China’s Collapse, America’s Rise, and What Comes Next — with Peter Zeihan | Prof G Conversations

00:51:08
https://www.youtube.com/watch?v=UltVl2Qlf6A

概要

TLDRIn this episode, Peter Zion discusses the geopolitical landscape, focusing on China's vulnerabilities due to its trade dependency and demographic issues. He argues that China's rapid industrialization has led to a significant drop in birth rates, making it susceptible to collapse. Zion also analyzes the Russia-Ukraine conflict, highlighting the changing nature of warfare with new technologies. He emphasizes the need for the U.S. to strengthen its manufacturing base and energy independence while addressing demographic challenges through immigration. Zion expresses skepticism about TikTok's data practices and discusses the potential for various regions in the U.S. to benefit from deglobalization. He advocates for a diverse energy strategy and shares insights on the future of AI and the importance of understanding global trends for those entering the geopolitical advisory field.

収穫

  • 🌍 China is highly trade-dependent, making it vulnerable to collapse.
  • 📉 China's birth rate has dropped significantly, impacting its future workforce.
  • ⚔️ The Russia-Ukraine conflict showcases new battlefield technologies.
  • 🔋 U.S. manufacturing needs to double to meet future demands.
  • 🌐 Immigration can help address demographic challenges in the U.S.
  • 🚫 Zion opposes TikTok due to data privacy concerns.
  • 📈 Regions in the U.S. poised to benefit from deglobalization include the South and Rockies.
  • ⚡ A diverse energy strategy is essential for the U.S.'s future.
  • 🤖 The future of AI is uncertain due to semiconductor supply chain issues.
  • 📊 Understanding global trends is crucial for entering the geopolitical advisory field.

タイムライン

  • 00:00:00 - 00:05:00

    The speaker discusses their presence on various platforms, emphasizing their avoidance of TikTok due to privacy concerns, particularly regarding data handling by Facebook and TikTok.

  • 00:05:00 - 00:10:00

    Peter, the guest, is introduced, and the conversation shifts to his views on China's potential collapse, citing its heavy reliance on trade and demographic challenges as key factors.

  • 00:10:00 - 00:15:00

    Peter elaborates on China's trade dependency, noting that it imports a significant portion of its energy and food, and highlights the demographic issues stemming from the one-child policy.

  • 00:15:00 - 00:20:00

    The discussion continues with Peter arguing that any conflict with China could lead to its downfall, emphasizing the vulnerability of its economy and military.

  • 00:20:00 - 00:25:00

    Peter addresses the potential for China to form new trade agreements amidst shifting global alliances, but remains skeptical about its long-term viability due to demographic issues.

  • 00:25:00 - 00:30:00

    The conversation touches on the impact of tariffs and trade policies on China's economy, with Peter suggesting that the country is losing access to the American market.

  • 00:30:00 - 00:35:00

    Peter expresses doubts about the effectiveness of any deals China might strike, given its demographic decline and lack of understanding within its leadership.

  • 00:35:00 - 00:40:00

    The discussion shifts to the technological advancements in manufacturing, particularly in relation to companies like Apple and Tesla, and the challenges they face in China.

  • 00:40:00 - 00:45:00

    Peter discusses the complexities of semiconductor manufacturing and the challenges of producing advanced chips domestically in the U.S.

  • 00:45:00 - 00:51:08

    The conversation concludes with Peter discussing the importance of a robust industrial base for the U.S. economy, emphasizing the need for energy independence and the role of immigration in addressing demographic challenges.

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ビデオQ&A

  • Why does Peter Zion believe China is facing collapse?

    Zion cites China's heavy trade dependency and declining birth rates as key factors leading to its potential collapse.

  • What are the implications of the Russia-Ukraine conflict according to Zion?

    Zion discusses the demographic challenges Russia faces and the evolving technologies in warfare that could change the dynamics of the conflict.

  • What does Zion think about the future of U.S. manufacturing?

    He believes the U.S. needs to double its industrial base and emphasizes the importance of energy independence and infrastructure.

  • How does Zion view the role of immigration in addressing demographic issues?

    He suggests that immigration can help mitigate demographic challenges, but timing and integration are crucial.

  • What are Zion's thoughts on TikTok and data privacy?

    Zion expresses strong opposition to TikTok, citing concerns over data privacy and the lack of anonymization.

  • What regions does Zion believe will benefit from deglobalization?

    He identifies areas in the U.S. from Virginia to Texas and the Rockies as poised to benefit from industrial growth.

  • What energy technologies does Zion support?

    Zion advocates for a mix of energy sources, including coal, gas, solar, and wind, emphasizing the need for all available options.

  • What is Zion's perspective on the future of AI?

    He is skeptical about the immediate future of AI due to supply chain issues and the need for advanced semiconductor technology.

  • Who does Zion consider promising in terms of demographics?

    He points to countries like Mexico, Indonesia, India, and Turkey as having favorable demographic trends.

  • What advice does Zion give for those looking to enter the geopolitical advisory field?

    He suggests focusing on understanding global trends and the importance of having a solid baseline of knowledge.

