Aarthi Ramamurthy has had a long and successful career in technology. She has lead product teams at Microsoft, Facebook, and Netflix. Aarthi has also built two startups, including Lumoid which went through YC Combinator.
In the midst of the pandemic, Aarthi started a show w/ her husband Sriram on the social audio app, Clubhouse. On the show, they’ve interviewed some of the biggest names in business and popular culture including Elon Musk, Calvin Harris, and Mark Zuckerberg.
In this episode, Aarthi and Aaron discuss why we should be optimistic about tech, lessons from leading teams, and practical startup advice.
Aarthi Ramamurthy’s Challenge; Build something. Separate it from your identity.
Connect with Aarthi Ramamurthy
Tony Greer, editor of the Morning Navigator, filters a chaotic global landscape through 30 years of macro trading experience and his own analysis to provide regular insight and risk/reward for each trading day.
Tony Greer’s Challenge; Explore the difference in the fundamentals of oil and tech.
Connect with Tony Greer
If you liked this interview, check out our interview with Doomberg where we discuss food shortages, inflation, and why Energy is Life.
Tyler Denk is the cofounder and CEO of Beehiiv, a newsletter platform company that recently raised $2.6 million.
Tyler was the 2nd employee at Morning Brew, where he worked on engineering, product, and growth. He was responsible for building the renowned referral program and bespoke tech ecosystem that facilitated the company to scale to a successful $75m exit in 2020.
Now, he and his team are working to develop all the same capabilities and features for anyone to use on the Beehiiv platform.
In this conversation, Tyler and Aaron discuss the key capabilities most newsletter platforms are missing, the lessons he’s taken from Morning Brew, and the success of the Milk Road.
Tyler Denk’s Challenge; Always leave the house with a few dollar bills to donate to the homeless.
Connect with Tyler Denk
Big Desk Energy
If you liked this interview, check out our interview with Jon Shanahan where we discuss Shark Tank, men’s cosmetics, and selling in large retailers.
Peter Zeihan is a geopolitical analyst, author, and speaker who makes bold and startlingly accurate projections on the basis of geography, demography, and global politics.
He has authored 5 books about geopolitics; A Crucible of Nations, The Accidental Superpower, The Absent Superpower, Disunited Nations, and his latest, The End of the World Is Just the Beginning: Mapping the Collapse of Globalization.
Peter takes a somber, yet realistic, view of what the short to medium term future holds for countries around the globe. Decades of relative piece, secure routes, and economic integration represent an extreme outlier in the course of human history.
In this episode, Peter and Aaron discus how demographics and globalization will affect changes, trouble ahead for China, and how leaders can prepare.
Peter Zeihan’s Challenge; Donate to the AFYA Foundation.
Connect with Peter Zeihan
If you liked this interview, check out our interview with Doomberg where we discuss energy shortages, food shortages, and how to prepare.
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Aaron Watson: Peter. Thanks for coming on the show. I'm really excited to be talking with you. So I want to try as quickly as we can to summarize your view. And it is a macro geopolitical view. So there's a lot of pieces to unpack here, but for folks that have not read any of your books before seeing some of your past presentations, I would basically point to, you know, these pillars that you see driving a lot of the macro picture, which is changing demographies in different countries. Control of the seas and safe passage across the oceans changing finance and capital structures as associated with those demographics. And then just the plain old geographical constraints that countries have been facing, you know, through time and Memorial. We've lived through the last couple of decades where there's been a lot of I guess the opposite of volatility and we are entering. Indicated by the cover of your book here appeared where that volatility is going to be skyrocketing. So with that, as a jumping off point, can you give people a little bit more of a picture?
Peter Zeihan: Sure. So everything that I deal with is the two twins of de-globalization and depopulation. So first globalization and how it's ending. The system we have was established by the Americans at the end of world war II. We didn't have a free trade system before that. So if you weren't an empire, you were kind of real, you're typically a colony. With world war II, that system ended and the Americans patrolled the ocean so that anyone could participate in any supply chain and access any market and resource and work with any partner. And for the first time we got true civilian shipping and that has generated the world that we know that's international oil trade that's international manufacturers. That's the European union. That's the rise of China. All of that came from the American policy during the. The whole idea was we will allow this to happen and we will protect you if an exchange you side with this gets the Soviets. Well, cold war ended in 92 and we've been edging ever further away from that system. And in seven straight to presidential elections, the person who didn't like globalization is the one who won that includes Biden. So we are well past the point of no return there. And now we get to see the system break back apart and that'll be messy by any chance.
