Summary The World At War: Peter Zeihan: Full Interview. - YouTube (Youtube) www.youtube.com
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Anthony Peter. How are you?
Peter I'm doing great. How about yourself?
Anthony I am doing fantastic. I'm super excited to talk to you when I told people that you were coming on. I got inundated with questions. And and all kinds of things to talk about. So maybe first, let's just start with the Russia Ukraine conflict, I think is kinda the the event everyone is focused on at the moment.
Peter Oh, there's a war I hadn't noticed.
Anthony When when when you think about that that What is your analysis in terms of, like, how do we get here? And is it specifically related to just the nato kind of expansion? And and what's... I think been talked about a lot in the mainstream media or there are other elements that led to this event that maybe people aren't as aware of or paying attention to.
Peter This was always inevitable. In in any world where the United States is no longer banning war. And is no longer regulating commerce in the way that we did during the cold war and the post cold war period. The Russians were always going to go out and try to secure what they see is the gateway access corridors, places like the Bullish plane, the best Arabian gap, out the baltic seat. They were always going to try to do this.
Peter What has changed is that the Russians are literally dying out. And the post cold war generation that was born through the 19 nineties was so small that the Russians were losing the capacity to feel a regular army. So if they didn't do it now, they would lose the possibility. And there... They would be then una anchored in this kind of...
Peter Great open flat zone in your the middle of your Eurasia, and the next time there's a war, they couldn't stop it. So they're hoping to forward position what they've got left in these gaps. And the Ukraine unfortunately is between them and 2 of the most important gaps. So it's not just that they're going for Ukraine. They're going from globe.
Peter They're going for parts of Romania, Poland and all of Estonian and Latvia, Lithuania. It's just a question of timing. But Ukraine is flavor of the month. I kind of see this war as the last conflict of the cold war, because as long as the Russians existed and their security was going to drive their decision making. So it's kind of like how the Civil war was the final war of the American revolution.
Peter We're kind of at the end of this section of history now.
Anthony When you think about what's happening kind of on the ground. And, of course, I I always am careful to say, like, we don't really know what's happening, or we can just go off for the reports we're getting. It seems like Russia may have thought that they would be able to be successful in Ukraine much quicker than they have been. I think they've been a little surprised by the resistance that they faced. And also it appears that they may have thought...
Anthony So China or other countries we're going to have much more support for them than it appears that they do. Is that a fair categorization in terms of maybe some assumptions that Russia had going into it and they've been surprised by the lack of success or support that they've received.
Peter Absolutely. 1 of the things we've seen in a lot of the authoritarian governments that are existence right now, most notably Russian China is that their leadership is completely isolating selves from the rest of the world. And so if you are not if you are in Putin's inner circle, you don't dare give him bad news, because he will kill you So there were a lot of assumptions that were made in the Kremlin that just have turned outs to not be true. Now and all due defense to to Putin in the Kremlin everyone in the West was thinking the same way. We never thought that the Europeans would pulled together in the way that they did.
Peter We'd never thought that we would get any sort of meaningful international. Sanctions that included countries like Japan and Korea. We thought that Ukrainians would crumble. We thought that the war would be over in a month. You know, everyone has gotten it wrong.
Peter But from my point of view, the single biggest flaw is the complete collapse institutional of the Russian military. They are making mistakes that were worse than what the Iraqis did in 19 92 or what they themselves did during the C wars. Just that the inability of them to launch any sort of meaningful multi domain operation and what we thought of as the second most advanced military the world is just blows your mind and forces the Russians now to do siege mentality tactics where they just obliterate civilian infrastructure because now that's the only way they can win the war.
Anthony When you start to think about the participation of nato allies in this conflict. There still is no no fly zone. There still is at least officially no troops on the ground from those nato allies. But there seems to be quite a bit of flowing of both capital and weaponry to Ukrainian forces. How is that helping?
Anthony Would they not be able to provide this resistance without that? And and I guess kinda how important is it that the European countries came together along with the United States to provide the support to Ukraine?
Peter Well, I don't have a good answer for you for how the Europeans came together because no 1 even in Europe anticipated this level of support. And everyone is taking any weapon system that they can that doesn't require a static footprint like so no jets because that requires an airport. Or an airfield. But anything that can be carried or move by truck that is not nailed down as being shipped in. And the reason originally was they wanted to give the Ukrainians a fighting chance.
Peter But I think it was the Con that was north of kiev of the 40 mile long 1 that terrified western leaders. Because we hear we had this 40 mile conway with thousands of vehicles that stalled out in a day because of lack of fuel dis horrible just 6. And then 2 days later, they ran out of food. And so all the soldiers had to get out and walked back to Belarus just leaving their vehicles behind. 6 Well, you know, from a certain point of view, that's a, yay, the Russians are incompetent.
Peter But until you realize that if there ever was a direct conflict. Between Western and especially American forces and Russian forces on the battlefield, the Russians would be obliterated. That's a bad thing because it means that if Russia pushes through and captures all of Ukraine and then moves to its next stages which are those gaps in Romania and Poland, for example, there will be a direct flight. Fight, and the russians would be obliterated, And they would then face a simple choice. Do we go into a humiliating strategic withdrawal from which this country will never recover.
Peter Or do we up the ante to include nukes? And so once that decision... Once that issue kinda sank in in the White House and Dod, now we are almost desperate to send any possible weapon systems that we can, So in April, this war is going to be incredibly bloody. Because when the war started, the Ukrainians only had a few hundred... Ja anti tank launchers and they only had a few dozen sting anti aircraft missiles.
Peter Well, that was before the Americans started supplying things in bulk. They're only now starting to arrive. So we're talking about the the Russians suffering, tank and attrition at an order of magnitude higher than right they are right now. And this has gone from an issue while we need to slow Russians and extract a cost, but we know we can't win to a If we don't win, we are really risking a nuclear conflicts, We have to do everything we can short of regular direct intervention. To crush the entire Russian system as quickly as possible.
Peter So Ukraine is now the field upon which this will all be determined
Anthony So it feels like there's 2 conflicts that are very much tied together. The first is the violent conflict that's playing out in Ukraine. This is... Russian forces versus Ukrainian forces. The Ukrainians have the support of nato, the United States and many other allies, the the Russians have you know, somewhat of a Trump card and that they're mutually armed and no 1 wants to push them far enough to to actually execute that power That's the violent conflict.
Anthony There's also a financial war that seems to be taking place, which was essentially over before it even started once the European countries plus the United States came together and they levi what are unprecedented sanctions against not only the Russian banks, the central bank, their leadership, but also what essentially has been every single wealthy person that even knows a politician, It seems like in Russia, seems to be getting all of their assets frozen, etcetera. Like, talk a little bit about what your analysis of the financial war that's being levi and just how effective that has been so far.