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  • 00:00:00
    I see you everywhere. Where am I seeing
  • 00:00:01
    a YouTube? I'm on YouTube. Uh we have a
  • 00:00:04
    Patreon page which is our primary
  • 00:00:05
    distribution for subscribers. We're in a
  • 00:00:08
    lot of places, but never never Tik Tok.
  • 00:00:10
    That'll never happen. You are worried
  • 00:00:12
    about your being on Tik Tok. Oh yeah, I
  • 00:00:14
    would never do it. Whenever you have
  • 00:00:15
    Facebook on your computer, even if it's
  • 00:00:17
    not open, Facebook is capturing every
  • 00:00:19
    keystroke on your computer. And they use
  • 00:00:22
    that information to bundle you into like
  • 00:00:25
    groups of roughly 10,000. And then they
  • 00:00:27
    actively market you to scammers based on
  • 00:00:30
    what sort of fraud they think you will
  • 00:00:32
    fall for. But when they do it, they
  • 00:00:34
    anonymize your data. The people can
  • 00:00:36
    still target you personally, but they
  • 00:00:37
    don't have like your name. Tik Tok
  • 00:00:40
    doesn't anonymize. It's your name. It's
  • 00:00:42
    your social security number. hurts your
  • 00:00:44
    entire credit history and that gets sold
  • 00:00:46
    on. So yeah, I will never ever be on
  • 00:00:48
    TikTok.
  • 00:00:50
    [Music]
  • 00:00:54
    Peter, where does this podcast find you?
  • 00:00:57
    I am at home just above Denver. By the
  • 00:00:59
    way, thanks for being here. We we wanted
  • 00:01:01
    you on for a while. You've been vocal
  • 00:01:03
    about China's impending collapse. Why do
  • 00:01:06
    you believe that? How do you what what
  • 00:01:08
    are the dynamics that are setting up for
  • 00:01:10
    for uh China's collapse? Well, let me
  • 00:01:13
    give you the two big ones and there's a
  • 00:01:15
    lot of small ones. Uh, number one, this
  • 00:01:17
    is the most trade dependent country in
  • 00:01:19
    human history. They
  • 00:01:21
    import 75 to 80% of their energy. They
  • 00:01:24
    import 80% of the stuff that allows them
  • 00:01:26
    to grow their own food. They are the
  • 00:01:27
    world's largest importer of food. They
  • 00:01:29
    import all the raw commodities they need
  • 00:01:30
    to make their manufactured products and
  • 00:01:32
    then they export most of those
  • 00:01:33
    manufactured products. So, something
  • 00:01:35
    happens to trade for any reason, they're
  • 00:01:37
    the first ones to go and the ones that
  • 00:01:39
    fall hardest. uh that is something that
  • 00:01:42
    theoretically could be managed with a
  • 00:01:44
    good diplomatic core which I might add
  • 00:01:46
    they don't have. But the other problem
  • 00:01:48
    is demographic. Uh when you
  • 00:01:51
    industrialize and you move from the farm
  • 00:01:53
    to the city, your birth rate drops cuz
  • 00:01:55
    kids go from being a free source of
  • 00:01:57
    labor to simply a cost. And China
  • 00:02:02
    industrialized and urbanized more
  • 00:02:04
    quickly than any country in human
  • 00:02:05
    history. And on top of that, they had
  • 00:02:08
    the one child policy.
  • 00:02:10
    So from the point that the process
  • 00:02:13
    really got going in the 70s to 1990,
  • 00:02:18
    their birth rate dropped by 2/3 and fell
  • 00:02:20
    below the American birth rate. And it's
  • 00:02:22
    only dropped since then. And today, all
  • 00:02:24
    of the major cities have birth rates
  • 00:02:26
    that are less than one quarter of
  • 00:02:27
    replacement level. So the American birth
  • 00:02:29
    rate is now more than triple that of
  • 00:02:31
    China. It's been going for so long that
  • 00:02:33
    they now have more people aged over 53
  • 00:02:36
    than under. and within the next few
  • 00:02:38
    years they simply won't have a
  • 00:02:39
    consumption base, a workforce, a tax
  • 00:02:42
    base
  • 00:02:43
    or consumers at all. Yeah. One of the
  • 00:02:47
    things there's a lot of catastrophizing
  • 00:02:48
    trying to justify investments or
  • 00:02:50
    bringing onoring US manufacturing that
  • 00:02:52
    we couldn't survive in a shooting war
  • 00:02:54
    with China, but I think I read somewhere
  • 00:02:56
    that China's out of business if you
  • 00:02:57
    manage to cut off their their energy
  • 00:02:59
    supply that they're actually quite
  • 00:03:01
    vulnerable to any sort of external
  • 00:03:02
    conflict. Your thoughts? I I would argue
  • 00:03:05
    that if there's any meaningful conflict
  • 00:03:07
    in China, we don't simply have a break
  • 00:03:09
    of the Chinese military, which by the
  • 00:03:10
    way doesn't have range. So for them to
  • 00:03:14
    beat us in a shooting war, we have to go
  • 00:03:15
    to them. Uh if we want to destroy them,
  • 00:03:18
    we just need a few destroyers in the
  • 00:03:19
    Indian Ocean base and inter to interfere
  • 00:03:21
    with shipping and that's it. It's over.
  • 00:03:23
    Uh we're actually looking at the
  • 00:03:25
    disassociation of China as a unified
  • 00:03:28
    industrialized nation state within the
  • 00:03:30
    decade. And before Trump came in, I
  • 00:03:33
    would have said that would have probably
  • 00:03:34
    been about 8 years. If we take a much
  • 00:03:36
    more aggressive position on trade, it's
  • 00:03:37
    going to be a lot less. That doesn't
  • 00:03:39
    mean we won't feel it. You don't remove
  • 00:03:41
    the world's largest industrial base from
  • 00:03:44
    the math and not feel it. Uh but for us,
  • 00:03:47
    it's something we can grow through. For
  • 00:03:49
    them, we are literally looking at the
  • 00:03:51
    end of the Han ethnicity this century.
  • 00:03:54
    Just to steal man this, isn't
  • 00:03:55
    potentially the tariffs and America sort
  • 00:03:58
    of tearing up the post-war alliances and
  • 00:04:00
    a lot of nations, I think, no longer
  • 00:04:02
    looking at us as a reliable partner. Do
  • 00:04:05
    you think there's an opportunity for
  • 00:04:06
    China in terms of new trade agreements
  • 00:04:08
    or a I just saw for the first time that
  • 00:04:10
    more people globally see China as a
  • 00:04:11
    force of good than the US? Isn't this
  • 00:04:13
    potentially an opportunity for China for
  • 00:04:15
    new markets? As a rule, I ignore what
  • 00:04:18
    people say and look at what they do. Uh
  • 00:04:20
    this isn't the first time that American
  • 00:04:22
    politics have made us less popular
  • 00:04:24
    around the world. And I'm don't to
  • 00:04:26
    suggest that there aren't some
  • 00:04:27
    short-term opportunities here, but the
  • 00:04:30
    bottom line is that China doesn't have
  • 00:04:32
    enough people under age 50 to consume.
  • 00:04:35
    And so the product has to go somewhere.
  • 00:04:37
    It just gets dumped in other markets.
  • 00:04:39
    And as we have seen with the EV issue in
  • 00:04:43
    2024, as soon as the United States put
  • 00:04:45
    on tariffs to block EVs from swarming
  • 00:04:48
    into the American markets, everyone else
  • 00:04:50
    did some version of the same if they had
  • 00:04:52
    any sort of auto industry. So what we're
  • 00:04:54
    seeing right now is the first stages of
  • 00:04:56
    that. Uh the Chinese are losing access
  • 00:04:57
    to the American market. They're trying
  • 00:04:59
    to dump everything everywhere else and
  • 00:05:00
    we're now starting to see those
  • 00:05:02
    secondary waves of tariffs forming. So
  • 00:05:05
    it's a nice thought, but I wouldn't put
  • 00:05:06
    too much stock in it in the long term.
  • 00:05:08
    They must be playing with the ultimate
  • 00:05:10
    poker face though because my sense is
  • 00:05:11
    they've basically told Trump to pound
  • 00:05:13
    sand and if they were as vulnerable as
  • 00:05:15
    your data suggests, don't you think
  • 00:05:16
    they'd be more amendable to some sort of
  • 00:05:18
    big beautiful deal? A couple thoughts to
  • 00:05:20
    that. Uh number one, this always had a
  • 00:05:24
    limited runway and so any deal that they
  • 00:05:27
    were able to strike, say today, uh
  • 00:05:29
    they'd still collapse within the decade.
  • 00:05:32
    So is there a deal that would allow them
  • 00:05:34
    to persist throughout that time without
  • 00:05:36
    losing their sense of self? I'm not sure
  • 00:05:38
    that's true anymore. It might have been
  • 00:05:39
    10 years ago, but not now. Second, it's
  • 00:05:42
    unclear to me how much Xi is actually
  • 00:05:44
    aware. Uh he has so purged the system,
  • 00:05:47
    most notably the bureaucracy, that the
  • 00:05:49
    bureaucracy no longer even collects data
  • 00:05:51
    that they think might result in numbers
  • 00:05:53
    that Xi doesn't want to hear. So they
  • 00:05:55
    just don't collect it at all. So the
  • 00:05:57
    idea that Xi has a deep understanding of
  • 00:06:00
    the reality of the world or even his own
  • 00:06:02
    country now, that's flawed. Uh it's just
  • 00:06:05
    not true. the new book by I think it's
  • 00:06:07
    Patrick McGee talking about Apple
  • 00:06:09
    essentially upskilling China and as a
  • 00:06:12
    result creating a pretty robust advanced
  • 00:06:15
    manufacturing capability in China and
  • 00:06:18
    Tesla you could argue doing maybe the
  • 00:06:20
    same thing that some of that is leaked