Wow, that was going on. It also changed the way we live and not just because things were getting better and safer, but the technologies of industrialization now could be applied everywhere in the world, including to the former colonies. And so from 1945, until 1992, that was primarily the Western world and their affiliates. But after 1992, expanded to the entirety of the world so the Chinese joined. Mixing went to China even up to the Russians joining in 1995, when you industrialize you also urbanize. And when you urbanize, you have fewer kids and after generations, two and a half generations of that, most of the advanced world, including places in the advanced developing world like Korea and. I've now aged well past the point of no return. And for all of those countries, this, this century may well be their last because they don't have populations of replacement levels anymore. Now it's happening at different speeds in different places. And every country started at a different time and followed their own cultural norms, their own economic development policies. So there's a lot of staggering. But this decade was always the decade when we were going to pass the tipping point, because this is the decade when all the younger countries become the age past the point of reconstitution and all the older countries age into mass retirement. So whether you're looking at it from an American point of view, a globalization point of view or demographic point of view, this was always going to be the last decade. COVID sped it up by two years and the Ukraine war is a hard stop. We're never going back to 2019.
Aaron Watson: And another part of that as you've alluded to, is this kind of insuring by the U S of the safety of the seas, or just, you know, you heard the moniker, like the world's policemen and to some degree. That's being pulled back. And you even said that there's almost an incentive for more disorder because the us can gain more from those types of interactions. So where are some of the vectors or the, the, the areas that you look to as the, having the highest potential to inflame into another conflict like Ukraine and Russia, because you predicted that what seven years ago?
Peter Zeihan: Remember, we're only in the second month of Ukraine. We're right here. And so to think that this just, just going to end with the Russians and the Ukrainians is a bit naive. Let me just kind of draw a thread here. And this is a possibility, there's any number of ways that this can all go, but we know that we're going to lose four to 5 million barrels of Russian crude within a couple of months. And in that scenario in the short term, it is Europe that suffers 100% of the pain, but the Europeans have something they can do about it. They can tap American crude, which the United States is going to be willing to give them, I think can go to their former colonies in Africa and renegotiate deals so that the crude goes north to them between the United States and Africa, that's enough for almost everything that the Europeans need, but then that crude is not going somewhere else.
And the country that is at the very end of the line that absorbs most of the world's crude. The single largest importer is China, but China doesn't have the Naval power to get to say the Persian Gulf in order to convoy ships back. But the Japanese do so. It's very easy for me to see. African economic and political issues triggering a conflict in east Asia, where the Chinese are left out. And then you're going to have some degree of military confrontation. If, if we're lucky, it'll stay constrained. If we're not, it'll get very big in east Asia. And to think that the middle east, with the Americans absent is suddenly going to be a peaceable place with the Saudis and the Iranians already glare at each other across the Gulf, I think is a little naive. So those are like the three big ones, but you can look at almost any country pairing in the Eastern hemisphere and there's a lot of bad water under the bridge. And these hateful pairs are perfectly capable of coming up with our own dust ups in a very short period of time. If there isn't a global policeman. All right. Now, while I applaud the Biden administration for trying to support the Ukrainians, you'll notice that that's not really happening anywhere else, except with. The United States is not interested in the world in the way it used to be.
Aaron Watson: And another thing that, you know, as you outline these, and I'm not that as the same student of history, but there are so many historical just Europe itself is its entire history is conflict between all these different countries in different forms. And one of the, the kind of weird phenomenon that reminds me of another book, the fourth turning by William Strauss and Neil, how is this idea of a allowing. Of generational memory. So if we point to the folks that can actually even conceive of what a world in which there was a world war was like, those folks are, are literally in the retirement home, if not already in the ground because of the passage of time. So why this book is valuable, but also. An additional layer to the challenges, navigating a world that is so foreign to that, which we've become accustomed to over the last couple of decades.
Peter Zeihan: Absolutely. The Europeans haven't been at peace because of the globalized system for 75 years. And because the peace was imposed from the outside. The country that imposed that piece, the United States smashed the Germans as part of a process. We have taken the center weight out of the European system and replaced it with a degree of placidity and wealth that they could have never generated on the road. Hopeful that the Ukraine war is going to be a new page for the Europeans, where they both acknowledged their history and build something better. And you know, maybe we have seen some things pushing in that direction the last few weeks. But on the other side, the geography hasn't changed at all the conflict with the Russians. Isn't something that's new. It has been part of European warfare politics and security. Going back to the beginning of the concept of. And to think that the Germans can go from a pacifist, socialist background to just flip and double the defense spending and be asked to defend the Poland from the Russians again. And there's not going to be any side effects from that. I really hope it works, but we're going to have a situation here very soon, where all the patterns are going to repeat. There are a couple of pipelines that come to Germany that don't go through Ukraine and don't go through Poland. So we're going to have a situation here very soon, where the Russians are going to tell the Germans, Hey, yeah, we can totally keep your lights on and keep supplying you with energy, but there's going to be a cost. You have to back out of the nature coalition when it comes to all issues, Ukrainian, in which case the natal position would cease to exist because we can't do it without German logistics. So all of these historical fault lines are still there. And I dare say the Russian. More aware of them these days than most of the Europeans.