Peter Okay. So first the splash that's in the news, second the stuff that's behind it that's actually more important. And then the third what's coming. So the splash in the news is going after the Oli arcs. In the 19 nineties, a group of people took advantage of the collapse of the Soviet system and grab assets for themselves by on any number of means.
Peter Very little of it was what we would consider elite or what the right and law would consider illegal because there wasn't a lot of russian law then, but it was definitely unethical, and they have now become multi billionaires. And this first batch of oli arcs. When Putin came in in the year 2000. He brought them to heal. He made them a deal, that if they stayed completely out of politics, he would not go after their assets.
Peter And so there's been this truce between them for the last 20 years. Under Putin, he elevated a number of people from his F b days, Kgb days based on who's doing the math. To take over large portions of the Russian economy. This includes things like the defense industry, Ga prom, which is the world's largest central gas company and Ro nest, which is the world's second largest oil company. And these are all people who were not part of that original group.
Peter These are people who are all Putin's inner circle. So we're going after 2 different groups of all our arcs here. The ones that are around Putin, totally worth it. These are people who have been with Putin Bolted to the hip with every single policy done for 20 years. These people should be brought down.
Peter The other people, the folks that have been there since the 19 nineties, I don't mean to suggest that they're kinder gentle folks. I mean, they they are robber Barron at best. But going after them just makes your feel good because they have very little influence over putin. So we're talking to hear about Mel scoop the entire core out of the Russian economy by going after the leadership, but 1 group is not gonna affect the war whatsoever. And that's that first group in the nineties, they're the ones who have most of their assets overseas.
Peter So they're the ones are actually vulnerable to what's going on. Now behind that. We didn't... Just sanction a bunch of companies and people. We sanctioned the Russian central bank.
Peter And we don't think of how important the a central bank is in systems because we always assume it's a neutral actor in the background that maybe messes around with interest rates and bond purchases and that's about it. But they are the primary is connectivity point between any economy and the rest of the world. 1 of the thousands reasons, I'm not a big fan of bitcoin. Is it assumes that the central banks a will empower it and b will do nothing to impede it, and that's clearly not true that And in the case of the Russian Central bank, they can no longer deal with any entity in any of these countries and access any currencies that are dollars euros yen won Australian dollars, Canadian dollars, taiwanese dollars, and I'm sure I've met Swiss francs. And I'm sure I've left on a bunch.
Peter So anything that the bank tries to do anywhere cannot use any of those normal channels. And so among other things that denied the russian access to some 90 percent of their currency reserves. That means that when they sell well, somebody has, like, physically needs do a transfer in a third party and fly the money into Moscow. This is not a 10 situation. We tried doing some version of this for Iran and it was crushing.
Peter But we've never done it to an economy this bigger this holistically. And then what's coming? We have a number of sanctioned against Russia, it's the most sanctioned country in his now actually, it has more sanctions on it than all other countries and all other time frames throughout human history. The Europeans are now talking about an open band tree on all sales of Russian crude, not just to the Europeans themselves, because all that would do is shift the pain they're talking at the beginning of the process of talking about making sure that Russian crude can't make it to market anymore. That would mean among other things, blocking ships from going in and out of the Baltic sea, probably the stagger at and probably block blocking sheet ships going in and out of the black sea, probably through the Turkish straits.
Peter Now how Russians would respond to that would be really interesting. But if the blockade are further back from Russian ports, the Russians military can't do anything about it. So we're looking here at removing 4 to 5000000 barrels a day of crude production from the world. That is more than enough. To guarantee an energy induced depression that is global and scale.
Peter And the crazy thing is we might even get there without an official sanction. Because insurance companies are not allowing ships to go into these ports, the ports are shallow, so they can't take super tankers and then run it into China. So either you get this daisy chain of dozens of mid sized vessels that are gonna be loading onto a super tanker sight of a nato port and expecting that Nato is not gonna to do anything about it. Or they just close this straight all altogether. 1 way or another, we are headed for a very interesting year.
Anthony So we'll get the commodities in 1 second, but I want... Talk about this Central bank kind sanction that you mentioned, Sure. Which is... It's 1 thing to say, hey, you cannot transact. Right?
Anthony If I said, hey, Peter Central Bank, you're not allowed to transact in these certain currencies or in these other other organizations. There's an added piece though, where we essentially have frozen or confiscated, the central bank reserves as well. And that to me feels like it is today, a footnote given how complex situation is and how kinda just mind boggling everything, but it has massive ramifications across many countries over the next, you know, 50 to hundred years, What is your thoughts around the actual freezing and conversation of another country's central bank reserves that just happened to not be within their border?
Peter Let me put it to you from the point of view of an outsider. So here we've got the United States who has been moving down a path towards isolation isn't for 30 years, and it just wakes up 1 day decides that it once we've been involved in the Ukrainian and Russian situation. It's been removing troops from the middle east. It's been troops Measured and removing troops from Europe. We...
Peter When Biden was elected, we were at the low point for international involvement since reconstruction. We have fewer troops station abroad that's since reconstruction. So, you know, we're at a hundred and 50 year low right now. And now we tell people that they can't use the dollar for any currency. Everyone who thought that the American retreat was going to give rise to a multi world in which the United States had minimal power really hadn't been paying attention to how the world works.
Peter To have a global currency. The first thing you have to be sure of is that the country that issues currency, has to really not care about what happens with it every single day. Because if they're gonna manipulate the currency in order to achieve trade advantages, then nobody's gonna want it. In addition, it has to be, you know, sufficiently deep pool of liquidity in order to work. There's only 1 country that fit fits that criteria.
Peter There's only 1 country that's fit that criteria since 19 45, and it's certainly not China. And people are discovering, now countries are discovering now, that if you want to be part of that system, There are certain things you can and cannot do. Invading countries that for whatever reason the United States should not be invaded, it makes the list. And so I would say that the the biggest panic, the biggest damage that we are seeing from Ukraine war outside of Ukraine obviously. Is in China because in 1 month, the Russians have pulled back the blind on what has been a 50 year strategic program The idea that China can have the global power with American sponsorship with American ind that it can take Taiwan that it can intimidate Japan, that can dominate all of East Asia and yet not suffer economically at all.
Peter It was always ridiculous But now it's been shown to just be absolutely stupid. Now the question moving forward, of course is what's the next thing the United States is gonna care about. And considering how our erratic our politics have been for the last 15 years. That's a tough question, but it's something that every single country that trades now has to ob assess about if they wanna to continue doing anything along the lines that they thought they could.
Anthony It's basically, I have to remain in good standing. With the issue of the global Reserve currency or else I could be next. Right?
Peter I I exactly and there's and there's nowhere else to go. I mean, Yuan is only traded internally because it's the most currency in history. The euro con, bank deposits tip pay for bailout. I mean, there are there things that the Fed could do better in my opinion? Of course.
Peter But compared to all the competition. I mean, they're there isn't any competition competition.
