Video URL: https://www.youtube.com/watch?v=jJTw3SzrlQM
[Music] by night hello Peter what's going on man nice to meet you right back at you it has been a crazy year yeah it's been a crazy year for everything right yeah it's uh it's one thing when you talk about how the world's going to be coming to an end it's quite another one it's like here and now yeah um well you've been working on this type of material this this subject matter for quite a long time so tell everybody your background uh let's see my background's in Economic Development it's all about figuring out what works where and why and why if you try the same policies in the next town over it's usually a disaster and then I worked actually here in Austin at a company called Stratford for 12 years and I was they're they're sole generalist so it was my idea to kind of plug everything together and figure out what the map of the world looks like and how he pulls a string on one side of the world something changes on the other side well your perspective on sort of global interactions with China and Russia and the United States and the energy Supply and the food supply I have not heard before I I haven't heard it as comprehensively as I've seen you put it together so I'm kind of excited to talk to you about this so when uh let's let's I guess we should start with Russia when Russia invaded Ukraine Ukraine you you were not surprised not a not even a little no you expected this and you felt like this is inevitable and this is just something that was always going to happen and it's not going to just stop at Ukraine no not even remotely the Russian space is among the worst Farmland in the world and so they've never been able to generate enough income to have a road Network everything has to be moved by Rail and their Frontiers are just huge and they're open and if you've got a force that can't maneuver itself your only reasonable defense strategy is to be forward positioned and use geography to help you out so you expand until you reach mountains or oceans or deserts and then you anchor on either side of those and plug the access points unfortunately for Ukraine there are two of those access points on the other side of Ukraine so the Russians were always always always
going to try to push through and retake that territory territory that they had controlled for most of the last 350 years unfortunately for them in the 30 35 years since the Soviet system collapsed the ukrainians have developed an identity and now they would like to be something other than a road bump so one of the narratives that was going around was that the reason why Russia was pushing in the Ukraine is because NATO was moving their arms closer to the border of Russia there is something to be said for that uh you just have to put it in the context to really understand it so the Russian point of view is for us to be secure we need to expand until we reach a point where Invaders cannot overwhelm us we have to be able to plug those access points but to give the Russians what they want you have to sign over the future of Estonia Latvia Lithuania Poland Finland the Czech Republic Hungary Slovakia Romania Belarus Ukraine oh let's go on Azerbaijan Armenia Georgia Kazakhstan all the stands basically the the Russians in order to feel safe you have they have to be able to occupy total populations that are twice of Their Own and I'm sorry but that's just not feasible so you know technically the people who claim that NATO provoke this are correct NATO can't have what it wants in Russia in order for Russia to feel safe but for Russia to feel safe they've got to occupy over a hundred and eighty million people and that was never part of the game so what did you what do you think they anticipated was going to happen when they started the war well I don't think it was just the Russians who anticipated it uh Ukraine the last war in 2014 basically rolled over they proved to be militarily incompetent they were corrupt they couldn't put up any sort of resistance Crimea fell in just a matter of a couple of days uh and I think a lot of us who are in the security side of things thought that this was going to be to a degree a bit of repeat now excuse me I was probably one of the more optimistic people for Ukraine because I had seen them develop a culture and seen an arm and train and had seen it be meaningful but Ukraine is still a flat country and the Russians are still one of the largest militaries in the world
so even I was saying that within six months to a year this was all going to be over but the ukrainians have surprised the upside and probably most importantly the Europeans didn't just roll over and let this happen like they did the last seven times that the Russians have gone on the war path since 1999 and that's changed the game fundamentally and when you look at it going forward if if people didn't anticipate that the ukrainians were going to be able to fight back as well as they have and then you look at it going forward like where does this go well there's two paths here and the problem is we haven't seen either side fight in their full Glory yet and until we have that fight we really can't judge in their full Glory like meaning well the the ukrainians are the underdog but they're in the process of rapidly arming with more and more sophisticated equipment and by the time we get to may they will have been able to do a lot of deferred maintenance on the equipment they captured from the Russians which was more equipment than they started the war with and there will be 60 000 Ukrainian troops that have trained in NATO countries with more Advanced Equipment back in the field so you know we get our Athens if you will uh on the other side the Russians will finish their second mobilization and they will have at least another half a million men in the field now they will be badly trained and badly equipped and badly LED with low morale but troops like that have a technical term attached to them Russian there's nothing about this war that is unique in Russian history the first year is always an absolute [ __ ] show and then the Russians throw bodies at the problem until it goes away and in half of those Wars the Russians ultimately win so by the time we get to May and the mud season is over we'll have a more advanced Ukrainian Force fighting a much larger Russian Force and we will get our first real Glimpse at how this is going to go and we should know which way it's going to break now it'll still take time because if the Russians are going to win it's going to take them a year to overwhelm Ukrainian defenses and then they have to occupy the country and
that's going to kill a couple million people or the Russians are going to be able to completely break the logistical Supply chains that allow the Russian troops to even exist and we'll have a half a million dead Russians and the ukrainians will be able to push the Russians out of crime in the East and then we get to talk about the next stage because this is just the opening phase of what is going to be a multi-year and perhaps even multi-decade conflict Jesus yeah welcome to Russia so how do you think it goes like if when may rolls around yeah ask me again in May right now the balance of forces clearly are edging more and more towards the ukrainians they've proven to be more adaptable when the Russians made it clear that they were going to do a second mobilization that seemed to have broken The Log Jam in a lot of countries most notably Germany and we now have armored vehicles up to and including some light battle tanks which I know all the tankies out there gonna hate that term but anyway armored vehicles that have some serious Firepower are going to be coming now uh the Bradley's from the United States specifically and that is a it's a tool that the ukrainians have not had so every time the ukrainians have achieved a tactical breakthrough they can only push as far as their inventory can run now their infantry is going to be mobile and in a war of movement to this point the Russians have proven that they're absolutely incompetent and why is that part of its graft the guy who is the defense minister shoigu is he's arguably one of the least competent people on the planet uh but he's a friend of Putin and so he's been able to milk the defense department for everything uh best guess is that he has taken a third of the budget himself for procurement and his flunkies have taken another third so very little gets to the military itself so it's corruption huge corruption and that means no training or if the tree there is training it's basically a parade and when you're using a force that can only Supply by rail you're completely dependent upon trucks for local distribution and that's why the ukrainians went after the trucks with the um all the javelins that they got early in the war they didn't really go
after tanks they went up to the trucks and they've destroyed roughly 2 000 maybe 2500 of them and that has reduced the Russian military to going back to Russia confiscating city buses and literally Scooby-Doo Vans and bringing them back to the front and think of a Scooby-Doo van now fill it with full of Art Hillary shells you know every time you hit a bump and that is their primary ammo supply system now because the rail system into Crimea got blown up the Kirch bridge and what's going into the east is all under artillery range so they have to use truck and they're just not very good at it now for a lot of people the big fear is that if Russians start Russia starts really getting desperate then they use nukes sure and it would have to be very desperate I have never I've not been as concerned about the nuclear question as some folks because there's really only four scenarios a scenario one is the Russians consider throwing one against the United States but we've made it very clear from our intercepts and our sharing of information with the media that we know exactly where Putin is at any time we're listening to his phone calls we're reading his emails and so he now knows very clearly that if he throws a nuke at the United States we're going to throw one not at Russia we're going to throw one at him and there's no version of this where he survives so he has tamped down the rhetoric quite a bit since last March uh option number two nuking Ukraine that doesn't make sense they want to occupy Ukraine you don't want to have your troops in a place that's a radioactive Wasteland there may have been a case last year for new king Poland and Berlin and Stockholm in order to disrupt the weapons flows into Ukraine but after the battles of isium and Kirsten the ukrainians have more Russian gear now than they know what to do with it's going to take a month to bring that all online there's a lot of deferred maintenance that needs to be done and so disrupting the weapons flows no longer is a critical issue because the weapons are already there so the only scenario I can see where the Russians would seriously consider nukes is if Ukraine doesn't simply win
but decides to carry the fight across the border into Russia proper in that scenario where the very existence of the Russian government is threatened that would probably change the math but I don't find that likely without a significant shift in mindset in Washington because we're we're not just providing the ukrainians with the weaponry and the ammo we're providing them with the intelligence and most of the steps of the kill chain without that the weapons are of limited usefulness especially at long range and the ukrainians have no desire to rupture that relationship so we're talking about a theoretical that is at a minimum seven months away probably further this whole thing is such a terrifying conflict being that Russia is a nuclear superpower and the history of Russian Wars I mean there's such a long history of sacrifice and death and they have it's like they're accustomed to it in a way or we can do better than that we can make you a lot more depressed okay so let me give you two things uh number one the Russians are relatively casualty immune they fight in an area where they fight with numbers they've never been technologically advanced versus their peers they've always just thrown bodies at it so there has never been a conflict in Russian history where they have backed out without First losing a half a million men we're at about a hundred thousand now we have a long way to go before the Russian military breaks so the Russians have lost roughly a hundred thousand that's the best guess how many ukrainians have been lost probably about a third of that but that is a third in terms of military forces in terms of civilians we really don't know it could be as much as 250 000 at this point we just don't know really well it's the data exists on the other side of the front line all we know are about what has happened in the territories that have been liberated and if you think of things like bucha and izium German radio intercepts told us as far back as May that there were at least 70 places behind Russian lines that had suffered massacres like izium I'm sorry like um like butcha and when we've had additional Liberation since then it corroborates that General assessment so well so that's piece one you can be a
little depressed about the piece too uh the Russians see this as an existential fight for their survival they feel if they don't get those blocking positions they're doomed and they're probably right but we now know that the Russians are fighting so badly they're doing much worse than the Iraqis did in 1992. really oh yeah if we had a direct fight now between NATO and Russia it would be a thousand one casualties and I don't know anyone in the defense department who's happy about that because if the Russians see this as an existential conflict and they know they can't hold a match to Nato the nukes are their only option so the primary reason why everyone in the west has gotten shoulder to shoulder on this is they know that if Ukraine Falls in Poland's next there will be a direct fight the Russians will you lose and then there will be a general nuclear Exchange so there's plenty of really solid reasons to root for the ukrainians on this one Jesus Christ now when this whole thing broke out what what do you think the that you think the Russians expected Ukraine to just give up absolutely that's what happened in 2014 for the most part and what are the possible scenarios for Russia I mean if it seems like they're completely committed to this they are and if they don't win it the the Russian position is that our demographic structure is is in such diseased and aged and terminal decline that the Russian state will be turning the lights off sometimes between 2050 and 2070 anyway yeah the uh they've had a series of big melon Scoops out of their birth rate throughout the history uh World War One World War II the collectivizations under Stalin bresniff's mismanagement Cruise shots mismanagement uh the post Cold War collapse and a lot of these stack on top of each other and the biggest one stacked on top of the post Cold War collapse so there are more Russians in their 50s than their 40s and their 30s and their 20th and teens and then they lie about the data of the teenagers on down uh which means that there isn't there aren't enough Russians that have been
