The Jordan Harbinger Show - 640: Peter Zeihan | Why the World Should Care About Ukraine

Episode Date: March 22, 2022

Peter Zeihan (@PeterZeihan) is a geopolitical strategist and author of The Absent Superpower, The Accidental Superpower, Disunited Nations, and the upcoming The End of the World is Just the Beginning: Mapping the Collapse of Globalization. What We Discuss with Peter Zeihan: How did the Russian invasion of Ukraine become a "now or never" scenario for Putin? Even if Russia "wins" this conflict by sheer numbers, how difficult will it be to maintain control of Ukraine -- and what can we expect Putin's next move to be? What the US and its NATO allies are doing to keep the desperation of a nuclear confrontation at bay. Why Peter believes Putin's ruthless pruning of threats to his personal power -- leaving no competent next-generation successors -- will ensure he's the last president of the Russian Federation as we know it. Are China's designs on Taiwan likely to be deterred by the difficulty faced by Russia's forces in Ukraine? And much more... Full show notes and resources can be found here: jordanharbinger.com/640 Sign up for Six-Minute Networking -- our free networking and relationship development mini course -- at jordanharbinger.com/course! Miss the show we did with award-winning cybersecurity journalist Nicole Perlroth? Catch up with episode 542: Nicole Perlroth | Who’s Winning the Cyberweapons Arms Race? here! Like this show? Please leave us a review here -- even one sentence helps! Consider including your Twitter handle so we can thank you personally!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Coming up next on the Jordan Harbinger Show. You can hand over the future of all of these peoples to us, and then we will be happy when we'll never ask for anything again. Belarus, Ukraine, Georgia, Azerbaijan, Armenia, Moldova, Romania, Bulgaria, Turkey, Czech Republic, Slovak Republic, Hungary, Poland, Estonia, Latvia, Lithuania, Sweden. And they don't get a say in this de facto control over the last. lives and security policy of a total population that is double that of all of Russians combined. But that's still utter unmitigated horseshit. We will never abide by that, neither would any of the countries in between.

Welcome to the show. I'm Jordan Harbinger. On the Jordan Harbinger show, we decode the stories, secrets and skills of the world's most fascinating people. We have in-depth conversations with scientists and entrepreneurs, spies and psychologists, even the occasional Emmy-nominated comedian, former cult member, or drug trafficker, and each episode turns our guest's wisdom into practical advice that you can use to build a deeper understanding of how the world works and become a better thinker. If you're new to the show or you're looking for a way to tell your friends about it, we've

got these episode starter packs that I'd recommend here. These are collections of our favorite episodes organized by topic that'll help new listeners get a taste of everything that we do here on the show. Topics like persuasion and influence, disinformation and cyber warfare, China, North Korea, crime and cults, and more. Just visit jordanharbinger.com slash start or take a look in your Spotify app to get started. Today, Peter Zion, an author and forecaster of geopolitics, we'll discuss what the invasion of Ukraine will look like as the war progresses, how this will affect the global economy, the Russian economy, the Chinese economy, and regional economies around

the world. Also, what will happen not only to the oil supply that everyone is, of course, talking about, but also the global food supply and how this might lead to civil unrest or even conflict and regime change in the Middle East, Africa, and beyond. Also, what China might do, are they going to help Russia? And what those knock-on effects might be with respect to Russia, sanctions, and the greater war in Europe and beyond. Now, some of these theories may well come to light, others may be a swing and a miss, wherever they land. This is a really interesting episode, especially given the timing. Fascinating stuff today. I hope you dig it as much as I did. Now, here's Peter Zion.

A lot of people want to know, and they're wondering why Putin is invading Ukraine. And there's a lot of, in my opinion, kind of bunk theories. Like he's trying to rebuild the Soviet empire or he's just a madman like Hitler and he wants to take over the world. What do you think about those theories? You need to look at the topographical map of the Russian space in Europe to get an idea of what he's after. So Russia's been invaded 50-odd times in its history. And all of the invasions have come through one of nine of what I call gateway territories that link the former Soviet space to the rest of the world.

The Polish gap, the Western Arabian gap, those are two of the biggest ones, and they are unfortunately for the Ukrainians on the far side of Ukraine from Russia. So Putin's end goal here is to plug all nine of these gaps. And when the Soviet Union collapsed, the Russians went from controlling all nine to just one. And bit by bit with the Kazakh conflict, the Nagarabah with the Georgia War, the Crimean War, they've added bits and pieces back to plugging those gateways. And if they get Ukraine in its totality, they will have merely plugged another two. Now, that does mean that Ukraine is not the end of the story. It's just the middle of the story. There's another war after

this one. So he took over Crimea, or annexed, I should say, Crimea. That's Black Sea. We've got Odessa is annexed on his list here in Ukraine. I guess Ukraine's access to the Black Sea, but also gives Russia sort of unfettered access to that as well. And you also mentioned the demography, a terminal demography of Russia. Can you explain what this means? Nobody's really talking about this. So the geography explains the why. The why now is demographics. The Russians, I don't know if you've ever been to Russia, the climate is awful. And it's very difficult in a modern society to function because you don't have rivers going the right directions. The winters are long and they're harsh. And so civilization in the way that we think of it is very expensive and they don't have any

natural ways to generate capital on their own. So it's always been a very brute force approach. took Stalin to industrialize what was then the Soviet Union. But that has a consequence. As you move people off of the farms and into cities, kids go from being free labor to just being mobile, loud, expensive pieces of furniture. And you have less of them because adults can do math. So Russia, in two generations, went from having seven children per family to now under two. And that was before the bottom fell out in the post-Soviet collapse. And they're now down about 1.4. The generation that collapsed in the 1990s is now so small that when it's their turn to have kids, there's not a whole lot that can happen. So this is kind of the last year that the Russians have a large enough cadre of people in their 20s to have a draft-based military.

