peter zeihan on rogan

#1921 – Peter Zeihan | The Joe Rogan Experience

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Key Takeaways

  • Starting in May 2023, there will be a more advanced Ukrainian force fighting a much larger Russian force; this will be the first real glimpse of how things will go
  • The demographic structure is so bad that the Russian state might be turning the lights off between 2050 and 2070 anyway 
  • “One way or another this is the end of Russia. The question is whether it dies on the long-term on their terms, or in the shorter-term when they’re completely unmoored.”Peter Zeihan    
  • Putin’s paranoia combined with the nation’s terminal demographic structure results in the political elite class of only about 130 people; any sort of leadership talent in Russia has either left or been killed 
  • Peter Zeihan predicts that the Chinese system collapses this decade due to its demographics: “They [China] are going away. And they are going away this decade, for certain.” 
  • If the same sanctions that were placed on Russia were placed on China, there would be a famine that would kill 500 million people in under a year, in addition to an industrialization collapse
  • Xi Jinping refuses to access information; he does not want to hear anything other than what he wants to hear 
  • Given the waterways and ocean moats that the United States has, it is likely to remain an economic power regardless of who runs the world 
  • The globalization that existed post-WWII until today has started to unwind, and that is why these problems are starting to surface
  • Geography plays a much larger role in a deglobalized world
  • The year 2033 has regional spheres of influence that may cooperate with each other, but exist in their own little worlds; it will have a similar order as the early 1900s 
  • The Germans have spent 3x as much as California on green tech, but are only getting about one-fifth of the power because the sun doesn’t always shine in Germany
  • Peter thinks we will “be on the other side of this” deglobalization 25 years from now

Intro 

  • Peter Zeihan (@PeterZeihan) is a geopolitical analyst, author, and speaker. His fourth book The End of The World Is Just The Beginning: Mapping the Collapse of Globalization is a New York Times Bestseller. He writes a free newsletter and publishes on his YouTube channel “Zeihan on Geopolitics”.  
  • In this conversation, Peter Zeihan and Joe Rogan discuss why the end of the world is just the beginning, why globalization is over, the Russia-Ukraine conflict, the nuclear war, why demographics and geography are more important now than ever, why this is China’s last decade, Taiwan, what the world will look like in 2033, the opportunity for the U.S., energy policy, and more  
  • Check out these Podcast Notes from Peter’s conversation on Modern Wisdom 
  • Host: Joe Rogan (@JoeRogan

Russia

  • Peter was not surprised when Russia invaded Ukraine
  • Russia has the world farmland in the world 
  • Russia has never been able to create a road network; everything must be moved by rail 
  • Since the Russian force struggles to maneuver itself, its only reasonable defense strategy is to be forward-positioned and use geography to its advantage
  • Russia expanded until it reached mountains, deserts, or oceans, and then anchored on either side of them to plug the access points
  • Unfortunately, two of those access points exist on the other side of Ukraine
  • Peter was convinced that Russia would eventually invade to secure those two access points on land that it used to control for hundreds of years  

What About NATO Expansion? 

  • From the Russian point of view: For us to be secure, we must expand to the point that invaders cannot overwhelm us by plugging access points 
  • But for Russia to “feel safe”, it would like to occupy basically every country in Eastern Europe
  • It is true that NATO cannot have what it wants and for Russia to feel safe, but Russia must occupy over 180 million people for it to feel safe, which is unfeasible   

The War 

  • Ukraine rolled over in its last conflict with Russia in 2014, and Crimea fell in just a couple of days 
  • Peter says that Ukraine proved to be militarily incompetent and corrupt in 2014 
  • A lot of national security analysts thought the 2022 invasion would be similar to the 2014 invasion 
  • Ukraine has surprised everyone in the national security and intelligence community to the upside
  • The Game Changer: the Europeans didn’t roll over and let Russia invade without friction like it let them do the last seven times that Russia has invaded since 1999

