Geopolitical Strategist Peter Zeihan speaks in Shreveport, LA at BRF Annual Event
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Geopolitical Strategist Peter Zeihan speaks in Shreveport at BRF’s 2023 Annual Event, offering insight on Northwest Louisiana’s strengths in the economies of the future.
About BRF BRF, headquartered in Shreveport, is an innovation hub and economic development organization establishing North Louisiana as a preferred destination for high growth initiatives. Diversifying the region’s economy is its mission. It fulfills this mission through initiatives that start new businesses, recruit new businesses and retain current businesses in the region, and through supporting the development of a science and technology-based workforce.
BRF leads seven initiatives in economic development that span business recruitment, the development of a regional defense industry, workforce development and digital media, STEM education, biomedical research and healthcare, entrepreneurial development and startup support, and brownfields development.
About Peter Zeihan Peter Zeihan is a geopolitical strategist, which is a fancy way of saying he helps people understand how the world works. Peter combines an expert understanding of demography, economics, energy, politics, technology, and security to help clients best prepare for an uncertain future.
Over the course of his career, Peter has worked for the US State Department in Australia, the DC think tank community, and helped develop the analytical models for Stratfor, one of the world’s premier private intelligence companies. Peter founded his own firm — Zeihan on Geopolitics — in 2012 in order to provide a select group of clients with direct, custom analytical products. Today those clients represent a vast array of sectors including energy majors, financial institutions, business associations, agricultural interests, universities and the U.S. military.
Peter is a critically-acclaimed author whose first two books — The Accidental Superpower and The Absent Superpower — have been recommended by Mitt Romney, Fareed Zakaria and Ian Bremmer. His latest third title, Disunited Nations: The Scramble for Power in an Ungoverned World became available in March 2020.
Peter’s fourth book, The End of the World is Just the Beginning: Mapping the Collapse of Globalization, became available in June 2022.
Recorded Jan. 12, 2023
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Zeihan argues that deglobalization driven by geopolitical conflict (Ukraine war), demographic collapse (especially in China and Europe), and energy/resource decoupling will create massive economic disruption but unprecedented opportunity for North America—particularly the US, Mexico, and regions like Louisiana positioned to process resources and serve reshoring manufacturing.
- Russia's war in Ukraine has severed critical supply chains for fertilizer, semiconductors (neon), metals, and energy, forcing countries to source locally or face shortages
- China's demographic collapse (fastest-aging workforce plus population overcount) makes 2030 its 'last decade'—no economic model exists for this transition
- The US has competitive advantages in shale energy, agricultural processing, and manufacturing that will drive 5-15% annual inflation for 5 years but yield the strongest North American economy ever
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Russia has been invaded 50 times in its history and never once when the foe made it to the green land (the wheat belt) have the Russians ever rejected them—it has been the weather that did the heavy lifting, shaping Russia's geographic expansion strategy outward through beige (flat, empty) territories to red (mountainous) barriers where they can position troops.
“Russia's been invaded 50 odd times in its history and never once when the foe has made it to the green made it to the good land have the Russians ever rejected them it's been the weather that's done the heavy lifting”
In the US, peak lifetime wealth occurs at age 55-64 (the last decade before retirement) when mortgages are paid down and children are launched; the capital generated in that decade drives 70% of global private capital; at 65, retirees liquidate stocks/bonds for T-bills/cash, a normal transition unless there's a currency or market crash—but the demographic pyramid structure (pyramid shape for millennia until 1945) has collapsed into an inverted structure due to low birth rates, making aging cohorts' liquidation suddenly critical.
“the real magic happens at age 50 because that's when your single largest expense your last kid leaves home...that last decade 55 to 64. the last decade that you're working is the wealthiest you will ever be and the capital that you generate in that decade of your life is what drives the entire global system it is literally where the money is that is 70 of global private capital”
After 1945, the US created globalization by using its Navy to patrol global oceans, allowing anyone to trade with anyone; this meant countries only needed one of four essentials (food, oil, coal, iron ore) and could trade for the others, causing all countries to industrialize at different paces; industrialization changed family economics because urban kids are expensive vs free farm labor, so birth rates dropped 70 years later.
“at the end of the war we found ourselves facing down Stalin and the Red Army like oh we're gonna need some help with this one and so we did the most reliable thing we could to build up an alliance we bought it we created globalization we use our Navy to patrol the global ocean so that anyone could go anywhere at any time and interface in any Market with any partner and that changed the way National economics worked pre-1945 if you had food oil coal and iron ore you could industrialize and develop and expand but if you lacked any of those you were probably a colony 1945 and globalization changed that now anyone could go and trade for anything so you only needed one of the four...when you industrialize family economics changes because you move off of the farm and into the city to take the industrial jobs on the farm kids are free labor you have as many as you can because free is great but in an urban condo kids are really expensive really loud really annoying...so we had fewer of them and 70 years on we changed from this to this”
American Shale production is geographically unique: the US produces energy where it lives and uses it domestically, unlike the rest of the world which must transport energy from where it's produced to distant markets; this is the single most important reason American energy is fundamentally different from other countries' energy.
“there are 20 odd reasons why American energy is fundamentally different compared to the energy complex of every other country but considering the environment we're in today this is by far the most important here only here we produce it where we live”
Russian petrochemical facilities built in the 1960s under Khrushchev have only remained operational because of Western technology, Western investment, and Western workers applying 'high-end duct tape' maintenance; now that all Western involvement has been withdrawn due to sanctions, industrial accidents so large they are visible from orbit are occurring in Russian industry.