You wait any longer than this, and the Russians are going to have difficulties patrolling their own internal territories, much less fighting off any external aggressor. So while no one's expecting a war in the short term of somebody invading Russia, the Russians know that if they don't do this now, that no matter what the power balances are in the future, they will always be on the losing side. A lot of people might question whether or not that sort of thing matters in a world of missiles and air power. You know, like, who cares if you've got mountains on one side, if you've got people flying ICBMs and bombers overhead? That is absolutely spoken as an American. We basically have a hemisphere to ourselves. I mean, our best friends are the Canadians to the north. Our most integrated economy neighbor is Mexico, now our largest training partner.

Our second largest demographic partner, Russia's never been like that. Russia borders a dozen different countries, all of which have taken a crack at Russia at some point in the past. And hypersonics sound great until you realize that unless you put a nuke on the end of that, all you've done is blown up a building. And it's a very expensive way to blow up a building. So hypersonics really serve very little purpose in a conventional war. Jets do, and Russia's military reflects that. When you've got a large chunk of territory and you expect to be the defender, you have bottomless supplies of cheap disposable jets. And to this point, there's no one on their borders who can match that. But the Germans are no slacks. The Swedes

always punch above their weight. The Poles have a historical grudge to bear. The Iranians and the Turks have never been Russian friends. The Chinese almost gotten a nuclear war with the Japanese in the past, and the Russians are still smarting over their war with Tokyo back in 1905. So from the Russian point of view, there is no horizon that is safe. And the hypersonics just aren't the weapon systems to balance that. The only reason that the Russians have done hypersonics is their logic is if it works, then we have the ability to strike the North American continent in a very short period of time. I would argue, though, that what we've seen out of the Russian systems does not look all that promising for no other reason than either the Trump or the

Biden administrations hasn't pushed for a new round of nuclear arms talks. Because as soon as they started working on hypersonics, we started working on hypersonics. And that was a program here that we shelved in the 70s. So it was very easy for us to get that back up and running again, whereas they were doing it from scratch. And if something is going to change the strategic balance that extremely, and the Russians know they can't keep up in the financial fight, you know they're going to be screaming for arms control because that's the only way they can achieve parity. So hypersonics are what missiles that travel faster than the speed of sound? Is that what we're talking about? As a rule, in most of the nomenclature, faster than Mach 5.

So the idea is they have an intercontinental launch, and then they glide down, and then they're following the curvature of the earth to the point that it's very difficult to track them. And so they make the entire trip to the United States in like 30 minutes or less. Oh, okay. Because I was going to say it sounds like pretty slow for a missile to go, what speed is to sound 700 miles an hour, and I'm like that? I don't know.

Loads faster than that. Wow, 30 minutes from Russia to the U.S. is that sounds like something that's really hard to shoot out of the sky. Block. Or block, yeah. Yeah. You're talking about needing to fire your interceptor before you see the missile. That's the whole idea of it.

Wow, yeah. I don't know if this plays any role or how much you know about this, but a lot of alcoholism, a lot of substance abuse. Like, many countries have this, but in Russia it's apparently even more intense, you know, by all accounts. And then they didn't really invest in their education. You've spoken about this, right? The military and their general education sector sort of stopped in the years.

after I was born and I'm 42. You didn't quite miss it. You're really close, though. Let's start with the health. The Russians, I don't want to say they're all alcoholics or anything like that, but you can buy shots of vodka in the subway to keep you warm in a winter morning

from a little old lady that's just right there at the door. Okay. The idea that vodka solves all harms is definitely ingrained into the society. In a long winter, low sun, climate like Russia, there are not a huge amount of vegetables and fruits and their diets,

a lot of saturated fats, and a lot of heroin. In per capita terms, Russia is probably the second most addicted country in the world. And because the bottom fell out of the health care system post-Soviet, they also have the highest tuberculosis rates in the world, probably one in four Russians carry the TB bacteria in and beckless form. And it's not the TB that we know here in the United States. It's multi-drug resistant. So you're talking about needing two years of antibiotics at the cost of several thousand dollars a person to get off of it. And they just don't have the income for that. They used to be one of the most infected countries in the world, and then they stopped collecting data.

So we haven't had a good update on that in 15 years, but at that time, it looked like the people of reproductive age upwards of a fifth of the population may have been exposed, but we really just don't know. Education. In the 1980s, especially after 1983, the Russians were facing a simultaneous strategic and financial crunch. And the only way they could make the strategic picture work is by having some sort of peace with the United States. they had outspend themselves for 30 years. And so they were flat broke. And because you don't just go from, that is my ideological foe, that's the country that's been threatening me

with nuclear weapons for 50 years, to, yeah, we can talk now. You don't do that in a year. It took two premieres dying of old age before they could finally make that offer. So in the meantime, they just tried to spend their way out of their strategic embargo,

and it didn't work, it bankrupted them. And so they had to figure out where to cut. Well, they couldn't cut the military because they weren't ready to make peace. They couldn't cut the nuclear facilities because they weren't really to make peace. They couldn't cut their oil and natural gas production because that was the only source of income.