  • 00:06:21
    to BYD. It strikes me that they have
  • 00:06:24
    built this incredible supply chain. You
  • 00:06:28
    don't you don't think that pulls them
  • 00:06:29
    out? You don't think that's their saving
  • 00:06:31
    grace? No, I mean that certainly helps.
  • 00:06:33
    Uh, but we're not at a point where tech
  • 00:06:35
    transfer would help here. I mean, if you
  • 00:06:36
    don't have workers, you don't have
  • 00:06:37
    workers. It really is that simple. In
  • 00:06:39
    the case of Tesla, Tesla made the same
  • 00:06:41
    mistake that most manufacturers in the
  • 00:06:43
    United States made is they thought they
  • 00:06:45
    could set up a system where their
  • 00:06:46
    intellectual property rights would be
  • 00:06:48
    protected. And then the competitors,
  • 00:06:50
    BYD, for example, set up a plant across
  • 00:06:52
    the street and hired exactly the same
  • 00:06:54
    people. So, they'd work one shift at
  • 00:06:55
    Tesla, copy everything they could, work
  • 00:06:57
    one shift at BYD, install it all over
  • 00:07:00
    there. We've seen this story over and
  • 00:07:02
    over and over again in pretty much every
  • 00:07:04
    manufacturing sector. Uh Apple little
  • 00:07:07
    different. Um Apple, it's an assembly
  • 00:07:09
    story. Most of the parts that are that
  • 00:07:13
    matter uh for Apple are made somewhere
  • 00:07:15
    else and everything comes together in
  • 00:07:17
    China. It's just like the semiconductor
  • 00:07:19
    sector at large has 30,000 pieces. They
  • 00:07:21
    come together at Taiwan. Uh and now
  • 00:07:24
    Apple has to basically figure out a new
  • 00:07:26
    model for bringing everything together.
  • 00:07:28
    And it's not clear they can achieve the
  • 00:07:30
    same scale anywhere else in the world.
  • 00:07:32
    So we will probably be taking a few year
  • 00:07:35
    break from having iPhones. This was
  • 00:07:37
    Patrick's point that the notion that an
  • 00:07:40
    iPhone domestically manufactured in the
  • 00:07:42
    US at would cost $3,500. He said it
  • 00:07:44
    might as well cost a million that we're
  • 00:07:45
    just literally not capable of it. A
  • 00:07:47
    million or a thousand a,000 individual.
  • 00:07:50
    The $3,500 assumes you've already built
  • 00:07:52
    the infrastructure, right? We haven't.
  • 00:07:55
    And his his point was it would be easier
  • 00:07:57
    to recreate the Manhattan Project than
  • 00:07:59
    try to figure out a way to produce a
  • 00:08:00
    million iPhones a day. Manhattan Project
  • 00:08:02
    was easy. That was just a few dozen
  • 00:08:03
    dudes basically running a few gammaray
  • 00:08:06
    experiments. Made for a good film. Yeah.
  • 00:08:08
    Just it's like the modern I mean this
  • 00:08:10
    little guy. I mean there's 1,800 pieces
  • 00:08:13
    in this and each of those pieces has
  • 00:08:15
    their own supply chain. One of the
  • 00:08:17
    things that we forget when we talk about
  • 00:08:19
    electronics is it's not just like eight
  • 00:08:21
    pieces. It's 800 plus pieces each of
  • 00:08:24
    which have their own
  • 00:08:26
    components. Computing today, Highland
  • 00:08:29
    Electronics today requires the entire
  • 00:08:32
    planet. And people focus on the United
  • 00:08:33
    States and China and Taiwan. It's not
  • 00:08:35
    those are unimportant partners, but for
  • 00:08:37
    example, there's a s single company in
  • 00:08:39
    California and another one in Germany
  • 00:08:41
    that make very very small pieces for the
  • 00:08:44
    manufacturing process that don't even go
  • 00:08:47
    into the chips, but without them none of
  • 00:08:48
    it happens. And there's 30,000 failure
  • 00:08:51
    points like that. So, you would not be
  • 00:08:53
    long Apple stock right now. You said a
  • 00:08:54
    couple years without iPhone. No. No. I
  • 00:08:57
    mean, every time the new phone comes
  • 00:08:58
    out, I buy a backup because I'm
  • 00:09:00
    preparing for the day that this just
  • 00:09:01
    stops.
  • 00:09:03
    Uh, but no, it's like there's there's no
  • 00:09:07
    way that Apple comes out of this without
  • 00:09:09
    a few years of no product. What do you
  • 00:09:11
    So, you're obviously bearish on China.
  • 00:09:13
    Who are you bullish on? If you were
  • 00:09:15
    willing to dial the clock back to
  • 00:09:17
    October, I would have been bullish on
  • 00:09:19
    the United States on all cylinders.
  • 00:09:21
    We've got the best demography. We've got
  • 00:09:22
    the best infrastructure. We have the
  • 00:09:24
    best educational system. We're more than
  • 00:09:26
    self-sufficient in energy and food. We
  • 00:09:28
    had some gaps, all of them related to
  • 00:09:31
    the manufacturing sector. And really,
  • 00:09:33
    that was it. Uh, one of the problems
  • 00:09:36
    that I've got with the Trump
  • 00:09:37
    administration right now is it's
  • 00:09:39
    basically cut off our ability to access
  • 00:09:42
    the precursor stuff that we need in
  • 00:09:44
    order to build out our industrial plant.
  • 00:09:47
    So Trump likes to focus on steel and
  • 00:09:49
    aluminum. Not that those aren't
  • 00:09:50
    important, but it's more than that. It's
  • 00:09:52
    turning raw chemicals into processed
  • 00:09:54
    chemicals that can then be built into
  • 00:09:55
    the manufacturing system. It's about a
  • 00:09:57
    copper smelter. There's a thousand
  • 00:09:59
    things that happen in the processing
  • 00:10:01
    world that the United States doesn't
  • 00:10:03
    have that we need first if then we're
  • 00:10:06
    going to build out the industrial plant
  • 00:10:08
    and Trump has basically made that
  • 00:10:09
    impossible in the midterm. So does this
  • 00:10:12
    all present an opportunity for Europe in
  • 00:10:14
    the short term again but their
  • 00:10:17
    demographics while not as terminal as
  • 00:10:20
    the Chinese are still pretty bad. Uh the
  • 00:10:23
    Chinese are aging faster than anybody
  • 00:10:24
    else and by the end of this decade they
  • 00:10:26
    will have the oldest average age of any
  • 00:10:28
    country in the world including Japan.
  • 00:10:30
    But uh the Germans and the Italians and
  • 00:10:32
    the Dutch are not all that far behind.
  • 00:10:34
    So we are in the final years of them
  • 00:10:36
    having a value added manufacturing
  • 00:10:38
    system as well. Can a lot of these
  • 00:10:40
    problems be solved with immigration
  • 00:10:41
    though in terms of you're you're I love
  • 00:10:43
    that you focus on demographics, but
  • 00:10:45
    can't some of this work labor force and
  • 00:10:47
    and aging population be solved with
  • 00:10:49
    immigration policies? About based on
  • 00:10:51
    whose numbers you're using and how you
  • 00:10:52
    define Hispanic because that's a problem
  • 00:10:54
    here in this country. Somewhere between
  • 00:10:57
    1/3 and 1/2 of the American birth rate
  • 00:11:00
    is either immigrants or children of
  • 00:11:02
    immigrants. And so that's a that's a
  • 00:11:04
    nontrivial factor. The problem's timing.
  • 00:11:08
    So if you can incorporate immigration
  • 00:11:11
    into your political culture and so have
  • 00:11:13
    a dribble coming in year on year out so
  • 00:11:16
    that those people can be assimilated uh
  • 00:11:19
    then yes immigration absolutely can be
  • 00:11:21
    part of your solution. But if you have
  • 00:11:23
    waited waited waited waited waited until
  • 00:11:25
    everyone's old and then open the doors
  • 00:11:27
    and you've got a very different
  • 00:11:28
    situation. So take the German example
  • 00:11:31
    right now. There's roughly 80 82 million
  • 00:11:34
    Germans, but the average age is now over
  • 00:11:37
    50. So for them to just hold where they
  • 00:11:40
    are, they need to bring in 2 million
  • 00:11:42
    people under age 25 every year for the
  • 00:11:45
    next 20 years just to hold the line. And
  • 00:11:47
    that means you've brought in 50 million
  • 00:11:49
    people and all of a sudden the Germans
  • 00:11:51
    are no longer the majority in their own
  • 00:11:52
    country. That triggers a series of
  • 00:11:54
    political consequences that I'm not sure
  • 00:11:56
    the Germans can deal with. You want to
  • 00:11:58
    do that in China, you need an order of
  • 00:12:02
    magnitude more. And the world to be
  • 00:12:04
    perfectly blunt only can provide those
  • 00:12:06
    migrants from one place, India. Wouldn't
  • 00:12:10
    that be a hell of a thing? So if and
  • 00:12:14
    there's a lot of logic here that a
  • 00:12:15
    youthful workforce is a productive
  • 00:12:17
    workforce. Saudi Arabia, India,
  • 00:12:20
    Indonesia, who demographically is set up
  • 00:12:22
    the best? There's a mix of countries.
  • 00:12:25
    Now, I I must underline that all of
  • 00:12:27
    these countries are aging faster than
  • 00:12:29
    the United States. The faster you go
  • 00:12:32
    through the urbanization and the
  • 00:12:33
    industrialization experiences, the
  • 00:12:35
    faster your birth rate collapses. And
  • 00:12:37
    the US really is an outlier in that. But
  • 00:12:40
    Mexico,
  • 00:12:41
    Indonesia, India, those and Turkey,
  • 00:12:45
    those are the big four that look really
  • 00:12:47
    promising in the future, which isn't to