Anthony So let's talk about commodity prices. I specifically want start with oil and natural gas. We've talked to a ton. On this show about the fact that the third largest oil producer. I think they come up with almost 15 percent or so of all natural gas globally and it's not just is it produced in Russia or even in the Ukraine kind of region, but also there's a lot of flow of these assets as you were describing in terms of the straits and and many things that are kind of being at least evaluated as potentially creating problems.
Anthony How do you think about... Let's start with oil maybe first. And the price has exploded, it's come back down. There's people running around saying that if we actually stop buying oil or natural gas from Russia, it'll create these energy shocks like what's your evaluation of it?
Peter Sure. I'm not a financial analyst, so I'm gonna put that out there at the beginning as it... Caveat, I am gonna throw some numbers out there where I think this is going to go based on supply mechanics. But, you know, take take it with a grain of salt. Okay.
Peter So Russia's is the world's second largest oil x quarter. And it exports via 4 main routes. 1 to China, 1 to the Baltic c, 1 to the black sea and then on via pipe order Europe. What's going on right now because of the Ukraine war is that the pipes that go to Europe are gonna be disrupted either by the war itself Or because Ukrainian partisan are targeting Russian income flows. 1 way or another those pipes aren't surviving this year.
Peter The stuff that goes to the Black sea is in a war zone, So insurance companies will not give the ind identification that is necessary for vessels to operate in that area. So the only way a ship can go and docket it overseas right now is if a country gives it sovereign ind identification and takes all the risk. Some of that is happened. The Chinese. It might be happening with the Indians that's the little touch can go, They're still negotiation.
Peter P, that's the Baltic port the So right next to Saint. Petersburg. That is not an a war zone. So you can get insurance to go to p. However, ship captains for the most part are not.
Peter Are refusing to go. And European dock workers are refusing to unload the cargo when it arrives. So that is still in use, but not nearly as much maybe a quarter of what it used to be before the war started. And then the final pipes either terminate on the Pacific Coast near flood of os stock or there is a short spur line that goes down into Do King and Northeastern China. Now the Western 3.
Peter Black c, the pipes to Europe, Baltic c, Those are interconnected to a decree. So if there's a problem at 1 port on 1 pipe, they can redirect some, less than a third, but some of the crew to other places, it is completely disconnected from the eastern pipes that go to China and Japan. So if all the stuff in the west is shut down, which is what I think is going to happen. None of it can go east. The rail line is already operating beyond capacity, the pipelines are already full.
Peter You would have to build a fundamentally new infrastructure from the fields in northwest Siberia to Chinese population centers. That is greater than the distance from Miami to anchorage most of which is through virgin territory that is very rugged. That's a 10 year program, minimum, even with the Chinese building it. So 1 way or another, we are looking at those western flows which add up to 4 to 5000000 barrels a day. Going offline.
Peter There's still about a million and a half barrels refined product that might go out, but most of that is going up be via rail So that'll be a little trickier to disrupt. I think the Europeans can maybe disrupt half of that if they really want to. But we're looking at this single largest removal of crude from the market ever. And in proportional terms, it's gonna have a shock somewhat similar to world where 2, and that assumes that there are no downstream effects anywhere as we had Insurance company is not doing it should company not doing. Dock workers not doing it, and now Hall, Baker Hughes and Sc.
Peter Have pulled out, and they do the technical work that makes a lot of this possible. All the super majors are gone. We even have a couple of major projects out Suck that are probably just gonna die because the Russians can't make those projects work by themselves. Most of the oil and gas out of that goes to China. So we're actually looking at an environment where the Chinese see reduced flows, rather than increased as Russia just mel and scooped out of the market,
Anthony When you think about this, obviously, I think Europe, United States, many other importer. Of oil and natural gas or kind of scratching the heads feeling like, how did we get to this point? Yeah. And in an open ended way because you can take it so many different directions. How did we get to the place where European countries in the United States are so dependent.
Anthony On Russian oil and natural gas to essentially survive.
Peter I would say there were there are 2 kind of main threats here. The first 1 is at the end of World War 2, the Americans change how the world worked. We created free trade and globalization and told everyone that could participate in market anywhere without military escort, they could access our market. If in exchange, they formed an alliance with us against the Soviets, We bought an alliance. And we guaranteed as part of that alliance, their energy flows.
Peter So the primary reason the Us has been so bogged down in the Middle East for so long. Was because we had to in order to keep our alliance fueled. If the Middle East would have gone offline, the European alliance would have shattered and the Soviets would have walked away with Europe. That was the logic. Post cold war.
Peter We kept holding up the ceiling. We kept up our end of the deal. But there was no boo man. So people went their own ways. And in many times that meant that they started signing deals with the Russians.
Peter It's gonna thread 1. Thread 2, Europe's a nasty place. Its history is horrific. And the world Wars were just the the capstone of what had been a millennia of conflict. And so with the American led order, the Europeans let themselves believe, let themselves hope that history had finally turn the page and that they were finally finally had all that behind them.
Peter And in that sort of environment, especially in the post cold war version of it where the Germans if were unified. Russia was seen as a country that end the end needed to be incorporated into the European family so that Europe could finally be whole at peace and free. It didn't work. And so we're dealing with a lot of shattered dreams in Europe right now right alongside with the war, because a lot of people's guiding ideology and hopes for the future died on February 22 when the Russians moved in the tanks. And so 1 of the reasons I think that the the European response has been so vi is that they're not just disappointed here.
Peter They feel betrayed that their whole idea of what could happen isn't gonna happen anymore. And in their mind it's very clear who's at fault.
Anthony When you think about this lack of energy energy independence both in Europe and in the United States, how much of the environmental kind of pitch over the last, you know, 20 years has also played into it. There's a geopolitical element in which you're you're speaking to.
Peter There's Yeah.
Anthony You talk a little bit about that in terms of... It seems like, you, 1 extreme is pointing and saying oh, the environmentalists did all of this. Another extreme is saying they had nothing to do with it. Truth probably somewhere in between.
Peter The truth is definitely somewhere in between. And if you're looking for someone to blame. I mean, if you're if... If that's what you're after here, it's definitely the German greens because they decided that coal was better for the environment than if nuclear power. They sought it from a nuclear waste point of view rather than a carbon emission point of view.
Peter So there are a number of countries in Europe that followed the greens and started dismantling the nuclear power plants, which meant that they had to use something. And natural gas from Russia was the cheapest of the options available that wasn't coal versus the Germans did coal as well. So, yeah, we are looking at an un a massive unwinding of Es issues in boardroom rooms across Europe and a massive unwinding of environmental progress general, Europe is neither a very sunny nor, very windy place. And so they can build all the the turbines they want and they put in all the solar panels they want. But in most parts of Europe, especially the northern part that is wealthy, The only way they've been able to bridge the gap is with Russian natural gas and now that's gone.