So they cut education. In Russia, the educational system is different from here. So here, you go to high school, you go to college, maybe you go to grad school, you enter the workforce, and you're earning money from day one, hopefully. Yeah, you picked up a couple hundred grand worth of debt along the way, but whatever. Fair enough.

Fair enough. But in Russia, there was a technical training that was done in their high schools that is not done in the United States as a rule. And then you become an apprentice. And you have an apprenticeship for four or five, six years before you go on and get your grown-up job of being an accountant or an engineer

or whatever it happened to be. Well, the high school technical training collapsed around 1985. That's when all these cuts happened, just as Gorbachev was coming to power, which meant that there was no one that could be taken as an apprentice right out of high school. You would have to train them up additionally. And so the labor force got very thin,

the educational system was never repaired, and yet the post-Soviet collapse where pretty much everything was canceled. And you fast forward to now, and the youngest group of people who have had that technical training and had a good apprenticeship and actually had a real adult job, they're in their late 50s. And it's far too late at this point to regenerate that. They've tried a couple of times with hiccups here and there. It's never really stuck because it was never for more than a small subsector like software coding or a very specific group of people like friends of Putin's kids. And as long as that's the situation, you know, you're not getting the millions of new workers that are skilled that you need every single year. Two million workers also moved out in the aftermath of the Soviet

collapse. They were all young and they were all skilled. And we've probably had about a quarter million Russians flee so far during the Ukraine war, which again, were young and skilled. And they were absolutely irreplaceable. So you fast forward just a year or three. And we're talking about the Russians having to make some very real choices about what to let drop oil and natural gas, food production, the military component, the strategic missile forces, they can't keep all of these things up and running. And I don't want to overanalyze this because we just don't have very good information. We're only in three of the war. There's a case to be made that their military commanders are something they decided to let drop, in which case, that was probably the

wrong thing at this time. But we've seen a rocky level of military coordination and logistics in the war so far. It's abysmal. It's underperformed what every analyst I have spoken with has ever guessed the Russians were capable of. Yeah, it doesn't look so good. And I'm kind of aware that watching Western news sources, and even European, not just American news sources, there's probably a fair amount of bias towards, we want to cheer for the underdog and things like that, and we wanted to look like Ukraine is doing well. Certainly. But it's really hard to find something that is contrary to that narrative that's not straight off of RT or from like a Kremlin source directly. Trust your instincts on that. I have no doubt that there's some selective reporting conscious

or unconscious going on. No argument on there. But the point is, Karkiv is still there. Mirapal is still there. They've been under shelling for 20 days. There's been a dozen assaults on Kiev. All of them have been repulsed. But the one for me was that 40-mile-long convoy. It stalled a day in because it ran out of gas. And then two days later, the Russian troops abandoned it and walked back to Belarus because they ran out of food. That should not happen to the tip of your spear. Yeah. To me it looks like, and this is wild speculation, how do you not know that you don't have enough gas or food? I mean, you have to know going into it or somebody does, but maybe that person was the person that sold the gas and the food and went, let's just play this

one by ear. There's a large history of corruption throughout the Russian system, the military included, but we thought, and we say we, I mean, everyone who's ever studied Russian in the last 30 years, we thought they learned all those lessons after the Second Chetchon War, because by the end of the Second Chetchon War, in 2001, they weren't doing this anymore. But here we are, 20 years later, and despite a couple significant international deployments, and all of a sudden it feels like we're back in 1993. Yeah, to me, it doesn't quite make sense. And there's a lot of different theories like, oh, well, they didn't really want to fight,

so they're headed back, or there's a lot of people that are ideologically opposed to this, so they're not going to fight or they're self-sabotaging. But if you've got a 40-mile convoy of vehicles, even if, let's say, a quarter of these people are self-sabotaging and don't want to fight, there's 75% of your forces is still left, which is already much larger than anything Ukraine could muster. What happened to them? Where did they go? Well, if the number is 25%, that's more than enough. Because if you're all advancing down with single highway, three or four vehicles blocking the convoy,

everybody just has to stop. The very approach to this is not a problem necessarily with logistics. It shows a level of incompetence on strategic thinking. You're talking a thousand plus vehicles in a single file line, 40 miles long. I'm sorry, that's idiotic. And here we are. So it's looking like a catastrophic failure to perform across the entire system. I know that Russia has like a whole division of the army that's essentially, I guess, a rail core, what do you call it, where they build tracks.

And it's temporary, but they build them fast. The whole point is they want to be able to run trains in because that's what they've been doing for 100 years, is building trains so they can run in huge amounts of tanks. They don't have to drive them on a highway and run out of gas. What happened to those? Right, but you have to secure the land first. Because if you get one stick of dynamite under one railroad tied and you set it off at the right moment, the train pile up that happens because of that is absolutely epic. So you only do that once you've actually pacified the countryside.