Aaron Watson: So does that mean that the, and maybe this is overly reductive XQ you'll excuse me for thinking that some of our leaders aren't particularly great students of history. It's the, is that what you would look for in terms of the leadership that can navigate these types of scenarios? Understanding actually how these countries played amongst one another in those more historically normal times, unlike what we've experienced the last couple of decades.
Peter Zeihan: Historically speaking, we have been decent at that as a rule, the United States until the cold war tended to elect a lot of governors or a lot of people with institutional experience. We've certainly gotten away with that with the last three choices, senators writ large don't know a whole lot about the world and Donald Trump, Donald Trump's, Donald Trump. There may be. May be an exception with Biden simply because he's literally old enough to remember it all. He's one of the handful of people from the bygone era that actually was a functioning adult during the cold war and is still involved in politics. Now we can pick apart his entire team if you want to.
I'm not feeling hugely optimistic, but I'm certainly feeling more optimistic than I was for the last four guys. Because Biden got a lot of. For the way we pulled out of Afghanistan. And I can understand that, but we couldn't do what we're doing in Ukraine right now. If we were still in Afghanistan, because we were dependent upon the Russians for logistics to support the troops there.
So we actually have a free hand. Now that's something we've not had for a while. We are at the start in the United States, have a fundamentally new strategic picture. I would like to think it is going to be at the head of a renewed nature Alliance. I see things like the Australia, UK deal as potential grounding point for something similar in the Pacific.
But you'll notice that none of this is economic, it's all security. So the whole deal that we had during the cold war of a guns and butter deal to get everybody on our side, that's not on the table. Biden's actually more populous than Donald Trump. So we are talking about a fundamental break and the only relationships the United States is likely to have are those where the security interests align.
And as we're seeing with the Australians that comes with an economic cost to the petitioner, not to the United States, if you want to be on our side, now you literally have to pay for.
Aaron Watson: So in the spirit of both security and this conversation around China, another kind of very influential book is the kill chain by Christian bros, who now is with Andrew.
And there's this discussion of this history of how the U S secured the oceans with these big super carrier Naval platforms that were unparalleled in there, you know, scale and power, projection abilities as the way to ensure this world that is in the process of coming apart from your vantage point.
You know, I I've seen you make the argument in the past that, you know, these super carriers really defined power projection into all these different geographies. Do you see that also being on the decline as it pertains to relevance in some of these potential security concerns?
Peter Zeihan: To a degree. They were definitely the weapon of the cold war and world war II for the United States. And they've been central for American projecting power around the globe. Ever since the 1940s, they are good for projecting power, but they're not particularly good for protecting ceilings. They're to concentrate. And we only have 13 of them. Now, if you want to patrol the ceilings in a more chaotic world, you don't want 12 platforms, half of which are going to be important at any given time.
You want hundreds of platforms like destroyers or arsenal ships. We don't have that anymore, or we don't have that yet. Anyway. In a world where everyone in the American Alliance to first the United States on security issues. And so it does not flow to hostile Navy and where your primary foes are Russia and China, and they're functionally landlocked.
This works, but when globalization goes away and each country has to start looking out for their own interests economically, and especially in the maritime realm, you will have multiple navies that are competing. And while the United States. By and large still have the most powerful Navy by at least a factor of five moving forward.
It's about a factor of 10 right now. We no longer can operate with complete impunity. And in that environment, we cannot protect the ceilings for everyone. We can only protect the ceilings for certain countries that for whatever reason have bought into our program, whatever that happens to be administration by administration, we're not there yet.
But we're getting there because in a world where the Russian energy supplies are disrupted or in a world where the Chinese and the Japanese are hurting each other's throats or in a world where Persian Gulf energy supplies break down, we will need regional regional powers. We'll be forced to look after their own interests and they cannot do that without a functional Navy.
There's no reasons to expect the United States to enter into a significant war with any of them. But in fact, a lot of them that will be arising are likely to be friendly rather than not. But the days when the United States can just by Fiat dictate a security environment on the waves, those are gone and we're in the transition now to whatever's next.
Aaron Watson: Part of this kind of macro picture that I was curious to get your take on is the role of narratives. So in certain ways you've talked about, you know, historical fault lines or literally like the geographic constraints that say you know, Russia or China might face with the, you know, the first island chain kind of boxing China.