Peter So they're gonna try to build more solar and wind and they're gonna realize very quickly that that really isn't gonna solve the problem in most places. They're gonna try to bring in Lng from other parts of the world, but every shuttle tanker of Lng that they take in is 1 that's not going somewhere else. So somebody has to be left hand holding the bag. It'll probably be the East asians. And then they're gonna make up the difference with coal, which the Germans have a very big head start on because they already get about order of the fuel from something called ignite, which is a soft brown coal that's 20 percent water.
Peter It is actually more carbon intensive and less energy intensive... Or and generates less energy than would. But that's what they have. So we're and We're gonna see a lot of what we thought of as progress towards Green just being un unwind violently over the course of the next several months because the alternative is to have no electricity and that is not a viable option.
Anthony Let's talk about wheat. Obviously Russia you Crane kind of region is 1 of the largest producers of wheat in the world. What is the disruptions that will happen there and what's the impact kind of globally?
Peter Well this this is the horrific part. And if if the energy induced depression didn't get you down this well. Alright. The last time the Russians interfered with exports the former Soviet Union, it was 20 10. And they had had a bad harvest and a drought and a lot of fires in Western Siberia where they grow a fair amount of their wheat.
Peter So they blocked exports for a couple of months. That drove global wheat prices up by a factor of 2. Remember, food, especially based commodities like wheat have in elastic demands it doesn't take much of a disruption in supply to make prices go bonkers. In their primary export markets, which are the middle East, prices tripled. So And that triggered the series of coup and revolt and wars that we now come to know is the syrian civil war in the Arab spring.
Peter So small amount disrupted, prices tripled the middle East, double globally big deal. We were still feeling the effects of that. Oh, this is gonna be so much worse. So Russia is the world's largest wheat exporter and most of their wheat is exported via. Nova cease, the port that it can't be accessed right now.
Peter And Russia, the world's largest wheat exporter has invaded Ukraine, the world's fifth largest wheat exporter, and they are making a drive for the city of Ad odessa, which is where the Iranians offload all of their wheat. So we're looking at 2 of the top 5, maybe not Vanishing, well, Ukraine Vanishing from the market. Ukraine gonna be a net importer this year. They can't plant anymore. But a lot of the Russian production is not gonna be able to make it to the global market.
Peter Only if they can derail it to you, can you still get it? So Iran's probably okay. There's gonna be a little bit more maybe going to China and that's... Everybody. Everyone else replied upon Russian wheat, you're you're just out of luck and if you're quite on relied on your Cra wheat, it's just gone and it's not coming back this decade.
Peter That's all piece 1. That's just piece 1. We had a phosphate and a nitrogen fertilizer shortage globally when this all started. You need natural gas to make nitrogen. The European fertilizer manufacturers have already suspended most of their nitrogen fertilizer production because of what's going on the Ukraine war and the cost is already...
Peter It's I believe today we're at 60 dollars per for thousand cubic feet in in Europe natural gas versus United States, which is, like, 4 and a half. So I mean, there's no way you can be viable making that you're at that prices and that's without sync. Means. And 40 percent of the world's pot ash comes from either Russia or Belarus. So we now also have a pot shortage because they can't get that to market means So all 3 of the primary components that go into all fertilizer are in shortage globally, it takes a minimum of 3 years to build up the physical infrastructure to to bring a new phosphate.
Peter Excuse me to bring... Yeah, a new phosphate or an nitrogen facility online and probably closer to 10 years to get the mine and the mill sister is situation in place for pot. So this this isn't a 1 year issue. This is a multi year issue. And we're gonna have a lot of countries around the world, particularly in the poorer side that just aren't gonna be able to use fertilizer this year, which means their yields will create crash.
Peter The number 1 importer of Russian fertilizer is Brazil that the world's second largest agricultural export. So at a minimum, we're going see the prices for their output going up strat. It's the This is more than enough to trigger a multi content famine that starts probably in the third or fourth quarter of this year and then just doesn't let up for quite some time.
Anthony What does that mean? When when you say a multi consonant famine. Help people understand, famine could mean, people have a a caloric. Deficit and aren't getting enough food. It could also mean people literally get 0 food and everyone dies.
Anthony Like, like, what is the severity or extreme when you describe that?
Peter Well, again, let me start with the caveat. Not that I don't follow this stuff, but there's a lot of other things that go into agricultural supply chains. Assuming that the only disruption we have to deal with is what's going on in China with phosphate, which is a story and what's going on with pot ash in the former Soviet union and what's going on with nitrogen because of natural gas prices. Let's assume that there are no other factors that play into this part we probably only have enough fertilizer that's gonna get out there to support a population about 6000000000. So that means we're looking at 2000000000 people entering chronic m nutrition over the course of the next 18 months.
Peter Probably. 1 of the things we're going to see is when people realize that they can't just export widgets or iron ore and then import we because there's not enough of it. They're gonna have to grow it themselves. Now, luckily, wheat is a weed. It is very easy to cultivate it grows in a wide variety if climates and under globalization where everyone goes after whatever bid they can earn the most money for, wheat has been pushed to the margins.
Peter So you can go into a place like Algeria and grow more wheat and rip up some of your orchard, for example. You won't get as much bang if your buck in terms of income, but your people won't starve that way. We're gonna see that happen across Africa across Latin America across east and Southeast Asia because they're not going to have a much of a choice. So either, we have 2000000 people in malnutrition, Or we have maybe... I'm sorry, 2000000000 people or we have maybe closer to a 1000000000 people in malnutrition and the collapse of the global agricultural system that brings us out of seasoned blueberries and avocados or somewhere in between.
Peter We are definitely entering a period where it's going to be a very rough sliding in places like sub a Sahara in African, South Asia, because they are the world's most countries that are the world's... Sorry. They are the parts of the world that is most dependent either on direct food imports, the Or on the imports of the fertilizer that allow them to grow most of the food themselves. I would actually toss China into that that bucket as well. They're probably at like, an 80 percent import dependency upon the inputs that allow them to keep the Chinese population alive.
Anthony I've got 2 of my brothers here, Joe and John. Joe, what questions do you have?
Joe Hey, Peter. Thanks for joining us. Off the back of what you just talked about with the fertilizer shortage and price increases. I think the last time we saw something similar was around 2008, right? Where natural gas prices increased really dramatically.
Joe And it caused subsequently the same thing to happen with fertilizer. Don't know exactly how many people this calls to be put into chronic malnutrition, but can you compare that to events, right? Because I think that the main difference now, obviously... Lee is, we've had Covid for the last 2 years. There's obviously supply chain issues going around globally.
Joe Does this make it much worse or is it just a totally different event?
Peter There there's definitely some parallels draw upon, but let me kinda of put it that in context. So the the primary problem we had in 2007 to 2008 was that the China boom was huge. It was just gobbling up any resources they could. And American subprime was generating an artificial inflation of demand if you will in the United States. At the same time that the Iraq war was keeping oil off the market in Venezuela was early in its national suicide.