And I would argue in the case of Ukraine, that's not going to happen. Yeah, like ever. The Russians are going to still win despite all of this. They outnumber the Ukrainians. they've got better equipment, they've got shorter supply lines, they don't have to worry about controlling their borders in order to keep the resources coming. They can suck up a huge amount of casualties in Russian society will not rebel. Remember, it wasn't until you had almost a million dead in World War I that we had any inkling of political problems back in Russia. We're nowhere

close to that. And a lot of Russians agree with what Putin is doing either for nationalist regions or for strategic reasons. So these reports that we do see about people fleeing Russia, they are true, there are dissidents, they are not going to win. So far, all of the protests combined, still talking less than one-tenth of one percent of the population. That doesn't move the needle in the dictatorship. Right, yeah, that's a good point. And so Russia's going to win this, and then they're going to have to pacify the country. And the question is, what level of internal violence and sabotage are they willing to tolerate in order to move on to the next stage of the war? And that's where things get interesting from the NATO point of view. Yeah.

Because if there's one thing that was coloring American decision-making on all things Russian, it's that they were maybe not a pure force, but a near-peer force. And we would have to be very careful how we operated. We would have to be at the top of our game if we weren't going to have horrendous casualties. All of a sudden, that logic's gone out the window. And we now know that if American forces and Russian forces meet on the field of battle, the Russian forces will be obliterated. And if that happens, the only choice the Russians have is between a humiliating,

strategic withdrawal to do whatever the Americans say or up the ante with nukes. And so from the American, from the White House, from the DoD's point of view, this has gotten a lot scarier than we ever thought it would be. Because all of a sudden, if we can't keep Russia locked down in Ukraine, if we can't bleed them there till they die, if we can't make it out of their reach so that they can then go on and do the next series of targets, then there will be a direct American-Russian confrontation that we can't avoid because these are NATO allies. So the NATO strategy, the White House strategy now, is to ship every piece of military equipment that we can that doesn't require a static, physical resupply or launching point like a plane. So drones are good, anti-tank missiles are

good, stingers are good. Anything like that's great. Send it all. Because as long as Russia is bogged down in a bloodbath in Ukraine, they can't go to the next step. And that's where the American troops are. We have to prevent that from happening. Interesting. Yeah. I think you wrote something and I'll paraphrase here, so correct me if I mess it up. But perhaps the biggest change in recent years is this. The United States now has an interest in a Russian assault because it would be Russia's last war. We talked about the demographics. Demographics have told us for 30 years that the United States will not only outlive Russia, but do so easily. The question has always been how to manage Russia's decline with an eye towards avoiding gross destruction. A Russian-Ukrainian war would keep the bulk of the Russian army bottled up in an occupation that would be equal parts desperate and narcissistic and protractive.

until such a time that Russia's terminal demography, the aging sort of population we talked about, transforms that army into a powerless husk. And all that would transpire on a patch of territory in which the United States has minimal strategic interests, Ukraine, essentially. The reason is because we don't, I hate saying it like this because it's so cold and callous, but here we are. We don't, quote, unquote, need Ukraine, but we also are not tied to defending it. You know, it's not Poland. It's not Latvia and Lithuania or a NATO country where we have to honor Article 5. It's almost like if Russia puts itself through this meat grinder, and we keep that meat grinder powered on for another five years or three,

there's nothing left. There will be nothing left of Russia's armed forces. That logic hasn't changed. The only thing that has changed is that because the Russians now appear so weak, the degree of desperation that might exist and their strategic thinking is something that we really hadn't taken into account earlier. What about the leadership cadre of Russia? You mentioned something interesting, which is, I think the United States has

countless, I will say, politicians or people that could go into politics. More than we need. Yeah, certainly more than we need. Certainly more than anybody ever asked for. But Russia has the opposite problem where you're counting three-digit number of people that could do this. Why? It's the same basic concept as what's going on with the military and the economy. The last group of people who have the full suite of training were trained in the mid-1980s. In the case of the leadership specifically, we're talking about all people from the KGB. When Uriand Dropoff took over in the early 1980s, it was a bit of an internal coup in that we had one faction that used to be part of the government, take over the government,

because they thought that the previous two rulers, Khrushchev and Bresnav, had mismanaged the system so badly, that they really needed adults in the room, people who had the full picture of everything that was going on, and in a highly censored totalitarian dictatorship, that meant the intelligence services. So the KGB generated Uriand Dropoff, Trenenko, and ultimately Gorbachev, all from the KGB to run the system. Well, these people stayed in, I wouldn't even call it the background. They weren't officially in charge, but they were always large and present in the 1990s. And when Yeltsin took ill, they're the ones who took over from Yeltsin. So we had a quick revolution lasted a few years, then Yeltsin got dropped because of help was atrocious. And the KGB's successor, the FSB's successor, the FSB.

hasn't in charge of ever since. Now, Putin is obviously from that crowd, but so has everyone around him. Alexei Miller of Gasprom is probably the best example, but the chiefs of all of the major companies that they're called the syllabarks, the security oligarchs, that have taken over chunks of the Russian economy in large bites ever since 1999. They are all personally beholden to Putin. They are all from that inner circle, and they are all over 50. There is not a generation waiting in the wings that has been trained. Putin has been very effective at pruning any potential challengers to his rule. So he will be the last capable, competent president of the Russian Federation.

He's already 70. Yes. There's like no secession plan theoretically that looks credible. Every once in a while, we have a faction within that group that kind of rises to prominence because they want to succeed. And as soon as Putin thinks they might get closely to succeed him, he smashes them. And so right now we haven't had anybody. like that for a few years. Yeah, they tie themselves to a chair and fall in a pool. Yeah, exactly.