And as a, as a kind of very hard physical reality we've talked with other investors who will talk about, you know, a meme stock or a narrative. You know, pools, markets, and valuations and all sorts of different directions. To what degree do you put weight on that? When it comes to some of these geopolitics and example of that, that I would give is we had a civil war in Ethiopia and there was no opinion in the U S there was no media headlines owning everyone's attention.
And yet that's clearly not the case as it pertains to what's going on with Ukraine, where there's. You know, every headline, every, every, you know, newsletter that I get from the wall street journal is the days update with what's going on there. Well, we see more conflicts where as a us citizen, it's just not even carrying a purview or having, you know, being the thing, so to speak.
Peter Zeihan: I think we're going to see more of that rather than less. Well, Ukraine suggests that maybe the United States is to a degree getting interested in the world again, we'll see how long it lasts, but for all the other conflicts that are going on in the world right now, I think they've just completely fallen off the radar.
I mean, w when was the last time you heard about Congo or Sudan or Yemen, or even a rock? You know, none of these conflicts have stopped just the Americans have stopped caring. If you want to be involved, if the us government wants America to be involved, there is a case you have to make the case to the American people about why it's worth intervention.
After 20 years of the forever wars, that's a hard call. And even with Ukraine, Biden has gone well out of his way to make it very clear that this is not going to be a regular conflict. There are risks. Absolutely anything with the Russians is going to be risky, but we're not talking about forward surging forces to face the Russians down in Eastern Ukraine.
And that's not going to be on the agenda at all. So either you are a country that is able to negotiate a side deal with the United States, or you are on your own. And countries are still coming to terms with what that means. The country that by far is looking at the worst position or the Chinese, because the the security situation Ukraine has laid bare their 40 years of their planning as being wrong.
And they're losing the ability to talk to the United States in a constructive way due to internal problems and that the Americans are walking away too. And there's no country in the world that is more dependent upon the old system than the Chinese.
Aaron Watson: Are there any alliances that will make sense to be formed? You know, you're familiar with NATO? There was the news of it was, I believe was the India. Japan I'll show you us quad agreement. Are there other alliances that we should be paying attention to or should we should expect to come back with a return to his.
Peter Zeihan: To start out with it. Anyway, there's only going to be a very few and they're countries that are either cultural cousins or just strategic necessities to keep options open. So Australia is far and away at the top of the list. Japan paid to join under Trump. And if you can cut a deal with both Biden and with Trump, you're good. And the Japanese have figured out how to make that work. Definitely a U S ally moving forward. And of course the United Kingdom, but anything outside of those four, you have to make the case. Now we are seeing the first re-invigoration of NATO in decades. I would argue that Europe is operating on the same page. First time since like the treaty of Westphalia this sort of integration and cooperation in Europe is utterly unprecedented. Let's hope it lasts beyond that. Everything in the Western hemisphere is kind of behind a bit of a court on cemetery. So it's not like a lot of the countries in the Western hemisphere are allies, but the Mexicans are friends and family. And that that works and the Americans have their own reasons for keeping Eastern hemisphere powers out of the Western hemisphere, which will benefit a lot of Western hemisphere powers. But there's nothing that they can bring to the table in terms of security cooperation that will assist that none of them have deployment capability. The closest of course would be Canada. And as we've discovered, less than six weeks into the Ukraine war, they have already shipped everything that they have to the Ukrainian. The cupboard is bare. And so the Canadians are actually in Washington right now, talking to arms manufacturers in the U S about purchases because they don't have any of their own anymore. They all broke down and closed after the cold war. So it's, it's a really short list.
Aaron Watson: So in that same vein, and this is another thing once again, completely take for granted as an American. But we basically have the, the world's two greatest modes to our east and our west with the Pacific and the Atlantic ocean, just the capacity to step back and not have to engage with different conflicts. And then having, you know, one, like you said, Mexico and Canada, and that's the entirety of our borders to secure and how different that is from many of the other countries of the world in terms of their own security picture. You have spoken about Mexico and the drug cartels, the drug wars they're potentially representing a risk vector. And I would say similarly for the, for the U S we haven't thought about. About any sort of potential conflict like that on our border. Can you expand a little bit on another thing you kind of see on the horizon there?