Peter So we had oil prices between a 100 and a hundred and 50 for a prolonged period of time that would contribute to the financial crisis obviously. You don't use oils to make fertilizer. And in a lot of places natural gas is indexed oil because a lot of times they're c produce. But they are different commodities. So natural gas was drug up with oil because of that linkage, in 2008, and that definitely contribute to a fertilizer problem.
Peter But even at its peak in the United States natural gas never breach 7. Now in the United States right now, courtesy of the shale revolutions, we have a lot of excess natural gas that we've been gobbling up in the years since. We went to 6 at the end of last year. Right now we're below 5 still. I don't think we're gonna go above 7.
Peter But in Europe, it says natural gas... Well, natural gas because it's a gas is more difficult to transport. So you need a you need a more dedicated pipeline system or you have to bring it in via Lng, which is incredibly expensive. Before the war started, the Europeans were already experiencing shortage, which had already taken natural gas prices up to 30. Compared to 6 in the United States.
Peter It's doubled since then. So we're talking about prices in Europe at least that are 7 times what they were in 2008 at the peak. And so it's not an issue of fertilizer is expensive. It's an issue of they're no longer making it because the basement material is too costly.
Anthony John, what questions you have? Yeah. Peter, thanks for joining us. My question won't be about the timing of this situation. So Looks like Russia has been pending this for years.
Anthony Why now? And what effect does that have on the economy globally?
Peter Well, the demographic situation was certainly pushing him them... Do it in the in the near term. I... Asked as as to why specifically, why February. It had to do with the combination of the Trump impeachment and the biden administration's changing of do arms export roles.
Peter So you may remember that the first impeachment trial for for Donald Trump was about him trying to blackmail mail the Ukrainian president. Current guy, the guy who's, like, doing Tiktok videos in Downtown, Ukraine when the bombs are falling? That guy. Tried to blackmail him into investigating Hunter biden for him in order to get dirt on the Biden family for his reelection campaign. And as a result of that, he cut cut military aid to Ukraine substantially.
Peter The Russian thinking was if that if Trump wins reelection, that's the end of Nato will be able to swallow the place. Well, that didn't happen. Biden 1. And 1 of the first things that Biden did was restart the military aid. And in November, If you remember, that's when the Russians started getting all squeaky and screaming about security issues in Europe.
Peter Well, November is when the Ja met the frontline troops in the sep provinces of Lu And the Russians actually saw the impact of American military aid on their troops. That's when the build started.
Anthony Peter, when you start to think about kind of why they're doing this now, I merely jump to okay. Obviously, right now it's not a good situation. There's massive ramifications, whether it's the commodity prices, whether it's kind of second order effects. Like global famine, etcetera, What is the off ramp? How do we get out of the situation?
Anthony If there is any at all?
Peter The Russians see this as an issue of existential national survival, and I think they're reading the situation correctly. They they know if they don't win in Ukraine and Poland and Romania that this is the end of... That the end of Russia is inevitable. And probably before the mid century point. They think that if they can plug those gaps, they buy themselves more time.
Peter And I think they're reading the situation correctly. Which really does make it enough them. There is not a version of a piece here that would satisfy both sides, the Russians like to say that, you know, if you only gave us what we wanted on security, none of this would have ever happened. But remember what they're asking for is the ability to... Either put troops in or decide the security policies.
Peter A Finland Estonia Latvia, Lithuania Poland to the Czech Republic Slovakia Hungary, Romania Bulgaria Bosnia, Croatia, S, Macedonia, Serbia, Ukraine Bill, Kazakhstan, Armenia, As Azerbaijan, Georgia, Taj Stan, Tu, you expect to stan. I probably missed a couple. Anyway, They're saying that they need to be able to write the security policies for a combined population that is twice that theirs. That's as. So anyone who says that Nato forced the Russians into this is technically correct, but they're also stupid.
Peter There is no version of this. There is no off ramp. They're Putin would accept because he knows, especially now that if he fails, that's the end And the only thing that would be worse than not launching the war would be launching it and failing. So he's not going to stop.
Anthony What is the odds of nuclear war at this point? We know that they are armed. We know that the United States and other nato allies have explicitly stated they do not want to intervene out of caution and or appetite for participation, but caution to not trip kind of World War 3 in nuclear war is that avoid or how do you think about that the nuclear component or overlay on this?
Peter Here's my concern. Ukraine is today is not the Ukraine as it was 20 13. If the Russians have done this in 20 13, this war may well be over already. They didn't have a strong national identity. Their military was weak and there was a substantial percentage of the population that was overt pro over That's not the case anymore.
Peter So now the russians are looking to have to occupy a country that at the start of the war had 45000000 people. That's gonna take a couple million trips, and they only have a couple of million trips. So from a conventional point of view, this is already the last word that the Russians will fight. When they move on to Romania, Poland and the rest, it is a nuclear question because that's the only way the Russians can get what they want. So if the Russians can pac Ukraine and Moldova to their preference.
Peter They will then start explicitly threatening nuclear tax across nato in order to get what they want in those areas. And they will not be afraid to use nukes to do it. Because from their point of view, the end is already nigh, So better to go out swinging and maybe possibly be able to intimidate and given them what they want, than not. And it's not as stupid as it sounds. Because there are 2 pipelines to take natural gas under the Baltic sea and under the Black sea direct Germany and Turkey.
Peter And without Germany and Turkey, there is no nato function in this area. So we're getting very close to the point that energy gonna be disrupted, but the Germans and the Turks can be offered a deal that the Russians can keep their lights on and only their lights on, but only if they abandon nato. I don't know how the germans in the turks are gonna respond to that. But that's probably the next chapter of this, which makes it absolutely beyond critical that Russia, never sufficiently pac Ukraine so that they feel they can move on. This is where from the West point of view, this has to end,
Anthony And does that mean that if it is needed, your belief is that the United States and Nato should step in with boots on the ground, no fly on No.
Peter Because that would immediately trigger nukes. Now the this... The Ukrainians have to do the fighting, We can provide them with all the equipment and intelligence and targeting information that we can. But if we do if we have American soldiers in Ukraine, the Russians will know and then it's a different sort of field. If we put fighter jets or start doing a no fly zone, same thing.
Peter The Russians will feel they have no choice but to escalate. So this has to remain conventional, and it has to remain in Ukraine. Anything else you are talking about mushroom clouds.
Anthony Yeah. I I tend to agree that the dee escalation is incredibly important here. We've talked a lot about the United States, European countries and various allies. We haven't spoken as much about China and India. China seems to be taking more of an indifferent approach maybe is the way I would describe it, where they're not necessarily supportive of Russia, but they're also not supportive of the Us and nato in terms of Sure taking the position that they're taking.