It's really interesting to see this because, I mean, even North Korea has been like, hey, I should probably come up with something for when I croak. And here we are with Putin, really, what's the plan? Really, he has to have some plan, right, or not? I mean, if you look at the demographics, it is perfectly reasonable to assume that Putin was going to be the last leader of Russia anyway. So if you're just staying in power to be the person who will turn the law, lights off, I've heard dumber things. I guess here we are. So what happens to Russia after Putin? I mean, even if he's the most successful tyrant and ends up taking over all the countries he's aiming at, and we'll talk about that in a second, eventually time is going to catch up with a guy. So what happens to

Russia after that, in fighting? The best case scenario is we get something a little bit like what happened after Mao left in China, like a gang of four from the different factions who rules as a committee, and then one of the four offs to the other three, and then he's in charge. That's kind of the best. case scenario now. I think it'd be more likely that Putin has so removed everyone of leadership talent that would probably have more of an organizational collapse. Igor Setchin of Rosneft, that's the state oil company, is probably the most capable who's left, but everyone else of the 150 KGB members that are left. So thoroughly hate him in all things that it's really doubtful that he'd be able to rally anyone to his flag. So there really is no one.

He doesn't seem super adept at picking leadership, or maybe I'm looking at the wrong criteria, but when I look at dipshits like Ramzan Kadyrov, who runs Chechnya, I'm just seeing the dumb guy at the gym who starts fights with everyone and has no career outside of lifting weights, running a supposedly separate country. And I'm just thinking, this is probably the last pick for a kickball guy who's so insecure. It's like he's on Twitter starting beefs with Elon Musk. What the hell is going on? And you're picking this guy in a leadership role.

that also sounds a lot like an American position. We look at leadership different than the Russians, too. The strong man is who rules Russia. It always has been. The terrain does not lead to regional economics that are separate. So like, you know, here, Texas, New York, California, Florida, Minnesota, these are all discrete economic entities. And so we have a federal system where each other states chooses their own leadership and then submits their leadership choices at a representative level to Washington. That would never work in the Russian Federation. In the Federation, you've got Moscow, you've got St. Petersburg, and then you have all these secondary cities that are dependent upon some degree of link to one of those two, and all of them have been conquered by Russia over the course of their existence. Every single one of them, Russia is not a republic. It's certainly not a democracy. It's a multi-ethnic empire. And with that sort of political and economic footing, someone's in charge. And if someone's not in charge, no one's in charge. And the future of Russia, in my opinion, is probably going towards the latter.

But for now, it means that you have a strongman in the center who appoints regional strongmen like Kediriv to look after things for him. This is not about growth. This is not about jobs. This is not about popularity. This is about control. That makes a lot more sense. All my logic has turned out its head when I look at this guy, right?

It just doesn't make any sense. But I guess if you've got somebody else credibly running the secret police and the secret service and monitoring this guy and all he's supposed to do is smash dissidents with a ham fist, then I guess he's probably, right guy for the job, right? And from Putin's point of view, choosing Kadirah's father, because that was who he originally appointed back in 2001 as his successor, was smart because he turned one faction of the Chechens against the other Chechen factions, and together with the Russian military, they were able to break

them all. And so that faction was rewarded with control over a personal fiefdom, very medieval, very middle ages, very feudalistic, of course, as is, will always happen to fathers, they will pass on in time. Kadirov Sr. was assassinated. And so Kadirif Jr., the current guy took over. And yes, this guy is dumb as a bag of snakes. There's no argument there. But he is proven relentlessly capable of keeping Chechnya in line.

So Chechnya is no longer functionally part of the Russian Federation from an economic point of view. But the independence push was squelched. And Qadiriv regularly participates with Moscow when it comes to security issues. Specifically, Putin relies upon the Chechens to assassinate people in Russia who he finds politically inconvenient. You're listening to the Jordan Harbinger show with our guest, Peter Zion. We'll be right back. If you're wondering how I managed to book all these great authors, thinkers, and creators every single week, it's because of my network and I'm teaching you how to build your network for free over at Jordan Harbinger.com slash course. This course is about improving your networking and

connection skills and inspiring others to develop a personal and professional relationship with you. It'll make you a better networker, a better connector, and a better thinker. That's Jordan Harbinger. com slash course. And most of the guests you hear on the show, subscribe and contribute to this course. Come join us. You'll be in smart company where you belong. Now, back to Peter Zion. I've read a bunch of books about Putin, and whenever somebody gets stabbed within view of the Kremlin and all the cameras that are for security happen to be off, it just has Chechen marks all over it. Or what was the theater where a bunch of Chechens rolled in with explosives? Well, that's pre-Kederov. Pre-Kederov. Okay.