Peter Zeihan: Sure. So let's start with the border. It's 2000 miles long. It is completely impossible to defend with conventional means. People talk about putting the army down there, but assuming we put our entire military on the border, that's like, One dude, every couple of miles we don't have the capacity to even monitor it much less seal it and all the talk of the war, the Sonora and the Chihuahuan desert are the greatest national barriers in the Western hemisphere. I'd argue they're actually even better than the Andes because the Andes have passes. If you build a road, the entire length of it, you first have to build 50 construction roads to get to the border. And then you have obviated half of the border because you've made it easier for people to cross half the desert. So I would actually argue that the wall is responsible in large part for a lot of the extra legal migration we've seen in the last five years. Once you kind of digest that. You look at the picture a little bit differently because it's much easier to smuggle drugs than it is to smuggle a person. You know, it's, it's a lightweight high value topic. And by putting in roads, we've made it very, very easy for things to be driven all the way up at the U S Metro regions in that environment. You change the culture of Mexico. We used to shoot down planes or capture boats that were bringing in the stuff by water direct to the United States, you know, the Miami vice days and in doing so that forced the cargo to go into Southern Mexico, where it would start winding up through the mountain valleys until it eventually got to the U S. Well, whenever you go up a mountain valley, you get concentrated groups like organized crime groups that grab a piece of it, and then they expand up and down that valley to take more and more and more of it until they clash. That's the drug war in Mexico is the clashing over those transport routes. You fast forward to today. And there are two giant alliances of the drug cartels. One is the Sinaloa. They're kind of like the the version. They think the drug smuggling business as a business, and they have expanded into parallel industries into tourism and agriculture and property. And I don't mean to suggest that these are nice. They're drug runners. They are not my skies, but they see violence as a means to an end, rather than an end in and of itself. Well, because remember all chapel he was the leader Sinaloa. And when we finally got El Chapo faction of Sinhala, what broke away and eventually merged as what we now know as the Heliscope new generation cartel. And they see violence as an end in above itself. They're far more brutal. They're far more likely to go to war with everyone. And that's one of the reasons why Eastern Mexico is such a violent place now is because they've been going head to head with the cartels. They're just wiping them out. And they're challenging Sinaloa as well. Problem moving forward is that wholistic new generation is now challenging the preexisting cartels at every single border crossing. And as soon as they get one. They can start bringing in drugs in mass. So yes, this, this, in my opinion is the greatest security threats that United States faces over the longterm because it's not like we're going to end our relationship with Mexico. It's our largest interrelationship. It's our largest agricultural relationship. It's our largest manufacturing relationship. And if you factor out the illegal migration, it is still the largest migration relationship. So Mexico and the United States for better, for worse are going to be working together from now on. And we have yet to come up with a good strategy to fight this.
Aaron Watson: What, so what are the historical parallels there? Because you know, you can, there might be different tools. There might be different technologies for war fighting, but they're still similar. You know, the art of war was written how many thousand years ago the art of a drug war, the art of our cartel war is kind of a different.
Peter Zeihan: I would love to be able to give you some signposts of how we could make this better. But as long as Americans like their cocaine, and then as long as they're willing to pay for it, it's going to continue to come. And the drug cartels are going to fight over it. One of the problems we've got now, however, that's made it worse is because the cartels have had so much power for so long. They're laundering their money through other industries. And those other industries have now become profit centers. So it's no longer just about the drugs and that gives them a degree of staying power versus any potential strategy. And if there was an easy solution to this Biden would have fixed it. Trump would have fixed it. Obama would have fixed it w would have fixed it. Bill Clinton would have fixed it and all the way back to the 1960s. This is, this is a reasonable national concern that doesn't have
Aaron Watson: an easy answer. I'm going to switch gears here. I know that once again, if your headline reader, China's very scary, they there's you know, the ability for them to surpass us economically and all these other things that you know, people will ring the alarm bells about you are one of the first voices that for me, Shifted my perception of not only the, the kind of structural risks that they entailed but perhaps the likelihood that there wasn't this kind of inevitability of Chinese dominance across the entire globe. I think we're starting to see some of the fissures in the forms of some of the lockdowns and food shortages being experienced in Shanghai and other provinces around China. But can you talk a little bit about these downstream ramifications for both energy and food as it pertains to.