“most of their petrochemical facilities were built in the 60s under Khrushchev and the only reason they're still operating is you've had a lot of Western technology and Western investment in Western workers basically applying a lot of high-end duct tape to keep it all working and they are now all gone and we are already seeing industrial accidents in Russian industry that are so big not that we can see them from orbit we can detect them from orbit”
Insurance policies (not price caps) are the critical constraint on Russian oil exports; as of January 1, 2023, European insurers (90% of global coverage) prohibited coverage for Russian vessels, and global reinsurance firms refused to insure Russian vessels without sanctions, causing Russian exports to drop 1.5 million barrels per day in just the last week and a half.
“you cannot have a vessel go into a port out of a port or go through a constrained Waterway like say Suez without an insurance policy and as of the first of the year the Europeans said no ship can get one of their policies that's 90 of global coverage...it's the insurance that really matters and it's already gone so we have seen in just the last week and a half exports out of the Russian space drop by about a million and a half barrels a day”
Charleston adapted to geographic constraints (between two rivers, no room to expand) by creating a targeted workforce training model: identify investors' job requirements, train 5-6 candidates per position with state partnership, let investors interview candidates, pay the government a fee if hired to offset training costs—giving companies ready-made workforce while government captures training costs.
“Charleston very similar to the pnw in terms of its inability to expand they basically live between two rivers and so they have struck on a double strategy number one they've come up with a really creative way to train their Workforce when they find an investor they ask what specific jobs need to be filled and then they work with the state of South Carolina it's a train up a half a dozen people for each theoretical position and then they allow the would-be investor to interview them and if they hire anyone from their pool the government gets paid a fee”
Most countries use the conventional steel process: iron ore + coal in blast furnace → pig iron (useless intermediate) → hot rolled or cold rolled steel; the US is the world's greatest steel recycler (95% of US steel is recycled, reused 1-18+ times), but recycled steel can only become hot rolled steel, not cold rolled (shiny, corrosion-resistant); cold rolled requires virgin pig iron, and 75% of global pig iron came from Russia/Ukraine—now under sanction or destroyed, with only Brazil as alternative (insufficient supply), creating a steel shortage.
“recycled steel can only be turned into hot rolled you can't make it pretty at least not yet cold rolled has to be made from pig iron it has to be virgin Steel we don't do much with foundries so what we do is we import someone else's pig iron and we turn it into the highest quality Steel in the world mostly for export three quarters of global pig iron came from a rock excuse me wow wrong more three quarters of global pig iron came from Russia and Ukraine”
China and the US are not technological peers; the US makes high-end chips, China makes low-end with imported equipment, tools, software, and labor for quality checks; in December, Biden blocked Americans from selling tools/equipment/software to China and forced American chip sector workers to choose between jobs and citizenship—within 24 hours, every American in the sector quit or was transferred abroad, ending Chinese semiconductor capability.
“they can't make the high end they can't make the mid quality they can make the low quality but they can only make them low quality with imported equipment important tools imported software and imported labor to do the quality checks well back in December the Biden Administration put in a series of executive orders said you can no longer buy the equipment or the tools or the software and any American working in that sector now has to choose between their job and their citizenship that was the bulk of the workers within 24 hours every American in the sector was either transferred abroad or quit it's over”
Neon is made in a two-step process: first in air separation units attached to steel mills (almost exclusively in southern Russia, all under sanction), then in advanced separation facilities in Mariupol and Marieupol (now gone), resulting in loss of 70% of global neon production within about a year.
“neon is made in a two-step process step one you have an air separation unit which is attached to a steel mill and the former Soviet World those are almost exclusively in southern Russia they are all under sanction and they are all are barely operating anymore the second stage is you take your first stage air separation and all the gases that you don't use when you're making steel so anything that's not nitrogen or oxygen you put into a canister you send it off to this more advanced facility and you separate out all the trace gases helium argon carbon dioxide Neon those facilities were in where Marriott poll and Mary apple is gone so we've lost now 70 percent of global Neon”
The US has a diversified democratic system with local, state, and federal government plus academia, business, and civic organizations; if one stumbles, the whole system doesn't fall apart because the others provide legitimacy and decision-making power, unlike China's one-man system.
“here in the United States we've got a diversified democratic system we've got local government and state government and federal government we have Academia and business and Civic organizations and if one stumbles the whole system doesn't fall apart because the others are still there giving legitimacy and decision-making power overall and so if some idiot glues their hand to a painting or a bunch of Housewives when curlers start screaming let's go Brandon at a food Mall you know our civilization doesn't end but everything in China is one guy”
Germany's natural gas is used primarily not for electricity generation but for petrochemicals, and those petrochemicals are not exported but kept in-house to be processed into manufactured goods, making natural gas the base of the entire German manufacturing system; Germany is not like the US where energy independence is a slogan, but a precision manufacturing country in a tough neighborhood where energy security is existential.
“you can't can't do that in Germany Precision Manufacturing in a tough neighborhood and not only do they bring in the natural gas to generate power that's not that's primary use it's primary uses for petrochemicals and those petrochemicals are not exported no no they're kept in-house to be processed into regular manufactured goods it's the base of the entire system and it stopped”
The Russian wheat belt has the lowest productivity of any major agricultural zone in the world—capable of producing only one crop of short-seasoned wheat per year due to climate (hot, dry summers like Western Kansas; cold, dry, windy winters like Northeastern Alberta), making agricultural income per acre so low that Russia has never been able to successfully build a comprehensive road network and relies on rail for volume transport.