Russia-Ukraine Predictions from Peter Zeihan  

  • It is hard to predict where the conflict goes without seeing both militaries “fight in their full glory” 
  • Starting in May 2023, there will be a more advanced Ukrainian force fighting a much larger Russian force; this will be the first real glimpse of how things will go
  • Ukraine has captured more equipment from the Russians than it started the war with 
  • About 60,000 troops trained in NATO countries will return to the field in May 2023 
  • By May 2023, Russia will have launched its second mobilization with 500,000 men
    • Generally, the 500,000 men will be badly trained, badly equipped, badly led with low morale, according to Peter Zeihan 
  • Historically, the first year of a Russian war is a “sh*t show”, and then the Russians throw bodies at the problem until it goes away
  • “If Russia is 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 of million people. Or, the [Ukranians] 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 million dead Russians and the Ukrainians will be able to push the Russians out of Crimea in the east.” – Peter Zeihan on possible outcomes for the conflict 
  • What are we seeing today is the opening phase of a multi-year, potentially multi-decade conflict

Bradley Vehicles Arriving, Scooby-Doo Vans 

  • Ukraine is receiving important military equipment from Europe and the United States that it did not previously possess, most notably dozens of Bradley armored tanks from the U.S.
  • Before receiving the Bradleys, Ukraine’s infantry could only push forward as far as it could run; the tanks provide mobilization capabilities 
  • There is massive corruption in the Russian military; Peter speculates that a third of the military budget is stolen by higher-ups in the Russian defense ministry 
  • Russian troops receive very little training
  • Since everything travels by rail in Russia, the military is heavily dependent on trucks to move and supply the ammo that the trains deliver 
  • Ukraine has destroyed 2,000 to 2,500 Russian trucks, which has forced the Russian military to confiscate city buses and “scooby-doo” vans in Russian cities  

The Four Nuclear Scenarios 

  • Russia would have to be very desperate for it to use nukes
  • There are four scenarios to the nuclear question 
  • Scenario #1: Russia considers launching a nuke at the United States
    • The U.S. would respond with one landing in Putin’s exact location since the U.S. is tracking his movements and communications so closely
    • There is no version of scenario #1 where Putin survives, which make it unlikely for him to opt for it 
  • Scenario #2: Nuke Ukraine
    • This doesn’t make sense because Russia wants to occupy Ukraine
    • Who wants to occupy a radioactive wasteland?
  • Scenario #3: Nuke Poland, Berlin, and Stockholm
    • This would be to disrupt the weapons flow into Ukraine 
    • However, the weapons are now already in Ukraine, so this would not disrupt all that much, and is an unlikely option
  • Scenario #4: Ukraine doesn’t simply win, and decides to carry the fight into Russian proper, threatening the existence of the Russian government
    • It is not clear how Russia would respond to this
  • The Ukrainian weapons are only useful if they know where to use them, which is based on information provided by the United States
    • This makes Ukraine very dependent on the U.S. and reduces the chances that it does something to upset the U.S. 

Russian History, Nuclear Exchange   

  • The Russians are relatively “casualty immune”
  • Russia has never been technologically advanced relative to its peers; it solves a problem by throwing numbers at it
  • There has never been a conflict in Russian history where it has backed out before losing 500,000 men
    • As of January 2023, Russia has lost about 100,000 soldiers 
  • Peter believes that the Russians are fighting much worse than the Iraqis did in 1992 
  • If the Russians view this as an existential conflict, and they know they can’t hold a match to NATO, then nukes are their only option  

Russian Demographic Collapse  

  • The demographic structure in Russia is not good; it is diseased, aged, and in terminal decline 
  • The demographic structure is so bad that the Russian state might be turning the lights off between 2050 and 2070 anyway 
  • There haven’t been enough Russians born in the last 30 years to carry the ethnicity forward, much less farther 
  • Plugging the critical access points now with its last generation of young people may allow Russia to die on its own terms 50 years from now 
  • “One way or another this is the end of Russia. The question is whether it dies on the long-term on their terms, or in the shorter-term when they’re completely unmoored.”Peter Zeihan   
  • Failing to control the access points leaves a 2,000 mile hole in their border with countries it considers to be hostile 
  • The year 2022 was the last year that Russia had enough people in their 20s to even attempt this invasion, according to Peter Zeihan 