Yeah, that was back in 2000. The conspiracy theory that if you're going to pay attention when you should pay attention to, is that back in 1999, a couple of apartment blocks in Moscow were blown up. No one in Chechnya claimed credit for it, and the Chechens had kind of screamed all of their bombings and successes from the rooftops for every other tech they've ever done, but Putin blamed the Chechens for them and used that to whip up Russian public opinion into a frenzy and launch the second Chechen war. So did Putin do it at its own people? Considering his ethical standards, I don't think it should be ruled out, but there's certainly no proof one way or the other. Yeah, that was the one, I think, where the police had investigated this,

and they found that the explosives belonged to some training regiment of domestic security, and then they just immediately stopped investigating because it looked like they almost caught themselves. It was wrapped up very quickly. So, yeah. So if you want to dig for something suspicious, I would recommend digging there. Yeah, yeah. That is, again, sort of conspiracy theory. I don't usually dabble in that stuff, but, you know, it's hard not to when you're talking about Putin and Russia. It's really, yeah, because sometimes it's like, well, there really is a conspiracy. Look at that. So how screwed is Russia even if they win in Ukraine, right? They got terminal demography, but how do they get out of this? Are they able to do that? Ukraine's, again, just this is the middle

war. So, you know, Broner, Karabba, Georgia, Crimea, Kazakhstan. These are all kind of in their back pocket now. Even control of all of Ukraine doesn't solve the problem on the Western front. They would, in addition, need Moldova, the northeastern sliver of Romania, that's part of the best Arabian gap. That's how the Turks have often invaded. They would also need. Eastern Poland right up into downtown Warsaw on the Vistola River. That's the Polish gap. That's where the Nazis like to invade it. And then they would need Estonia, Latvia, and Lithuania in totality, because that's how the Swedes have gotten in the past. So you're talking about six more countries, five which are members of NATO. Obviously, that's where things get very dicey. I mean,

they can probably capture Moldova on a long weekend, although looking at the military effectiveness so far, maybe I should extend that out to a month. Yeah, spring break at least. Yeah. But for the other five, if Ukraine is able to keep the fire lit, then the Russians aren't going to have enough conventional forces to do this. And the only thing worse than having a Russia that didn't try to do this and just kind of shrivels in time would be a Russia that leapt forward, launched the war, paid all the prices for the war, and still remains strategically unmoored. So there's a point we're going to get to in a few months, probably later this year, certainly next year, where the Russians will have digested Ukraine and Moldova to their satisfaction, their plan, and then they'll have

that clash with NATO. And that's when the nukes become a very real question. Right, because this is the Russia can expand or Russia can die, Catherine, the great quote, where they have to control all these borders. But yeah, so what you're saying, essentially once they get to those NATO borders, they still need to take those NATO countries in order to plug those gaps. And they're obviously not able to do that conventionally. so they have to resort to nuclear weapons. Right. Think about what the Russians did in Crimea. They started moving in troops.

It was apparent that the populations were russified enough that they were not going to resist. And when talk in the West started coming around about going to back dissident forces, like say the Crimean Tatars who were basically Turkish, the Russian snarled that will mean and end to all energy exports from Russia into Europe, at which point by Angela Merkel,

in one of her more ignoble moments, said Crimea is Russia's. We will have a level of sanctions that will not approach anything that causes economic pain to either side, and we are going to call it there. That is no longer an option. So strategic weapons are now on the table for that threat. Yeah, interesting. There's irony there with Germany appeasing somebody who is slightly reminiscent of somebody who also, well, Austrian technically, but who had a similar but slightly more eastward plan. Well, German and Russian history is always about trying to find ways to work together so they don't fight, and then that not working, so then they fight.

But then that doesn't work, so they try to find ways to work together so they don't fight. This is like the ninth cycle. Yeah. It's the back and forth and back and forth and back and forth, and that's why the countries

that are between the Russians and the Germans hate history so much. Yikes. Yeah, that's where my family's from, and they moved. I wonder why. Something, something, Pogrom, something World War,

then another one, and then they went, you know, screw this place, basically. Actually, it was before the Second World War, but Pogroms will do that to you. So, can Russia, Occupy Ukraine. Sure.

Theoretically they can, right? But they need like their entire armed forces to do that, correct? Well, Ukraine. At the start, it was a country of 45 million people. We are now down to 42.5 million people. It's the biggest movement of people ever recorded in human history. Wow. Two and a half million people in under three weeks.

That's just unprecedented. And we are nowhere near done because right now the fighting is only happening on less than one fifth of Ukrainian territory. Wow. Yeah, Ukraine is huge. Yeah. We haven't even gotten to the part of Ukraine that before three weeks ago, we considered the pro-Western part. As a rule, it's not perfect, but the river, the deeper that cuts the country roughly in half.

The general understanding was if you're west of that, you're pro-Western and you consider yourself primarily Ukrainian. And if you're east of that, you're pro-Russian, you consider yourself at least a Russian speaker. What the Russians have done in the last eight years and having this low-intensity war in Ukraine and the Donmos has changed that. And everyone in Ukraine is now broadly considering a Ukrainian and outside of Russian, TV, there's no one in Ukraine that is not resisting in some way. I mean, this is just an epic turnaround from a national identity point of view. So Russia is going to not just have to level the entire place. They're going to have to continually bomb and launch programs the length of the entire country to retain control. That's going to generate at least another 10 million refugees.