“in economic terms of the world's major agricultural zones that is the least productive spot on the planet you can grow one crop of short seasoned wheat per year and that's it in the summer the climate is about like Western Kansas and in the winter it is roughly like Northeastern Alberta so hot and dry or cold dry windy the income that comes from that one crop of wheat is so low per acre that the Russians even today have never been able to successfully build a road Network”
US/Canada inflation history post-WWII shows three phases: (1) globalization/industrialization → industrial-demand inflation; (2) 1960s Boomers coming of age → consumer-demand inflation; (3) 1990-2020 China entering labor market + Soviet collapse = two greatest disinflationary trends in human history, lasting 30 years; now both trends reverse (Chinese labor dying, Russian materials gone), and Boomer consumption driving inflation is back.
“the Chinese brought a billion workers to the table and pushed down the cost of manufacturing Goods the Soviet system collapsed dumping an Empire worth of raw materials into Global markets the two greatest disinflationary Trends recorded in human history and they lasted for 30 years well folks the disinflationary trends are turning inflationary the Chinese labor is literally dying out and the Russian stuff is going away”
Gen Z dream job is 'working in a closet that locks from the inside'—they don't want to meet anyone; if you need coders, Gen Z is ready, but for anything else (management, coordination, synthesis), you need Millennials who like being in the same room together; this creates a complementary labor ecosystem where 'we're gonna have a highly productive financial sector, rock bottom prices for IT [from Gen Z], and in the middle managing all the details you've got people who actually like to be in the same room together [Millennials]'—'this works everywhere else.'
“they never want to meet you their dream job is to work in a closet that locks from the inside so if you need coders we've got a whole generation ready to go but if you want anything else you got to turn to the millennials...this works everywhere else the boomers are leaving and there's no one else to pick up the Baton”
Energy is inelastic—if you can only get 90% of the gallon you need, you will pay whatever required to get that last 10%, setting the entire market price; losing 2M bpd of Siberian crude alone can increase energy prices by $60 easily, with more potential further loss.
“energy is not a normal product you know if you can't get wheat you can eat corn can't get corn you can eat soy whatever if you can't get fuel things stop if you need a gallon of gas to get to work but you can only get nine tenths of a gallon not only will you pay whatever you have to do to get that last little bit the price you pay for that determines the entire Market so just losing two million barrels a day of Siberian crude you know that's enough to Jack Energy prices up by 60 bucks easily”
On COVID, there are two buckets of thought (natural immunity vs vaccines), but in China's case, the CCP prevented natural immunity spread—no one has immunity—and China's vaccine doesn't work (every country that tried it has sent it back); the strains in China have higher communicability than measles, and two dominant strains were only identified 2-3 months ago, so it usually takes 6 months to understand fatality/communicability—meaning China is now facing an unprepared population with novel strains without baseline data.
“the CCP was successful at keeping covet out of the general population no one has natural immunity and every country that has tried the Chinese vaccine has sent it back because it doesn't work what's going on in China right now we don't know where this is going to go but we have never seen a population so big and so unprepared subjected to something like this ever all of the current strains that we have data on which isn't all of them I'll admit show that the strains circulating in China have a are not a communicability that is in excess of measles”
In shale patches where natural gas bubbles up as a byproduct of oil projects, producers flare it (visible from space) rather than investing in gathering and transport infrastructure because the gas is so cheap; this creates a different price structure than global natural gas markets, with Henry Hub at much lower prices than Chinese and European gas.
“so much Nat gas is bubbling up out of the oil projects as I buy product we have to flare it you can see the flares from space it's the same in the Permian it's the same in the eagle bird that's a very different price structure these producers are basically giving the stuff away just to get rid of it”
A narrative took hold around 2014 that fossil fuels are done because conventional fields take 3-8 years to bring online and 5-15 years to break even, so with 2040 carbon neutrality goals already past the investment window, why invest in projects that won't pay back—this logic spread in financial centers and produced ESG, but the average is not true for individual fields; American shale is an exception because it produces where it's consumed, making it economically different from global conventional basins.
“back in 2014 at the peak a narrative took hold that fossil fuels are done necessarily for directly environmental reasons but the idea was that it takes three to eight years to bring a conventional field online and another five to 15 years for that investment to break even well if you're thinking that we need to be to a carbon neutral environment by 2040 we're already past the time window for the investment so why would you put your money into a project that will never pay you back now I can find a freight train of logical disconnects in that particular logic chain but it took hold in all of the world's Financial Centers”
Fertilizer production is broken into two pathways: crude oil → refinery → naptha → products (oil route), or natural gas → ethylene → products (gas route); the US uses natural gas for all pathways due to cheap nat gas; Shreveport has the Haynesville (one of world's great natural gas fields) next door, giving all these options locally plus access to refineries (New Orleans, Houston), allowing entry into heavy industry (Windows, sports equipment, insulation, glass, diapers, makeup, tires) with 10,000+ possible products.
“we use it to do all of this that's everything from Windows to sports equipment to insulation to Glass to diapers to make up to tires so you have the Haynesville next door which is one of the world's great natural gas Fields these are all options every Circle and square up there is something you could do and if you don't want to you can import the stuff from refineries nearby whether it's New Orleans or Houston and then do the next step into heavy industry and get into any of those products I just mentioned plus about 10 000 others”
The Nord Stream pipeline was Russia's primary natural gas supply to Germany (40% of total), delivering gas at marginal cost; it was destroyed in September and cannot be repaired due to internal water corrosion, eliminating Russia's ability to supply Germany and forcing Germany to source from 7 different marginal suppliers at 6-7x prewar prices, requiring them to shut down industrial usage and limit consumption to electricity generation only.