born in the last 30 years to carry the ethnicity forward much farther and so they're thinking if they can forward position their military and plug those gaps now with their last generation of young people then they can kind of die on their own terms 50 years from now have they really thought about this in that term like yeah this this one way or another this is the end of Russia the question is whether it dies in the long term on their terms or in the shorter term when they're completely unmoored because if they fail to secure those borders then they've got a 2 000 mile open border with countries they consider to be hostile and they have no way of moving troops around in a way that would allow them to defend it they'd just be waiting for somebody to come over and knock at them over and you you believe that they're aware of this that they they can't survive past 2050 2070 whatever it is I think that's what's been driving them because 2022 was the last year where they had a sufficient number of people in their 20s to even attempt this so from my point of view not only did the war always have to happen it always had to happen by now Jesus now is this just because of the nature of a dictatorship that's run by someone like Putin that it's just completely mismanaged because he's just dominated the power structure and made sure that everybody Falls in line with his ideology and his Reign like what what caused all this to be so poorly managed well Russia has always been poorly managed an authoritarian but under Putin it's taken a much darker turn because of the nature of the end of the Cold War if you remember back to 1982 there was a coup in the Soviet Union and Cherno mirden and drop off and Gorbachev were FSB well then KGB agents who basically overthrew the old system of Brezhnev and took over and tried because they were the only ones who really had a full understanding of what was going on they controlled the information they were not able to save the system and so it broke and Putin is the successor to that Legacy because he was also in the KGB and we're now in an environment that between the terminal demographic structure of the Soviet slash Russian system
and Putin's personal paranoia so he's gone through and purged what was left of the KGB FSB of anyone who has personal Ambitions to succeed him we're left with an entire political Elite of only about 130 people and Putin has removed anyone who has leadership Ambitions oh Jesus now they all see the world the same way they all kind of agree with Putin on what's at stake here uh but it does mean that when this generation is gone this is it this is all the leadership talent that the country has so because of his sort of top-down approach he's eliminated all the possibility of Future Leaders even if Russia did have a replacement generation coming up and it doesn't he's taken steps to make sure that they can't challenge him and so any sort of leadership Talent has left or been killed what did they hope happens and what how I mean when when everything's going so poorly like what do we know about how they're assessing things well they're obviously not thrilled with the way the things are uh they're using one bit of propaganda after another to justify it saying you know we're fighting all of NATO or like you know demons are involved that was my personal demons oh yeah you know when it came to the Kirsten offensive and it became clear that there was more going on than just NATO weapons the ukrainians actually knew what they were doing uh they changed the the line from that these are all Nazis to these are actually gay demons gay gay demons yes what yeah Russian propaganda is a hoot please explain the gay demons oh I don't know if I can explain it I'm just saying that this is the official line right now that we have homosexual demons fighting Us in Ukraine but why why gay demons like uh well is there a mythology to that not really uh the guy who's in charge of the Orthodox Church is a Putin crony uh kiril is his name um he's kind of like the Eastern Orthodox Pope if you will and he has been a partner with organized crime and with Putin since the beginning and so he is coming up with ever more creative approaches to the propaganda and so this is a way of how can I say this without pissing off half of the people listening
imagine Trump using his influence with Evangelical Evangelical Christians to come up with a theological reason why something didn't go his way it's kind of the equivalent of that and some gay demons is what he came up with gay demon yes and they ran with it so that's on state propaganda now really yeah it's wow and what's the epicenter of the gay demons oh Kiev obviously yeah so we've got a Jewish Nazi gay demon foreign wow yeah and Truth is always weirder Than Fiction and the scary rumor is that Putin has cancer and that or Parkinson's is one I've heard as well oh really yeah I don't know what it is he's clearly on steroids but you know that could mean a whole lot of things like prednisone or something along those lines indeed you say that because of his appearance yeah he looks very not just flushed but puffy yeah and that's that's kind of a classic too many steroids in your system issue and this puffiness is this this these steroids or to battle this cancer somehow in theory uh you know steroids keep you going in a time when you should probably be laying down is really the kind of the bottom line uh whether he's medicated over medicated or medicated because of medical Zone reasons we really don't know he's not in great health that is obvious and for someone who has been the uh the shirtless horseback rider and the propaganda videos that's a real problem he's visibly wearing uh bulletproof or bullet resistant vests even around his own propaganda people there was this great piece that came out that I saw last week where it was all the propaganda shots that he's taken with like with the soldiers mothers and on the front and with the tech people and in the intelligence and it was like the same 12 people were in every single shot just in different outfits and even with those people he's wearing his ballistic vest now when you say when you talk about his appearance that he's clearly unhealthy is is there uh can you demonstrate that are there images that show him a couple years ago versus now where he could see his appearance yeah it's not much of a reach like I said he he likes to pose shirtless on Horseback to show how virile he is he didn't look good on Charlotte yeah I know you got to look at
it from the Russian point of view I mean the standards are a little different are they oh yeah uh and he's got the shakes that's one of the reasons why the Parkinson Parkinson's uh analysis I guess has come out I've never seen any of this yeah it's so there's video of him shaking see if you can find any of that Jamie see if you find a comparison yeah I got an article on like a timeline of his health okay go yeah and he said three minute video he used to be a fairly animated speaker boy he does look puffy yeah now whether or not he's actually sick or not I have no idea um could it just be that he's just drinking a lot technically he says he's a tea toddler which really which is pretty rare in Russian Society but you know he's still alive and a lot a lot of Russians make it to his age how old is he now mid-60s and so it's just an appearance thing we don't have any like real hard no we do well the folks in the intelligence world who are listening to his phone calls and reading his email might but that has not made been made public to my knowledge from the American side so Ukrainian Military Intelligence Chief claims Putin is very sick and a coup is underway yeah has been saying that there's a coup underway since March so I he's kind of the Ukrainian propaganda guy I wouldn't put too much what would even happen there well it's like a coup did take place Putin is so thoroughly purged that what's left of the intelligence there's only 130 of them and there's probably only one of them who would have the guts to throw a coup that's um the rosnift CEO rosneft as their oil Monopoly Igor section is his name he used to be a gun Runner during the Soviet period he's got the guts to pull it off but if there's anything that the other 129 agrees that section's an [ __ ] and he should be shot on site if he kills Putin oh Jesus so there's no there's no like immediate Pretender to the throne here what a [ __ ] up situation well for the Europeans who have been dealing with the Russians for three centuries this is kind of par for the course it's just a modern version of it yeah yeah the Soviet period was kind of a relief because we actually had an institution that pushed their weird
religion to the side and actually worked on technocracy and technology and from the European point of view that was a huge Improvement and the belief in the post-soviet period was that they would start from that and move forward and modernize and maybe even democratize and people believed that for far too long even when it was clear that Russia was degenerating rather than advancing itself now the title of your book is the end of the world is just the beginning that's the one why that we are dealing with the end of the world that we know Russia is a more of a symptom of this than a cause so to go back a little bit in the world before World War II if you had coal oil food and iron ore you could industrialize and try to make something of yourself but if you failed to have one of those you were probably a colony at the end of the war the Americans abolished the imperial system and patrolled the global oceans for everyone and as a result now you only needed one of those four and you could trade for the others and so for the first time in human history we were all on the same path you know from different starting points and going to different speeds but we were all industrializing and we were all urbanizing problem well let's start with the opportunity when you urbanize you move from the farm and into town to take an industrial job when you live on the farm you have a lot of kids because they're free labor you move into the city you have a lot fewer kids because kids are no longer free they're really expensive and noisy and annoying and dirty pieces of furniture and you have fewer of of them and so your population starts to shift it used to be that you have loads of children a few young adults fewer retirees it's kind of a pyramid but as you urbanize your pyramid opens up into a column because you have fewer kids but everyone's living longer and as long as your population is a column economic growth is spectacular because you don't have to spend a lot of money on your kids you're not old enough that you have a lot of retirees but you got a lot of people in their 20s and 30s to build things and buy things and then a lot of people in their 40s and 50s to do the
investing and the rich world was a population column from 1945 to 1992. and with the end of the Cold War the developing world became a column in 1992 until now the problem is that this is all temporary because birth rate keeps dropping people keep living older and your column eventually inverts into an open pyramid upside down and now you no longer have children you no longer have a replacement generation at all and there aren't enough people in their 20s and 30s to buy everything and there aren't enough people in their 40s and 50s to pay for the retirees so this decade was always going to be the decade that most of the advanced world moves into Mass retirement and the economic model collapses and next decade was always going to be the decade that that happened to the developing world and we found out recently that the Chinese have jumped the ship and this is their last decade too so all of the globalized connections and consumptions that create the world we know we are at the end of it and we have to go back to a world where trade is more focused on the countries that have a better demographic and security infrastructure because the Americans are no longer patrolling the global oceans anymore so we're losing the security ramifications of an open system at the same time we're losing the demographic capacity to support it in the first place and that's all going down right now so when you're saying that China has 10 years to go at most what do you mean by that well we now know that they've lied about their population statistics and they're they over counted their population by over 100 million people all of whom would have been born since the one child policy was adopted so this is one of those places where they've got more people in their 60s and their 50s and their 40s and their 30s and their 20s what was the logic behind the one child was it that they were overpopulating Mao was concerned that as the country was modernizing the birth rate wasn't dropping fast enough and that the Young Generation was literally going to eat the country alive so they went through a Breakneck urbanization program which destroyed the birth rate at the same time they penalized anyone