Peter Zeihan: Sure. Well, let's start with the baseline. The only reason we're even talking about China as a significant power is because of globalization. It was the end of world war II settlement that removed the Europeans from the capacity of intervening in China. It was the end of world war II and the settlement with the Japanese that prevented the colonization of China. Japan was winning in China right up until the bombs fell on Nagasaki and Hiroshima. And then all of a sudden the Chinese environment changed overnight. All the foreigners left and the Chinese could fight their own internal civil war, which eventually the communist school. And then we got to a point 20 years later where the Soviets and the Chinese fought a near nuclear conflict over border disputes, entered Nixon and Kissinger. And the rest is history because we basically convinced the Chinese to switch sides. They joined the globalized system and in turn for turning their backs on the Soviets. And that is what set up the strategic environment for China's growth ever since. However that is not sustainable without intervention from the United States or globalization in general, the line of islands off the Chinese coast, Japan, Taiwan, Philippines. If there's one thing they all agree on is that they're not China and the Chinese have never been able to project. Beyond that, except during the global order, because the Americans have forced everyone to be on the same side, that's breaking down now. And the Chinese don't have the capacity in any form to project power, much beyond their own coastline. They do have a lot of ships. 90% of them can't sail more than a thousand miles from shore. And that assumes the going at a slow speed to save fuel in a straight line. And no one's shooting at them really Chinese. Barely make it past Taiwan. And China is the most internationalized economy in terms of its resource and its market dependence. So if the global system breaks down, that is the Chinese system implodes. And if China find itself in a real war with anyone, someone, the Japanese, the Taiwanese, the Vietnamese, the Indians, the Americans, someone is going to put a couple of destroyers in the Persian Gulf or in the Indian ocean and cut the energy. Because the United States hasn't been the world's largest energy supporter for some time over a decade. It's China, China imports, 85% of their energy. And 85% of that comes from the Persian Gulf and the Chinese can't reach the Persian Gulf. So any breakdown in the regional or the global order and it's lights out. And never forget that agriculture is an industrialized sector in the Chinese import. Almost all of the inputs for that too. So you're talking about the lights going out, the truck stopping and famine within a
Aaron Watson: year. And so how will you try to get legibility into that situation? Because we've seen them expel external journalists, they already make the even reporting of certain internal data, illegal or obfuscated or falsified. So, you know, really we're talking about. Production function here as a researcher, as a, as a person trying to craft strategy from reality. Where do you look for actual signal through
Peter Zeihan: the noise? Actually, it's gotten really easy. It used to be a lot more opaque, but ever since she denigrated his own system into culture, personality, they've ceased making functional decisions at the top. A great example is what's going on with the Ukraine war. So there was this belief in China that. The Russians will take Ukraine first kind of prove that the theory that we have, that we can take Taiwan easily. Clearly that's not the case because while. The Russians are clearly not performing to snuff. The Ukrainian army is not a regular army. They're doing great. Don't get me wrong, but the power mismatch, and that is not nearly as big as the power mismatch between China and Taiwan, because the Taiwanese had been preparing for this war now for 70 years. And they have a lot of modern equipment and oh yeah, there's still an island. So scratch one. They know the strategic relationship will not go the way they were. They're terrified of the boycotts and the sanctions, because the idea that shareholders would back away is something that they can't deal with economically. They need those connections in order to employ their own population and the sanctions. No, say what you will about the Russian economy. It's a major exporter of both foodstuffs and energy and the Chinese are major importers of both. So if we put a Russia style sanction on the Chinese system, that's it it's over it collapses in less than a year. And then if you just need one more reason, you know, it's like, I think there's was plenty. Demographics. The one child policy started 40 years ago. They're literally running out of workers and consumers. It's the fastest aging society in human history. And some of the data they been leaking out of the 20, 20 decade census suggests that this is them suggesting that they've actually over counted their population by about a hundred million people.
All people who were born since the one child policy. And it's probably the vast majority of them being women. So there is no hope for a demographic reconstitution of this country. We've always known for demographics. It was going to collapse the century because they're aging so fast. There'll be less than half as many people in 2100, as there are now, assuming nothing goes wrong with anything else.
And now with this new data from the census, We may have to speed that date up by 50 years. So in my opinion, this decade was always going to be the decade where the Chinese system completely collapsed. We're losing our boogeyman. I think we'll get back.
Aaron Watson: I want to just push on that a little bit more. I buy most of the arguments, but just to kind of play devil's advocate here on the fall of demographics, there's the argument of robotics. You won't need as many people from a manufacturing standpoint because we can put robotics in there. You won't need as many drivers because there'll be autonomous vehicles. And then. In, from an energy independent standpoint, they can roll out new Keeler. They can rely on coal and amongst other energy sources and basically replace their need with an electric grid powered by nuclear in order to accomplish that, those are, those are kind of two arguments against two of the points.
Peter Zeihan: These are points they're fair points. I mean, you, you changed the rules of the game and I'm going to change my mind. That's just how that works. Nuclear and coal are feasible options for them, for electricity. That is absolutely true. Their nuclear power plants are by far not the most efficient in the world, but they get the job done and they have plenty of soft coal. My concern because of the demographic stance is far more basic, though. If you don't have enough people to consume, you don't have enough to fuel your economics. And so the Chinese have always been dependent far more than most on imports for the raw commodities and then exports for the finished goods.
You can't do that without a globalized system. So you're talking about the best case scenario here being a North Korea like environment where the food goes away, but the power station. It could be worse. Chinese history is replete with examples of it being worse, but what you just identified as probably the best case scenario.