“the Nordstrom pipeline it's not the marginal supplier for the Germans it's the primary it's 40 of the total...back in September somebody blew it up it's gone it's not coming back can't be repaired because there's now water corroding it from the inside...they have replaced that 40 percent with seven different marginal suppliers and so prices are six and seven times as a rule of what they were before the war”
Pacific Northwest (Portland, Seattle) cannot expand much due to geography (Seattle on isthmus, ridiculous land prices, $1M minimum for efficiency condo), so they were forced into IT/STEM not by choice but by necessity—this model is not viable for Shreveport because the land is affordable, removing the capital constraint that forced PNW into high-tech.
“they've gotten into I.T in a very big way this probably isn't the model for you I mean does everyone you know just have a spare hundred thousand dollars lying around because that's what it takes...they went into Tech not because they wanted to but because they had no choice there was nothing else they could try”
De-globalization means different things for different people: for the US, it's primarily an opportunity because the US has been subsidizing the global system since 1945 as Cold War commitment, but that ended 30 years ago; the US has backed away from the commitment ever since, and Joe Biden (who remembers when Europe was founded) has deepened security cooperation with Europeans, but there's no 'guns for butter' deal as before—every trade fight Trump picked, Biden continued and institutionalized (not personalized conflicts).
“de globalization means a lot of different things for different people for the United States it's primarily an opportunity we've been subsidizing the global system as our commitment to fight the Cold War but that ended 30 years ago we've been backing away ever since Joe Biden since he was there when Europe was founded remembers where Europe is and we're seeing more security cooperation with the Europeans than we have since the 80s and you know I personally think that's great but there's no guns for butter deal in play here like there used to be every trade fight that Donald Trump picked Biden has continued in fact he's taken every tweet that Trump ever sent out and turned it into policy and run it through a really good grammar checker and institutionalized it”
US demographics are 'pretty good' compared to developed peers; despite aging, the US is partnered with Mexico (healthier demography than India, Indonesia, Turkey, and any other advanced developing country), and they're linked via NAFTA 2 trade deal (Trump's NAFTA revision was 'freaking brilliant' and embedded into the system); Biden and Mexican president López Obrador have strong personal/professional/ideological alignment and completed the most successful North America trilateral summit since 2006.
“ours are pretty good I mean we're still aging and we still have these distortions...we are partnered with Mexico which has the healthiest demography not just in the rich world but in the advanced developing world as well better than India better than Indonesia and turkey...and the fact that they're already linked together in a trade deal I mean there are a lot of things about Donald Trump I was not a fan of NAFTA two was freaking brilliant and it's done it's it's it's embedded into the system”
Soviet-era aluminum production was based on importing bauxite and using cheap electricity to process it; with Australian and Irish bauxite sources now subject to sanctions, this supply has essentially shut down.
“the Soviet system was one of the few parts of the world that didn't have access to bauxite which is the precursor material for aluminum so what they did in the 90s since they had all the spare electricity and no industrial production is they imported all kinds of boxite from other places used their spare power to turn it into metal and then export it most of that box site came from either Australia or Ireland two countries that have been relatively enthusiastic about sanctions on the Russian sorry on the Russian system so that's shut down”
Germany's closest non-Russian natural gas is in Nigeria, which requires a minimum 15-year development program to bring online, meaning Germany has no path to energy security within any realistic timeframe.
“closest natural gas to Germany that's not Russian is in Nigeria that's a 15-year program at least to get it online”
Shreveport/Louisiana is positioned between New Orleans (world's largest bulk export terminal) and a geographic expansion boundary; the key problem is that proximity to New Orleans encourages commodity export rather than value-added production—anything within ~600 miles has repeatedly been decided to 'just not move up the value-added chain, produce, ship to New Orleans, send it over the horizon'—limiting local economic advancement.
“problem is New Orleans is the world's largest bulk export terminal and so anything that was in about 600 miles of it the decision has been made over and over and over and over to just not move up the value-added chain producer Rock commodity ship it to New Orleans they send it over the horizon and that's the end of the story cheap it's easy it's boring and it limits what you can do”
Belarus, Ukraine, and Russia collectively are the world's largest suppliers in the first column of fertilizer and second or more in the next columns; because of sanctions and war, global supply of potash (40% from Russia/Belarus), nitrogen, and phosphate have been severely disrupted, forcing global food producers to face shortage of the three key nutrients that allow people to grow their own food.
“if you take everything that Belarus and Ukraine and Russian are the belligerents do put into a single bucket they are collectively the world's largest supplier of the First Column second largest or the second and so on...40 percent of global potash comes from Russia and Belarus now”
Electric vehicles require an order of magnitude more materials than conventional vehicles (copper, nickel, lithium, graphite, etc.); the 'green transition' requires dealing with geopolitically fragmented mineral supply chains across 20+ countries (Canada, Mexico, Peru, Chile, Bolivia, Brazil, Argentina, South Africa, Gabon, Congo, Eritrea, Ethiopia, Mozambique, Australia, Vietnam, Indonesia, Malaysia, China, Pakistan, Turkey, Mongolia, Kazakhstan, Uzbekistan, Russia)—every material must be processed, and 12 of the most common processing steps are done primarily in China, which will go to zero.