Vladimir Putin’s Paranoia, Health  

  • Putin’s paranoia combined with the nation’s terminal demographic structure results in the political elite class of only about 130 people
  • Vladimir Putin has removed anyone that has leadership ambitions 
  • Any sort of leadership talent in Russia has either left or been killed 
  • Putin’s health is another variable to consider; it is obvious that he is not in great health 
  • Putin is wearing a bullet-proof vest even around his own propaganda people 
  • Putin has the shakes, which is why some believe he has Parkinson’s
  • Among the 130 people in Russia’s political elite class, there is not an immediate pretender to the throne 

The End Of The World Is Just The Beginning 

  • They are dealing with the end of the world as we know it
  • Russia is more of a symptom of this than the cause 
  • Before World War II, a nation needed coal, oil, food, and iron ore to industrialize and try to make something of itself 
  • If it did not have one of those (coal, oil, food, or iron-ore), then it was probably a colony 
  • After World War II, the Americans patrolled the open oceans for everyone, and now countries only needed to have one of those four because it could trade with the others  
  • For the first time in human history, the world was on the same path; moving at different speeds and starting from different places of course, but the world collectively industrialized and urbanized  
  • Urbanizing means you move from the farm into town to get an industrial job 
  • You have a bunch of children when you live on the farm because they’re free labor 
  • You have fewer kids when you move into the city because they are no longer free labor, they are expensive and noisy pieces of furniture
    • This behavior change causes the population to shift
  • Think of a population as a multi-layer pyramid with the children at the bottom and the elderly at the top
  • Economic growth is great when the population is a pyramid, or even if it becomes a column, but it is a disaster if the pyramid starts to invert – that is, more old people than young people 
  • After the Cold War, the developing world’s population pyramid became a column, and has remained one until now; but this is temporary
  • The birth rate keeps dropping, people keep living to be older, and the column eventually inverts to an upside-down, open pyramid
  • There are not enough children to make up a replacement generation
  • There are not enough people in their 20s and 30s to buy things and stimulate economic growth 
  • There are not enough people in their 40s and 50s to pay for the retirees
  • The decade of 2020 to 2030 was always going to be the decade that most of the advanced world moves into mass retirement and the economic model collapses
  • Peter thinks this is the Chinese’s last decade 
  • We are at the end of all the globalized connections and consumptions that created the world that we know
  • We will return to a world where trade is more focused on the countries that have better demographics and security because the United States is no longer patrolling the open oceans  

Why This Is China’s Last Decade 

  • Peter Zeihan believes that China has ten years to go, at most
  • China is experiencing a demographic collapse 
  • Mao enacted the one-child policy because he feared the young generation would eat the rest of the population alive 
  • Without young people, the Chinese labor cost has increased by a factor of 14 since the year 2000
    • Mexican labor is now one-third the cost and twice as skilled as Chinese labor 
    • Despite their bottomless supply of stolen intellectual property, China has not advanced technologically in the last fifteen years 
  • No one wants to bring Xi Jinping information on anything 
  • The U.S. is imposing technical barricades on China that reduce its ability to make semiconductors
    • Check out these Podcast Notes on Palmer Luckey discussing the implications of a Taiwan invasion on the global semiconductor industry
  • China’s tech industry has stalled, it doesn’t have enough young people to enact a consumption-led economic model, and it is completely reliant on the U.S. Navy to access global trade 
  • Peter sees China as the most vulnerable country in the world right now 
  • The job of the rest of the world is to figure out how to continue on without China 
  • “They [China] are going away. And they are going away this decade, for certain.”Peter Zeihan 

Taiwan 

  • The Russian economy is a massive exporter of food and energy 
  • If the same sanctions that were placed on Russia were placed on China, there would be a famine that would kill 500 million people in under a year, in addition to an industrialization collapse
    • The Chinese know this, and can only push so hard with Taiwan  
  • China capturing Taiwan does not solve any of China’s underlying problems
  • Russia capturing Ukraine actually solves some of Russia’s problems
  • Even if China does take over Taiwan’s semiconductor fab facilities, they don’t know how to operate them
  • China’s semiconductor fab facilities are amongst the worst in the world 
  • Strange stuff happens when an authoritarian leader isolates himself from information; in this case, “strange stuff” could mean a Chinese invasion of Taiwan 

