Europe Unites Against Russia: What It Means for the Ukraine War | Peter Zeihan

Europe Unites Against Russia: What It Means for the Ukraine War | Peter Zeihan

the Euro has to be a centerpiece of that now in the end do I think that will fail yeah but I would have never guessed on February 22nd that the Europeans would have stuck together as much as they have on the Ukraine war I’ve been pleasantly surprised I would love to be pleasantly surprised on the Euro as well crypto can only work if it has regular interfaces with the real economy and it’s liquid in an exchange and it’s neither of those things uh also it can’t be a currency per se because no one’s in control of the money supply um bitcoin’s probably the worst example of what might theoretically work because supposedly it’s available in limited volume uh but but no I I just I see no potential there I don’t see it serving a need I don’t see it having a use it’s definitely not a store of value or a medium of exchange now does that mean that there is something out there that could serve all those roles well yeah we call it gold uh limited Supply uh but I mean it has all the negatives of crypto with one exception it actually exists it’s a physical thing uh and because it has industrial uses it will always have a base value whereas crypto’s net value especially if we move into a world where we hope to regulate carbon at all cryp Bitcoin anyway it’s its net value is negative uh it just it just it doesn’t match any of the criteria for any useful economic asset my concern is when you’re making a forecast based on climate change is that our data sucks um do we we know the world is heating up yes do we know that warmer water or warmer air holds more water and so can make bigger storms yes I mean that that’s not really disputed but if you want to say what that means for a specific town now you’re going off the reservation we do not have data for that uh the best example I can point to is here in the United States in the summer of 2021 uh the city of Portland which is normally rainy overcast and cool uh got hotter for a two-e period than Las Vegas has ever been no one predicted that we predict that deserts will get hotter we predict that marshlands might expand you know we we have these General things but when it comes down to what happens on this square kilometer of land we have no idea uh moving forward that means we should expect change but we shouldn’t expect that change to be overly predictable at the at the urban level uh so my work with climate change focuses on those grand gener generalities that we know that have to be true so you raise an area by one degree what does that mean for agriculture uh and it’s usually a balance between what you brought up rivers and water and temperature we know that crops generally are fairly temperature hearty you can raise the temperature up to 10° and they’ll still be there assuming they get enough water and so I’m most concerned about the more Aid parts of the world which is where most of our wheat is grown so Humanity’s number one crop is actually the one facing the greatest danger so I really I really don’t know um it it strikes me as a little bit too convenient of a pattern personally but again this is not where I I focus I focus on De globalization I focus on depopulation because we know where this goes and we know where this has been going since the 1960s it’s just that we’re finally reaching the transition period this decade okay let me start by saying I’m not a CFA and I’m certainly not a day trader okay so I I look for long-term trends that match up with my general analysis uh so with that kind of put to the side as a caveat uh I am most interested in things that are in very large markets with deep pools of liquidity which for the moment Now is really just the United States uh I want products that are energy intensive in their production because in the United States because of the Shale Revolution we have the cheapest oil the cheapest natural gas the cheapest electricity uh that’s a huge competitive Advantage particularly AS Global Supply chains breakdown I look for things where their demand is demographically driven uh because the United States has the healthiest demography in the rich world and Mexico has the healthiest demography in the advanced and uh developing world and if the product is exportable great because as Supply chains globally break down but North American ones get stronger there’s an Arbitrage opportunity as well um and then of course because of the Ukraine war I’m getting very very big in the things that we need need to make things that are no longer going to be flowing from the Russian system so that’s boide and aluminum that’s titanium uh steel pig iron uh wheat nitrogen based fertilizers phosphate based fertilizers if you can find any of that that is in the western mold or specifically in an American firm that is not exposed to the former Soviet Union that’s the catch there uh they’re good the problem with all of this is that it doesn’t match the investment thesis that have been coming out in this Capital Rich period where anyone can throw money at anything and it’ll stick uh so like if you want to invest in agriculture for example it’s a global fund and obvious obviously it touches uh companies like Bungie that are very heavily invested into Ukraine and Russia and they’re losing everything uh so you have to go more specific and that’s a lot more leg work uh I would say overall if you could only take one piece of advice away from this uh the period of bottomless supplies of capital are ending and that means capital is going to become harder to get and that means we’re probably going to have a lot fewer Financial professionals and they’re going to have to prove that they offer a value ad because high frequency trading doesn’t work broad index funds don’t work ETFs don’t work in this environment if there’s less money available and there’s more people who need it the cost of that Capital will rise and if you are an investor there’s some wonderful opportunities here but you have got to do your homework you just can’t rely on your CFA to go out and identify a half dozen funds dump your money in and then go undo something else that doesn’t work anymore y remember when I said we don’t have an economic model for where we’re moving we don’t have a political model for it either uh now in the United States and in Mexico where the change is happening most slowly we’re going to be able to Tinker with the existing system uh for at least another 30 years but in Europe and East Asia where it’s in collapse now they’re going to have to figure out a new way to do all of this so hopefully those of us who are in North America can look to the Eastern Hemisphere and learn a few things or even if it’s just a few things that we shouldn’t do as opposed to might try uh my biggest concern moving forward is that every time we’ve had a clash of economic models especially when they’ve been in their infancy and just being developed we have had conflicts uh the Cold War the German Wars at their heart economic theory was there it wasn’t just geography it wasn’t just materials it was about the role of the state well we now get to do that on a global basis during an energy crisis and a food crisis and a financial crisis we’re not going to get it right on the first try that’s over the last 70 years globalization has allowed every agricultural producer to specialize in whatever grows best in their climate so we now have avocados in North Carolina and we now have corn in Iowa and Florida and I’m sorry California and Florida are big into orcharding for example if you break down the global system people are going to be more responsible for their own food production and that means a lot less specialization and bringing wheat back to the core of the production system in the United States where we’re a large geography uh that’s not a big issue but everywhere else the smaller the country in particular the more of a problem that is because it used to be and in globalization you could export kumquats and import wheat or export cars and import wheat that’s not going to be an option for most countries and even before you consider things like the breakdown in the fertilizer supply chain which we are already hip deep in because of the Ukraine War simply matching production of each country to each country’s needs is going to reduce the amount of calories the world Grows by more than half so in the best case scenario where there are no Wars over anything we’re already looking at having three billion more people than we can support minimum yeah I am hoping with gains in technology that some of the countries that can keep producing a broad-based system I think the US and France are going to be at the top of that list Australia is probably on that list Argentina assuming they can get their head out of their asses on that list uh you know that’ll hopefully along with the shift from large scale animal protein to large scale plant protein reduce the number of people who die of famine over the course of the next 20 years to only a billion that’s still some horrific shifts and I don’t see any way uh to avoid it for