“if we want to do the green transition if that is really our goal then we need to deal with Canada and Mexico and Peru and Chile and Bolivia and Brazil and Argentina and South Africa and Gabon and Congo and Eritrean Ethiopia and Mozambique and Australia and Vietnam and Indonesia and Malaysia and China and Pakistan and turkey and Mongolia and Kazakhstan and Uzbekistan and oh yeah still Russia...these are the the 12 most common materials that go into the Green Revolution...everything that is a red wedge up there is processed primarily in China and it will be going to zero”
Putin has launched eight military conflicts since coming to power 23 years ago (Georgia, Crimea, Donbas, Kazakh intervention, Karabakh, and others) all aimed at rebuilding the outer shell of Soviet access points and geographic barriers lost after the collapse of the Soviet system.
“in the 23 years the Putin has been in charge he has launched now eight military conflicts with that in mind to rebuild those Footprints this is the Georgia War this is the Crimea War the donbos war the Kazakh intervention the karabat war”
Early in the Ukraine war, everyone at NATO defense ministries initially thought Russia would be easily defeated because the 40-mile convoy stalled on day 4 due to fuel shortage and day 7 soldiers walked back to Belarus due to food shortages, suggesting Russia had forgotten modern warfare lessons and was a parade force worse than Iraq 1991—but this assessment missed that Russia sees the war as existential and will use every tool including nuclear weapons if facing NATO directly.
“everyone I know at every defense Ministry across NATO thought the same thing well holy crap the Russians don't know how to fight a modern war at all they've forgotten all of the lessons they've learned in the last 200 years it's a parade Force they're doing worse than the Iraqis did in 1992. if we go head to head with Russia there will be a thousand to one casualty ratios it will be a Wipeout and this made no one happy at all because the Russians see this war accurately as an existential battle for their survival”
China spent 2 trillion USD and unlimited intellectual property theft over 25 years trying to move beyond its current tech capability but cannot, because advancement requires cross-brain work that is part of cultural training—you can't just teach it; China's tech peers are not with the US.
“they have spent the last 25 years over 2 trillion U.S and a bottomless amount of intellectual property theft to try to move Beyond where they are right now and they can't because that takes a degree of cross brain work that they don't train for that you can't just teach it's part of your culture”
China is experiencing the fastest aging workforce on record in human history, and data recently admitted by China shows they overcounted their population by over 100 million people—all the missing millions would have been born under the one-child system and are now all 40 and under, suggesting the yellow bars (young people) in the demographic pyramid don't actually exist.
“China that is already the fastest aging Workforce on record in human history and we now know that that data is wrong little over a year ago the Chinese admitted publicly that they had over counted their population by in excess of a hundred million people with all of the missing Millions people who would have been born under the one child system meaning that they're all 40 and under suggesting that these yellow bars those yellow bars don't even exist we don't have an economic model humans don't have an economic model for how that might work”
Xi Jinping has consolidated more power unto his person than any human in history including Caligula and the Kim Dynasty; as a result, he has executed messengers so many times that no one brings him information they think will displease him, and they don't know the status of the voices in his head, so information flow has completely broken down—evidenced by China experiencing rolling blackouts in February 2021 that Xi didn't find out about until September (when Biden told him in a phone call).
“chairman G of the People's Republic of China head of the Communist party has now Consolidated more power unto his person than any human in history more than Caligula of Rome more than the Kim Dynasty in North Korea more than anyone at any time in any place and as a result things are breaking down even if he were the smartest person in human history you can't manage a system of a billion and a half people by yourself and he has now executed the messenger so many times that no one wants to bring him any information...best guess is that she didn't find out until September you know who told him Joe Biden on a phone call”
The US faces a workforce shortage: Boomers are exiting, Zoomers are the smallest generation ever; last year the gap between exiting Boomers and entering Zoomers was 400,000 workers, and this gap increases each year until 2034 when it peaks at 900,000—but we know the precise Zoomer inflow for the next 20 years because all Zoomers are already born, so we can forecast the shortage with certainty.
“Boomers largest generation ever Zoomers are the smallest generation ever this calendar sorry last calendar year the difference between the exiting Boomers and the entering Zoomers was 400 000 worker shortage figure will increase each and every year until 2034 when it will Peak at nine hundred thousand how do I do this all the Zoomers are already here we already know the precise inflow into the workforce for the next 20 years”
The Millennials are the 'blue arrows' pointing toward salvation—though they're the children of Boomers and told they were special (high self-esteem), they're now in their 20s-30s at peak consumption, driving the economy; without Millennial consumption since 2007, the US would have had at least 3 recessions; in 10 years they'll enter capital-rich years, replacing Boomers as capital source; Gen X is too small to bridge this.
“those blue arrows in the U.S one those are pointing towards the Millennials and they are the people who will save us all literally just threw up in my mouth a little bit...if it wasn't for Millennial consumption since 2007 we would have already had at least three recessions in addition in 10 years the oldest Millennials will be in their 50s...they're going to be entering that Capital Rich period of their life replacing the Boomers as the source of capital”
For timber: Russia historically supplied a huge portion of global timber; Russia is going away (either wins war and stays sanctioned, or loses and collapses); Shreveport's region is already a timber harvesting zone but not a processing zone, and there's no excuse for not becoming a timber processing hub given proximity to population centers and timber supply—plywood, furniture, pellets from sawdust are all options.