Xi Jinping Has Isolated Himself 

  • Xi Jinping refuses to access information; he does not want to hear anything other than what he wants to hear 
  • No one wants to bring Xi information unless they are ordered to because they do not know what is going on in his head 
  • Russian information security is so poor that U.S. intelligence can listen in on everything
  • In China, U.S. intelligence can hear into the office, but there are no conversations happening 
  • Everyone in China’s Politburo is a “personal flunkie” of Xi Jinping

China’s Plan To Escape Their Demographic Collapse

  • “Nationalism” is China’s plan to escape their demographic collapse
  • Nationalism is a non-economic reason for the Chinese people to support the state
  • It is too soon to know if nationalism will be enough to support the Chinese Communist Party (CCP) 
  • There is no trade option out of this collapse without the United States 

Variants in China, Lockdowns  

  • China is a one-man state: all policy and authority starts and stops with Xi
  • It is impossible for one person to provide clear policy on everything, especially in a large country like China
    • The bureaucracy either goes into “automatic” or “nothing”, and recently has defaulted to the nothing mode more than the automatic one 
  • So instead of gathering data and lying about it, the bureaucracy has chosen to not gather data at all 
  • We will not know how bad the COVID variants are until they get out of China and circulate around the rest of the world, which takes time 
  • Food is considered a sign of wealth in Chinese culture, so getting fat is the thing to do
    • Diabetes, hypertension, and obesity is common in China
  • Over two-thirds of the Chinese population lives in a metro region with poor air quality 
  • China has the worst aspects of the Indian and American systems wrapped into one 

Is Peter Zeihan A Spook? 

  • Peter does some work with the Defense Department and cannot talk about the details 
  • The Department of Defense and intelligence community is rebuilding its capacity to think on multi-decade time horizons

Peter Predicts How China’s Collapse Will Go 

  • Chinese history is rich with examples of how its system can collapse in a short period of time
  • The two most vulnerable systems in the world right now are energy transport and food production 
  • About 80% of the calories that humans produce are produced with at least one imported input, such as fertilizer, pesticide, fuel, tractors, etc.
    • This number is closer to 90% for the Chinese, so 90% of the calories China produces are dependent on a foreign support system
    • This number is around 10% for the United States   
  • We are currently knee-deep in a global fertilizer crisis  
  • The Chinese are the last in line for energy transport and food production, two areas that are experiencing dramatic changes right now 
  • Historically, China’s rapid collapses have been caused by too much centralization in tandem with an incompetent leader cadre 
  • How Chinese collapses usually go:
    • Northern China falls into famine and tyranny as hundreds of millions of people suffer from malnutrition and die
    • The interior breaks off and shatters 
    • The coastal cities in the South basically become independent city-states that integrate with foreign powers, primarily to get food 
  • For 14 centuries up until 1945, the coastal Chinese cities in the South have been dependent on foreigners to keep them alive
  • The potential Chinese collapse is “reverting to a historical mean”

The Perils of Authoritarianism   

  • Chinese academics were very aware of their nation’s collapsing demographics ten years ago and their recommendations shaped government policy 
  • However, the Chinese system has shifted more towards central control in the last decade, which leads to the formation of designated narratives instead of the truth 
  • China is forgetting its own history 
  • Peter says that the narrative about the Chinese planning ahead many decades is “a bunch of crap”; China has ideological blinders that can lead to short-term decision-making just like everyone else

The World In 2033

  • There will be a system of regional trade where there are certain regions of power that have benefited from deglobalization
  • The United States has more navigable waterways than everyone else in the world put together; this is an advantage because it costs one-tenth the price to move things by water compared to by truck 
  • Given the waterways and ocean moats that the United States has, it is likely to remain an economic power regardless of who runs the world 
  • The United States basically paid other countries with globalization to choose it over the Soviets – and it worked – but we are now getting away from that 
  • Geography plays a much larger role in a deglobalized world 
  • A country with decent geography and demography can do pretty well in a deglobalized world
  • Countries with good geography and demography:
    • United States 
    • France
    • Turkey 
    • Argentina 
    • Japan (who has an American friends and family plan)
  • The year 2033 has regional spheres of influence that may cooperate with each other, but exist in their own little worlds 
  • Anything outside these spheres of influence is probably a territory that is not economically viable with unsustainable demographic structures 
  • Peter Zeihan predicts that we are going back to the world that existed in the early 1900s  

What Happens To China?

