Interconnectivity dooms the state order of geopolitics --- collapse has multiple inevitable endroutes which means it’s a question of movement in this time of slippage

All the trade, all the integration we've been enjoying for the past, I don't know, decade, couple decades is maybe going down the tubes. We'll talk about famines that could be caused by the inability to get fertilizer and other agricultural inputs, raw materials for food production. This is going to leave many countries unable to produce goods for themselves, let alone for export. So a lot of what we see today with countries being interconnected and working together to specialize, that apparently according to Peter is going to decouple and that system will indeed crumble and we cover a lot in this episode from trade and economics to shipping, to demographic collapse, to petroleum, China, green energy batteries, and more. We had some audio issues with this one that we tried to fix, but bear with us on this one. I think you're really going to enjoy this episode because we covered a whole lot. All right, here we go with Peter Zeihan. This book, Peter, just full of sunshine and roses, wasn't it? ? Look, it's a great time to be alive, but it's kind of artificial, right? Let's talk about that. I want to talk about one, why it's a great time to be alive because the rest of the episode can be about how this is all falling apart. Peter Zeihan: Yeah, fair enough. It all has to do with globalization. In the world, before World War II, we had an imperial system with the empires, duking it out over access to everything. And trade as a rule needed to be militarized because every time there was a conflict, you would lose access to whatever happened even if you weren't a party to the conflict, a shipping would be a target. Jordan Harbinger: Ah. Peter Zeihan: So at the end of World War II, the Americans who at the only ne Navy left in the game said that they would put their navy at the service of the global commons so that anyone could trade with anyone anywhere at any time and access any market. And we came to know this is free trade in globalization. Now, there are two big implications from that. The first is that we were no longer in a world where if you wanted to be successful, you had to have iron ore and coal and steel and food. You only needed one of them now and you could trade for the other three. And everyone started to industrialize together, starting from different points and moving at different speeds. But we all got on this path that we are all now very familiar with. And second, when people industrialized, they changed their personal habits and national economies evolved as well. So it used to be that you were probably living on a subsistence farm, and when you do that, kids are free labor, so you have a bunch. But when you move into the town to take industrial and services jobs, kids go from being free labor to really expensive habits, and adults aren't stupid. So we had fewer of them. Jordan Harbinger: Fewer kids or fewer expensive habits or are those the same thing? Peter Zeihan: Different expensive habits, fewer kids. Jordan Harbinger: Got it. Peter Zeihan: You play that forward 75 years, and it's not that most of the world is running out of children. That happened 30 years ago. It's that now the world has run out of working-age adults and we're starting to run out of mature adults. Everyone's moving into mass retirement. So from a strategic point of view, globalization was based on America's commitment to the Cold War, which is long since over. Jordan Harbinger: Mm-hmm. Peter Zeihan: And economically the industrialization experience, the urbanization experience has been about this bulge moving through the population structure that started with children, then turned into 20 and 30 somethings that was consumption heavy, then turned into 40 and 50 somethings, which were capital heavy people saving for retirement. And now, they're all moving into retirement. So the whole process has already played out and under globalization, first with a lot of workers and with a lot of capital, we got the technological explosions that we know. But these were all nothing more than a moment in time. A moment that lasted 75 years, but it's now over. And so we now have to go back to what we had before World War II but without people. Jordan Harbinger: That doesn't sound possible. Peter Zeihan: It's not great. Jordan Harbinger: Okay. Yeah. Okay. I was like, what? I'm missing a piece here where this actually can possibly happen without suddenly inventing robots that can replace tons of people overnight that are also affordable. Peter Zeihan: Well, robots wouldn't even solve it because robots don't consume, they can only produce. Jordan Harbinger: Ah, I see. Right, so we could fix half the equation with one miracle, and then we need a different miracle to fix the second half of the equation. Peter Zeihan: We need cloning, low-cost cloning. Jordan Harbinger: Right. You've said the 2020s are going to see a collapse in many categories. Let's explore that because we've spoken before about, not necessarily you and I, but just we as in people can't shut up about how great globalization is. And then we had the pandemic and it was like, oh shoot, globalization, that thing that means we can't get things now. A cargo ship gets stuck in the Suez Canal and suddenly, we realize how fragile this system is. And it sounds so fragile that it's hard to believe how fragile it actually is. And none of us are looking at shipping. I've done shows on shipping and it's the Wild West. Only if things break the entire world is totally screwed. Peter Zeihan: I don't think it's quite that positive. Jordan Harbinger: No, quite that, okay. Gotcha. Gotcha. Peter Zeihan: The key thing to keep in mind for shipping — let me throw it into three general categories. Number one, 80 percent of the stuff that enables people to grow food is transported internationally, whether it's equipment or fertilizer or fuel. Only 20 percent of food is traded internationally, but 80 percent, you need the inputs to grow it in the first place. Number two, roughly half of all oil is shipped on the ocean blue, typically by supertanker, along with everything that comes out of the Persian Gulf. And then number three, safety on the waves is what's allows us to have the East Asian manufacturing model, which is a fancy way of saying the manufacturing model because roughly half of all manufactured goods are produced in East Asia. And you will get components coming from Thailand versus Indonesia versus China versus Korea versus Japan. But the key thing to remember is less than one percent of that shipping happens on land. Jordan Harbinger: Wow. Peter Zeihan: Korea is in effect an island. Japan is an island. Most of the Southeast Asian countries are either islands or peninsulas, and they're ring by mountains. So physical connections, independent of maritime trade in Asia almost don't happen at all. Jordan Harbinger: Wow. So we are totally, totally, totally dependent on these boats, being able to get from one place to another, not get stuck in canals, not get attacked by pirates. Having oil at a decent, somewhat reasonable price to be able to transport other oil and other goods, and also just logistics and other things not getting totally screwed up. And if any one of those things gets out of whack and this ecosystem suddenly Tickle Me, Elmo is not available for Christmas. And there's tears all over the world. Peter Zeihan: Certainly. And you know, the book is about how this happens on a decade's time scale. How the 2020s were always the decade that it was always going to break down in. But events in just the last couple of months are speeding this up. A lot of this is probably going to be front loaded. Well, think of what just happened in the first week of December. So the Europeans announced their plan for an oil export ban, and a lot of the details are being made up as they've gone in. It's a very European policy in that regard, but what it is encouraging is a split in the way we view oil from the Russian space versus the rest of the world and the different types of crude coming out of the Russian space. So the stuff the Europeans are primarily concerned about is Euro's crude that is exported west to the European space, and that can only be sold for $60 or less now, and that's affecting insurance and shipping rates and the type of vessels that go in. And we saw over the course of the last two years how disruptions and simply the type of vessel being available can generate supply chain snarl. So now, we're doing this with energy, but there's also a crude grade that exports to the Pacific that doesn't touch the European space at all that trades differently. We now, just in the Russian space, have two fundamentally different markets, not just for pricing, but for physical accessibility, for the ability to get ships and insurance to allow it to move. One of the reasons why the world has been so stable, air quotes, "stable" since 1945 is there's been one oil price. Now, it's modified by the length of the journey or the quality of the crude, but there's one oil price and everything is safe.