“this already is a harvesting Zone but because you're close to New Orleans it is not a processing Zone I don't care if all you do is turn sawdust into pellets or make plywood or make furniture the options are almost endless and your proximity to population centers makes this perfect because this is something Texas can't do because they don't have”
The Kursk pocket is the only chunk of territory west of the Nepa River (Russia's 'Mississippi') that Russia captured early in the war; Ukrainians publicly advertised they would liberate it first, Russia reinforced it with 20-25,000 of their best forces, but Ukrainians launched a secondary assault elsewhere, forcing Russian redeployment, which allowed Kharkiv Province to fall in five days with the capture of Isum (a key forward logistics rail hub) in 36 hours intact—the Ukrainians captured more equipment in 36 hours than NATO had provided in seven months.
“this is the chunk of territory they wanted to liberate first the Russians saw those advertisements and so they moved about 20 25 000 of their best forces to the other side of the river to reinforce Best Equipment they have on November 1 that assault did begin but as we all know that wasn't the whole story there was also a second assault right here because the Russians had to move their troops from somewhere and the ukrainians waited to see where they were being pulled from and in that assault the entirety of kharkiv Province fell within five days”
Texas (with 15M people and space to expand) is metabolizing land between the four triangle cities and undergoing re-industrialization; without Chinese/German supply chains on the skids, the US probably needs to double its industrial plant within 5 years—Texas is only a minnow in this game, somewhat ways out from the triangle, and doesn't control the system.
“folks that's 15 million people with a lot of space to expand and they're slowly metabolizing all the land that's between the four triangle cities and even with that that the re-industrialization of North America has been going so far I mean this isn't a new thing we've been industrializing an ever-going pace for about 10 years now without the Chinese and the Germans being on the skids we probably need to double the size of the industrial plant in the United States within the next five years”
Russia's strategy shifted from rapid conquest to attrition: they realized Ukrainians are fighting for their homes (not Jewish Nazi gay demons as Russian propaganda claimed), so they adopted a strategy of advancing slowly behind endless artillery barrages targeting civilian infrastructure to obliterate it, making Ukraine unable to support industrial population levels and causing civilians to either flee or be killed if they remain under age 55.
“they're like okay maybe we drank a bit too much of our own Kool-Aid maybe these are not Jewish Nazi gay demons and maybe they're just people who are fighting for their home and if that's the case if they're going to fight for their home then the civilian population is no longer a non-issue it's a problem well we can reach into our own history and find a strategy for that we could Advance very very slowly behind a never-ending hail of artillery fire not targeting anything that moves targeting anything that stands”
China has stopped collecting COVID data entirely (not just lying about it—stopped collecting altogether); the lowest realistic death estimate is 1.5M but assumes health care system doesn't break down; fever clinics (first-line defense) are mostly closed because staff have COVID; and within 4 days of anti-lockdown protests in November, protests shifted to Xi's personal skill set, suggesting institutional cracks.
“the Chinese have gone from collecting data online about it just not collecting data at all because what we're seeing is a breakdown of decision making...the lowest realistic estimate I've seen is a million and a half...their fever clinics which are their traditional first line of defense have mostly closed because they can't find staff that don't have covid we don't know and it's not going to stay limited to health...within four days of those protests over Thanksgiving people weren't just protesting coveted lockdowns they were protesting ji's personal skill set we've had a crack”
In 2001, there was a moment under George W Bush to renegotiate globalization terms with Russia and China, essentially saying 'the Cold War is over, if you adopt new rules you're in, if you don't we'll bury you'; but 9/11 happened and the US got distracted for 20 years, during which Russia/China grew strong; now we collectively can't subsidize them and instead are burying them, but we've lost the option of negotiating a transition to a new system.
“if if we could do a share and turn back some time and go back to 2001 there was a moment under George W Bush when we were trying to basically it's going to sound a little jaded but beat Russia and China into shape and say you know the Cold War system is over we're entering a fundamentally New Era we need to renegotiate the terms of globalization and if you do that great we're all in this together and if you don't we will bury you and then 9 11 happened and we got a little distracted for 20 years and in that time we maintained enough of the structures of globalization that all these places that had poor geographies kept growing and now collectively they're twice our size”
A calorie map shows dark blue/green countries are major producers/exporters of soy and grain; everyone else is net importer; countries in red/orange import at least half the calories they consume; countries with X's face 40%+ reduction in crop-growing ability without reliable fertilizer input systems—de-globalization means different things for different people, but for net food importers, it's a crisis.
“this is a calorie graphic every country in dark blue or dark green is a major producer and exporter of soy and grain-based calories everyone else is a net importer and the countries in red and orange import at least half the calories they consume the countries with x's are those that in a world without a reliable fertilizer input system are looking at at least a 40 reduction in their ability to grow the crop in the first place”
In 2009, North American shale production exceeded half of regional natural gas demand for the first time; in response, hurricane-driven price spikes ended because all on-shore wells eliminated the gulf supply vulnerability; historically (pre-2009), storms caused price spikes via supply disruption, but now Henry Hub prices are decoupled from hurricane risk.
“it's the same in the Permian it's the same in the eagle bird that's a very different price structure these red arrows those are hurricanes you see these blue spikes that's Henry hub old story storm comes through the Gulf they shut down everything they go out after the storm repair the damage that's how it was until 2009 because that is the year in the United States well North America where Shale production produced over half of global demand”
As of November 2022, the US was back to a new all-time high as a net exporter of energy, reversing shale revolution's transition from importer to exporter—this is a structural advantage that compounds other US benefits (agricultural export, manufacturing reshoring) in a deglobalizing world.