  • 00:12:49
    say they don't have their own
  • 00:12:50
    complications. All of these countries
  • 00:12:51
    have problems with rule of law, for
  • 00:12:53
    example. All of them have problems with
  • 00:12:55
    infrastructure and electricity and
  • 00:12:56
    education. But these are the problems
  • 00:12:58
    you would expect for countries at their
  • 00:13:01
    stage of
  • 00:13:02
    evolution. We'll be right back after a
  • 00:13:05
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  • 00:15:07
    So big news over the weekend with
  • 00:15:09
    respect to uh Ukraine taking out 40
  • 00:15:11
    strategic bombers from the Russian air
  • 00:15:13
    force. It felt I I mean I thought it was
  • 00:15:16
    just incredible. I've been watching that
  • 00:15:18
    video over and over. Maybe with the
  • 00:15:19
    exception of the the pedagra operation
  • 00:15:22
    against Hezbollah. I think this will go
  • 00:15:23
    down as one of the decades great sort of
  • 00:15:26
    I don't know military operations.
  • 00:15:27
    Curious to get your thoughts on the
  • 00:15:29
    operation and how you see the Russia
  • 00:15:31
    Ukraine conflict progressing and
  • 00:15:33
    unfolding. Well, the technology of what
  • 00:15:36
    they used was not particularly new. It
  • 00:15:38
    looks like what the Ukrainians did is
  • 00:15:40
    built a bunch of sheds, put them on a
  • 00:15:41
    bunch of flatbed trucks, and just drove
  • 00:15:44
    them to their destination. And when they
  • 00:15:45
    got within a certain distance that was
  • 00:15:47
    pretty close, these were not long-range
  • 00:15:49
    drones. They just abandoned the trucks,
  • 00:15:52
    remotely operated the the roof hatches,
  • 00:15:54
    and the drones flew out and did their
  • 00:15:56
    thing. It was maybe somewhere between
  • 00:15:58
    100 and 150 drones is what most of the
  • 00:15:59
    reports are saying. And it took out long
  • 00:16:01
    range strategic bombers who were
  • 00:16:04
    designed to carry nuclear tipped cruise
  • 00:16:06
    missiles to target either extreme
  • 00:16:09
    Western Europe, North America or the
  • 00:16:11
    sealanes in between in case of a war
  • 00:16:13
    with the United States. So while these
  • 00:16:16
    craft could have been used have been
  • 00:16:18
    used to target Ukrainian targets the
  • 00:16:21
    location of the bases in places like
  • 00:16:23
    Mormanskin or Kootsk these are places
  • 00:16:25
    that were designed to strike the United
  • 00:16:28
    States with weaponies that were designed
  • 00:16:30
    to strike the United States. And so in
  • 00:16:32
    one day Ukraine did more to secure
  • 00:16:36
    American national interests than any
  • 00:16:39
    ally has ever done since 1945.
  • 00:16:43
    that is going to resonate in Washington.
  • 00:16:45
    That's a really interesting insight. I
  • 00:16:48
    So you're saying it's this is more a
  • 00:16:50
    psychological blow or Well, let me ask
  • 00:16:53
    you this. Do you think do you think the
  • 00:16:54
    Americans were behind this? If you would
  • 00:16:56
    ask me that a year ago, I would have
  • 00:16:57
    said would really be hard to imagine
  • 00:16:59
    this happening without the Americans
  • 00:17:00
    behind it in some way. With the today's
  • 00:17:02
    political environment and how things
  • 00:17:03
    have gone, particularly as Vance becomes
  • 00:17:05
    more and more ingratiated into the
  • 00:17:07
    defense community. Ingratiated, wrong
  • 00:17:08
    word, intertwined. Um I don't know. I
  • 00:17:12
    have a clearance but you know need to
  • 00:17:14
    know and all that. I can't just go
  • 00:17:15
    through the archives and the defense
  • 00:17:16
    department whenever I'm in Washington
  • 00:17:19
    but it's difficult to imagine something
  • 00:17:23
    of this caliber getting signed off by
  • 00:17:26
    this white house. So this was again
  • 00:17:29
    didn't use any fundamentally new
  • 00:17:32
    technologies. It was just audacity and
  • 00:17:35
    it was amazing. Yeah it really was.
  • 00:17:38
    So give us your view of the state of
  • 00:17:41
    play in terms of on the ground there and
  • 00:17:43
    how the conflict, you know, who's
  • 00:17:44
    winning, who's losing, how you see it
  • 00:17:45
    playing out. Well, the the problem is in
  • 00:17:48
    part demographic. The uh the Russians
  • 00:17:50
    are facing something similar to the
  • 00:17:52
    Chinese, just not on as steep of a
  • 00:17:54
    descent. They know they only have a few
  • 00:17:56
    years left that they'll have enough men
  • 00:17:57
    in their 20s to even attempt to use
  • 00:17:59
    military tactics to adjust their world.
  • 00:18:02
    and they feel they need to get to
  • 00:18:03
    something closer to the old Soviet
  • 00:18:05
    boundaries if they're going to be able
  • 00:18:07
    to defend themselves. Right now, they've
  • 00:18:09
    got wide open frontiers that are about
  • 00:18:10
    3,000 mi long. If they can get into
  • 00:18:13
    central Poland and Romania, that shrinks
  • 00:18:15
    down to about 500 miles. They feel
  • 00:18:17
    that's more manageable, the right. Uh
  • 00:18:20
    unfortunately, that means they have to
  • 00:18:21
    conquer all or part of a dozen countries
  • 00:18:23
    that collectively have a population
  • 00:18:25
    that's larger than theirs. And Ukraine
  • 00:18:27
    isn't the first postsviet war. It's the
  • 00:18:29
    ninth. and it won't be the last if
  • 00:18:31
    Ukraine falls. So from the Russian point
  • 00:18:34
    of view, they outnumber the Ukrainians
  • 00:18:36
    in any fight somewhere like three to
  • 00:18:38
    five to one, which means that any fight
  • 00:18:41
    where the Ukrainians don't kill three to
  • 00:18:43
    five as many Russians as they lose of
  • 00:18:45
    their own people is a fight that
  • 00:18:46
    technically the Ukrainians have lost
  • 00:18:47
    because their demographics are very
  • 00:18:49
    similar to the Russians. So by the
  • 00:18:51
    numbers, the Russians very much are
  • 00:18:54
    wearing down the Ukrainians. The problem
  • 00:18:57
    with projecting how this war is going to
  • 00:18:59
    go one way or the other is that the
  • 00:19:01
    technology is changing so quickly. None
  • 00:19:03
    of the weapon systems that have
  • 00:19:05
    dominated the battlefield in 2025
  • 00:19:07
    existed in 2021. And we are now in I
  • 00:19:10
    think our 17th turnover in terms of
  • 00:19:13
    drone technology in Ukraine and our 11th
  • 00:19:15
    in Russia. The Russians aren't
  • 00:19:17
    innovating nearly as quickly, but they
  • 00:19:19
    also can draw upon lots of legacy
  • 00:19:21
    equipment out of North Korea, lots of
  • 00:19:23
    drones out of Iran, and then lots of
  • 00:19:24
    industrial plant out of China. So, this
  • 00:19:26
    is a type of war that mixes what we
  • 00:19:28
    thought we understood with things that
  • 00:19:30
    are completely new. And it's taking us
  • 00:19:32
    in a lot of really strange directions. I
  • 00:19:35
    mean, it looks like the Russian
  • 00:19:37
    military, which used to be an entirely
  • 00:19:38
    artillery force, can barely even use
  • 00:19:40
    artillery anymore because the Ukrainians
  • 00:19:42
    can target it before the shell even
  • 00:19:45
    drops. Counter battery has gotten that
  • 00:19:47
    good in this new acoustic drone
  • 00:19:49
    detection age. So, I don't know. By the
  • 00:19:53
    numbers, still Russia's war to lose. by
  • 00:19:56
    the numbers. NATO needs to get ready for
  • 00:19:57
    the next phase because it involves seven
  • 00:19:59
    NATO countries now. But it's anyone's
  • 00:20:02
    guess because the goalposts keep moving.
  • 00:20:04
    Other than drones, what are some of
  • 00:20:06
    those new battlefield technologies? One
  • 00:20:08
    of the things that the Ukrainians set up
  • 00:20:10
    early in the war was a series of
  • 00:20:12
    basically microphones along the border.
  • 00:20:15
    So whenever the drones cuz they were, if
  • 00:20:17
    you remember the Shahed drones out of
  • 00:20:18
    Ron are really noisy. Whenever the
  • 00:20:20
    drones started to come in, they could
  • 00:20:21
    basically get picked up on multiple
  • 00:20:24
    phones and figure out what the vector
  • 00:20:26
    was and where they were going. And so
  • 00:20:28
    you could activate air defense on the
  • 00:20:29
    other side. The Ukrainians have now
  • 00:20:31
    turned that into a counter battery fire,
  • 00:20:33
    which is spectacular. Uh the Ukrainians
  • 00:20:36
    have combined drone technology with
  • 00:20:37
    rocket technology to make rocket drones
  • 00:20:39
    that have a range of,00 miles they can
  • 00:20:41
    hit within a couple of meters of their
  • 00:20:42
    target. So, we're seeing really, really
  • 00:20:46
    cheap developments that are
  • 00:20:49
    outperforming anything that was in the
  • 00:20:51
    Russian arsenal before. And that applies
  • 00:20:53
    to us, too. A Ukrainian drone jammer,
  • 00:20:56
    which is the only reason that Ukraine is
  • 00:20:58
    still there this year, which forces the
  • 00:21:01
    Russians to use fiber optic drones, uh,
  • 00:21:04
    is now about oneten the cost of what the
  • 00:21:06
    US produces and performs an order of
  • 00:21:08
    magnitude more effectively. So if you