And that's going to require at least a couple million Russian soldiers to occupy the place. And that's the vast bulk of the Russian military. That includes their draftees. So we're not just talking about the best Russian troops completely being locked up. We're talking about nearly all Russian troops being locked up unless the Russians issue a state of emergency and start drafting anyone under age 50, which is probably where this is going to go. Because the Russian economy is in free fall anyway, so why not? To have people who are, let's say, 50 years old, having to actually do something that requires what might approach combat? because, again, they might just be standing in a town or in front of a school guarding things,

but they're going to be a target. People are going to be going to be going to be going to be after them. They're going to have no training. They're probably going to have five bullets in their pockets, some of which have gotten wet seven thousand times over the course of the last few decades that they've existed, right? I mean, this just sounds like a giant mess waiting to happen. That's just going to add to a body count. Again, from the Russian point of view, this is about national survival. Right. And can you imagine? I mean, there's no comparison in the American historical experience for something like this. When it comes to demographic collapse, it's never happened to a major power before. So, you know, the statistician in me is looking on

at this fascination. It's like, okay, well, it's the only country with a worst democracy than Russia is China. What happens there in a few years? Because that's not that far off. That's within a decade. But Russia is going to give us some interesting signposts that we can use to evaluate other countries that are in a similar demographic decline. Wow. Two million troops is bigger than Afghanistan and Iraq put together. Is that true? Oh, we never had more than 110,000 troops in Iraq and never more than 95,000 in Afghanistan. So I'm off by a factor of 20. That's part for the course for this show. So how the hell do they get out of that? This stronger relationship with China that Russia's been asking for, is that going to be significant? Or do you think China's going to

say, you're on the losing side of this? I don't really want to rock the boat. Here's a token gesture of some gasoline or what. Well, we've got a similar problem in China that we do to Russia and that the has isolated themselves to the degree that they're not getting good information anymore. And Xi has done that with a cult of personality in addition. So he'll give orders to different groups of bureaucrats of things he wants done. They'll go out and do it. And if those orders down the line clash, no one reports back up because nobody wants Xi to be looking at them.

So when the power outers, for example, happened last May in China, at 1.13 the country was experiencing rolling black and brownouts. It looks like Xi didn't know until September. Really? Yeah, and we didn't get our first policy to deal with it until February. Yeah, a lot of my Chinese lessons were canceled because they would say, we don't have power. I'd say, what about your phone? We can just do it on your phone, and they're like, no, you don't understand.

There's no power anywhere. It's not just my apartment. There's not a breaker that I got to go flip. There's no power. I'm looking out the window. It's dark. There's nothing on. So in a system like that, the only leader that she had face-to-face contact with since January

of 2000 was Putin at the Olympics. And then Putin apparently just lied to his face. No one in Xi's inner circle or within the intelligence apparatus, within the foreign ministry, wanted to tell Xi, oh, yeah, they're moving troops to the border. Oh, yeah, it looks like they're going to go. They just heard what the story was from Putin. That is what Xi had been presented with and no one contradicted. So the degree of complete policy failure we can expect out of China should be catastrophically entertaining. And I think we're seeing that now and think with the food system and the electricity system, we're probably going to see it with the port system here really soon. Entertaining is not quite the word I was looking for, though.

They're real people at the end of this that don't want to live there or that don't need to be living under a Mao 2.0. But I understand what you mean. It's too late for that. Yeah, it is too late for that. I have my family's Chinese, Taiwanese. It's really hard to, but it's really important to separate the Russian people who are living in a hellish craphole environment right now because of their leadership and the Chinese who are doing the same. I mean, yes, people will say, what about America this? but at the same time, like, probably nobody other than Ukraine is really wishing for, like,

a huge number of dead Russians. Well, I would argue whenever the term, what about is used, that you're dealing with somebody who doesn't have a good understanding of where they're coming from. That's just my two cents. For sure. What aboutism, I agree, is garbage. I'm just trying to say, this isn't about wishing for dead Russians or starving Chinese. Like, we've seen that movie, and it's ugly at the end of the day.

Yeah, an argument there. The thing was, we don't know what he's going to do because he doesn't know what he's going to do because he's not getting good information. So people are saying that, you know, Putin is talking to the voices in his head. There's some truth to that, but for the most part, there is a cadre. They are intelligent. It's just not a lot of people. Wazi, there's no one. So predicting what the Chinese are going to do is kind of an exercise in futility. I see. There's really nothing else that the Russians can give the Chinese. The Chinese have already reverse engineered all their weapons. The pipelines to China are already running at full capacity. The rail system is already running at full capacity. The only other way to get more stuff would be if you loaded at a Russian western port, say Petersburg and overseas, which is they're shallow ports, they're small boats, then somewhere at sea, you transfer the cargo from a small vessel to a larger one, sail it around Africa because you can't use Suez all the way to China. So the cost of that, the logistics of that, getting around insurance companies and shipping

companies, they'd have to charter everything themselves, insure everything themselves, and running routes that are four and five times as long as all their other supply routes are. So just the volume of stuff that you might be able to increase to Beijing is just minuscule. So all that is left from the Chinese point of view is how long is Russia a useful distraction away from people gaining up on China? Because on day one of this war, the Chinese were really, really excited. Because it's like, oh my God, this is going to show just how weak the West is. This is going to show how Russia can take an entire country and walk away with everything that

had before. And that is just so false now. And the Chinese know that if they try something on Taiwan, they are far more vulnerable to the sanction packages that the United States has now led than the Russians are. Because at the end of the day, the Chinese still import roughly 80% of their energy and 80% of the inputs that allow them to feed their population. So if you do something like we've done against Russia against China, not only does the Chinese system collapse in a matter of months, they've lost 500 million people from famine within a year.