who wanted to have kids and both of those at the same time have generated the demographic collapse we're in now and the problem with that also was that they wanted male children yeah there's a cultural aspect to that too and obviously men can't have kids on their own and what is the like ratio to men to women in the younger people in China now uh before the data revision with the last set of Lies it was about one to 1.2 it was the most distorted in the world even more than Sri Lanka where there had been a civil war for 30 years uh since then we don't have good sex by sex data but it's undoubtedly worse and so what are the other problems that they're encountering that leads you to believe that they only have 10 years left well without young people we've seen their labor costs increase by a factor of 14 since the year 2000 so Mexican labor is now one-third the cost of Chinese labor their educational system focuses on memorization over skills so despite a trillion dollars of investment in a bottomless supply of intellectual property theft they really haven't Advanced technologically in the last 15 years Mexican labor is probably about twice as skilled as Chinese labor now even though it's one-third the cost they've Consolidated into an ethnic based paranoid nationalistic cult of personality and it's very difficult for the XI Administration to even run it because it's not an Administration anymore no one wants to bring G information on anything so like Putin lied to his face for example the last last February about the wars you know why would I invade Ukraine and you can see in some of the the presses the the defense guys in the back of the room like I didn't want to say anything because she has a history of shooting people he doesn't like uh and so they the Chinese were the only country that where it's caught with their pants down when this all went down uh the Biden Administration is basically taking the trade policy of Donald Trump and running it through grammar checker and putting it into institutions so we now have Tech barricades that prevent the Chinese from buying the equipment the tools or the software that's
necessary to make semiconductors in fact he went so far as to say any Americans working in the sector have to either quit or give up their American citizenship every single one of them either quit or was transferred abroad within 24 hours so the tech system is stalled they don't have the young people to go consumption-led they're completely dependent on the U.S Navy to access International Trade they are the most vulnerable country in the world right now and based on how things go with Russia we're looking at a significant amount of raw materials falling off the map specifically food and energy and the Chinese are the world's largest importer of both of those things so there's no version of this where China comes through looking good and the challenge for the rest of us is to figure out how do we in as smooth and quick as a process as possible figure out how we can get along without them because they are going away and they're going away this decade for certain well if you say they're going away clearly they're not just going to lay down no they're going to try to adjust yeah they'll die but but how so do you think this is because like what is other than well here he would be a big problem right Taiwan like if if we impose the kind of sanctions that we've imposed on Russia if if China decides to invade Taiwan and the world stands up and the world imposes sanctions on China how does that go uh very ugly for the Chinese so you know say what you will about the Russian economy it's corrupt it's inefficient it's not very high value ad but it's a massive producer and exporter of food and energy you put the sanctions that are on the Russians on Beijing and you get a de-industrialization collapse and a famine that kills 500 million people in under a year and the Chinese know this they can only push so hard also you know you can make the argument that if the Russians succeed they actually solve or at least address some of their problems even if the Chinese were able to capture Taiwan without firing a shot it doesn't solve anything for them there's still food importers they're still dependent on the United States there's still
energy importers and even if they take every single one of those semiconductor Fab facilities intact they don't know how to operate them because they can't operate their own and their own are among the worst in the world not the best the only reason in my opinion to be concerned about a Taiwan War is because she is so isolated himself that when one person is making all the decisions and that one person refuses to access information to make the decisions strange stuff happens and when you say refuses to access what do you mean by that he does not have normal information flows anymore like even at the height of the Trump Administration when Trump was basically isolated himself from the entire intelligence Community uh he was still getting the daily briefing there was still information being put in front of him but she is so isolated himself he doesn't want to hear anything except for what he wants to hear and since no one knows what the status of the conversation with the voices in his head in on any given day no one wants to bring him anything unless they're ordered to how do we know this about him because there's no one to listen to anymore that's one of the fun things about Russia versus China right now is that the Russian information security is so poor that American intelligence is literally listening on everything but in China we can hear into the office but there are no conversations happening what do you mean by that what do you mean like so no one talks to him about anything anything if you look at he's just terrifying to people yeah exactly because he murders dissidents he murders anybody that he doesn't murder everyone but there's a lot of people in prison and there was also a lot of billionaires that got disappeared yeah and any dissent yeah uh it's you're either executed or exiled intimidated into silence there's there's a variety of options and if you look at the the third party Congress that we had late last year that's when they select the polar Bureau everyone on the Polar Bureau now is a personal flunky there is no one from a different faction there is no one that has a history of being incompetent whoo and what is their plan the Chinese yeah do we have any idea of what their plan to get out of this is nationalism
uh if you know that the economic situation is going to go to pot then you have a couple of options option one is you try to cut a deal with a country that can help you out but the only country that could do that is the United States and the start of strategic surrender that the Americans would require is not something that the Chinese would accept so think about Germany in 1946 that's the scale of support and control that the Americans would con would insist upon for giving the Chinese a lease on life uh but if you go with nationalism give people a non-economic reason to support the state so even if you lose your job even if you can't feed your family I'm Chinese I'm Han that's enough that has been the strategy for the last couple of years will it be enough to preserve the CCP too soon to know and they're also in they're in the middle of the worst aspect of the pandemic for them ever yeah now which is very strange for us because we're on the other end of it right so what happened over there well let me start by saying I think it's safe to say that no country has really figured out how to handle this well right uh second I will say there are seven different variants circulated in Beijing right now or in China right now three of them did not exist two or three months ago and it takes about six months of data for you to get good information on the r naught and The lethality so we just don't know and then third in part because of G when you're a one-man state all policy and all authority starts and stops with you and unless you're providing very clear guidance on everything which is impossible for one person to do for a whole country especially when the size of China the bureaucracy either goes into automatic or does nothing well right now it's doing nothing so the data decisions in China are not to gather data and figure out what we can do it's to instead of gathering data and lying about it we're just not going to gather any data at all so we're not going to know how bad these strains are until they get out of China and circulate in the rest of the world for six months so the lowest fatality estimate that I have
seen that I consider credible is that they're going to lose a million and a half people just from covet just from covet that assumes no broader breakdown in the health system which we are already seeing and is this because they don't have natural immunity because it's part of it the rigid lockdowns they encountered yeah you know from from a plus point of view they did keep the virus out of the population for almost three years so no one has natural immunity but we also know that they're domestically generated vaccines aren't great and most of the countries that used them in order to get their kind of first batch then moved on to a western model that worked better so they had a two-fold problem they did not have vaccines and they didn't develop natural immunity and now everyone's getting hit all at once with a virus that has at least 50 percent more communicability than the measles and their overall health is worse than ours diabetes as a percentage of the population is higher they don't have a critical care system like we have and their hospitals are really their only line of defense they don't have a clinic and a doctor system in the towns like we do and what about nutrition education and the understanding of yeah when you industrialize very very quickly especially in a culture like China where food is considered a sign of wealth getting fat is the thing to do so we've got a lot of diabetes a lot of hypertension a lot of overweight people and over two-thirds of the population lives in the Metro region and their air quality sucks too so we're kind of seeing like the worst aspects of the Indian system in the American system all in one foreign so obviously the United States government is aware of all these things correct well let's not oversell it but broadly broadly have you been brought in to talk to people because you have a very comprehensive view of this that includes energy and nitrogen fertilizers everything like if has anybody ever brought you in said Can Peter can you give us an assessment of what what we're really dealing with versus what like each individual expert has to contribute to it because you're giving an overall an overall sort of
comprehensive view of this I'm happy to say that I am doing some work with the defense department I can't talk about the details obviously but um I think it's I think it's good to give credit where it's due uh one of the many many things about the war on terror that reshaped the US government is that we focus all of our intelligence apparatus on supporting the troops which is reasonable so instead of thinking you know it's 2045 and you're thinking Over the Horizon who's our foe going to be and what kind of tank are they going to use so that we can start preparing which is what we used to do it instead became there's someone in on the other side of this door and the third floor of this building at the edge of town in Fallujah what side of the door are the hinges are because we need to know if we need to blow it off the hinges or kick it in so we focused all on that second thing for 20 years which meant not only did we lose all the analysts who knew how to think forward we lost all the people who trained them 20 years is a long time so even if everyone in DOD or the intelligence Community disagrees with everything I have to say and I have some friends I have some colleagues I have some non-friends who listen the fact that they're trying to rebuild that capacity is a really good sign and the fact that they started rebuilding that capacity so soon after the war on terror ended means that they recognized the hole in the system so if you play out China's collapse how do you anticipate that that goes who do you think what do you think first of all what do you think is like the first piece to drop well Chinese history is Rich with examples of how it all falls apart in a short period of time um if I were a betting man I think that the the two most vulnerable parts of the International System right now are energy transport and food production about 80 percent of the calories that humans produce are produced with at least one imported input whether it's you know pesticide fertilizer fuel tractors whatever and
with the Chinese it's more like ninety percent ninety percent is imported yeah well no no not another food is imported the inputs the input strain and 90 of the calories they produce are dependent upon a foreign support system in the United States it's less than 10. we produce most of what we need locally and most of the rest comes from Canada but you interrupt the food supply chain in any meaningful way and China is only one of a host of countries that has some very real problems now China faces the biggest one in absolute terms because of the size of their population but with the Russians having their problems the Russian space is the world's largest single supplier fertilizer of all types so we are already knee-deep in a fertilizer crisis globally and we're seeing industrial accidents in the Russian space that are so big you can see them from orbit because you know a lot of petroleum stuff explodes if it doesn't go right and the Russian facility has been held together with duct tape and Western Tech for a while now that's all gone now so China being kind of the last man in line to get a lot of the stuff is in a very vulnerable position we're probably going to see about a million barrels a day of Russian crude fall off line within the next few weeks as part of the price cap that the Europeans have put into place but more important all the insurance firms have said they're not going to deal with Russia anymore so you're not supposed to sail at all with your ship if you don't have an insurance policy so countries like China and India are stepping in and offering Sovereign indemnifications but that's something they've never done before and so if there's ever a case where a ship for whatever reason needs to file a claim it's going to immediately go to International arbitration because they have no method for the payout as soon as that happens no one's going to take an Indian insurance policy again that's another million to two million barrels a day that goes offline and then all the crude that the Chinese get from Eastern siberias from fields that the Russians never developed themselves that was all BP BP's gone so we don't know how long the Russians can keep it operating but we know it's