  • 00:21:10
    were advising the US and Europe, you
  • 00:21:12
    your general what I think you said
  • 00:21:14
    before was that if if Ukraine falls,
  • 00:21:17
    it's only a matter of time before
  • 00:21:18
    there's a there's a a next conflict.
  • 00:21:21
    Where do you see that ne next conflict
  • 00:21:22
    emerging? Would it be Poland? Where
  • 00:21:24
    would it be? It will depend upon the
  • 00:21:26
    tactical situation at that moment. And a
  • 00:21:29
    lot can change between now and a
  • 00:21:30
    hypothetical Ukrainian fall, but the
  • 00:21:33
    Russians know they have to reach the
  • 00:21:35
    Vista River and that's in central
  • 00:21:37
    Poland, cuts through Warsaw. uh they
  • 00:21:40
    know they have to be at the Baltic Sea.
  • 00:21:41
    So there are the three Baltic republics
  • 00:21:43
    and they know they have to reach the
  • 00:21:44
    Danube which is the north will include
  • 00:21:46
    the northeastern sliver of Romania. So
  • 00:21:49
    which one of those the Russians would go
  • 00:21:50
    for would be shaped by the tactical
  • 00:21:52
    situation at the moment they felt the
  • 00:21:54
    need to pull the trigger but they need
  • 00:21:56
    all of that territory. And now that
  • 00:21:58
    Finland is n in NATO they would
  • 00:22:00
    definitely go for Finland as well if
  • 00:22:01
    they thought they could pull it off. I
  • 00:22:03
    would guess they would do the Baltics
  • 00:22:04
    first because it looks from the details
  • 00:22:07
    the simplest,
  • 00:22:09
    but the tactical math changes pretty
  • 00:22:11
    rapidly. And you think they have the
  • 00:22:13
    economy and the war machine? I mean, my
  • 00:22:14
    sense of all of this is it's kind of
  • 00:22:16
    defanged them a bit. You think they
  • 00:22:17
    still would have the capacity to wage
  • 00:22:20
    more war? If you had asked me that a
  • 00:22:21
    year and a half ago, I would say that a
  • 00:22:23
    very real concern that they simply don't
  • 00:22:24
    have the capacity to carry it forward.
  • 00:22:26
    Now, I'm not so sure. So few of the
  • 00:22:28
    legacy weapon systems that the Russians
  • 00:22:30
    started this war with are still being
  • 00:22:32
    used. This is a drone fight now.
  • 00:22:34
    Something like 70% of the casualties
  • 00:22:36
    over the last 8 months have been
  • 00:22:38
    firsterson drones. It's a different math
  • 00:22:41
    now. Artillery, tanks, jets just don't
  • 00:22:44
    mean as much as they used to in the
  • 00:22:45
    current context. I just underline that
  • 00:22:48
    we are very early in this transition and
  • 00:22:51
    guessing what these weapon systems are
  • 00:22:53
    going to evolve into over the next 5
  • 00:22:54
    years would be as foolhardy as guessing
  • 00:22:57
    3 years ago that we would have ended up
  • 00:22:58
    in some version of where we are today.
  • 00:23:00
    This is all very new changing very
  • 00:23:02
    rapidly. My sense is that it's so the
  • 00:23:04
    stuff you're not worried about that gets
  • 00:23:06
    you and that's fair. I don't think we
  • 00:23:08
    were that worried about India and
  • 00:23:10
    Pakistan till recently. What's your take
  • 00:23:11
    on the situation there? The Americans
  • 00:23:13
    love to ignore India and Pakistan
  • 00:23:15
    because there's obviously no solution.
  • 00:23:17
    You've got two countries that don't like
  • 00:23:19
    each other on a border that is not
  • 00:23:21
    economically important, which means they
  • 00:23:22
    can piss back and forth over the line
  • 00:23:24
    however much they want. And until a nuke
  • 00:23:26
    gets used, no one in the rest of the
  • 00:23:27
    world really cares. Uh so unfortunately
  • 00:23:30
    or fortunately based on your point of
  • 00:23:32
    view, that assessment is broadly
  • 00:23:35
    accurate and has not evolved
  • 00:23:37
    uh in any real war. It goes to nukes
  • 00:23:43
    very quickly because neither of them
  • 00:23:45
    have the capacity to really hurt the
  • 00:23:47
    other side in any other way. The Thar
  • 00:23:49
    desert is there. Kashmir is broadly
  • 00:23:51
    worthless. Uh you're talking about
  • 00:23:54
    glaciers and empty mountain sides.
  • 00:23:57
    So they're fighting over an idea which
  • 00:24:01
    means that it can be trumped up or
  • 00:24:02
    tamped down based entirely on domestic
  • 00:24:05
    politics. And unfortunately, earlier
  • 00:24:07
    this year, they both had a vested
  • 00:24:08
    interest in plumping it up more than it
  • 00:24:11
    needed to be. Whether or not the current
  • 00:24:13
    ceasefire will hold, that is also a
  • 00:24:15
    question of internal domestic politics.
  • 00:24:18
    So, both of us predicted that Biden
  • 00:24:20
    would be reelected. What do you think we
  • 00:24:21
    got wrong? Well, technically he didn't
  • 00:24:24
    run, so you know. Fair enough. Fair
  • 00:24:26
    enough. Uh, yeah. When I did my
  • 00:24:28
    postmortem, my my general idea was that
  • 00:24:30
    for the first time in modern American
  • 00:24:33
    history, in two elections in a row, the
  • 00:24:37
    independents flipped. So the way it
  • 00:24:40
    worked before is every time we had a
  • 00:24:42
    fresh elections, the the independents
  • 00:24:43
    would vote for the other guy. They
  • 00:24:45
    they're notorious for having buyers
  • 00:24:47
    remorced. But when it came to Trump,
  • 00:24:49
    they changed their mind because Trump
  • 00:24:50
    basically said, "Your vote doesn't
  • 00:24:53
    matter, so I don't care about you at
  • 00:24:55
    all." And their response was basically
  • 00:24:57
    hold my beer. And the independent vote
  • 00:25:00
    in the United States, the 10% of
  • 00:25:02
    Americans who really are independent did
  • 00:25:04
    continue to turn against Trump. Actually
  • 00:25:06
    turned more strongly in this most recent
  • 00:25:08
    election. But everyone else went the
  • 00:25:12
    other direction. Every single voter
  • 00:25:14
    demographic, 49 of the 50 states shifted
  • 00:25:18
    towards Trump, which blew away any
  • 00:25:20
    significance for the independent vote.
  • 00:25:22
    And what do you see going on here? I
  • 00:25:23
    mean you talk a lot about uh other
  • 00:25:26
    nations and geopolitics. What do you
  • 00:25:27
    what do you think are the undercurrents
  • 00:25:29
    in the US that led to I mean I I was
  • 00:25:33
    shocked by this this election. I didn't
  • 00:25:35
    I I not only didn't see Trump winning
  • 00:25:37
    but I didn't see him winning as soundly.
  • 00:25:41
    Any themes that you think are emerging
  • 00:25:43
    out of the US that uh kind of go against
  • 00:25:45
    conventional wisdom? Well, first let's
  • 00:25:47
    not overplay it. Trump um Trump beat
  • 00:25:51
    Caris by the same
  • 00:25:54
    margin as Biden beat Trump. So, it's
  • 00:25:58
    really only a 3% switch in the in voter
  • 00:26:01
    preferences in the right places.
  • 00:26:04
    Electoral system mucks up the analysis,
  • 00:26:06
    but really it wasn't nearly as tidal as
  • 00:26:09
    a lot of people would like to think it
  • 00:26:11
    is. Uh the second issue is more
  • 00:26:13
    historical. Uh we have a first pass the
  • 00:26:15
    post single member district system which
  • 00:26:17
    is a really technical way of saying that
  • 00:26:19
    you vote for one person who represents a
  • 00:26:22
    specific geography in a specific group
  • 00:26:23
    of people. You're not voting for an idea
  • 00:26:25
    or a party on a national basis. You're
  • 00:26:27
    voting for a district. And what that
  • 00:26:29
    means is we tend to have really really
  • 00:26:32
    big tent parties that are not driven by
  • 00:26:35
    ideology with a lot of factions within
  • 00:26:37
    them. And those factions get more or
  • 00:26:39
    less powerful based on changes in
  • 00:26:42
    demographics or technology or trade or
  • 00:26:45
    security or culture or immigration,
  • 00:26:47
    thousand different issues. But every
  • 00:26:49
    once in a while, about once or twice a
  • 00:26:51
    generation, the changes become so
  • 00:26:55
    significant that the factions that are
  • 00:26:57
    under the tent don't just rise and fall
  • 00:26:58
    within the tent, they jump out of the
  • 00:27:00
    tent or maybe jump into the other tent.
  • 00:27:02
    And that's what's going on right now.
  • 00:27:04
    It's the sixth time we've done this as a
  • 00:27:07
    country. We will get through it. But
  • 00:27:09
    it's really awkward because all of the
  • 00:27:11
    old rules have gone away and the new
  • 00:27:13
    rules are not in place. So I would argue
  • 00:27:15
    that in this last round the Democratic
  • 00:27:17
    party died. I'm not sure they're going
  • 00:27:20
    to come back. But the Republican party
  • 00:27:22
    died, too. It is MAGA now. And MAGA
  • 00:27:26
    doesn't have a wide enough base to win
  • 00:27:29
    an election. So, we've got two things
  • 00:27:32
    that call themselves parties that can't
  • 00:27:35
    possibly win. It's just a question of
  • 00:27:36
    who can lose more. And last time, the
  • 00:27:39
    Democrats pulled out all the stops. So,
  • 00:27:42
    staying on the US, uh, talk about the US
  • 00:27:45
    is a little bit like saying Europe. And
  • 00:27:47