Aaron Watson: Got it, and then one last part here, and then we can kind of, I want to wrap with just you as the geopolitical strategist, but there's another. Russia has seen this literally, and this word is used too often, but literally unparalleled financial sanctions levied against them. And they had this fortress Russia idea. You've talked about the finance minister there being someone you've really admired for her kind of brilliance to do as much as she possibly can. Central bank chief. I'm sorry. The idea that once. Bullet has been fired, so to speak by the Western world that now China sits in a position where they can say, oh, we now see what's possible. See what's capable. And we can start to make our efforts to prepare for such a scenario because the bullets actually come out of the chamber for the first time. What do you think about that? Well, let's start
Peter Zeihan: with currency and then let's go to FDI. So with currency, everyone who, for whatever reason, doesn't care for the United States, saw this as proof in the pudding that they need to shift to a different system. And so everyone started having conversations about what they would shift to the Russians say, well, obviously it should be rubles and the Chinese. No, no, no, it should be you on, but it's not convertible. So you will, you're going to have to fly those to you. A pallet at a time. And we don't want any of them back ever. And the Indians were like, well, Hey, rupees, let's use rupees. And so, you know, it's only been six months and all of those plans have imploded. And the U S dollar role in the global system has gone up even because the Euro now has basically hitched itself to the dollar as a secondary support system, rather than its own independent poll and the same with the Japanese. So, you know, there, there's just, there's no alternative here. There's no other. On the investment side the Chinese have had a reputation for using a lot of capital flight and a lot of export earnings to purchase what they consider to be strategic assets around the world. And that has generated a lot of heartburn in a lot of places while they now know that that's pointless because the Germans who are, let's say not. I should have put this, made some poor strategic decisions over the course of the last 30 years as regards to the Russians. They're already nationalizing Russian assets in Germany, the Germans, the ones who were the passive it's the socialist. So the Chinese are now realizing that everything they bought overseas. Is worthless and they're trying to sell a lot of it. So at least they'll get some cash out of it, but the only $1.
Aaron Watson: Got it. Powerful answer. So I want to wrap up here because not only have I seen your assent here for the last couple of years, as someone who can deliver insights and just build a really interesting business, I had understood that. A career like yours was possible. When I was coming out of school, I think that's actually would have become a north star for me of, of sorts. So can you just maybe start off by just giving us a picture of Zion on geopolitics, the business model and what actually just even goes into being a geopolitical strategist or a geopolitical consult.
Peter Zeihan: Well step one, I'm a generalist. So I do finance. I do demography. I do manufacturing. I do act, I do a lot of things. My basis are obviously demographics and geography, but that doesn't do anything. If you can't apply it to the people who are in front of you. So we started out doing consulting and eventually turned into public speaking. I have a lot of fun on stage. I usually have a bourbon and a coffee, and it's a good time for everybody. Some of the joy has gone out of it in the last month because you know, we've got to start talking about the war. But if you can't make the information accessible and applicable, I would just be another consultant with. I try to be more than that. And that means I have to learn the world from every client's point of view for each individual presentation or consulting effect. That is alternatively really exciting based on the client, what they care about. It can be a little depressing. I don't always have good news. And so it's in the delivery in many cases so that you don't encourage people to find the nearest balcony to jump off of. Second the books are my way of having a conversation with myself. So to speak, every presentation I give is different. It's tailored for the audience. And since the book is a general audience, it's a combination of education and forecast and making people understand how we got to where we are. And the new book, particularly the end of the world is just the beginning. It does that from an economic point of view, as well as a strategic one. So the first three books that I did are kind of in the rise and fall of nations genre. And this new one is, you know, here's what the world we're going to be living in for the next 30 years is going to look like.
Aaron Watson: And it's really good. I am going to strongly, strongly recommend it to people. The, I think the best analogy that I could come up with that I've referenced a couple of books already, but you've all Harare's sapiens was like the book that everyone cited and I was like, oh, this is how the world works. This was bad. I've read both. This is better than that book. Nope. Nope. Not casting any shade against you all, but it should be just as big a hit and, and really edifying on what's actually going on in the present right now and create this really clear picture. How do you construct your team to get you the information that you need? Whether it be, you know, researchers like, like even just. Hey, I want to make sense of X. Are you getting really, you know, granular and that, like, I need to know what the oil production is from this country over the last 30 years, or how are you actually managing information within a company like yours?