  • We have never faced a demographic collapse that wasn’t caused by war
  • The Chinese are going to lose a greater percentage of their population in the next 20 years from aging than Europe did in the Black Plague, according to Peter Zeihan
    • An energy or food breakdown causes this to happen a lot faster

The United States of America 

  • The United States will have to double the size of its industrial base as the Chinese and German systems fall offline 
  • Doubling the size of the United States industrial base is an opportunity 
  • It simplifies supply chains, employs domestic labor, is cleaner, and makes supply chains more resilient to external shocks that would have previously affected them 
  • The United States has taken on this challenge before, and it will do it again 

Supply Chains, Re-Industrialization In The U.S.  

  • While the Inflation Reduction Act probably won’t do anything to reduce inflation, it did put together a nationalist economic policy that the United States did need in terms of pushing re-industrialization on specific sectors 
  • The United States is a world in manufacturing at the high-end of technology, such as semiconductors, software, vehicles, and machinery
  • The United States is also a world leader at the very low end, especially for input-intensive processes related to energy products and food products 
  • The problem for the U.S. in the middle, and it relies on Mexico for those processes
  • Mexico is great at producing the things in the middle
  • Mexico will be the United States’ largest trading partner for at least the next 30 years

Mexican Cartels, Violence In Mexico, Trade   

  • The Mexican cartel wars would be a lot less of a problem if Americans didn’t like cocaine 
  • Violent crime dropped in the U.S. from the period of 2004 to 2013 because the Sinaloa Mexican cartel killed all the American gangs committing the crimes in the U.S. 
  • Murder rates in Mexico have skyrocketed in the last three years
  • The Sinaloa Cartel is being replaced, which is why there has been so much recent violence in Mexico 
  • An increase in Mexican drug cartel violence north of the border could change the relationship between Mexico and the United States
  • Donald Trump’s administration convinced America’s hard right that Mexicans are a part of the family; Americans thinking of Mexico as drug runners again will damage one of the United States’s most productive trade relationships   

Regime Change In China

  • It is unlikely that there is a succession plan in place if Xi Jinping were to die tomorrow 
  • Xi is in his late sixties 
  • Most of the people in the Politburo technically aren’t supposed to serve because they are too old, a point echoed by Peter Thiel in his conversation with Peter Robinson   
  • Xi Jinping will remain in power for as long as he is alive, according to Peter Zeihan 

People That Disagree With Peter Zeihan 

  • People mostly get upset with Peter when his analysis is at odds with their investment thesis 
  • Peter’s thoughts on electric vehicles:
    • They aren’t as good on carbon as most people think 
    • The data does not account for the fact that most EV parts are made in China, where the processes are coal-driven 
    • The grids that most EVs run on are fueled by fossil fuels
    • They don’t perform well in the cold  
  • Peter doesn’t think we will be able to make electric vehicles for much longer because copper, nickel, and cobalt will be used for green tech technologies in the geographic areas where they can best be applied  

California, Environmentalism 

  • The environmental movement is being forced to face realty 
  • California and Germany have very similar green tech policies 
  • The Germans have spent 3x as much as California on green tech, but are only getting about one-fifth of the power
  • The idea that Germany is green is ridiculous; they turned to coal and spent $500 billion to keep the lights on in the winter of 2022
  • Geography is why California has had more success with green tech than Germany
  • The environmental movement had never considered geography before 2022
  • Solar panels belong in Phoenix, not Connecticut 
  • Putting solar panels in places like Connecticut increases the carbon footprint because there is not enough sun to generate enough electricity to pay down the carbon debt that it took to build the solar panel in the first place