    that is there just different regions and
  • 00:27:49
    cultures and economic bases in the US.
  • 00:27:52
    Who where in the US or which regions do
  • 00:27:54
    you think are poised to be the biggest
  • 00:27:56
    winners and losers from deglobalization?
  • 00:27:59
    del globalization, AI, whatever big
  • 00:28:01
    themes you see. Let's put AI to the side
  • 00:28:03
    because that's not going to happen for
  • 00:28:05
    touch that later. Uh we need to double
  • 00:28:08
    the size of the industrial plant and for
  • 00:28:10
    that you need workers, you need green
  • 00:28:12
    space, you need infrastructure, and you
  • 00:28:15
    need a regulatory structure that is
  • 00:28:16
    friendly to the investment. You put all
  • 00:28:19
    those together, you're basically looking
  • 00:28:21
    at an area that starts roughly in
  • 00:28:23
    Norfolk and Richmond and uh V Virginia,
  • 00:28:27
    comes down through the south into Texas
  • 00:28:29
    and then up through the Rockies to maybe
  • 00:28:32
    Denver and Salt Lake City. Um so down
  • 00:28:35
    from from the west from the mountain
  • 00:28:36
    west down into Phoenix, over through
  • 00:28:38
    Texas, then up uh to the very very
  • 00:28:41
    southern tip of the mid-Atlantic. That's
  • 00:28:43
    the section that can most benefit from
  • 00:28:45
    where we are. Uh the problem that all of
  • 00:28:47
    these areas are going to have is first
  • 00:28:49
    and foremost electricity. If you're
  • 00:28:51
    going to double the size of the
  • 00:28:52
    industrial plant, that means you need at
  • 00:28:53
    least expand the grid by half. And we
  • 00:28:56
    now need to do that without the Chinese.
  • 00:28:58
    And that will not be cheap and that will
  • 00:29:00
    not be quick and that will not be easy.
  • 00:29:02
    But until we do that, none of the rest
  • 00:29:04
    of this matters. But it's all based on a
  • 00:29:06
    premise that we need to further expand
  • 00:29:08
    our industrial base. The economy has
  • 00:29:10
    done really well moving more to a
  • 00:29:12
    services base. Why is an industrial base
  • 00:29:14
    so important to the US's future? There's
  • 00:29:16
    the national security component to it.
  • 00:29:18
    Trump is not making that up. Uh but more
  • 00:29:20
    importantly, the Chinese system is tying
  • 00:29:22
    and we need to prepare and that means if
  • 00:29:25
    we want stuff, it needs to be me made
  • 00:29:27
    somewhere else. Does it all need to be
  • 00:29:29
    made here? No. And the wider the net
  • 00:29:32
    that we throw, the more countries we
  • 00:29:34
    bring into whatever the post globalized
  • 00:29:36
    order happens to be, the easier and
  • 00:29:38
    faster this will be. We cannot do it in
  • 00:29:41
    anything less than a 20-year time frame
  • 00:29:43
    without Canada and especially Mexico. So
  • 00:29:47
    when Trump in his first term
  • 00:29:50
    renegotiated NAFTA and basically we got
  • 00:29:52
    the guy who was calling me Mexicans
  • 00:29:54
    rapists all of a sudden being the
  • 00:29:55
    Mexican's best friend in trade talks. I
  • 00:29:58
    was really optimistic because if you
  • 00:29:59
    take the most rightest anti-immigrant,
  • 00:30:03
    anti-forigner aspect of the American
  • 00:30:06
    policy, which is Trump, and you make
  • 00:30:08
    that friends with
  • 00:30:10
    Mexico, that's a pretty bright future,
  • 00:30:14
    but we're kind of up in the air again
  • 00:30:15
    now. So, you talk a little bit about
  • 00:30:17
    Mexico. What are your thoughts on Latin
  • 00:30:19
    America, specifically Brazil? Brazil is
  • 00:30:21
    its own beast. uh the demographics are
  • 00:30:23
    very rapidly aging and they haven't
  • 00:30:25
    built out the industrial plant that they
  • 00:30:27
    need for what's coming. Their
  • 00:30:30
    agriculture and industrial system are
  • 00:30:32
    the highest cost producers in the world
  • 00:30:34
    which only works if the Chinese are
  • 00:30:36
    paying for everything. So when China's
  • 00:30:38
    strong, Brazil is strong. You remove
  • 00:30:39
    China, all of a sudden Brazil looks
  • 00:30:41
    really bad. Uh they've also lost a lot
  • 00:30:43
    of their industrial plant to the
  • 00:30:45
    Chinese. uh under Lula last time uh he
  • 00:30:48
    invited in the Chinese to do a lot of
  • 00:30:50
    joint ventures which from the Chinese
  • 00:30:51
    point of view is we come in we build a
  • 00:30:53
    joint facility we steal all of your
  • 00:30:55
    technology we take it home and then we
  • 00:30:56
    drive you out of business on a global
  • 00:30:58
    basis and there's just not much left in
  • 00:31:00
    Brazil at this point. So we talked a
  • 00:31:03
    little bit about demographics and some
  • 00:31:05
    of the countries you think that are not
  • 00:31:06
    well positioned if you're if you're the
  • 00:31:09
    US is it and realizing it's a global
  • 00:31:11
    world is it you talked a little bit
  • 00:31:13
    about the importance of the US Mexico
  • 00:31:15
    relationship what about US and Canada
  • 00:31:17
    are there other allies we should be
  • 00:31:19
    focused on um developing stronger
  • 00:31:22
    partnerships with we already have free
  • 00:31:25
    trade deals with Central America,
  • 00:31:27
    Mexico,
  • 00:31:28
    Canada, Japan, Korea functionally with
  • 00:31:32
    Taiwan. If the Brits can ever figure out
  • 00:31:34
    what happens after Brexit, we'll have a
  • 00:31:35
    deal with them as well. That's the core
  • 00:31:39
    and that's a great starting point. If
  • 00:31:41
    you were to add one more big thing, I
  • 00:31:43
    would say Southeast Asia. The
  • 00:31:44
    demographics are pretty good. The
  • 00:31:46
    industrial plant is already pretty good.
  • 00:31:47
    They're very well positioned to pick up
  • 00:31:49
    anything that the Chinese drop. They are
  • 00:31:52
    a bridge to India, which is a
  • 00:31:54
    noninssignificant power. But the biggest
  • 00:31:56
    thing I like about Southeast Asia is
  • 00:31:58
    we're already friends courtesy of our
  • 00:32:01
    relationship with Australia and New
  • 00:32:02
    Zealand. And they have a big consumption
  • 00:32:05
    base. So this is already a billion
  • 00:32:07
    people with a demographic that is very
  • 00:32:10
    primed for consumption. It's exactly the
  • 00:32:12
    sort of partner that you would like to
  • 00:32:15
    preserve as the broader world breaks
  • 00:32:18
    down. I brought up AI and you said it's
  • 00:32:20
    not going to happen. Say more. There's
  • 00:32:22
    about 30,000 parts that go into your
  • 00:32:25
    typical semiconductor, not counting the
  • 00:32:27
    things that do the manufacturing like
  • 00:32:29
    say the lithography systems that came
  • 00:32:31
    out of ASML in the Netherlands. So
  • 00:32:33
    functionally, you've got 50,000 failure
  • 00:32:36
    points in that sector. Right now,
  • 00:32:39
    everything that we're running a large
  • 00:32:40
    language model on requires a chip that
  • 00:32:42
    is roughly 7 or 6 nmters or smaller. And
  • 00:32:46
    the newer chips that we're making for AI
  • 00:32:48
    are roughly two nanometers and have
  • 00:32:50
    encoded cooling into them. We don't have
  • 00:32:52
    those yet. That's what they're working
  • 00:32:54
    on building, hopefully getting out onto
  • 00:32:55
    the market within the next couple of
  • 00:32:58
    years. If we can't make those high-end
  • 00:33:00
    chips, if we can't do anything with
  • 00:33:02
    extreme ultraviolet, which is how pretty
  • 00:33:04
    much everything under 12 nmters is made
  • 00:33:06
    now, we have to go back to an older,
  • 00:33:08
    simpler technology called deep
  • 00:33:10
    ultraviolet. And that would suggest that
  • 00:33:13
    the only chips we're going to be able to
  • 00:33:14
    make at scale are going to be 14
  • 00:33:16
    nanometers or bigger. So we will need
  • 00:33:19
    five times as many of
  • 00:33:21
    those to fill the data centers to get
  • 00:33:24
    the same compute power. And that will
  • 00:33:26
    take four to five times as much power in
  • 00:33:29
    order to operate the center. So we're
  • 00:33:32
    looking at a 95% reduction on a cost
  • 00:33:35
    basis in order to run AI models that we
  • 00:33:38
    had last year. ChatgBD 4.0 0 that won't
  • 00:33:41
    be able to work at all. But chat GBPD
  • 00:33:42
    3.0 probably. So that lasts until such
  • 00:33:47
    time as we rebuild the supply chain in a
  • 00:33:51
    more demographically stable,
  • 00:33:52
    geopolitically stable zone. That'll take
  • 00:33:55
    20 years. A lot of what you've said the
  • 00:33:58
    last few minutes kind of bubble up to
  • 00:34:00
    the need for a dramatic increase in our
  • 00:34:02
    power grid or ability to produce
  • 00:34:04
    electricity. are which of
  • 00:34:06
    these energy technologies are you most
  • 00:34:09
    bullish and bearish on? I want them all
  • 00:34:12
    because it's like we're we're past the
  • 00:34:14
    point where we can pick a winner and
  • 00:34:15
    that'll do it. We're we have to do so
  • 00:34:17
    much so fast. So number one, we're not
  • 00:34:19
    going to retire anything. I don't care
  • 00:34:20
    if it's coal. We don't have the option
  • 00:34:22
    anymore. If we're going to still have
  • 00:34:24