Peter Zeihan: Well, that that's specifically as something that we get on every country and usually more than 30 years I remember every client's different that you're coming at the world from a different point of view. And we've got to have clients in manufacturing and agriculture and finance and all the rest. So yes, every time we build a picture of how the world works from their point of view, we have to understand all aspects of their operations and then all us. The context in which they operate specifically for the team though, I cheated a little bit. I rated my old employer more than once in order to pick employees that I had been working with for a long time. So some of my staff have been with me for a decade now beyond that we're always training up new folks. So we just hired a new one a few months. Who's taking it to like a fish to water. But I'd say that the single most important thing is I encourage my team to tell me when I'm wrong, because it happens. And if they don't, then I make a fool out of myself in front of a crowd and that's really bad. So you have to put your ego in a safe deposit box a lot of time and not take it personally.
Aaron Watson: And I have to imagine it's also having a really good understanding of where. The good data is like actually building up a premise from the first principle. So something, something I learned from you was you talked, it wasn't the Sinhala. What was the other cartels name here? Scott? The whole Lisko like part of the avocado issues that we were facing. My you know, the wife, the wife, squat going up in price was associated with that. Like how do you even like drill down to actually getting that information? You're not. I'm guessing interviewing someone in the Alaska as a rule.
Peter Zeihan: No, I have not intervened Europe interviewing international criminals for that specific one years ago, I did a presentation for a group that literally calls themselves the pickle packer. And in the winter, most of the hothouse cucumbers that go into the American pickle industry go from Mexico. Mexico's a mountainous country. So they've got the greenhouses going into stairsteps up the mountains, which means that they actually have the best footprint in Mexico for understanding the cartels. And when the car sells started getting into agriculture, a pickle Packers knew about it. So I checked. All of my clients. And I've been doing this now for 10 years. And I think I added up recently, it's been about 650 clients and they all have their own stories and it all just kind of gets thrown in together. And every once in awhile you find this bizarre connection that you would have never guessed. And that's what. And
Aaron Watson: I have to imagine that it's also, you know, the, the standard truism of this knowledge compounding, I, I heard a story once there was a or maybe it's like a fable or something, but it was, you know, the Senator is reading the news and he basically scans through the entire article and he's done with it in 15 seconds. Cause he was really only looking for one factoid relative to the story because he'd been tracking these arcs over decades of his career and the new intern couldn't possibly comprehend how. Pick that up so quickly from just reading an article. And I have to imagine that it's also part of your purview as you've been thinking about this stuff. So intensively for so long that you're really just adding one small, additional fact to a
Peter Zeihan: preexisting Corpus. It's all about the context. And when it comes to making people understand what's going on in the world about them, if you can explain it to them in their context, it'll stick with them. And I think that's. That's what we're all about here and so far, so good,
Aaron Watson: right on. Well, Peter, this has been fantastic. I really appreciate you sharing your time with us and your insights with us. Before we leave and ask our standard last two questions. Is there anything else outside of telling people to buy the book that you think they need to understand, or just part of the geopolitical picture that they should be keeping themselves attuned to?
Peter Zeihan: I just understand that the world that we've been living in for the last 70 years and especially for the last 30, was this just magical confluence of unrelated events, the age structure that was relatively young or relatively balanced and a geopolitical picture that was safer than it had ever been. And both of those are coming to the end. We're entering into a fundamentally new era where countries are going to have to sink or swim more or less on their own. You're in the Western hemisphere. That's going to be a lot easier than the Eastern hemisphere. And if you're in north America, it's going to be easier than south America. So the U S is going to come through this looking pretty good, different, and I don't mean to suggest the road forward is a straight or a non bumpy one.
But we'll be fine. If you're looking for more to follow, especially as regards to the crane war, because that's all anyone can talk about these days. The website is www.zihn.com. And if you could sign up for a newsletter right on the front page, the newsletter is free. It will always be.
Aaron Watson: Right on. And I would encourage people to obviously check out the new book.
The end of the world is just the beginning, but the older books as well, this United nations was one of the not easiest in terms of being simple, but just a page Turner that I flew through. I definitely recommend this United nations folks on we'll link that all in the show notes for this episode.
But Peter, before I let you go, I'd like to. To give you the mic one final time to issue an actionable personal challenge to the audience.
Peter Zeihan: Sure. We, because the newsletter is free. We're actively soliciting donations for a group called off yet. your foundation. foundation.org. They are providing medical assistance to the refugees of the Ukraine war. So far, we've got about six and a half million Ukrainians of. At their homes and there's another, almost 7 million internally displaced within Ukraine that are probably going to have to evacuate as well within the next couple of months. So anything you can give would be hugely appreciated. And here we are providing all of the royalties from all of the sales of all of the formats of all three of the books, accidental absence, and just United nations to Aphiah for at least until June one.
And at that point, we'll see where the war is.
Aaron Watson: Beautiful. Well, hopefully there is a quick end to that and a lot of people are able to donate support. Peter, thank you so much for coming on the show. We just went deep with Peter's ion out there as a fantastic day.