Anthony India also seems to be a country that is heavily reliant not only on the wheat and fertilizer, but also has much more of an appetite to settle outside of the sanctioned currencies, to go ahead and continue to conduct bilateral trade, How do you evaluate kind of the the geopolitical chest Right? When I think of that chess board, I think of you as as 1 of the people who pays attention to it all day long. Those 2 chess pieces of China and India seem to not necessarily be aligned toward. Holistically with the Us and Nato, but maybe not also completely with Russian either. What what's your read here?
Peter Well, let's start with the Indians because it's a simpler situation. India never joined the global order. They they were definitely Pros Soviet. And even when the Soviet Union died, they continue to be Pro Soviet. There...
Peter There's a degree of ideological catch up that the Indians have not yet. Done, and they've barely started actually. And so when they look at this situation, they see Russia as Soviet even though they're not, even though the Russians can't give them any of the money or most for the weapons that in the past, they thought were were viable. We're certainly seen on the battlefield that Russian weapons are not nearly as useful for in a real war as we thought they were. So whenever you see or aside from that, geographically Indians are absolutely trapped in South Asia.
Peter Even if Pakistan wasn't there, there's still deserts and mountains that hem them in. So India is incapable of projecting economic and political power into Europe in a way that would allow them to establish an independent trade link. They can only trade with Russia if the Europeans and the Americans allow it. And I think in April that is going to stop. And the the Indians will absolutely bitch, but there's absolutely nothing they can do about it.
Peter Also, the damage is done already in terms of the agricultural situation. So they're gonna be ob obsessive about fat issue here fairly soon. So that's India. China, who? Okay.
Peter So China joined the global order. With mao. That was the whole point of the Nixon mouse summit that we would bring the Chinese into the system if they would turn their back on the Soviets and it were and that contributed to the end of the cold war without a shot being fired. Big victory for both sides. Both sides being the Us and China at the Russians obviously.
Peter Now, the Chinese have expanded by a factor of 10 economically. They see themselves as a pure power. To the Americans, but they are unwilling to admit that all of the growth that they have had. Every little scrap of it is because of the globalized system that the Us maintains And when the Russians fell under sanction, everything that the Chinese thought was true about their future was laid bare as best, which will thinking and bad analysis. So they are now looking east to the United States and West to the Russians in a little bit of a panic because they are being tied indirectly to what's going on in Ukraine.
Peter And they have now found out not only does the West and specifically the United States financial tools work very well. They now know they would work much better against China than against Russia because at its core Russia's a commodities exporter, most notably oil, natural gas and food. China imports all those things. So if an equivalent sanctions regime was done against the Chinese, you'd have 500000000 dead Chinese and less a year from starvation. And that assumes nothing else gets folded into the situation.
Peter So the Chinese are trying to wrestle in with the collapse of 50 years of strategic planning and their core ideology as being completely non functional. I'd say if you look at the rhetoric from the last 3 weeks, they're they're doing a decent job of segway. But you don't you don't rip the mint whole roots out of an entire system overnight and next people just blink and then all of a sudden beyond the new scale. Europeans have shown that maybe that is a little bit more possible than I'm saying here. Whole but the Chinese have always seen themselves as anti america.
Peter They've always seen themselves anti western anti democracy. And now they're realizing that the mood, of the man in the White House determines whether their country exists. They're not gonna turn on a dime for that. But we'll know soon. I think this is another 1 of those things that we shaken out 1 way or another by the end of April.
Peter Oh, 1 other thing. As as tight as the sanctions are and as bigger as big as they're getting, they're nothing compared to the corporate boycott cuts. Almost every single company that left Russia was under no legal requirement to do so. They just didn't want to be associated with the war. And we're talking about those Es g, social goody shoes, mammoth companies like Exxon.
Peter And Hall, who now gone, and everyone else followed. So if that happened China, you know, that's all of their investment that matters. That's all of their technology transfers. That's all of their ant markets. This system if it turned against China would be far more damning than anything we've seen out of Russia so far.
Anthony Yeah. It's fascinating to kind think through the complexity here on the geopolitical landscape. We we've got a couple more minutes left, And I wanna spend our time talking about Bitcoin My understanding is that you're not nearly as excited about it maybe as I am.
Peter Think that's safe bet.
Anthony It's 1 way to put it help me understand kinda of, like, what what's your view on it? And maybe actually what be interesting is like, what are the challenges that you think Bitcoin has that you probably have? More confidence are inter insurmountable than maybe I or others have.
Peter Sure. Well, I mean, let's start with the the what works. The blockchain digital currency is I have no problem with that. I'd see that the next step and how central banks manage their money supply. So it's not like I'm a post a digital writ large.
Peter The bitcoin, you Anything that is going to be a currency has to have liquidity and Bitcoin has no mechanism for expanding what is necessary to match market demand. It is based on how many people can crunch however much data and then them getting paid for it. But that doesn't actually generate anything of value that is not in bitcoin already. So there there's no issuing mechanism that works. There's...
Peter It's not a method of exchange. It's too volatile. There's no 1 that regulates it. Supply. There's no 1 that can make it access this market or is that market as legal tender unless you wanna be and what is it I'll salvador the or.
Peter 1 of the Central American countries is if I'd go that way. Not working out great for them. It's it's tulip without the tulip ups. I mean, it doesn't... It's not an asset.
Peter It's not a store value. It's not a method of exchange, and it's certainly not independent because what we saw with the Russian sanctions is all the connect between bitcoin and the real financial sector got locked. And if you're going for bitcoin on a libertarian basis, I mean, that should just prove that there's any use to it at all. So that's kinda like the big 3 from my point of view.
Anthony Alright. I wanna take each 1 of them individually sure I don't come at this from a the perspective of trying to commit you differently, but I think talking through it actually is is super occasional to both people who are credits and also supporters of Asset.
Peter Go for it.
Anthony So when I think of a central bank. Right? There's kind a framework I use, which is most people would say you need 2 things for a central bank to be affected. 1 is it needs to be independent from political influence, etcetera. So just.
Anthony The the monetary situation. And then 2 is that it needs to be somewhat predictable. So the more surprises the central bank provides the less effective it is or or the. People kinda trust it. Right?
Anthony So predictability and...
Peter I agree with you with 1 exception. For the global currency that is not as necessary.
Anthony Okay. Fair. Very fair. And so when I think of Bitcoin, 1 of the frameworks that I've used to evaluate it is that it is Zeihan automated central bank. Now automated is this kind of word that can be used across a bunch of different things.
Anthony But it's just the fact that you I or nobody else in the world can change the monetary policy. Maybe the monetary policy is good or bad, maybe it's effective in a certain environment are not effective, but it just can't be changed. And the reason why in my opinion that's important is because it has a level of independence that it doesn't matter if there's World war 3 going on, Covid, a recession the president is tweeting about it or anything in between, it's just gonna stay the same. And I think that that at least on 1... Kind of analysis removes the view that it is not independent.
Peter So when you put it that way, it makes it sound like digital gold. And I would also argue that Gold is a horrible vehicle for for store of value. We've seen that with the Russians. Only gold is in the country. They can't trade it.