going to go to zero we just don't know how long it's going to take and the Chinese are the last in line for all of this stuff and if you have a food or an energy crisis or God forbid both at the same time on top of a Health crisis on top of government incompetence there is no way a central government holds together in that sort of environment now like I said Chinese history is Rich with ways that can all fall apart oftentimes it's based on having this hyper centralization and an incompetent leader or interpretent leader Cadre maybe is a better way to phrase that but how it usually goes is that the north kind of Falls in on itself it falls into famine it falls into tyranny you get hundreds of millions of people suffering from malnutrition and then ultimately dying um this the coast goes one way the interior kind of breaks off and shatters and then the cities of the coast and the South or Shanghai or Fuji on your Wong Joe your Hong Kong they basically become independent city-states and integrate with foreign powers primarily in order to get food and if you look back at the last 14 centuries for almost that entire period until 1945 the city-states have been dependent upon foreigners to keep themselves alive so we're really just reverting to a historical mean here now one of the things is really disturbing to the West is watching what's happened to Hong Kong sure that Hong Kong has essentially been taken over by the CCP and they've imposed their rule of law on people that had existed in more or less a westernized democracy right like how do they control that the Chinese yeah I mean well Hong Kong would probably be one of those cities that splits off but for that to happen you first have to have the northern section basically fall in on itself as long as there are Security Services these Southern cities can't go their own way but as soon as something happens to those Security Services and they're focused on the Homeland in the north then the southern cities are going to bolt now what does China think about did they have an understanding of this collapse or is it just because of G's power over everyone that none of this
gets discussed so this is a planet this is one of the beautiful things about authoritarianism is they start telling stories and eventually they'll believe them happen in Russia it's happening in China uh Chinese academics as recently as 10 years ago were very very aware of this and it shaped government policy they wanted to make sure that the the Democrats Little D uh in Hong Kong didn't get too uppity they tried to make sure that there were people from the south on the politburo but as we've gotten into a more ossified and centralized decision-making system all of the lessons of the past are going away and it's all about central control and they're once again because this is another Trend that pops up in China over and over again they're forgetting their own history but China has always been thought of as a country at least the narrative has always been they plan long games yeah it's punch crap is it yeah no the Chinese are just as bad as everyone when it comes to ideological blinders and short-term decision making and the more isolated and concentrated the decisions I'm sorry the the tools of power become the more problematic that becomes so what is their plan on getting through what you think is a 10-year timeline for their demise beat the Nationalist drum so that when the food and the energy run out everyone is banding together simply because they're on Chinese that's it that that's as good as it's going to get because there is no trade option out of this without the United States what do you think the world looks like in 10 years I think we'll have a system of regional trade where you've got certain Regional Powers who have actually benefit from the environment so one of the fun things about the United States is that we've got more navigable waterways than everyone else in the world put together about 13 000 miles and it's about one-tenth the cost to move things by water as it is to move it by truck Sue with that sort of environment and ocean moats the United States is an economic power whoever who is in charge I mean we've had Decades of bipartisan effort to try to screw this up and we haven't pulled it off yet we're not
going to do it in the under Biden he doesn't have the energy uh which means that globalization from our point of view from an economic point of view was a problem because we had one of the world's best geographies and we deliberately sublimated that in order to support our allies against the Soviets in the Cold War we basically paid people with globalization to be on our side and it worked but we're getting away from that and now geography is going to have a much bigger role to play and if you layer demographics on top of that if you have a country with a decent geography and a decent demography they can kind of write their own ticket in the world we're going to and there are a few of those the United States is at the top of the list Argentina looks really good France and turkey look great and then Japan is kind of a consolation prize because they've managed to cut a deal with both the American right and the American left and get themselves invited into kind of an American friends and family plan so you get these spheres of influence that don't necessarily cooperate or compete with one another but are kind of in their own little worlds and anything outside of those spheres of influence is probably a territory that is not very economically viable and most of them don't have demographic structures that are sustainable at all this really is the end of the world the end of the world we understand yeah we're going back to something that's a lot more similar to the world as it existed in the early 1900s how does China come through this though they don't so what happens to them if they don't well I mean this is one of the wild things and the hard parts of my job is we have never faced a demographic collapse that wasn't caused by War the closest would be the black plague but the Chinese are going to lose a greater percentage of their population in the next 20 years than Europe did during the black plague and you think by famine this assumes no famine this is just aging just aging yeah if you have an energy breakdown or a food breakdown it happens a lot faster and they have energy issues and they have food issues they are the world's
largest importer of energy about 14 million barrels a day remember we're in that exporter and they are the world's largest food importer of food and food inputs and are we the only major superpower that can generate its own uh natural resources in terms of natural gas Shale Oil we're the only ones who can do it at scale I would argue that Argentina can do a pretty good job of it by Argentine standards so we're fairly safe in that regard yeah I mean we'll always find things to stress about I don't mean to suggest that the next five years are just going to be a picnic we're going to have to double the size of the industrial plant as the Chinese system and the German system both fall offline but that's an opportunity you double the size of the industrial plant obviously that's inflationary but at the other side you're building things at home using local resources and local workers you're using less energy and less water it's cleaner you're selling to locals and your supply chains are simpler and safer and shorter and you're largely become immune to shocks Beyond the Horizon this is a good challenge it won't be easy but to be perfectly blunt we've done it before we can do it again well one of the things that came up during covid was our understanding for really for the first time of the supply chain and what happens when it gets cut off and when medicine so much medicine is produced in China so many uh computer chips so many so many different things are made over there that there's been a real conversation about the need to have all that stuff here and for the United States to be self-sustaining with the inflation I mean I don't want to come across as a partisan here but the inflation reduction act while from a um an inflation point of view is ridiculous there's nothing about that that addresses inflation it did put together a nationalist economic policy that we probably did need in terms of pushing the re-industrialization on some specific sectors uh it'll probably be the first of a series of things that are coming and a lot of this stuff is not particularly complicated so take the the medication issue it's 1950s technology for the most part the medicines that we import from China and India are not the biologics or The Cutting Edge stuff or
the Cancer drugs they're the day-to-day maintenance things that a lot of us use and it is not particularly expensive or time consuming to build out the capacity here it's basic chemistry but there has not been an economic incentive to do it yet so you get one act of Congress and splash a little cash on it and it might cost us eight cents for a pill instead of four cents but you know we can argue whether or not that is worth the price you get into more sophisticated manufacturing and it kind of does this weird split so the United States is a world leader at the very high end whether it's semiconductors or vehicles or Machinery or software but we're also a world leader on the low end if it's input intensive so Energy Products and food products fuel processed foods our problem is in the middle places where it's not the natural Bounty of North America that helps us out and it's not the Ingenuity and the skill of the American Workforce that helps it out the stuff in the middle to be perfectly blunt for that we've got Mexico and they're great at it the American Mexican trade relationship is already the largest in the world and they're going to be our largest trading partner moving forward for at least the next 30 years probably a lot more are there hiccups oh yeah plenty of hiccups well I'm sure you're paying attention to the Cartel Wars that are going on right now yeah it would be it would be so much better if Americans did not like cocaine I would just solve half of this overnight or if cocaine was legal uh the health studies that I have seen suggest that that is not the way forward but you do you really think that it would change the consumption oh it would definitely alter the consumption how I don't know this is not something I'm an expert at but most of the people that I've seen who have done the assessments suggest that any gain in terms of law enforcement and criminal activity would be lost in terms of work days and sickness so from a purely economic point of view at best it looks like it might be a wash so the legalization of cocaine in in your opinion would cause more use and more problems probably but which is different stop all these fentanyl overdose because well this is an issue with the illegalization yeah see that's the
problem we ask people why they're taking what drug to say that if cocaine was immediately available that they'd stop taking fentanyl but they're not taking fentanyl on purpose oh you're talking about deaths it's cut Like Cocaine fentanyl deaths are very high well then you're talking about a regulatory issue and just keep in mind that whenever you move something in from an illegal to a regulatory point of view there is a how should we call this an adjustment process so I live in Colorado now which was the first state to legalize pot and what we discovered was that yes you solve some problems and you bring a lot of money in for the government but it has criminalized a lot of economic activity in Colorado because think about what happened with pot it's still controlled from a financial point of view at the federal level so Banks won't touch it so all the pot dispensaries have a walk-in safe where they keep all the cash yeah so the Federal Reserve is like this is this is a theft issue this is a security issue we can't allow this to happen so what we're going to do is we're going to hire out a bunch of armored cars and trucks and we're going to send these to these pot dispensaries after hours and with armored guards we're going to come in and we're going to take all your cash we're going to spray a lot of Febreze on it we're going to take it back to the Federal Reserve building we're going to count it and give you a digital deposit let me get this right the Federal Reserve of the United States of America is now in the business of money laundering count us in and so now they are laundering their money through the pot industry of Colorado and it's generated to just a different problem this is a gentleman named John Norris and he started out his career as a game warden a guy who like checks fishing licenses and stuff and along the way he discovered that because of the legalization of marijuana in California they decriminalize it to the point where growing it is a misdemeanor and so people are growing it on Federal Land and state land and so these state forests and federal forests in California are filled with cartels they're growing marijuana so he had to
form a Tactical Unit to combat these cartels so they're you know they're they're wearing tactical gear and this guy was a game warden and now they've got you know Belgian Malinois and [ __ ] machine guns and they're going in there and they're fighting off cartels and and he wrote this book called hidden Wars it's [ __ ] crazy there's rarely a silver bullet unfortunately but this is the problem that you have when you have it illegal I mean this is literally what propped up organized crime during the prohibition this is what what funded the mafia they ran booze illegally because it was illegal well so criminals are going to be in charge of things that there's a demand for when there's an enormous economic incentive I think the mafia is a great example for why you shouldn't look for the Silver Bullet because yes that in the 1920s during prohibition was one of the big reasons it got going but the mafia didn't waste any time and diversify him and neither of the cartels so one of the many problems in Mexico today is that the cartels have Diversified they've gotten into cargo theft and kidnapping and avocados and limes and real estate and local government and criminality is always going to exist now the attractiveness of gutting them of some of their primary income should we look at that of course but it's not so simple as removing one and it just all stops because of the limes and avocados and all these other things because I mean these are things that are obviously legal right but the cartels have found a way to take it over and make it their own but isn't that the problem was initially because of illegal drugs so that's where they got their enormous resources well I would say that allowed them to expand into other semi-legal or legal I'd say the problem was lack of rule of law and that goes to Chicago as well and the way we ultimately got past that is after prohibition ended it still took 20 to 30 years to kind of ground down the mob and we welcome them into politics to normalize it so careful what you wish for so do you anticipate that happening with Mexico uh Mexico is to be perfectly honest really early in this process uh