“as of November of last year we were back to a new all-time high we were once again a net exporter of energy”
Russia has never backed down from any war without either government collapse at home (minuscule odds) or at least 500,000 combat deaths; currently at 100,000, so Ukraine must either defeat 4x as many forces as currently fielded (bloody) or trigger a mass fatality event by cutting off irrigation to Crimea via the Crimean Canal (which Ukraine now controls at Kursk) to cause 1980s Ethiopia-style famine in Russian-controlled territory where best Russian troops are stationed.
“Russia has never ever ever backed down from any War without one of two things happening number one the government collapses at home I think the chances that are minuscule number two they lose at least a half a million soldiers to combat we're at about a hundred thousand right now...the ukrainians either have to treat four times as many forces minimum as they have to this point which would be bloody to say the word or they have to trigger a mass fatality event and they have a way to do that the Crimean Peninsula...the ukrainians now control it they're not going to turn it on come planting season the way Ukraine probably is going to win this war is by triggering a 1980s Ethiopia style famine in russian-controlled territory”
Ukraine will not stop being important to Russia until Russia controls all of Ukraine and then continues beyond, because Ukraine sits on the way to the two most important geographic access points between the Russian interior and the barriers that provide security.
“unfortunately for Ukraine it's not that Ukraine controls these access points but it's on the way to the two most important ones and as long as that is the case Russia will not stop until it has all of Ukraine and then it will continue beyond Ukraine”
Agricultural processing in North America (especially food and value-added agriculture) will be the fastest-growing economic sector in the world for at least the next four decades, and decisions made today will determine how big a chunk of that growth each region captures—manufacturing is sexy but agriculture is the real opportunity.
“Manufacturing is sexy I get it but agriculture agriculture in North America that is going to be the fastest growing economic sector in the world for at least the next four decades and the decisions you make today will determine how big of a chunk of that is yours”
Natural gas and electricity prices in greater Shreveport are in the bottom 10% of US prices; if you cannot use energy to 'do something, something is wrong there'—the region should target energy-intensive sectors (chemicals, fertilizer, steel, aluminum) facing global shortage due to sanctions/supply chains.
“natural gas and electricity prices here are in the bottom 10 percent of the United States if you can't use energy in Greater Shreveport to do something something is wrong there are a lot of sectors out there that are energy intensive that are about to fall into Global shortage and I suggest you move into all of them”
For corn/soy/cotton: Ukrainians are currently exporting corn via UN-managed safe corridors because it has more $/bushel than wheat; but once summer comes and power infrastructure no longer matters, Russians will target agricultural infrastructure to destroy capacity—corn, soy, cotton, cotton seed will all disappear from global supply; Shreveport should enter agricultural processing (grits, oil pressing) for sectors losing major producers.
“think about what the Russians are doing right now the war is stalled so they're using drones and missiles to Target electrical infrastructure throughout the Ukrainian system causing power outages trying to cause as many deaths as possible what do you think they're going to do once summer happens there's no point in going after the power infrastructure then they're going to go after the agricultural infrastructure this is also going to zero”
Germany's economic model was always going to collapse this decade (due to demographic collapse—checked birth rates 70 years ago, lost kids 30 years ago, and this decade the big bulge moves into mass retirement); the Ukraine war is just speeding it up.
“Check out bottom fell out of the birth rate 70 years ago they ran out of kids 30 years ago and this decade that big bulge moves into Mass retirement the German economic model was always going to collapse this decade the Ukraine war is just speeding it up”
By May, Ukraine will have completed six months of deferred maintenance on captured Russian equipment and will field 60,000 newly trained troops with new gear including battle tanks—an order of magnitude more powerful force than February. Meanwhile, Russia will have completed a second mobilization adding 500,000 more soldiers (4x their initial force) but these will be badly led, equipped, trained, and low morale—a classic Russian pattern where the first year is a 'complete and utter show' and then they 'throw bodies at the problem.'
“by the time we get to May we're going to have a really good idea of which strategy is ultimately going to win...the Russians will have completed their second mobilization and they will have thrown at least a half a million more soldiers into this fight an increase of a factor of four from what they began with now yes they will be badly LED and badly equipped and badly trained and with poor gear and low low morale but you know what you call soldiers like that Russian there is nothing about the war to this point that is atypical in Russian history the first year of every Russian war is always a complete and utter show and then they throw bodies at the problem”
The January 2021 Texas freeze (temperature 25°F) shut down all oil, natural gas, solar, wind, and nuclear production simultaneously ('snowmen in San Antonio'), demonstrating that Texas power grid is vulnerable to cold snaps and cannot guarantee supply reliability despite renewable dominance claims.
“this little Spike right here this is what happened in January of 21 when Texas got cold got down to 25. and everything stopped oil natural gas solar wind nuclear oh my god there were snowmen in San Antonio they were sad snowmen but they lasted for two weeks everyone in Austin just made margaritas”
Xi was caught completely off-guard by Russia's Ukraine invasion in February 2022 because he believed Russian propaganda; Putin lied to Xi's face about invasion plans during the Olympics, and Xi didn't realize Russia was about to lose significant crude oil supplies due to Western sanctions until it was too late.