Peter Yep. It's worth nothing to them now. And and so when I see Bit bitcoin, yes, it's there behind the scenes, but it's their connections. The the real financial sector that allow it to be exchanged and those can be blocked by a Central bank without even needing an executive order. So So.
Peter Degree of vulnerability for the asset overall just seems extremely to me.
Anthony I actually think hearing you talk about this. I think you and I are gonna agree on something it. But just bear with me for a second.
Peter Okay.
Anthony So that's the automated component of it. The second is the predictability. And so this idea of a programmatic monetary policy, people aren't sitting around waiting for the a press conference of are they gonna raise interest rates, 25, 50 basis points or not. Again, you can argue whether good or bad that it's fixed, but it is fixed. And therefore, when you have that programmatic ability, I know that it's independent, and I know that I have some degree of certainty as to what's gonna happen in the future.
Anthony Now your point, I think is the best critique of the monetary policy, which is that you do not have anyone with the ability to expand or contract the monetary supply. Or manipulate the interest rate or kind of the issuance rate in order to respond to world events. And so we think about pre going off the gold standard It was essentially the world had To cater to The monetary policy. And then we basically broke from that and we said no wait, the monetary policy should cater to the world. Right?
Anthony And that change, Essentially created the last 50 plus years of of economic boom. Now, when I think about bitcoin, that, like economic or monetary policy argument is a big piece of the story, but it's not the only piece of the story. And I think your point about gold in Russia is a huge point that many people missed here. Right? It's their foreign reserves, and basically, all of their assets that were not held inside of Russia are gone now.
Anthony And so that brings you back to this idea of, like, okay, if that is true, which it seems to be that is going to be a new playbook that can be levi against countries that fall out of favor with the United States or nato allies, etcetera. Then sovereignty becomes really important. And to your point, Gold sucks. It's heavy. It's really hard to move around, who's gonna accept it.
Anthony It's not very divisible, like all these challenges with using gold. But if you could do that same exact thing, with sovereignty in a digital world, This will remove all the problems because you still need someone to accept it on the other side, but it does at least remove what I would consider like the analog friction. It's not heavy. It's easy to move. It, you know, with a click on a button they can settle anywhere, etcetera.
Anthony And so I don't know if Bitcoin is the perfect solution. But it feels like whether do you evaluate from a monetary policy standpoint around independence and predictability or you evaluate it from a sovereignty standpoint. It's just better than what we have. Right? And is that how easy big about?
Peter You're basically making the E argument there. Okay. We rip out the old architecture. Put in an architecture that is designed for this new asset then everything will be fine. Unfortunately, we have to deal with life in between a and b.
Peter Or and the only
Anthony way that...
Peter People who can say that b is better, the people who are theo. There's no there's no example of it, and we'd have to, you know, first break down everything.
Anthony So your argue... Is so basically, it's this idea of, like, hey, if we transition from a, which is, let's call it the legacy or or existing financial system. To be, which is the new right now up put that air quotes, if it comes to fruition, there's a transition period that could be painful, inefficient maybe not even possible, etcetera. That... That's so good.
Peter And you have to get every central bank to surrender their authority
Anthony to. Who? So if we look around the world, this is where I think we're gonna end up agreeing, is El salvador, which I think most people would argue pre the Bitcoin announcement. Most people couldn't point to it on a map. They have 6 and a half million people or so in their population, which is literally less than you know, New York City, right?
Anthony As an example to just see how small of a country it is. They've gone ahead and what I, describe as they've plugged their country into the bitcoin standard. Now what does that mean in practice? They bought some bitcoin. Again, millions of dollars, not like billions of dollars they have created an Atm network.
Anthony They created in an app. They paid some of their citizens about 50 percent or more of their citizens to buy bitcoin or use Bitcoin, they paid them for it. And now they're setting up this bitcoin backed volcano bond, etcetera. So they're like all in. Right?
Anthony And again, small country, 6 point half 5000000 people. The part that is fascinating to me is not so much what is happening so far with Bitcoin. As much as they're reporting that tourism is up 30 percent year over year. That Gdp has started to grow, that actually they have more than 50 percent of their population who now hold Bitcoin as a savings technology, etcetera. And so what I don't yet know, because I don't think we have enough time or or data is when somebody goes ahead and makes Bitcoin legal tender or adopt it, which now we're seeing in many other countries So we just saw Lug gon, Switzerland.
Anthony Malaysia today just described that they wanna make a bitcoin cryptocurrencies legal tender. There's numerous states in the United States that... More marketing, but wanna do it as well. Is it actually the technology itself and what economic impact it creates, Or is it more so become a flag in the ground? Hey, we wanna be innovative.
Anthony We want entrepreneurs. We want to be business friendly. We wanna be at the forefront of this and that. Leads to the positive impact of tourism Gdp growth, etcetera. Like how do you think about that almost balance between the technology itself first the impact
Peter Well, let me give you a scenario where Bitcoin or things like it might have a role in the future. Okay. The whole global globalization... Thread that has driven everything since 19 45. That's what's breaking down right now.
Peter U. And in in my second book apps in Superpower, I think 1 of things I said is it really matter where the break happens. Gonna cascade. So the Russian of Ukraine war was 1 of the specific examples like I had. There was 1 of the Persian.
Peter If there's 1 of these east Asia. If you move away from the trade, it's kinda environment that we have. It's not that the dollar standard goes away. That it probably becomes more important because the United States will be even more emotionally disconnected from other second of the world and be be more of an impartial ar arbitrary and the dollar will be more important and take more market share. But if you break down into a series of disconnected regional trading networks, not all of them have a country at its core that I would consider an economic power, So when you're looking at certain parts of the world, they're gonna lack access to and influence over any sort of federal reserve action.
Peter Having another method of exchange that is not the physical Us dollar. Has a role, you'll have to keep the electricity on. You'll have to keep the web working. And some of these places probably aren't gonna be able to manage that. But there are other ways to establish a method of exchange in an environment or the Us just doesn't care about half the planet.
Anthony So here's a theory that I have. I have increasing confidence that this is gonna play out. But I actually think that the Us dollar use as an example and Bitcoin will rise and strength together. And 1 way to view it is there's a a stable coin that is peg to the dollars. And now algorithm worth mixed stable coin today, that recently they made the decision rather than try to use exotic financial mechanisms where people are arbitrage risk to keep it at 1 dollar.
Anthony They simply are going to get rid of that system and move to a bitcoin backed stable coin. So it's still a dollar peg asset, that is t able and to your point has stable value so you remove the volatility concerns. But the value essentially replicates the gold standard. Right? It's paper claims on the gold, now you have a digital token valued at 1 dollar that's peg there, and it has some sort of underlying asset to it.
Anthony I actually think that some of the weaker currencies, that is the path in which they essentially either adopt something to drive value to their weak currency, or they will fall at the feet of the dollar. Right? There's consolidation around the dollar strength. And so we see these weak currencies fail in the face of that. And so 1, I guess just like, what is your reaction to that?