    manufactured product, we have to do it
  • 00:34:26
    here. We have to do it with the grid
  • 00:34:27
    that we have. It's it's kind of like the
  • 00:34:28
    military going into Iraq. You fight with
  • 00:34:30
    the military. you have the idea of
  • 00:34:33
    transforming it into something
  • 00:34:34
    hypothetical and in the future is gone.
  • 00:34:37
    Uh in addition wind and solar while we
  • 00:34:39
    do have some of the world's best wind
  • 00:34:41
    and solar acreage and the southwest for
  • 00:34:44
    solar and the great plains for wind 2/3
  • 00:34:47
    of the cost of a solar or wind facility
  • 00:34:49
    is has to be financed because it's all
  • 00:34:51
    upfront construction. It's not a
  • 00:34:54
    subscription model like it would be for
  • 00:34:55
    coal or natural gas. Which means unless
  • 00:34:58
    the geography is really, really, really
  • 00:35:00
    good for installation, we're not going
  • 00:35:03
    to do it anymore because we've seen
  • 00:35:05
    capital costs increase by a factor of
  • 00:35:06
    four in just the last 5 years. That
  • 00:35:09
    won't come down until we have another
  • 00:35:11
    generation that ages into the capital
  • 00:35:14
    class, which is typically people age 55
  • 00:35:16
    to 65. Those are the people who are
  • 00:35:17
    saving for retirement. That's 70% of all
  • 00:35:20
    private capital. We've been relying on
  • 00:35:22
    the baby boomers until now, but now
  • 00:35:23
    they're twothird retired and so the
  • 00:35:25
    capital just isn't there for the green
  • 00:35:27
    transition to happen at all. I would
  • 00:35:31
    love for nukes to be part of the
  • 00:35:33
    equation, but we still haven't built a
  • 00:35:35
    prototype for a fourth generation
  • 00:35:37
    nuclear power plant or a small modular
  • 00:35:39
    reactor. So, we're stuck with a third
  • 00:35:41
    generation and the regulatory structure
  • 00:35:44
    for that is very strict. And as a
  • 00:35:46
    result, we've only built one in the last
  • 00:35:48
    50 years. So, we're looking at mostly
  • 00:35:51
    coal and gas, a sprinkling of solar and
  • 00:35:54
    wind where it makes sense, and after
  • 00:35:56
    that, we have to be
  • 00:35:58
    creative. We'll be right
  • 00:36:00
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    teed.com/scott. We're back with more
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    from Peter
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    Zion. I'm kind of I'm fascinated by you
  • 00:39:42
    because you as much as almost anyone I
  • 00:39:44
    know have created I had never heard of
  • 00:39:47
    you three four years ago and now you've
  • 00:39:49
    developed this personal I'm going to
  • 00:39:50
    take that as a compliment. Well, you you
  • 00:39:53
    didn't run for elected office. You're
  • 00:39:54
    not an athlete. you've basically have
  • 00:39:57
    kind of built this incredible brand
  • 00:39:59
    around very provocative predictions and
  • 00:40:02
    I make a lot of predictions and quite
  • 00:40:03
    frankly you you get a lot of yours wrong
  • 00:40:05
    but you always inspire an interesting
  • 00:40:07
    you catalyze an interesting conversation
  • 00:40:09
    and I think that's why people are really
  • 00:40:10
    drawn because even with stuff I think
  • 00:40:13
    well that can't happen I I it gets you
  • 00:40:15
    thinking I would just like to know more
  • 00:40:18
    about you like what's your origin story
  • 00:40:20
    how did you get how did you get to this
  • 00:40:22
    point it's not all that exciting ing. I
  • 00:40:25
    was just always the kid who had to
  • 00:40:26
    figure out why things worked the way
  • 00:40:28
    they did. And so, like everyone else who
  • 00:40:31
    was interested in international affairs,
  • 00:40:33
    I went to Washington for my first year
  • 00:40:35
    out of grad school and hated it. I was
  • 00:40:38
    there for 10 months. It was nine months
  • 00:40:39
    too long. And then I ended up working
  • 00:40:41
    for a private intelligence company/media
  • 00:40:44
    company for 12 years where I ended up
  • 00:40:47
    being their global generalist kind of um
  • 00:40:49
    putting everything together into a
  • 00:40:51
    tapestry. Uh and then 12 years ago I
  • 00:40:56
    left that company. Now I do this. And
  • 00:40:58
    what is this? I help companies and uh
  • 00:41:01
    entities usually at the local government
  • 00:41:03
    level figure where global trends are
  • 00:41:05
    going and the problems and the
  • 00:41:06
    opportunities they're going to have in
  • 00:41:07
    front of them in the not too distant
  • 00:41:09
    future. So is it like a green mantel or
  • 00:41:11
    a you know a brand you know what's it
  • 00:41:14
    called Eurasia Group? Uh Eurasia Group
  • 00:41:16
    is more focused on the here and the now
  • 00:41:19
    and the government decision-making
  • 00:41:21
    operatus. Not not that that's not
  • 00:41:22
    important, but that's not what I do. I
  • 00:41:24
    focus on the longer term trends of
  • 00:41:25
    geopolitics, trade, security, tech, and
  • 00:41:28
    of course, demographics. Tell us, you
  • 00:41:30
    know, this this is going to be the big
  • 00:41:31
    picture that you're going to deal with.
  • 00:41:32
    But if you want to know what happens
  • 00:41:33
    next Tuesday, talk to Ian Bremer. And do
  • 00:41:36
    you connect that to alpha? Do you get
  • 00:41:38
    hired by hedge funds to try and come up
  • 00:41:40
    with investment names? I do get hired by
  • 00:41:42
    hedge funds and financial houses a lot.
  • 00:41:44
    I do not do tactical trading advice,
  • 00:41:46
    though. Got it. And uh I'm curious,
  • 00:41:50
    Peter, do you have kids? No. No kids?
  • 00:41:52
    And is that Well, I'm part of the
  • 00:41:54
    problem. You're part of the problem. And
  • 00:41:56
    are you worried about kids being born
  • 00:41:58
    generally? And how do you feel about the
  • 00:41:59
    prospect of this the next generation in
  • 00:42:01
    America? Well, if you're in the United
  • 00:42:03
    States and you have any any opinions
  • 00:42:05
    about when the United States should be,
  • 00:42:07
    the most reliable way to make that
  • 00:42:10
    happen is to in make ensure the
  • 00:42:12
    existence of the next generation and
  • 00:42:14
    instill them with your values. So I will
  • 00:42:16
    never tell people to not have children.
  • 00:42:18
    We're not going to face an energy
  • 00:42:19
    crisis. We're not going to face a food
  • 00:42:21
    crisis. Our financial crisis is going to
  • 00:42:23
    be something that is a mild compared to
  • 00:42:26
    the rest of the world. Our challenge is
  • 00:42:29
    to build. As problems go, that's not
  • 00:42:33
    bad. Where do you find inspiration? What
  • 00:42:36
    do you have any go-to sources in terms
  • 00:42:37
    of media? Where do you spend your time
  • 00:42:39
    trying to get insight? As technology has
  • 00:42:42
    evolved, the entire media sector has
  • 00:42:45
    basically removed more and more eyes and
  • 00:42:48
    fingers from the process and automated
  • 00:42:49
    everything. So there aren't a lot of
  • 00:42:51
    people left in global media or national
  • 00:42:54
    media to basically do the smell check.
  • 00:42:55
    And so we've replaced it on a global
  • 00:42:58
    basis with opinions. And that is
  • 00:43:00
    definitely part of the problem in our
  • 00:43:01
    political space right now. It's just
  • 00:43:02
    there's no incentive on any side to
  • 00:43:05
    actually put forward something that has
  • 00:43:07
    been checked.
  • 00:43:09
    If someone I I would think a lot of
  • 00:43:11
    people look at Peter Zion and think I I
  • 00:43:14
    want to be you. It seems to me like you
  • 00:43:15
    have a pretty cool life. Uh there are a
  • 00:43:18
    lot of migraines that go with it. I'm
  • 00:43:19
    not sure it's all it's cracked up to be.
  • 00:43:21
    Yeah. But at least the perception I
  • 00:43:23
    don't know what the reality is, but the
  • 00:43:24
    perception is you lead a very
  • 00:43:26
    interesting life. You do interesting
  • 00:43:27
    work. You're doing what you want to do
  • 00:43:28
    and you make a really good living. And I
  • 00:43:30
    think a lot of young people would like
  • 00:43:31
    would like to be Peter. Curious if you
  • 00:43:34
    were helping someone develop a business
  • 00:43:36
    plan to become a thought leader, develop
  • 00:43:38
    a strategy firm, a geopolitical advisory
  • 00:43:40
    firm in terms of basic strategy focus
  • 00:43:45
    and specifically which platforms to try
  • 00:43:47
    and weaponize. You strike me feels I
  • 00:43:49
    feel like you were invented for Tik Tok.
  • 00:43:52
    You're just you have these very
  • 00:43:54
    provocative con just to be clear I'm not
  • 00:43:57
    on Tik Tok. You're not? No. Oh well I
  • 00:44:01
    stand corrected. Where do I see I see
  • 00:44:03
    you everywhere. Where am I seeing you?
  • 00:44:04
    YouTube. I I'm on YouTube. Uh we have a
  • 00:44:07
    Patreon page, which is our primary
  • 00:44:08
    distribution for subscribers. But yeah,
  • 00:44:11
    we're in a lot of places, but never
  • 00:44:12
    never Tik Tok. That'll never happen.
  • 00:44:15
    Well, let's go there. You're you you are
  • 00:44:18