“during the Olympics Putin was in town and he lied to Jesus face she asked him are you going to invade Ukraine and put it was like oh why would I do that would be crazy...chairman G was the only world leader got caught completely with his pants down he's bought into the Russian propaganda”
Since September 2022 (Ukraine war), natural gas in the US hit $9/MMBtu (Henry Hub), which in inflation-adjusted terms equals the 50-year average—Americans have been 'bitching about average energy prices' and complaining about inflation while European and Chinese prices are 6-9x higher, showing the US has a massive structural energy advantage most people don't recognize.
“this right here this is what we've been dealing with because of the Ukraine war back in September we hit nine dollars and we lost our minds nine dollars in the United States nine dollar natural gas an inflation index terms that's exactly the 50-year average we have been bitching about average Energy prices”
The remaining 30% of global neon comes from China, and while Chinese chips cannot satisfy demand for high-end semiconductors (made only by US, Taiwan, Japan, Korea), the bargain-basement chips in smart pens and dryers that come from China may be obtainable without the lost Russian neon, creating a disconnect between supply and demand due to security reasons—the technical economic term for this situation is roughly 'deglobalization'.
“the rest is roughly evenly split between China and the Middle East... not everyone can make all microchips we and the Taiwanese and the Japanese and the Koreans we make the really high-end ones and the medium quality ones but the Bargain Basement ones the ones that are like in your smart pen or or maybe you're dryer so it like sings to you when it's done those all come from China guess where the other 30 percent of global neon comes from China so that one type of Chip I would argue that we can get but I just fine without maybe the only ones that we're going to have and the technical economic term for a situation like this where you've got to disconnect between supply and demand because of security reasons it's roughly”
The Jones Act (passed during Great Depression to protect American maritime commerce) mandates that cargo between American ports must use American-built, -owned, and -captained ships; as a result, interport shipments have dropped 99% in value over a century; foreign ships are exempt, so all cargo goes to foreign ports (New Orleans) instead of inland rivers; this is arguably 'the single biggest problem facing American development' because it removes the most efficient transport mode, comparable to removing 30-50% of planes or 80% of trucks—only shipping gets this punishment.
“the Jones Act was passed during the Great Depression the idea was to protect American positions and Maritime Commerce and it says that no cargo can be transported between any two American ports unless the ship carrying the cargo is American built owned captained and crude as a result shipments between American ports has dropped by 99 percent in value over the last century and one of the reasons you guys do not see ships on the Red River every single minute is because of that law...I've been fighting this very lonely one-man war against this stupid law for so long I honestly think the Jones Act is the single biggest problem facing American development”
Britain will need to exit the Airbus family and join Boeing to complete a North American free trade deal with the US, but since Airbus depends on Russian-origin aluminum and titanium, the future of European aerospace will be jets without adequate titanium, aluminum, engines, or wings.
“when the Brits left the EU they neglected to figure out what was next and they've come to the conclusion grudgingly that the only way that Britain will be a successful economic player moving forward is if they enter into a free trade deal with the North Americans primarily the United States...Britain contribution to Airbus are engines and wings most of the aluminum from the former Soviet World goes to Airbus most of the titanium goes to Airbus so the future of European Aerospace are jets without titanium aluminum engines or wings”
2030 is China's last decade; there is no policy that any combination of countries can adopt to save China from demographic collapse.
“in the year 2030. this is China's last decade period I could give you a half a dozen other reasons why China is going to collapse but this is the one that is completely unavoidable there is no policy that can be adopted by any combination of countries that can save them from this”
Civilian casualty estimates for the Ukraine war are between 100,000 and 300,000, which is approximately the same pace as the first year of the Holocaust or World War II, indicating this war is defined by scale and will only intensify as it progresses.
“the estimates I've seen are somewhere probably between 100 and 300 000. that's approximately the same pace in the first year of the Holocaust or in World War II this war like everything with the Russians is ultimately about scale”
To get back to 2019 capital and labor environment, the US only needs to wait: 10 years for finance, 20 years for labor.
“all we have to do to get back to 2019 capital and labor environment is wait 10 years for finance and 20 years for labor that's it we just have to wait”
The alternative to re-industrialization is continued high inflation with no stuff, meaning more inflation; the tradeoff is between pain now with gain later vs pain now with nothing later—a 'really easy call' from Zeihan's point of view, though he doesn't make the decision.
“or we can still have that inflation and after five years not have stuff which means we have more inflation from my point of view this is a really easy call but I'm not the decision maker”
Zeihan has been fighting a one-man war against the Jones Act and recommends that Shreveport talk to its Senator to get rid of it; in the meantime, Shreveport should focus on processing (chemicals, fertilizer, timber, agriculture) rather than manufacturing, as manufacturing requires more economy of scale than a region can provide.
“I've been fighting this very lonely one-man war against this stupid law for so long I honestly think the Jones Act is the single biggest problem facing American development moving forward... so yeah talk to your Senator get rid of that in the meantime it's important to understand that you shouldn't trust Texas”
Germany is experiencing a freakish heat wave (hitting 50 degrees on New Year's) which stopped industrial usage of natural gas, allowing prices to come under control, but this reveals that they only achieved price control by paying seven times market price for natural gas and completely shutting down industrial usage—imagine what happens during a cold snap.
“they're having a freakish heat wave in Germany too it hit 50 degrees on New Year's in Berlin which is like 185 billion degrees above normal and so they're not using a lot of natural gas right now and prices are really under control but that's what it took they shut down their industrial usage of the stuff they have their electricity generation and it took a freak Heat Wave forget them to get things back under control and in order to do that they only had to pay seven times market price for the Natural Gas can you imagine what happens with a cold snap”