed by this shortage and they are not going away, I mean the baby boomers, the generation greatest the West has ever had, and they leave and will never return. In the United States we have to wait 10 years for millennials to fill this out.

Most of the advanced world doesn't have a millennial generation, so we're not going back to where we were before we were covered or before Trump. It's not possible, we don't have the numbers, we have to find a new way to operate and if you want to get a little depressed, it all depends on your point of view, if I'm going out, yes, if I'm right about China and we're seeing the disintegration of the Chinese system and if I am right about Germany and we are seeing the end of the German system this year, there is a lot of production that is disappearing now.

Your country andmy country are excellent at manufacturing in terms of value added, we are actually better than the Germans, but rebuilding those supply chains elsewhere, especially in a short time, especially during a time of prolonged labor shortages which is also inflationary, and Peter, there's always certainly been the traditional solution in this country in recent years, which is good, yes, we have a labor shortage, but what we're going to do is get a bunch of people and We will get the best people. from bulgaria and romania and poland and maybe ukraine now and also from north africa and maybe sub-saharan and we will bring a group of people from all over and we will solve the labor shortage, right?

You have the possibility to work now in the European Union, that is exactly what you did for the last 15 years and it is one of the reasons why the economies of Central Europe are now facing demographic collapse. Everyone under 30 years old went to the West or Western European countries. you can only do that once, so now you're talking about going further in the sense that the uk absolutely has an advantage over the rest of the eu because the uk has always had a more open definition of itself because, by definition the uk is a fusion of multiple ethnicities without necessarily erasing them like the french or germans did and that makes you a little more open culturally but it won't happen by accident, you're a fucking island and you just need to build the system that allows them to come either from the former colonies or from closer countries, there are ways of skinning which all of them generate a certain degree of political backlash and I think it's safe to say that at the moment everyone in the UK has a new appreciation of how touchy one can be when it comes to politics.

In the United States we learned that lesson five years ago with Donald Trump and with the people who thought that all it was going to take was the fall of Trump and the mentality to change him. No, our immigration policy is, if anything, stricter now than it was two years ago. This requires significant cultural adaptation. We went through phases and right now. Both countries like the doors to be closed and Peter, you mentioned something about the German about the collapse of the German system. I haven't heard anything about this, but it sounds exciting. Yes it is.

You know he has a Jewish background, so he's excited, but safe. I'm glad you laughed at that, otherwise that joke is very problematic, but anyway, Peter, it's like there's nothing but bad moods in my life anymore. Okay, so the German system has four pillars of support and without all four it doesn't work. Russia's cheapest energy supply is the only place where the Germans can get it cheaply and forms the basis of their heavy industry, which provides the materials for their medium and light industries, so if something happens that at the level basic is not just that they have a problem with electricity, although they do it is that they no longer have the necessary materials to make plastics or forge steel or do anything downstream from the fact that the Nordstream pipeline was disconnected yesterday there is a concern, a very serious concern.

The real thing is I'll never go back to what's happening now is that the Russians are trying to blackmail the Germans into withdrawing from NATO. It's that simple because without German help there are no logistical means to bring equipment from the rest of NATO to Ukraine. history so germans are forced to decide between being industrialized and neutral or non-industrialized and western it's not a fun conversation germans are the fastest aging society in europe they are in the top five globally germany is not a country where an open society can have an honest national conversation about demographic policy and it shows and that is why now there are more people who are 60 years old than 50 years old than 40 years old than 30 year olds than 20 years old so far this has worked because when there is a lot People in their 40s and 50s and early 50s.

Those in their 60s without children can work a long time. They can work hard. They can receive a better education. They are the most productive workers on the planet, but that group that is in their 60s is now retiring in this decade. and that changes things overnight, going from an advanced level base of workers with a lot of experience to a base of retired workers where experience is irrelevant that happens in this decade that was always going to happen this decade this was always going to happen being the last decade of the third german manufacturing model its not just about the germans a successful manufacturing system requires different stages of production with different workforces with different skill sets at different costs americans do this with mexico germans do this with poland and the czech republic and romania and ukraine and now it's over and finally globalization is needed because when you have an advanced population that is very heavy, you don't have enough people to consume, you have to export things and the Americans have lost interest, so It's not just Nordstrom that is the immediate cause of the day that these four pillars were already breaking with the demographics it was definitely going to completely break this decade with the Americans, it all depends on our mood and then of course the Russians are just forcing the things to come to light right now, so the German manufacturing model cannot survive the 2020s, the Russians can decide. whether it will survive in 2022.