Europe Unites Against Russia: What It Means for the Ukraine War | Peter Zeihan

In this insightful analysis, we delve into various critical global issues, including the stability of the Euro, the viability of cryptocurrencies, and the profound impacts of climate change. Our discussion touches on the Euro’s surprising resilience during the Ukraine war, while also expressing skepticism about its long-term viability. We critically examine the limitations of cryptocurrencies like Bitcoin, contrasting them with traditional assets like gold, which have intrinsic value due to their physical existence and industrial uses.

The conversation shifts to climate change, highlighting the challenges in predicting its localized effects despite general trends such as increased temperatures and extreme weather events. We explore the implications for agriculture, particularly the vulnerabilities of wheat production in temperate regions.

Attention is given to the trends in deglobalization and depopulation, emphasizing the economic opportunities and challenges they present. The focus is on identifying long-term investment opportunities in sectors like energy-intensive production and essential commodities, given the United States’ advantageous position due to the Shale Revolution.

We also discuss the shifting dynamics in global food production, predicting a return to more localized agriculture as globalization recedes. This shift is expected to reduce global food supply significantly, raising concerns about food security and the potential for widespread famine.

Overall, this video provides a comprehensive overview of these interconnected global issues, offering a nuanced perspective on their future trajectories and implications.

Peter Zeihan is an American geopolitical analyst, author, and speaker. He analyzes data from geography, demographics, and global politics to understand economic trends and make predictions.

Source:
WW3 is just the beginning | feat. Peter Zeihan | Global Macro #12

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