the challenge we're seeing in Mexico right now is that the uh the air quotes good cartel the one that saw drugs as a business is being broken up if you remember that's a good cartel yeah remember El Chapo Sinaloa cartel yeah he thought of himself as a Korean conglomerate president so I was like we we smuggle Drugs That's our business you don't mess with things that mess with the business so you don't trip the old lady you don't steal her purse you don't shoot at the cops these are people who live where we operate we want them to be on our side so maybe even throw a party every once in a while uh you focus on the business we got El Chapo we removed him from circulation the guy who died or got captured yesterday was his son one of the Los tapitos and uh his cartel as a result is fracturing because his leadership's gone the replacement cartel is Jalisco New Generation they're led by a former Mexican military officer who thinks that rather than don't [ __ ] where you sleep so that the people on your side whenever you move into a town you shoot it up you do kick over the old lady you do take her purse you make the people scared of you that's the point of this drug running is a side gig we are here to be powerful and Drug running is just one of the ways we make that happen and he has taken the fight to every cartel and The Mexican government and they're in the process of trying to break into the United States break in in what economically yeah El Chapo and the Sinaloa became the largest drug trafficking organization in America under the Obama Administration and one of the reasons our birth rate went down so far so fast is they basically either co-opted or killed American gangs so they killed the people who were doing the killing not a lot of Americans got killed after that all of the other cartels control the access points in the United States but Jalisco New Generation Now is challenging every single one of them trying to break through and if they do and they bring their business Acumen if you will north of the Border they're going to start killing white chicks named Sheila in Phoenix and then we're gonna have a very different conversation in this country about the drug war and
about trade with Mexico so what what when you say that they've killed The Gangs like in what way because that is an interesting thing that you don't hear a lot about American gangs anymore well that's because they're not there to the same degree so the Sinaloa they co-opted the Hispanic gangs especially the Mexican gangs because there wasn't a language barrier there and they really targeted and gutted a lot of the African-American gangs they took over drug smuggling and distribution from them to deny them income and then they just shot a lot of people and when did this take place that happened during the the 2000s it was pretty much completed by the time we got to 2013. but we weren't really kind of this this narrative didn't really go around this is not something that I've heard before oh yeah look at the murder it's making sense look at the violent crime rates in the United States they've been trending down really significantly since about 2004 and the drop from 2004 to roughly 2 2014 was amazing that's largely Sinaloa so they have silently sort of invaded and taken over the distribution and taken over the gang activity right and this is El Chapo's cartel that is now getting broken up and as soon as you have more players more violence is going to happen especially against one another and that's one of the reasons that the murder rate in Mexico is skyrocketed in the last three years do you know who um Ed Calderon do you know have you ever followed Ed Manifesto on Instagram he's uh he used to work for the government in Mexico and you know to fight off the cartels and now he's made his way to America and he's just does a great job of highlighting all this stuff but one of the things he was showing is they were using 50 caliber rifles to try to shoot down planes yesterday yeah have you seen that I have I mean what the [ __ ] is going on over there I mean it seems like we concentrate so much on these conflicts that are happening all around the world and there's a massive one happening in a place where we could walk to that's the disintegration of the Sinaloa cartel so uh back in 2019 the the Los chapitos I can't remember his name I keep want to
say in Octavia and that's not it because that's a girl's name anyway begins with no uh he was captured in 2019. and they weren't able to get him out of town fast enough so all of his homies basically got together with assault weapons and descended upon the police units that did it and they were forced to let the guy go yeah I remember that this time they were able to get into the airport fast enough and he's already in Mexico City so there was a clash but not nearly to the degree that we had a couple years back look at this here oh yeah one of the things this is a guy shooting at airplanes which is [ __ ] Bonkers I mean what kind of airplanes are those those are probably civilian and why is he doing this we're seeing a change in heart of the administration in Mexico Lopez obrador for the first couple of years of his presidency followed what he called hugs not drugs the idea that if we don't bother the cartels they'll just be nice yeah so that didn't work out and now he's taken a much more direct approach and since most of the security services at the local level have been infiltrated by the cartels he's tapped the military to do it so the military is now taking active steps against the cartels and if you are in a cartel that means you need heavy heavier Weaponry to fight back and that's why the 50 cows and things like them are starting to pop up a lot more and so what is the Mexican strategy in terms of utilizing the military and and dealing with the cartels what do they what are they trying to do uh I would argue that the amlo administration isn't to the point yet that they have a strategy but they realize that the murder rate has reached the point that hugs not drugs is no longer a viable option and so they're trying to militarize the equation equation in the hopes that the Mexican military is more capable than this or that cartel you can kind of break the cartel world into three groups you've got Jalisco New Generation the hyper violent ones you've got the Los chapitos and the associated groups that are what's left of Sinaloa are they're the most capable ones for
smuggling drugs that's where the money is and so that is where amlo seems to be focusing his efforts and then you've got what's left of the Zetas and the golf cartels which is a very Twilight 2000 uh doggy dog world out in eastern Mexico which everyone's just kind of ignoring because it's not strategic it's just violent uh but it appears and I don't want to oversell this because amylose clearly making this up as he goes it appears that they think if they can put a pinch in the income that maybe they can turn Sinaloa into the next Zetas and just break it apart uh I don't think that's a very good plan but it's better than what they've been doing for the last two and a half years and what's worst case scenario with Mexico worst case scenario would be if Jalisco New Generation penetrates north of the border and it changes our political discussion to be very anti-mexico one of the great achievements in my opinion of the Trump Administration is convincing America's Hard right that Mexicans are part of the family and taking one of the biggest looming racial issues in the United States and just dissolving it if Americans start to think of Mexicans as drug Runners again regardless of why that damages our most productive trading relationship and our most brilliant opportunity for our future right out of the gate but what is the worst case scenario in terms of the cartels overwhelming the Mexican military because it does seem they have you're asking all the fun cheery questions well that's why you're here bro I'm here to get freaked out our our advantage with Mexico so far is because they haven't had to fight a war in a long time that the military is not particularly competent but it's still armed and so when you bring it into the system they hit with a punch that compared to the normal local Security Services is really impressive but every time a armed group of the state has been brought into the fight the cartels have found a way to corrupt it and if you do that to the military we could have a very real problem here I think Chicago at the height of Al Capone but on a national scale Jesus Christ we're not there yet but that would be the concern now how much effort is the
United States putting to mitigate this and how I mean how much policy is directed towards trying to steer this in the right direction this is one of those where being a border country is a negative because you know we may be great trading partners and to a degree friends and integrated economically and demographically but we're always going to be titchy about the other one telling us what to do uh Trump and amlo got along great because Trump really never asked anything about he said like as long as you take steps to limit Central American Immigration into the United States I want to be hands off on everything else and so relations were pretty warm Biden comes in and takes a much more traditional American approach so it's about immigrations it's about drugs it's about rule of law it's about investment and amlo is like a really really angry Trump and he sees this all as unnecessary challenges to him personally so the relationship between Trump and I'm sorry between Biden and amlo is really poor uh and in that sort of environment it's been very very difficult for anyone in the U.S bureaucracy to have a productive relationship with anyone South of the Border so most drug extraditions of stop most law enforcement cooperation is stopped most intelligence sharing has stopped so we're just leaving that and watching it well because the Mexicans shut the door on us yeah well amlo specifically I don't want to put credit for that anyone or but on him what's the best case scenario well there's term limits in Mexico amlo will be gone in a year and a half so we will get a new person now who will that person be way too soon to know but you can only serve for five years as president of Mexico that's it yeah so they've got a very very bad one right now we'll see who's next oh Jesus and that's right there yep so the whole world's [ __ ] yeah it's a bit of an overstatement but we've got some challenges but this is it's making me more optimistic about America yeah I mean our economic system is broadly positive we've got a great partner for the most
part uh energy there's a great partner Mexico's our largest trading partner and they have what we need so I mean this is this is a relationship of Partners that's facing challenges I think we'll get through this remember that one in every six Americans now has uh genetic links into Mexico so this is this is a family argument this is a good argument Believe It or Not uh we're never gonna have a food crisis or the world's largest food exporter we're never gonna have an energy crisis we're the world's largest energy producer and we're Bit by Bit by Bit bringing in countries to our kind of a friends and family plan so Japan is already on board hopefully the Brits will be there before long how do you sleep at night easily but do you really with all this information I would I would imagine that this would keep me up uh I imagine it'll keep me up tonight yeah just thinking about if you focus on the negative you're never gonna sleep um how do you uh you medicated how do you oh well I get migraines there's no doubt there um but I focus on the fact that we've got the greatest opportunity for economic expansion in the history of our country and it's not just us it's Canada and it's Mexico as well this is going to be a great story we're going to emerge from this in 10 years in so much of a better place and we're hopefully within 10 years I'll probably be more like 15 or 20. be able then go back and reintegrate with the world and you know share what we've learned and remake The Human Condition this is a once not in a generation this is a once in a century opportunity to overhaul what Being Human means and I'm really excited about where this leads us I just wish we could bring more countries with us along now is there any possibility of regime change in China that would facilitate this in a more peaceful way I mean when you've got a one-man government you're talking to public a popular Uprising with leaders that don't exist to displace an old paranoid guy who has all the guns that's a tall order I don't think so and how how strong is his control over there I mean how much dissent is there against G there's definitely a lot of unhappiness with the system but because she is systematically removed everyone with an