Wow, it is obvious that in the German economy the economy is such a powerful power, if that falls, it will have shock waves throughout Europe, it will take Belgium, Poland, the Netherlands and all the economies in Europe central. He and the French will inherit the earth, it's a depressing thought, here we go, hey Constantine, do you love trigonometry? I am from Russia. I can't love anything apart from vodka, miserable literature and a horrendous downfall of my people, but yes, I find trigonometry satisfying. and you like live shows, of course, but only if it's a game control about the collapse of the Russian aristocracy as they face death and darkness before the glorious power of the proletariat and the beautiful revolution, okay , friend, if you like live trigonometry shows, then get your credit. card for the boys because we are going to the Edinburgh festival this August.

We've only booked two shows on August 6th and 7th because if we do any more the comedy industry will treat us like tsars and execute us, that's right we're going to I'll be in Edinburgh for two days only Saturday's guest is Andrew Doyle , which will surely sell out. Our other guest is Leo Curse, which means that when Nicola Sturgeon finds out about her, she will ban us from Scotland herself. The tickets will surely be sold out and when they find out. they're gone they're gone click the link below and we'll see you in Edinburgh on 6th and 7th August at the golden globe Teviet, come and see us before hordes of leftist comedians try to put us in the gulag peter i.

I wanted to talk about China because this is another area where you have very different ideas than most people. Lots of people, including a former guest of ours. We recently had Dr. John Lee on the show talking about what China is trying to do. make the threat of China and in front of Taiwan etc., you believe that again due to demographic issues in particular and also this end of globalization, China is on the verge of collapse, tell us about that, well, let's deal with the punchline first , China does not. survive the decade as an industrial power, probably not even as a unified country, the current demographic situation is so bad, aging is happening so fast and the birth rate fell so low so long ago that, by 2050, China's population will be less than half of what it is today and we are already in a situation where I was going to say that wrong, remember Germany has more people between 60 and 50 and 40 and so on, their demographic does this. towards children China does this right their point of no return was 30 years ago this is not something recent combining the most rapid urbanization ever experienced by humanity with the one child policy at the same time it was national suicide and now they are dying We no longer have a workforce that is competitive in any manufacturing sector, there is no product that is made anywhere else in the world, sorry, there is no product made in China, it cannot be made cheaper anywhere else and the only reason I still think of China as a manufacturing powerhouse is because of the pre-existing sunk cost of the industrial plant, but the Kovid lockdowns are even taking that off the table so there is no reason to expect China to ever improve Furthermore, their energy comes from a continent away, except for the part that comes from two continents away, also all the inputs they need for food, with the exception of phosphate fertilizer, are all imported, so globalization Anything happens to him for any reason and this is a Chinese. a country that simply ceases to exist there is no way with deglobalization that China will emerge from this decade with less, sorry, with more than 700 million people, it is going to be so bad and so catastrophic, well, that obviously sounds like a Huge impact on China. but does that mean you would say that means China is not a threat because you know I'm originally from Russia?

And people have been talking about Russia's demographic and death spiral since I was a kid, and yet here is Russia. Invade Ukraine and upset the global balance of power and cause all these problems that we're now talking about. Is it really true that we shouldn't worry about what the Chinese are going to do? It's a fun little compare and contrast. so Russian demographics are terrible, it will lead to a dissolution of the Russian state this century, probably around mid-century if I was a betting man, but it's not that fast because Russia, when it urbanized, only partially did so and when it industrialized , only. industrialized in part, so until you get to the post-Soviet collapse, the demographics I really want to say was ugly in many ways, but it was not terminal and there are some strategic things that the Russians can do to buy more time for the Ukraine war. part of that they are trying to get to a more defensible outer layer where they can place static forces in a few geographic areas that will block forces from entering their space in the future, so I don't want to suggest that the Russian situation is pretty, it's still terminal, but there are some things that can be done with a strategic policy that buys more time.