Anthony And 2, have you seen anything that the weaker currencies are doing to try to basically survive in the face of a strengthening dollar in kind of this world order that seems to be shifting underneath it.
Peter There there's there were face 3 strategies. 1 of the strategies used to be to find a regional poll like the euro that you want to work with, that has becoming less and less popular as people realize just how much the Chinese manipulate the currency. And especially in the in the aftermath of this round of... Against the Russians even the euro is not seen as a good role for that. So we were left with 2 others.
Peter 1 is a ama, or you have a number of countries that pool, their their financial have to make a regional currency, like the Caribbean dollar or West Africa had the West over in Frank, kind can't even honestly remember the status of that right now. Has changed so much in the last 2 years. Or option number 3, you just peg it to the dollar. You know and that's not just believes that's d facto Hong Kong and Taiwan. You you find ways to link yourselves into the bond market.
Peter So even if currencies do swing, you have enough exposure, so you get brought along for the swing, and that's more or less what the Australians and the kiwi have been doing for decades. The I see a lot more of that moving forward because the parts of the world the Us is gonna to remain engaged in or the western hemisphere Southeast Asia and maybe maybe maybe Western Europe. But if you're talking from about the Brits and the Japanese in the Us, In Canada, that's already 4 members of the g 7. And if you include the rest of that kind of inner circle zone, you're still talking about 2000000000 people. So either you can be associated with that, countries that have broadly positive demographic growth and consumption led growth moving forward or you can tie yourself onto something else where security is going to be a bigger concern for you than the finance.
Peter And when that is how people are thinking that's security is more important than finance. I really have a hard time seeing that something like Bitcoin coming in out of the shadows.
Anthony I think Bitcoin is the most secure asset in the world. Right? Which is...
Peter Because I I don't Hopefully, this isn't the point you wanted to end on no not gonna agree.
Anthony No no. No. Didn't expect to to change your mind on that. Here here is the the other piece of it though is... I think there's less humanitarian argument that it's it it's sad to talk about Right?
Anthony Because we're watching it happen in real time. But there are millions... Of Ukrainians who are saying to themselves, oh my god, we're being invaded, I need to get out. And where I go I may not even have an idea, but I have to get to a border, I have to get out of my country. And when they do that, they essentially look around and they say, what assets do I have that I can take with me?
Anthony Where is my family and friends and how many of them can I take with me? And everything else gets left behind? Businesses, wealth, etcetera. And we've seen this unfortunately, many times in history and their story after story after story that you'll hear of, you know, we got on the train with whatever was in our and that's basically where we went to the new home and and survived from there. There is this element of if the world order breaks down and globalization breaks down to some degree.
Anthony We see more chaos, more uncertainty, even potentially more violent conflict, the place where you want to have your wealth is actually in a digital asset that you can take with you that can't be confiscated that can't be seized, that you can carry as much... You carry billions and billions of dollars with you. And so what I've been thinking about is there's a trade off no asset, no market, no anything is perfect. And so for example, if you're in Ukraine, do you care that an asset swings 10 percent a day, if the opposite or or kind of opportunity. It it basically leave it behind.
Anthony Right? And and in that situation, you probably say, look, I'll take the 10 percent swings as long as I can get it out.
Peter Just keep in mind that from a government's point of view, the same things that make that give that a positive spin and make that useful are Oh, 0, so attracted organized crime.
Anthony Yeah. III think that that is a fair concern. What...
Peter Because you you can't have 1 without the other. And if governments are faced with that situation, I can tell you how all of them are gonna now.
Anthony They're trying right now. I I think the... No.
Peter They're not. They're really not yet.
Anthony Because bitcoin
Peter because the liquidity is... Liquidity of Bitcoin is not enough to attract organized prime at the moment. As soon as if that were to change, then, Oc would go into it very big and governments would come down on in a very very big and painful way.
Anthony I think that the law enforcement, Cia and various governments. They love Bitcoin. They love it because it's an open transparent ledger. And if you're an idiot and you use Bitcoin to conduct crimes, I think they have confidence that they'll be able to figure it out. Like, would you rather conduct a crime with physical cash?
Anthony Or with, you know, kind of your hands on a keyboard. What a law enforcement agent 1 time told me at the federal level. He said, you know, if somebody commits a crime, we want their hands on a keyboard. Like, drastically increases the odds that we catch them. And I always think about that as in terms of Bitcoin where if you commit a crime using an open immutable ledger that they can analyze forever.
Anthony They're probably gonna catch you.
Peter You know, I just from what I know about how the Mexican cartel work. They are more than savvy enough to make that work for them. The...
Anthony I'm not messing with the cartel. Yeah. Exactly to you.
Peter Yeah. It's like, I... It's just... The the the way that you can shove things through a system like that and and bring in intermediaries, you may not even know it. Just seems robust.
Anthony I I think that that's a fair view to take given the current information. Before I let you go, you have your book. Coming out in June. Yes. The end of the world is just the beginning, mapping the collapse of globalization.
Anthony Give us kind of a quick 30 second 60 second. Overview as to why why people should go get it.
Peter Sure. So the previous books were all about the rise and fall of nations and, you know, there's a lot on the Russian Ukraine wars and all 3 of them. But the new book is looking at it from the backside of AAD global world. What happens when the connections that make everything work stop. What all the various economic sectors from finance to agriculture to manufacturing, and how do they break down and how do they reform on the other side?
Anthony III think that this is like maybe the book to go read this summer.
Peter Open. It
Anthony may may pretty important. So anyone who who is not really of Peter's books, I highly suggest them. They're very well written, but also they really just make you think everything from dis united nations, books etcetera. So the end of the world is just the beginning mapping in the collapse of globalization. It's available for pre order, Amazon everywhere, which by the way I also...
Anthony My brothers will find this funny. The books Even out yet It's already number 1 best seller.
Peter What Really?
Anthony It is the number 1 best seller in Middle Eastern politics. Is 1. 1 of many places.
Peter Yeah. Amazon has so many categories that everyone is the best. Seller. Okay? I really excited there for a second.
Anthony After your appearance here today, will be the number 1 best seller in all of Amazon. If that would be since then you know who to credit. Yeah. Alright.
Peter Where where can we... Some bitcoin? Deal.
Anthony Where can we send people to find you on the Internet?
Peter Sure. So the website zion dot com ZEIHAN dot com. There's a newsletter you can sign up that is free that is always free. My Twitter handle is at... Peter's Zion and I am an equal opportunity bubble popper, so just be prepared.
Anthony Awesome. Well, thank, Peter so much. This is fantastic. I could literally talk you for hours about this stuff. You've been all over this and gave a great breakdown today.
Anthony So we'll definitely have to do again in the future.
Peter Alright. Sounds great.
Anthony Alright. Thank you, Next Peter.
Peter