opinion or competence if she were to die tomorrow I don't think there is a replacement system in the wings it's basically a system of cronies so if you look back to what happened after Mao died you had the gang of four and you had a period of just absolute chaos until ding Jia ping took over but ding Xiaoping was part of the system G is far more paranoid and far more isolated and far more Consolidated than Mao ever was oh Jesus so I mean how old is she now he's also late 60s I believe yeah most of the people in the new polar viewer technically aren't supposed to serve because they're too old he waved that rule what is their their requirement before that but I want to I'm not positive I want to say it was 66. and so he is at the he's right at that age I believe and there's no threat to his Reign none well none within the system and as long as he stays alive he will maintain power right and he'll be constantly surrounded by cronies and he has insulated himself from any criticism or any bad news yeah we've been going this way for a while so when ding took over he realized that one man government was awful so he worked out a series of secession and 10-year increments that different parts of the country different factions would have time in government and Rule and then when they were not the ones who were making the big decisions they'd still be in the polar Bureau so we got our third generation and our fourth generation in the form of um Zhang zimin and hujin Tao but ding realized when he'd set the system up around 1980 that he wasn't going to be there forever and he wasn't going to be able to predict what was going to happen in the 2000s so he told These two factions you then have to pick a compromise candidate for who comes next and they went with XI because he's from the South but his family is with the maoists and he had a foot in all camps well she spent his first five years purging the system of all the other factions and then the second five years of his Reign and making sure that everyone realized it was him and him only who was in charge after 10 years of that there's no one left and so there is no secession plan post she there is no one waiting in the wings and the old factions that they
once existed have basically been sledgehammered this is such a wild perspective on world economics and international relations welcome to my world but do you feel isolated in that you're the guy who's like explaining it this way I am adopted that's not new what what led you down this road to sort of developing this comprehensive view of the future of the world uh well I'm adopted so I really have always been on the outside looking in that is definitely a part of my world view but my background is in Economic Development so you know figuring out what works where and why and once you kind of get the ideology out of it you can look for patterns and that took me to Stratford and that took me to geography and so just kind of combining the data patterns with the American strategy for World War II and Beyond with the demographic developments that have happened because of that strategy it leads you some pretty unavoidable conclusions and then it's merely an issue of filling in the blanks and most of my career now has been filling in the blanks for the last 10 years do you have dissenters like how much pushback do you oh you got these ideas oh yeah I won't think you're full of [ __ ] those all kinds of people think I'm full of [ __ ] I am very sector and goal agnostic in my work which means I don't really care what your investment strategy is if it doesn't play against demography and geography in a comprehensive way at best you're hoping that everyone just kind of sways in your general direction and so there's no shortage of people in a room when I'm speaking who get really upset because they have an investment thesis or maybe they've bet their company on something that I just see as a non-issue so you know obviously the folks in the crypto World um have never liked me and I dropped a video last night about how EVS are just a disaster that aren't going to be with us very much very much longer and I got some I've gotten some interesting Communications because of that one so things like this happen with me with almost every presentation and last year I gave 179 presentations what is your perspective on EVS uh they're not nearly
as good on carbon as people think most of the data that exists doesn't take into the fact that most of this stuff is processed in China where it's all coal driven and it doesn't take into effect affect the uh I'm sorry it does not take into account the fact that most grids that they run out are also majority fossil fuels and that extends the break-even time for carbon from one year to either five or ten based on what model you're talking in cyber trucks far worse than EVS but the bigger problems we're just not going to be able to make them much longer if we really do want to Electrify everything that doesn't just mean EVS that means the entire system that feeds into the EVS we need twice as much copper and four times as much chromium and four times as much nickel and 10 times as much lithium and so on we have never ever in any decade in human history doubled the amount of a Mainline material per production in 10 years ever and we need all of this by 2030. no it's just not technically possible so how does the government say of California justify these mandates when they're saying something like by 2035 all combustion vehicles must stop being sold in the state of California let's put the ideology to the side because I'm not going to try to explain that I will give a little bit of defense for California though because I do consider myself a green I just think of myself as a green who can do math so I don't get invited to any of the parties um California's state legislature gives a lot of authority to their state bureaucracy so the bureaucracy will set the goal post no ice by 2035. knowing that the technology doesn't exist knowing that the supply chains don't exist but they will set the goal posts if we get closer to that date say 2027 and it's apparent that the technology is not proceeding at a pace that will allow that Target to be reached they have the authority all ready to move the goal posts and they do this on clean air issues they do this on toxicity they've done it on nuclear power they will undoubtedly will end up doing it on EVS so do you think it's one of those things where there's a bunch of green people who don't do the math oh yeah and it just sounds great it falls in line with the progressive ideology we
need to you know carbon neutral we can do this everyone go Electric yeah and there's going to be well there is a fascinating discussion happening in the environmental Community right now because they're being confronted with reality so California and Germany have very similar Green Tech policies but the Germans have spent three times as much as California but are only getting about a fifth as much power because I don't know if you've ever been to Germany but the sun doesn't shine in Germany and now with the Russians on the war path and their clean-ish energy from natural gas going away they're going back to lignite coal in force it was already their number one source of power Germany the idea that Germany's green is ridiculous because they rely on really really dirty coal now especially so but there's now a conversation going on between the German environmentalists and the Californian environmentalists about why California in relative terms of doing so well at this while Germany is not and the answer is simple geography but that's never been part of the conversation in the environmental Community before now it is they should have had this conversation 15 20 years ago but they're having it now and as soon as they come to the conclusion unwillingly but they'll get there that we have to choose where we put our copper and our lithium and our nickel EVS are not going to make the cut at all where will the copper and the nickel and where where will all that go it'll be focused on the green text that actually work in the geographic areas where it can be applied so you put solar panels outside of Tucson you put wind turbines outside of Tulsa that works with the technology we have now you do not put solar panels in Connecticut that's stupid that actually increases your carbon footprint because there's no sun there's not enough sun to generate enough electricity to pay down the carbon debt that it took to build the stuff in the first place there's an ideology in this country that is we must act against climate change or we will die and there's a lot of people that haven't done the research and haven't really looked into this and really don't know what the numbers are and they repeat that over and over again like it's a
mantra it's become a new religion yeah uh like I said I'm a green so I broadly believe in the science when you say you're a green what do you mean by that well I believe that climate change is real and I believe it's caused by human action I believe there are things some of it right uh the bulk of it the bulk oh yeah the bulk of climate change you think is caused by humans yeah I know I mean the the science of it was settled in the 1890s that's not particularly crazy different gases have different albedos and absorption rates uh now to think that we can predict on a local level what that looks like we don't have the math for that we don't have the case studies for that we do have weather data going back 130 years which shows some pretty clear Trends we've heated up by about 1.1 degrees Celsius over that time frame but that has different impacts based on where you are if you're in the Upper Midwest it's extended growing seasons and gotten rid of some Frost so pretty soon we're going to be double cropping but if you're in a drier climate like say Phoenix or Australia it's led to wildfires and a breakdown of the agricultural system so climate change is change it's not a disaster depends on where you are so why do you think this ideology has been so pervasive this ideology that is a disaster we're all going to die well now we're getting into cultural debates yeah yeah so one of the many many many uh aspects of modernization is that people become more connected but live in smaller units because as you urbanize you have fewer kids and that means that people are looking for other ways to belong because the old traditional methods of you know family and farm aren't as tight as they used to be and so this is much more further advanced in places like Japan or Europe than it is in the United States but it's happening here too and when you're looking for social opportunities politics are a way that can reach across the geographic distances no matter where you happen to be and you can use social media and Tech to communicate with people who have a belief system that you find attractive for whatever reason and so the same thing that makes the environmental Community more potent if less informed
is exactly the same thing that brought Donald Trump to power because you got people who felt like they were on the outside of a society who all of a sudden could link into one another it's a technology conversation from my point of view hmm so do you drive an electric vehicle or no I live at 7 500 feet in Colorado that would be suicide why is it bad up there at 7 500 feet uh they don't deal well with inclement weather cold right yeah they're fun to drive though it's like no for people who enjoy it for the Driving Experience go for it just don't pretend that you're being an environmentalist what do you think have you paid attention to Porsche's um what they're trying to do now with uh hydrogen they're trying to build a new type of carbon neutral feel I I don't want to condemn any technology that has not been through its development process but what I have seen from hydrogen at the moment suggests that it is far dirtier than gasoline and in what way you have to get the hydrogen from somewhere and right now we pluck it from natural gas so you've got a carbon input there then you have to build out a transmission system for it and the hydrogen molecules aren't tiny they're the smallest molecules that we have and the seals have to be perfect otherwise you're just hemorrhaging the stuff so you're generating something from fossil fuels and they're hemorrhaging it all along the way and I gotta say if they don't do it right in a car accident where hydrogen is involved is really exciting oh Jesus you got a Hindenburg type situation yeah yeah I'm not no I'm not saying they can't make it work I'm saying they haven't is that what Porsche is using is it what do they have some sort of experimental fuel that there it might be a cell in production I'm I don't know but I I know that they're I mean obviously they've created uh electric vehicles because they call it e-fuel act like gasoline it could provide gas alternative amid EV push Porsche said Tuesday that a pilot plant in Chile started production of an alternative fuel as it aims to produce millions of gallons by mid decade officials say e-fuels act like gasoline
allowing vehicle owners a more environmentally friendly way to drive Porsche officials celebrated the beginning of the e-fuel production with the filling of a Porsche 911 with the first synthetic fuel produced at the site I am unfamiliar with the chemistry for this one portion several Partners have started production of a climate neutral do you believe that not really e fuel aimed at replacing gasoline in vehicles with traditional internal combustion engines the German automaker owned by Volkswagen said Tuesday that a pilot plant Chile started commercial production of the alternative fuel by mid-decade Porsche is planning on to produce millions of gallons where he said that yeah so yeah there are some versions of this technology where they're hoping they can get here it is yeah so e-fuels are a type of synthetic methanol produced by a complex process using water hydrogen and carbon dioxide companies say they enable the nearly CO2 neutral operation of a gas powered engine Vehicles would still need to use oil to lubricate the engine and the pilot phase Porsche expects to produce around 130 000 liters of e-fuel plans are to expand that to almost 55 million liters by mid decade around 550 million liters roughly two years later the Chilean plant was initially announced with Porsche in late 2020 when the automarker said automaker said it would invest 24 million dollars in the development of the plant and the e-fuels partners include Chilean operation operating company highly Innovative fuels renewable energies let me slap some science on that real quick the three base materials water water carbon dioxide carbon dioxide and oxygen are three of the most stable molecules in the natural world and so to break them apart with electricity to make something else is a massive power suck if you're going to do that with a conventional fuel system like we have in pretty much every part of the world you're talking about a carbon footprint that there's at least triple what we do with gasoline right now the idea would be that if we can do it with Green Tech solar and Chile for example that maybe we can make that footprint carbon free or at least