China does not have that option. Russia is an exporter of food and energy. China is an importer. Russia can connect its periphery. China's periphery is naval there. There is no country or combination of countries that the Chinese can invade and conquer to solve any of their problems, where there is a good list for the Russians, so the most likely outcome here is that China simply implodes on itself, does that It means it can't be a war, of course, not when countries are dying, you never know what they're going to do. The problem of the moment, of course, seems to be Taiwan, but the Chinese government now knows that if they do anything in Taiwan, it will be a war.

It's going to be harder than they thought because they know there will be international sanctions and they know there will be international boycotts and any one of them is enough to destroy the Chinese system let alone all three at once. I've always thought of Russia as their dumb neighbor and you let the dumb neighbor try things like the canary in the coal mine, so to speak, and now they know that everything they've prepared for for the last 40 years was based on flawed assumptions. , this is normally the place where, as a national leader, you would send all your smart people to another room to play with some replacement plantations, but the cult of personality in China is now so strict and she has executed so many people in the Top that he no longer has a group of experts to send into the other room, so China just bangs his head against the wall over and over again until something breaks and I don't think that's something that's going to be Taiwan, well, Peter, you mentioned the reason why do you think Russia is doing what it's doing in Ukraine, which is securing a more defensible position?

You mentioned that there are other places where you need to plug those gaps and what the conflict looks like and the future of Russian aggressive behavior in Eastern Europe. like, in his opinion, when the Russians made that first run to Kharkiv and kyiv and realized that they were not going to be welcomed as saviors, that no one had bought their propaganda but they themselves had to reevaluate Ukraine, the problem with Ukraine by Russia. The point of view is not that it is in one of those geographical gaps, it is that it is on the way to two of them, so it is not that the Russians will not stop until they have all of Ukraine, but that they will not stop when they have it. all over Ukraine and that meant they had to dust off an old playbook and that's why we're seeing other artillery now they're deliberately destroying every piece ofcivil infrastructure that they can see, specifically agricultural infrastructure, to make sure that the land is uninhabitable for at least several years because that forces the population to self-segregate into refugees who leave and you don't have to worry about them or anyone who just leaves. is clearly a fighter and you can attack the Wagner group or the Chechens just to eliminate them and that's what we've seen in southern Ukraine and eastern Ukraine for the most part and we're seeing these incremental artillery advances if the Russians succeed, that does not simply destroy the Ukrainian nation and the Ukrainian state, it is simply the next step to reach those gaps and that means that Estonia Latvia Lithuania Poland, excuse me, Moldova and Romania also have to fall into the western periphery of Russian space, those are the countries that the Russians feel they should have to maintain and if they achieve it and then the FSB is freed to do what it was designed to do and that is to suppress all national dissent no matter what form wherever it is. go from the Russian point of view.

That's the easy part, the difficult part is conquering the country. First of all, well Peter, sorry Francis, let's end this, as someone who is less of an expert on the economic side of this, but someone who is from Russia and has been paying attention, I have been telling people this for a long time. This long is just the beginning, it's part of a much bigger plan, but I suppose the most valid counterargument would be: wouldn't it be suicide for Russia to attack NATO countries like Latvia, Estonia, Lithuania, Romania, etc. ? Well, we already found out. In the first week of the war, the Russian army from a conventional point of view was not as important as it seemed.

We now know that US NATO in general is running out of much of the equipment the Ukrainians need. fight because that is not how our armies are designed, the United States does not carry out massive formations, we do precision from a distance to destroy command and control and logistics centers and then we enter and clean, the Russians go inch by inch destroying everything and combats that require a different type of army and we cannot train Ukraine with the weapons that we use for the long range things because that is not something that is done in a few weeks, it is something that takes a few years, we don't have that kind of time, even if We would be willing to share our top-notch technology, which I think is open to debate, so we are running out of the kind of stuff that the Ukrainians can use and we will probably be heavily tapped in October, so if Ukraine doesn't has gutted the Russian army by then, this war is going to last a very different term because you will have a large, heavily manned Russian army that has low morale and poor equipment against a Ukrainian force that has no weapons.