Nuclear Energy  

  • Peter Zeihan is broadly pro-nuclear, but he believes “time frame” is a problem 
  • If there were no regulations at all, it still takes seven years to build a nuclear power plant
  • Small-modular nuclear reactors appear to be promising, but they do not exist yet 
  • The United States has only built one new facility in the last 45 years
  • Peter questions the long-term impacts of storing nuclear waste
  • There are no solutions in energy, only trade-offs
  • Peter’s comments on nuclear waste sparked a reaction from the pro-nuclear crowd:
    • Chris Keefer (@Dr_Keefer): “A brilliant man with very interesting takes based on an encyclopedic grasp of geography & demographics but his credibility is injured by an air of supreme confidence when discussing an area he so clearly doesn’t understand.” Chris also explains how mixed oxide fuels have been made from recovered plutonium at large scales for decades in France and other nations.
    • A thread from Decouple Media that eviscerates the merits of Peter’s concerns over nuclear waste
    • A thread from Madi Hilly (@MadiHilly) that puts his anti-nuclear myths to bed

The Problems With Solar Energy

  • In addition to efficiency, timing is the problem with solar energy
  • In most places, peak demand for electricity is after sunset in the winter; solar will never be part of that energy solution 
  • Solar energy needs to find something better than lithium for it to work 

Peter As Energy King For A Day 

  • Peter would invest $1 trillion in material science solutions
  • “Until we have the material science breakthroughs, the rest of it is kind of just spinning in the mud.” – Peter Zeihan on energy solutions 
  • It is better to spend $1 trillion on things that might work instead of spending it on things that we know already do not work 

Peter As Food King For A Day 

  • The United States does not have a food security problem 
  • The United States is the world’s largest food producer and exporter 
  • Today, over half of the world’s population is food-threatened
    • And this is before any fertilizers shortages
  • “Runaway success” is the reason for the world’s food security problem; globalization where everyone gets along made it possible for essentially every country to integrate into the global system, regardless of their geography 
  • Globalization has started to unwind, and that is why these problems are starting to surface

How To Survive The End Of The World 

  • Winners and losers will be chosen 
  • If there is only so much fertilizer, then you must choose who gets it, and who does not
    • Does the market decide?
    • Do you hoard fertilizer? 
    • Give it to allies?
  • “We can’t support our current population without industrialized inputs for agriculture.” – Peter Zeihan 

When Is All This Going To Happen?  

  • The Russian system could break tomorrow 
  • The major risk is a domino effect 
  • Energy is what to watch in the short-term
  • Peter thinks we will “be on the other side of this” 25 years from now 
  • He thinks the United States and its allies will create technology that allows us to do more with less and to exist on a more sustainable footing 
  • We do not know what happens to a country that has more retirees than working-age people
  • Countries will experiment with new economic models in an effort to survive; the United States must learn which models work and which do not

The Zoomer Generation  

  • He is most concerned about the “Zoomer Generation”, which is in the Gen Z generation and consists of people born between the mid-to-late 1990s and early 2000s 
  • Gen Z is our smallest generation ever
  • Peter’s concerns about Zoomers: they were born with an iPad, which makes them more socially awkward, so they date less and spend less time around other people, which means they are likely to generate very few children 
  • Dealing with smaller and smaller generations is new for America 

Bitcoin  

  • Peter predicts that the USD price of bitcoin will eventually “go negative” 
  • “There is no intrinsic value to this asset.” – Peter Zeihan 
  • He says there must be a degree of trust for a currency to function as a medium of exchange and a store of value 
  • He thinks that Bitcoin cannot be used for trade because there are a fixed number of coins 
  • Recommended reading from Jesse Myers (@croesus_btc): “Deflation vs. Inflation – A Response to Peter Zeihan on Joe Rogan” 

Central Bank Digital Currency 

  • Peter doesn’t expect the United States to use something other than the USD
  • A digital USD makes sense, but not a separate currency issued by the Federal Reserve 
  • China may adopt a CBDC to increase its control and surveillance
  • He is not concerned about the U.S. creating a CBDC or a social credit system
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