carbon neutral and then use the electricity to generate this stuff in a relatively Green Way that's a lot solar power and all of that to get in their best case scenario 550 million gallons we use almost 10 million barrels of liquid fuels in just the United States every day so you need to expand that by a factor of a couple hundred what about nuclear I am broadly pro-nuclear the problem is time frame like if there were if there were no regulations at all it takes seven years to build one of those suckers we don't have that kind of time honestly and if we start right now we won't see first output this decade there are small modular reactors that look really promising you can basically put them on the back of a semi-flatbed but they don't exist yet and once we build one of those then it's probably a 10-year process to build out the manufacturing supply chain to produce them in volume but wouldn't it be wise to start moving in that direction now if you're broadly pro-nuclear the the issue is until we solve the fuel um containment issue on the back end once it's spent so the chemistry of taking a spent nuclear rod and refurbishing it for a new reactor It's relatively inexpensive it's relatively easy it's but it has a side effect of producing weapons grade plutonium so to do this at scale we have to prove it we have to produce a civilian plutonium weapons civilian weapons quality plutonium disposal and management system we haven't figured out how to do that what do they do with it now they don't process it they just leave it in the spent fuel rods and they put it into a pond until the end of time oh boy yeah and no silver bullets so it's is it just that they don't know how to do it or do they have theories on how to do it you have to basically take this the rod you go through a chelating dissolving chemistry process and you separate out the various isotopes of uranium from the plutonium but then what do you do with the plutonium because you have now purified it because of this process
what do they do they just put in a pond well that's what I'm saying yeah they don't even separate it I was reading about some technology where they think they could take nuclear waste and convert it into batteries I have not heard that one see if you can find that there was a process of uh processing nuclear waste and converting it into a renewable resource it's a nice thought great thought yeah if the aliens could come down and give us some new tech but as of what we have right now you're not aware of anything that could do that no no I mean don't get me wrong I think solar and wind especially wind are great in the places where they work here it says radioactive waste can be recycled to create Diamond batteries scientists involved in American startup for the development of Nano Diamond batteries are trying to turn radioactive waste into batteries NDB is a Perpetual green self-charging battery made from recycled nuclear waste Isotopes combined with layers of Nano diamonds in a battery cell extremely good thermal conductivity of micro diamonds causes heat removal from radioactive isotopes so the process of generating electricity is fast NDB generates electricity similar to that obtained from solar panels but uses radioactive decay energy instead of sunlight an NDB battery usually consists of three main components an isotope a converter and a storage unit due to the delay Decay rather isotope radiation is transformed into electrical energy in the inverter the storage unit accumulates energy for future use we're problem solved bro yeah just keep in mind that this is radioactive decay and that's what turns you into goo so you're not going to put this in your watch you're not going to have it in your car you're going to have it at a fixed secured location now will that be like a power plant Maybe but wow I hope nothing goes wrong so these radioactive diamonds that's a diamond layer over the waist and then the waist is decaying and then they conduct the heat somehow ins so the the Decay is inside the diamond as long as the diamond doesn't get broken I'm guessing that the diamond is there to absorb things like beta and gamma
radiation hmm But this you believe also very dangerous well it's it would require some very serious security issues but at least from a chemical point of view it sounds theoretically possible the patented NDB universal self-charging battery provides a charge of up to 28 000 years of battery life yeah I'm more worried about your phones yeah the life um the half-life of most of this stuff is in the thousands of years so yeah I guess technically that's true Nano Diamond batteries will be able to charge devices and Machines of any size from aircrafts and Rockets to electric vehicles hearing aids smartphones sensors and more I'm gonna go with a hard no on that one really why you're going to put something that is powered by radioactive decay in your ear but but is this an oversimplification I mean if you were really well versed in this technology do you think there's always a chance that if you prevent me with the facts I'm going to change my mind but radioactive decay is not something you [ __ ] with you're certainly not going to have it on your person so you think this is all just pipe dreams I think in that interpretation it's a pipe dream because you think about what would happen if this is real and you can get a sizable one of these like for a car all it takes is a pickaxe and all of a sudden somebody has a dirty bomb Jesus yeah having it in a secured location where it provides energy to a grid maybe maybe maybe have a good security system yeah but you don't you so you're not a Believer but you are you just basing this on your instincts I mean do you think that you should maybe Reserve jobs that's fair but they did say specifically powered by radioactive decay of spent nuclear fuel right that's what turns you to goo and so you just think just because it's encased this presents all sorts of damage if the case is broken the case is broken anyone locally screwed yeah so if you drop your smartphone and it starts leaking radioactive decay we all know that smartphones are indestructible so I'm not worried about that Jesus beer you're you're I'm an equal opportunity you must be a real problem at parties
and someone starts talking I bring the bourbon everybody gets over it um so if you were the king of the world how would you navigate us out of the situation oh like the whole thing not just the nuclear waste issue well let's start with the nuclear waste issue uh we need a central repository where the stuff can be processed and the plutonium can be disposed of or at least incarcerated forever that is the idea behind Yucca Mountain but because the US is a federal system with the state and the local authorities having as much power as the federal it's been locked up in courts ever since it started because nobody wants that stuff in their neighborhood right which is why we want to put it in Nevada because aside from Vegas there's nobody in Nevada sorry Reno sorry Reno so when you it feels like if you did if somebody said hey Peter how do we do how do we handle this what would be your steps well if you want to look at American history we'd probably put it someplace like Guantanamo where American federal law doesn't apply I'm not saying I recommend that I'm just saying that's the easy solution really we need a place like Northern Nevada that the federal government just buys and shoves it through and if they did that do you think that's feasible I think that's the that's what other countries who have experienced this problem have done there aren't a lot of them because most of the nuclear industries of the world are linked into the American system when we don't allow it because we don't want the plutonium processing hmm so that's not really right that would be the the best approach if you wanted nuclear power to be a meaningful part of our future but it would take a radical restructuring right and it would probably take Congress literally ramming it through the courts they'd have to change the law so that the states can't fight it and that triggers a legal fight which in the United States as we all know we love to do and the but the conversation about nuclear has not been very positive in this country no it's not we've only Built one new facility in the last 45 years so outside of that how do you think we should handle it uh wind-win wind uh the wind the new turbines are pushing a
thousand feet tall and as you go up you tap stronger and more reliable wind currents so right now our good wind territory is the Great Plain so Western Texas up to North Dakota but as you go higher and higher and higher you can spread that out and I would argue a third of the population of the United States can get at least a third of their electricity from wind if it's done at scale and we're moving that direction and it's not with subsidies it's just that the the economics of the turbines as they go up get better and better what about the possibility of solar getting more efficient and you can the the big problem with solar is not just the efficiency though it's the timing Peak demand for electricity in most places is after sunset in the winter and solar will never be part of that solution right because sun's not out at night so we need a lot of money into tertiary Education and Research grants to find a better battery than lithium because we don't want something that can store power for an hour to do three to four hours we need something that can store power for a week a month we're never going to do that with lithium and is there anything on the horizon that holds promise in that regard there's nothing that at this point is promising that has reached the Prototype stage there are things like flow Val batteries and iron batteries that you know the chemistry looks intriguing but none of it's been tested out in a meaningful way yet so if you were going to guide our energy policy I would say let's invest a trillion dollars in Material Science Solutions before we start applying them at scale and we know they already that they don't work and would that be effective I mean even if you just throw a lot of money at it do you think that until we have the material science breakthroughs the rest of it is kind of just spinning in the mud so you think that an approach in that regard would be wise because we're spending a lot of money on a lot of things anyway right spending it on that at least you have the promise of possibly coming up with some sort of a feasible solution I'd rather see us spend a trillion dollars on figuring out what might work rather than us spending a trillion dollars on working on things
that we know already don't work okay so that's our energy problem what about our food problem uh in the United States we don't have one we don't no we uh don't we have a problem with our top soil where there's only like 60 Seasons left of the top soil yeah I've been hearing that for 40 years and it hasn't happened yet I don't mean to suggest that soil fertility isn't an issue but when it comes to crop rotation and the fact that your fertilizer is made within North America it's a manageable issue I mean we're not we're not Brazil where there's zero soil fertility and if something happens to one season of fertilizer Supply you just don't grow anymore they have zero soil fertility yeah it's all reclaimed Tropics so they have to basically rip out the vegetation poison the land with lime to get rid of the acid and you get left with something like beach sand and then you just throw fertilizer on it and without the fertilizer nothing grows now with the fertilizer you can get two maybe even three crops so it's not a horrible business model at least it hasn't been to this point but that was before the Ukraine war and Ukraine is where we get a lot of our federal Russia specifically Russia so what would you advise us to do about that uh there's not a lot we can do about that uh there are things that you can do with genomics and with Precision agriculture to more Target the inputs to each individual plant that can work with corn and soy it probably can't work with wheat because you know if you see a corn stock you do a digital photo of it the computer decides whether it's hungry or thirsty or has bugs and it squirts it appropriately stock stock stock but wheat is just a maze of tiny tiny little plants there are too many of them for you to economically treat each individual one differently and unfortunately wheat is our number one crop in terms of calories so it's genomics or nothing for wheat and we're better off than a lot of other countries we're the world's largest food producer and exporter we are not going to starve we might have some problems with out of season avocados but I think we can live with that but the rest of the world it seems like according to your model is in real Dire Straits over
half of the world's population is food threatened now and that's before we have fertilizer shortages and what what was the cause of this like why why has there been so runaway success since the Cold War ended we've brought huge new swaths of humanity into the globalized system and the the integration of Russia and China and Brazil that is the story of the post-world war I'm sorry I have the post-cold War era but the the reason that these parts of the world weren't in the first round wasn't just ideology it was that their geography isn't as good so Brazil's land sucks without fertilizer the Russian territories has very low productivity and China has some of the worst land in the world it took globalization and the access to all of the resources of the globalized world in order to make these places do very well from an agricultural point of view we're now seeing that unwind we're only in the very early stages of this and as it unwinds what what can be done to mitigate this oncoming crisis that you're describing because it sounds quite terrifying we're gonna have to pick winners and losers unfortunately there's just not enough uh if we do start a significant build out of the fertilizer system it takes about three years to bring new nitrogen or phosphate systems online but it takes like 10 years for potash now the Canadians after the Russians are the world's leader and they have started they've seen the writing on the wall and they're trying to speed it up however they can but they still think they're going to need seven years and what is potash potash is a mineral that you mine and I'm grossly oversimplifying here but you basically crush it and dissolve a little bit of acid and turn it into a pellet form that you can distribute on a field it's potassium fertilizer and this is just one it's one of the three potash is potassium and then phosphate and nitrogen nitrogen as a rule is made out of natural gas and the United States is the world's largest producer of natural gas and we're in the process of building out our nitrogen capacity in part because of this and when you say winners and losers like