There's no math there, but the Russians know they can't take us on in a conventional war. and that's where nuclear weapons come into play, especially especially if the germans have turned around, because if the germans have turned around, there is no defense of estonia, latvia, lithuania, poland and romania, anyway, so The Russians are playing their cards on the diplomatic and economic side of this issue. very well and to be completely frank it is not a difficult hand to play the Germans have lobbied for 40 years against dependence on Russian energy and raw materials and we are seeing where it leads and before you criticize the Germans because you know that that is justified.

This is not a new problem. Germany and Russia are our neighbors and they try to get along so they don't have to go to war and then everything falls apart and they go to war and then they try to get it again to try to avoid the next one, that's all they can do, it's It's just that we're unlucky enough to live in a time where we're in one of the ziggs instead of the zags, Peter the, the, paint the picture you're painting. This is very bleak, it's very bleak, it's very bleak about everything, actually, but you describe yourself as an optimist, so what does it mean to be an optimist?

Well, history is a series of cycles of an organizational structure forming and generating a golden age and then falling apart. its own inconsistencies and collapses and what we know is that history has ups and downs, ups and downs, globalization has been the biggest up and down we've ever had and its breakup was always going to hurt a lot, demographics are just faltering on top of that. It's worse, but we are now in a position where about half of the Earth's surface has been industrialized and urbanized and is not subject to collapse. Will it be inflation? Yes, will it be uncomfortable?

Yes, but think about the level of discomfort the UK and the UK have. The United States has to do, we have to double the size of our industrial plan, yes, that is expensive, yes, it is inflationary, it is a wonderful opportunity, it will generate some of the fastest growth in human history in the next five to 10 years, we know that global agricultural supply chains are disappearing, but probably not those in North America or the UK, which means we can incorporate some of the digital technologies that have already passed the prototype stage into the next generation of agricultural equipment and double yield.

This is a good thing, it's inflationary in the short term, but it's a good thing, unlike the big crashes of the past, big chunks of the world, big viable chunks of the world are not breaking up, so when we get to our next promotion within 20 or 30 years, all the basic components of today's society. will not have been lost this is not the collapse of the bronze stage this is not the fall of Rome it is not even the disintegration after the second world war there is pain there will be many ugly things but we are not looking at a breakdown of civilization here as we have had on other occasions, that's good, it's very interesting that you say that because we talk to people and many commentators, not very intelligent people, journalists, political thinkers, point out that what we are seeing is the last days of Rome and you don't think I believe what we're seeing imagine if we could see the last days of the roman system without the last days of rome some version of that's where we're going this isn't like that For some, this isn't like the middle ages where the arabs had the knowledge but they didn't They played it for a thousand years.

Silicon Valley is still there. London is still there and will continue to be Silicon Valley in London. What's happening is a contraction of what we consider the economic family of the world and the parts of the world that are most viable and we're going to be able to continue playing with these technologies until the rest of the world is ready to rejoin, that could be a lot. worse and peter in terms of some of the other things that are happening, obviously you focus on the economy, demographics, geography, etc. How does the type of modern information landscape influence this?

Because the reason I ask this is because often when I listen to You speak, I am hearing a lot of rationality and I know, as you mentioned above, that not all of our decisions in politics and in the world in general are made by rational actors in response to a rational observation of facts and data so we now live in a world where there is an abundance of information we are all connected by forms of communication that did not exist before how does that affect the landscape and the way our politics will develop throughout of time, well, social media is definitely part of the problem more than part of the solution because we have given every yahoo a megaphone and those yahoos sometimes get together, say the same thing and elect people to congress and parliament, no There is a lot we can do about it. that for the moment, but I think a little historical comparison might be useful in the 19th century we had a new technology called the telegraph which, like social media today, revolutionized our relationship between geography and information, suddenly you could send information to across a continent in seconds. and that created tabloid journalism because, like with social media today, there were no restrictions on who could share information, so people just made things up and, among other things, involved the United States in the Spanish-American War because people eventually bought the propaganda well, it wasn't propaganda, it was just blatant lies and that triggered a conflict that is also, among other things, shaping our political space in both countries right now, we are seeing that with Trump we are seeing that with Johnson We are seeing that with everyone who wants to challenge them now social media will eventually be controlled just like the telegraph did.