    worried about your being on Tik Tok. Oh,
  • 00:44:20
    yeah. I would never do it. So, um let's
  • 00:44:22
    let's start with the the devil we know,
  • 00:44:25
    Facebook, Meta, whatever you want to
  • 00:44:26
    call it. So, whenever you post something
  • 00:44:29
    on Facebook, whenever you have Facebook
  • 00:44:31
    on your computer, even if it's not open,
  • 00:44:34
    unless you've deleted it and logged out,
  • 00:44:38
    uh Facebook is capturing every keystroke
  • 00:44:40
    on your computer. And they use that
  • 00:44:43
    information to bundle you into like
  • 00:44:46
    groups of roughly 10,000 with similar
  • 00:44:49
    demographic structure, similar
  • 00:44:50
    economics, similar political leanings,
  • 00:44:52
    maybe similar kinks. There's dozens of
  • 00:44:56
    tags. They put you into a group of
  • 00:44:58
    10,000 and then they actively market you
  • 00:45:01
    to scammers um based on what sort of
  • 00:45:04
    fraud they think you will fall for. And
  • 00:45:07
    there are those there are two
  • 00:45:08
    conventions a year. One consumerism.
  • 00:45:10
    Didn't you just describe American
  • 00:45:11
    capitalism to potato? Uh but they
  • 00:45:15
    actively do it. But when they do it,
  • 00:45:16
    they anonymize your data. So they you
  • 00:45:19
    become user 123 for example. All that
  • 00:45:22
    data is there. that people can still
  • 00:45:23
    target you personally, but they don't
  • 00:45:25
    have like your name. Tik Tok doesn't
  • 00:45:28
    anonymize. It's your name. It's your
  • 00:45:29
    social security number. It's your entire
  • 00:45:31
    credit history, and that gets sold on.
  • 00:45:33
    So, yeah, I will never ever be on Tik
  • 00:45:36
    Tok. But let's back to we're starting
  • 00:45:39
    Geop Political Advisory Group. What has
  • 00:45:42
    worked really well for you? What
  • 00:45:44
    mistakes have you made? If you were
  • 00:45:45
    advising, if you were investing your own
  • 00:45:46
    money and wanted to advise a group of
  • 00:45:48
    young men and women to launch a similar
  • 00:45:51
    firm, what's worked really well for you?
  • 00:45:53
    Well, everything that we do is custom.
  • 00:45:55
    So, we figure out the world from the
  • 00:45:57
    client's point of view before we say
  • 00:45:59
    anything and then we put it against the
  • 00:46:01
    backdrop of deglobalization and
  • 00:46:04
    strategic shifts and demographics and we
  • 00:46:07
    see what is relevant to them. It is
  • 00:46:10
    difficult to imagine anyone else
  • 00:46:11
    replicating what we do uh without having
  • 00:46:14
    20 years of experience in the background
  • 00:46:16
    building that baseline. We actually
  • 00:46:18
    spend probably about half of our time
  • 00:46:20
    looking for things that prove the
  • 00:46:21
    baseline wrong. Uh so because we base
  • 00:46:24
    everything off of that. Um does that
  • 00:46:27
    mean that what I'm doing is not
  • 00:46:29
    replicable? Not necessarily. But it does
  • 00:46:32
    mean moving forward it's going to be a
  • 00:46:33
    lot more difficult because when you get
  • 00:46:35
    to the point where globalization really
  • 00:46:37
    does break and we're really close to
  • 00:46:38
    that, like an entirely new baseline is
  • 00:46:41
    going to have to be invented for a world
  • 00:46:42
    where all of a sudden the old rules
  • 00:46:43
    don't play. And the stability that has
  • 00:46:46
    been the backbone of all economic
  • 00:46:49
    development over the last 75 years is
  • 00:46:51
    going to turn into something completely
  • 00:46:52
    different, a lot more random, a lot more
  • 00:46:54
    disruptive.
  • 00:46:56
    Uh, I'm not sure it's a great time to be
  • 00:46:59
    getting into my business on a strategic
  • 00:47:01
    level, but the number of tactical
  • 00:47:04
    applications, if you can take a narrower
  • 00:47:06
    view, I think our our legion in the
  • 00:47:08
    world we're about to be in. If you were
  • 00:47:10
    going to start your business over, would
  • 00:47:12
    you do the exact same thing or would you
  • 00:47:13
    have a different focus? No. No. I' I'd
  • 00:47:15
    learn to weld and I'd learn Spanish. Say
  • 00:47:18
    more. Sure. I mean, we need to double
  • 00:47:20
    the industrial plant. Spanish is the
  • 00:47:22
    number two language in the United
  • 00:47:23
    States. Mexico is our number one trading
  • 00:47:25
    partner. will be at least for the rest
  • 00:47:26
    of my life. The fastest way to get six
  • 00:47:29
    figures is to speak Spanish and have a
  • 00:47:31
    trade.
  • 00:47:32
    And as we wrap up here, I just want to
  • 00:47:34
    do a s kind of a lightning round here.
  • 00:47:36
    Name an influence or influences in terms
  • 00:47:39
    of education or people in your life
  • 00:47:40
    early on that really shaped who you are.
  • 00:47:43
    George Herbert Walker Bush. He was the
  • 00:47:45
    president of the most important
  • 00:47:47
    inflection point in modern history. He
  • 00:47:49
    was taking us from the Cold War to
  • 00:47:50
    whatever was next. And he tried to get
  • 00:47:53
    us to have a conversation with ourselves
  • 00:47:55
    about what should we do with
  • 00:47:57
    globalization? What should we do with
  • 00:47:59
    this alliance, the greatest alliance in
  • 00:48:01
    human history and a system that
  • 00:48:02
    generated the fastest economic growth
  • 00:48:04
    ever? How should we reshape it for a
  • 00:48:07
    postcold war era? And what sort of world
  • 00:48:09
    do we want to leave for the next
  • 00:48:11
    generation? So, of course, we voted him
  • 00:48:13
    out of office. It's funny, you don't
  • 00:48:15
    hear that many people talk uh speak
  • 00:48:16
    about him that as glowingly or as as in
  • 00:48:19
    that kind of singular fashion. Where
  • 00:48:20
    does Peter Zion invest? Like, where do
  • 00:48:22
    you put your money? I'm not a finance
  • 00:48:24
    guy. I'm certainly not a CFA, so I I
  • 00:48:26
    can't really give you any tax. This is
  • 00:48:28
    investment. It's not investment advice.
  • 00:48:29
    I'm just cur If to the extent you're
  • 00:48:31
    willing to disclose it, where do you put
  • 00:48:33
    your money? Um, well, I I'm in I'm in
  • 00:48:35
    flux right now, just like the United
  • 00:48:36
    States is. If you go back to October,
  • 00:48:38
    everything everything that I had was in
  • 00:48:40
    US midcap because those are the
  • 00:48:42
    companies that have the combination of
  • 00:48:43
    fundraising plus uh access to rule of
  • 00:48:47
    law, demographic trends, production, uh
  • 00:48:50
    everything that goes along with
  • 00:48:51
    urbanization that we need. I I liked
  • 00:48:53
    products that were energy intensive
  • 00:48:55
    because we have the cheapest energy. I
  • 00:48:57
    liked where the demand profiles driven
  • 00:48:59
    by demographics. We had the best in the
  • 00:49:00
    rich world and if that end product could
  • 00:49:02
    have be exported, I really liked it. But
  • 00:49:05
    in the last 3 months, the policy has
  • 00:49:09
    basically punished anyone who wants to
  • 00:49:12
    invest in the United States. The Trump
  • 00:49:14
    administration's policies are actively
  • 00:49:17
    discouraging investment. We've now had,
  • 00:49:20
    as of today, 133 different tariff
  • 00:49:23
    policies since January 20th. And as long
  • 00:49:26
    as the goalposts keep moving, no one
  • 00:49:28
    knows what to do. So construction
  • 00:49:30
    spending has just stopped. And until we
  • 00:49:33
    get to the other side of this, I don't
  • 00:49:36
    know where to put my money. Yeah. And
  • 00:49:38
    just as we wrap up here, best piece of
  • 00:49:40
    advice you've ever received.
  • 00:49:42
    Go long. It's like I I was told by my
  • 00:49:46
    adviser when I was in grad school that,
  • 00:49:48
    you know, you could you're at the age
  • 00:49:49
    where you're going to screw up and
  • 00:49:51
    that's fine. Go long, hit hard, and if
  • 00:49:56
    you have to change tack in a year, fine.
  • 00:49:58
    Uh I had a number of people after him
  • 00:50:01
    who tried to talk me out of that and if
  • 00:50:03
    I every time I listened to their advice
  • 00:50:05
    I regretted it. Peter Z is a
  • 00:50:07
    geopolitical strategist and founder of
  • 00:50:10
    Zion geopolitics before launching his
  • 00:50:12
    own firm in 2012. He spent over a decade
  • 00:50:14
    at the geopolitical intelligence company
  • 00:50:16
    Stratford. Um Peter I really appreciate
  • 00:50:19
    you coming on. We've been trying to get
  • 00:50:21
    you on for about a year. I'm I'm so sort
  • 00:50:23
    of impressed by you have these datari
  • 00:50:27
    provocative really kind of courageous
  • 00:50:30
    out there often wrong predictions but
  • 00:50:33
    you you inspire a conversation and I
  • 00:50:35
    think that's really important. I really
  • 00:50:37
    enjoy your work and um I'm just
  • 00:50:39
    appreciative that you took the time to
  • 00:50:40
    join us today. It's been my pleasure.
  • 00:50:43
    Thanks Peter.
  • 00:50:45
    [Music]
  • 00:50:54
    [Music]
タグ
  • China
  • Russia-Ukraine Conflict
  • Demographics
  • U.S. Manufacturing
  • Energy Independence
  • TikTok
  • Globalization
  • Immigration
  • Geopolitical Strategy
  • AI