what what do you anticipate happens to the losers well I mean if you only have enough fertilizer support a half a billion people that means you get to choose who gets it do you let the market do it do you pick your friends do you pick yourselves and these are decisions we're going to have to make in the not too distant future and we say we you mean globally well it depends upon who has it in the first place so the Canadians are the world's largest producers single producers of potash we are their number one customer they also Supply potash to Japan and Australia and New Zealand after that they have to make some really hard choices do we try to save just the Chinese or everyone else it's really that hard yeah we can't support our current population without industrialized inputs for agriculture and without those inputs on average yields will drop by more than half and like what kind of time frame are we talking about to This Global collapse uh that of course is the billion dollar question because of what's going on in China we don't know because the decision-making process has become so not opaque but the United States is pushing the trade dispute issue to the hilt which is a really big problem if you're concerned about global stability but if you think it was all going to break down anyway there's something to be said for pulling the cord earlier uh the Russian system could break tomorrow or at that point and that is not just wheat that is barley that is potash that is nitrogen that is ammonia that is lithium that is nickel that is copper pieces are falling out and the risk here is that something will fall out that will then Domino and I think the issue to watch for that this coming year is the energy question because now that we have insurance companies saying just no we're not going anywhere near the Russian space at all it doesn't take much imagination for someone to think that something's going to go wrong in a war zone where energy has already been weaponized and once Russian stuff goes offline for whatever reason pressure builds up back
into the pipe all the way to Siberia and then the wells freeze shut and you have to re-drill them and the last time it took the Russians 30 years to redrill everything so when we lose Russian crude this time it's gone for good holy [ __ ] dude and so if you look ahead 25 years from now how do you see the world 25 years from now we're going to be on the other side of this so we're going to see a significant breakdown on a lot of systems over the course of this decade and into next but after that my bet is we're going to see a number of technological advantages be developed in the United States and within its group that allow us to do more with less and which transformed the economy into a more sustainable footing we'll also have had 30 years 25 years for this demographic situation to play out and we will find out what is next one of the big Mysteries right now is we've never ever in any era had a country with more retirees than working age population we don't know really what that leads to we know they're not growing food we're no they're not producing Goods but 25 from years from now that big retiree class is mostly gone and then we get a c after 25 years of experimentation what sort of economic model might replace that now hopefully for the United States and Mexico and Canada we're going to learn something from these all these experimentations because the Germans are probably going to be at the Leading Edge of this and they're not going to go quietly into that good night they're going to try to survive some countries are going to pull it off but I don't think anyone has an idea of what that system looks like because n equals zero we've never been through this before we're making it up as we go and I've heard you talk about the generations that are upcoming in this country and not with a very Rosy perspective you you have a lot of concern about just the the temperament the ideology the way these kids have been raised that doesn't lead itself well to adapt to this looming future well I'm a I'm a gen xer so I'm always going to belittle and look down on the Millennials mostly because they deserve it my big concern moving forward though
is not so much the Millennials because the Millennials exist in large number they're providing the consumption ballast of today the investment ballast of tomorrow uh there do we have Earthly blunt going to save us all uh my concern is with the Zoomers the younger kids kids 22 and under um there aren't a lot of them there are smallest generation ever by what factor uh there are about 30 percent fewer of them than there were Millennials at the same age and what do you what do you attribute that to well their parents were Gen X we were a small generation too so a small generation generates a small generation and they were raised in an era of digitization so an iPad was part of their childhood experience which means they're a little bit more socially awkward and they date less and they are less comfortable around other people so they are likely to also generate very few children now this is something that the Germans and the Chinese and the Italians have been dealing with for 70 years smaller and smaller Generations but this is new for us how do you see that playing out the technology changes it changes you you change it and the Zoomers are the generation who's going to decide what all this interconnectivity means and if they can figure out how to do that and still have families we'll be fine and if they can't we are starting down the German path now worst case scenario we still have another 60 years um crypto yeah it was always a hot dumpster fire um always yeah I'm not going to say that it was all fraud some of it was a pyramid scheme there's never been anything there uh it serves no purpose it's not a store of value it's not a medium in exchange and as we have seen if you want to decentralized and not under government control it is a Haven for fraudsters and now it is in the process of going to zero except for Bitcoin which will probably go negative because if we're moving into our world with carbon taxes you have to take into account the energy that it took to produce it in the first place well that's certainly playing out with like FTX yeah where you're finding out
that there will be more House of Cards do you feel like that's just sort of opened the door for people to examine all of crypto now oh yeah absolutely it's like as soon as you have one of the big ones go down it's just go down catastrophically within a week yeah I mean just there's no intrinsic value to this asset and now it's starting to be priced appropriately so it has a you know what's Bitcoin at 16 000 it has another seventeen thousand to go down duh really yeah there's no intrinsic value to this product and do you think that people just inherently like lost faith in the idea behind crypto because of FTX it became an ideology and whenever you invest based on an ideology you're going to make some decisions that are a little divorced from math and how what do you mean by ideology well they're the people who really like crypto are convinced that it's the currency of the future and that a decentralized ledger is the way to go and that anything that is controlled by a government entities by definition a negative and if it's done by the private sector freely it will be better and that's just not how currency Works currency is a method of exchange and a store of value and for that there has to be a degree of trust and you have to have it managed in terms of volume I mean one of the the craziest things about Bitcoin uh is that there will never be more than x number of units of Bitcoin well by default that means it can't be used for trade because the whole idea of economic activity is that there's expansion which means you need more currency to lubricate and manage that expansion if currency is locked into a specific number you get monetary inflation and that is one of the fastest ways to destroy an economic model so because of the lack of Bitcoin because there's a certain controlled number the only thing that can happen is Bitcoin becomes more expensive right and and that means that the people who hold it are the ones that make the money but everyone else suffers I'm sorry that's not viable the alternative is you have some private dude out there who generates the coins on a whim how is that different from the monetary Reserve or the monetary authorities that
we have at the Federal Reserve except for the point that there's no accountability no no a lot of people have concerned that the United States is trying to generate a centralized digital currency that they will control the Federal Reserve disagrees with that statement what do you mean well they don't see a purpose they don't see what need it fills so there may may be an argument for the Chinese doing a digital you want so they can monitor each and every transaction but you know conspiracy theories are going to conspiracy no I was reading like mainstream articles about the United States confirming that they're trying to develop a centralized if you're talking about a digital exchange system then I can see that see if you can find something but something separate from the USD no that this is what I I only looked at the the headlines of it because someone was sending it around and I didn't have the time because it was yesterday but this idea of a centralized digital currency is something that Maxine Waters talked about she said that we have to do that in order to compete with China yeah Maxine Waters is not exactly the brightest person in Congress that's not saying a lot yeah I know it's a low bar but she passes it here I don't know if this is a I'm just pulling up to see if this is what like what you're talking about digital dollar is something that makes sense the idea of smoothing the connections within the the plumbing of the financial system or moving beyond a physical currency at all you know that that all makes sense that's kind of like the next step but a separate currency where everything is mitigated or managed by the fed that's not something the Federal Reserve has an interest in um let me uh go go to Tim Kennedy's Instagram because he's the one who posted it a couple of days ago White House releases first ever comprehensive framework for responsible development of digital assets yeah this happened right after Bitcoin really started a nose dive and the question is how do you bring up crypto yeah how do you bring crypto into the regulatory environment but this is a
framework for responsible development of digital assets it doesn't mean a centralized digital currency the United States creates if you just go to Tim Kennedy's there's an article that describes it and he's talking about the dangers of this yeah you got to go yeah sorry well this is fun though it's been a lot of fun it's you scared the [ __ ] out of me but you're welcome but you're used to that yeah you throw some bourbon in me I get really Lively it's official the United States is developing a bank-to-back digital currency um take that headline and just Google that headline and find out what that means United States developing a bank to bank digital currency that I'm concerned with the United States having that along with a social credit score system yeah no we don't have the math for that and then the Chinese approved we don't have the math yeah well the Chinese have proven that their social credit Source system broke they didn't have the processing capacity to keep track of it and that is with a near bottomless supply of resources and full control of the political system so we certainly don't for those who thought the United States is behind the digital currency Space Race the news was welcome and the subsequent white paper on the project named project Cedar the New York fed explained that it has already completed stage one of testing and proved that International currency transactions can be done both quickly and safely through the blockchain yeah I'm overseried in the technical details was a revealing line on the Ambitions of the project the goal of the new network is to reduce settlement risk and cross-border cross-currency transactions the message we see what the world is doing with cbdcs and the United States is not going to be left behind so the way trade Finance works is if you're in Korea and you want to sell something to Chile you sell it in one it's transferred into US dollars and then the US dollars are transferred into Pesos if there's a three-step process and each of those requires a transaction but if you can digitize it then it's click click and you're done
that's what that's talking about so you don't think that the fear of a centralized digital currency that the United States controls you don't you're not worried about it yeah I mean honestly the Federal Reserve that's not what they're good at and that's not what they're trying to do and it's not what they have an interest in doing if they were to inject themselves into each individual transaction that would be a nightmare for them well Peter I appreciate your time I know that you have to get out of here to catch a flight and I appreciate you scaring the [ __ ] out of everybody and this view of the world and that what you've laid out is not that nice well I'll bring some diapers next time how about that I don't think that's gonna help but uh I appreciate all of your research and your time and your Insight it was very interesting glad you enjoyed yourself I know I did if people want to find out more about your stuff what's what is your social media if you have it sure on Twitter I'm at Peter Zion that's z-e-i-h-a-n or you can go to z-e-i-h-a-n.com and sign up for the newsletter which is free and we'll always be for it well thank you very much I really appreciate your time my pleasure bye everybody [Music] foreign [Music]