Eventually we both passed libel and label laws. We need something like this for social media. Will we do that in a year? Probably not. If so, the Americans would have done it after the January 6 edition of last year or I said already the year before. Sorry, time flies, but that is an issue for my congress and for your parliament, I would hope that parliament. to act faster because their system is less clunky than ours it is actually designed to govern it is designed to govern rather than designed to debate so we are in the United States once again looking to our parents for a potential path out of this, please don't do it.

Don't let us down, well, we'll do our best, Peter, we'll do our best, that's not part of the problem, although Peter is that no one we have, no one has really familiarized themselves with this technology, no, and it's new. I mean remember social media was only designed 15 years ago and only entered mass consciousness in the last six, it's very very new and one of the many reasons I'm looking at the UK rather than the US United to take the first steps. On this, you normally don't have a constitution, that is negative, we are seeing it with Brexit, but it means that little things like freedom of expression are not unviable and that allows you to play with the legal structure necessary to contain this technology without threatening the fundamental precepts of your country, this is a good thing because it allows you flexibility that we do not have.

Unfortunately, the people in charge, instead of trying to find a sophisticated solution to regulate social media, are turning to the police. investigate comedians for the jokes they tell and ask people to check their thoughts and all this other knowledge that is one of the disadvantages of their system. I will tell you that there is no chance that you don't have it all written down sometimes as something negative. It's usually not because of this now, something else that's different in our systems, another reason I'm looking at the UK and not the US on this, when your leader does something monumentally stupid, even legal, you can undo of them in one day because you can. go through the party as well as parliament we don't have that option we are in blocked term limits so if johnson were our president today we would have to wait a minimum of two and a half years to get rid of him you did it In one afternoon, the speed matters right now and Peter, there will be a lot of people listening to this and what you have painted is a very persuasive but bleak picture of the world and its future if you are an ordinary person listening.

This, what advice would you give them? What would you say to them to help negotiate what's coming? uh you need to understand where the things that make your life possible come from if it's a secure system you're good if it's not a secure system you need to personally invest in other means of supply otherwise when those things kick in you'll just stay without that, it's not a simple process, the supply chains are complicated, but anything that ultimately ties back to the Chinese or the Russians. particular system, you know that's going to go away, you know that's going to go away very, very soon, so it's best to be upfront about what the nature of your problem is so that you can start to resolve it before it explodes in your expensive.

Germany is a textbook case of what happens when you do the opposite, well here we go, so if you're reading and watching this instead of an average person starting to make everything you've been buying for every porcelain, everything is great, fantastic, Peter, well, you've given us some advice, uh, before. we let you go uh the last question that we always ask uh before we ask questions to our followers for our followers, of course, is what's the one thing that we're not talking about as a society that we really should be, I think across all sectors. economics facing turbulence the one people are really underestimating is agriculture, we have a global disruption across the entire fertilizer supply chain right now and building new fertilizer capacity requires a minimum investment of three years, about eighty percent of calories.

What we grow is grown with imported inputs and we are going to have a very good idea by September and October of this year of how bad the harvest will beglobal scale; it's not going to get better until we've rebuilt that fertilizer capacity and that's what you're talking about 20 20 20 20 25 as soon as possible uh we're not ready for that none of us are ready for that okay pizza so listen uh thanks for coming on the show lo What I will say is this you I have made a lot of predictions, I hope you are wrong in all of them, however, however, if you are not, we would love to have you back on the show in a year or so so you can say that you I said it, that's why you don't have power anymore, that's not why I do this and if you don't have power, they're not going to be watching you, yeah, I know, I know, but anyway my point is we appreciate your time.

I appreciate your experience uh and uh we hope you're wrong about everything but if not, let's do this again sometime sounds great the book is called uh the end of the world is just the beginning uh and there it is uh yeah If this interview didn't excite you , inspired and motivated enough, make sure you get the book too, Peter, we'll ask you a couple of questions from our fans for our locals, but for now, thank you for coming on the show and thank you. Guys, for watching and listening, see you very soon with another inspiring episode like this and for those who like it, yes, it has been fun for those who like trigonometry on the go, it is also available as a podcast.

Take care and see you soon guys, how does Peter see the almost total global control by certain countries of certain key minerals such as antimony and lithium developing in the coming years?