And they now know that. So the nationalist chest beating that we've been seeing more and more and more has gotten very circumspect. And they're just focusing on amplifying the Russian propaganda on Chinese news stations because they really don't know what else to do because they're seeing 50 years of strategic planning the Russians have torched in a month. And that's got to hurt. Yeah, good Lord. The idea that China might invade Taiwan, my family has been increasingly worried about this. I've been less worried about it because you'd have to be even more crazy than crazy looking than Putin to think now's a good time to do that, especially given that Russia can withstand some sanctions for some time. China, the last thing they want to do is torpedo their own economy. And a lot of people say, well, the West can't afford to sanction them, but I'm not sure. What do you think about that? The biggest hit that we would feel from the American side of things would be in tech manufacturing, because that's all been outsourced to East Asia, but very, very painfully little of the value add is done in China. There's much more done in the rest of the Asian countries.

So I'm not suggesting that we would walk away and not feel the difference. iPhone has, for example, completely doubled, tripled and quadrupled down. Anytime there's been a problem with China, they put in more money. Stupid will cost them the company in the end, but it's really the only company has gone that far. For everybody else, when you're talking about electronics, widgets, and telephones, yeah, it's going to hurt. But that's the only sector. And there's nothing about the technology that is required to do that that we can't do in the Western Hemisphere with the exception of low-end semiconductors. And I'm kind of counting on Vietnam to fill that gap because they're moving up the value-added scale so quickly, so much faster than the Chinese did. But aside from that, food, no. Energy, no. Tech, no, finance. We'd probably actually get a huge surge, just like we did after the Asian.

financial crisis. So in most sectors, there would be disruptions, but it would be even short-term gains for the American market. But in electronics and computing manufacturing, that is where we would feel it. That's unavoidable. Yeah, and that's a huge sector. I mean, tech companies have global markets. I don't know what percentage or share of US GDP it is, but it's probably not small. It's less than two. Really? I'm surprised to hear that. All manufacturing as a component of trade is less than 2% of GDP. Remember, only about 15% of US GDP total is involved in Internet. I did not know that. Okay, well, wow. The single biggest sector of that 15% is energy and not necessarily imports. It's like the

United States, Canada, and Mexico import and export among them. That's counted in that number. And then the next biggest part will be manufacturing it, again, in and out of Mexico and Canada. So if you remove the NAFTA economies and if you remove energy from the math, you're really talking less than 5% of GDP for everything else combined. Why didn't we outsource things to Mexico, such as the iPhone manufacturing? Why did the tech go to China? There must be a compelling reason for this. Sure, there's a couple reasons. Number one, you may remember back to the Mexican-American War, we took half their territory. That's still smarts. Okay. And so there's always been this strand in Mexican political thought, which is hard to deny,

that the Americans can't necessarily be trusted. And we've not always been the best of neighbors. In the ideology, as it evolved during the Cold War, that meant when the United States created the globalized order and everyone joined it in order to get to economic goodies and security protection, Mexico didn't because they still didn't trust us. So it wasn't into the tequila crisis of 1995 and the negotiation of the NAFTA Accords, which thank God Canada convinced us to bring the Mexicans into that. So 1995 is kind of the magic year when the Mexicans really took it seriously and started integration. And since then, they've become our largest trading partner. And I'd say are fast on their way to becoming our fastest friends. That's kind of the first big piece. The second big

piece is Mexico from a topographical point of view is not like the United States. So, you know, we'll have like a regional city. Let me just pick one out of the air, Des Moines. And it's surrounded by a series of suburbs and then beyond that small towns because, you know, it rains in Iowa. And so you have farms and you have townhouses and small towns. It doesn't rain in northern Mexico. It's desert. And so you've got a series of isolated population communities. And in a pre-integration NAFTA system, that made education really difficult. Because, I mean, you might have an island of educated people, but then nothing else for hundreds of miles.

That makes it really hard to do value added. When you say value added, can you tell us what that definition is? Sure. Taking some sort of raw material and turning into an intermediate product or taking that intermediate product and adding value to it included into a larger material. So steel into wire, spark plugs into a carburetor unit. Okay, gotcha. So 1995 is really when the Mexicans started on that path.

And since they didn't have the tech or the capital, it was up to Americans to come into Mexico, set up factories in league with local Mexican workers and bigwigs and produce. Now, the Mexicans since then have taken it and run with it. It's one of the best modernization stories we've got, but they still are limited by those pockets of population. And so they don't have any of them that are large enough with a big enough cadre of skilled labor to do something like high-end electronics. There just isn't a national or regional history of large-scale precision manufacturing.

So the U.S. does the high-end chips. Thailand and Malaysia do the mid-level chips, and China does all the low-end. But no one in North America can take that from China because we don't have the labor structure for it. Ours is too well skilled, and the Mexicans are skilled differently. So I really do look to countries like Vietnam to kind of plug the gap, but you don't do that in a year. When we're talking about low-end semiconductors, high-end, I,

assume is like an Intel chip that's inside or an Apple M1. Low end is what, is that what's in like a TV remote? There's a semiconductor or 10 in here. Probably. Anything that's part of the internet of things is probably from a Chinese fab facility. Gotcha. So I did read that the U.S. threatened to shut down China with respect to semiconductors and there was a lot of speculation that we couldn't do that. Depends on how you define semiconductor. Right. That's what it sounds like. In the United States, we only make 11% of the world's chips by number, but we make 60% by value. So if it's going into your high-end phone, if it is going into a laptop or a server, that is definitely an American chip, or maybe from Taiwan, South Korea, or Japan, if it's going

into your car or your plane, something where it doesn't have to be nearly as small because you've got some room to work with, that's probably out of Thailand and Malaysia. And if it's your blender singing when you've pured to a certain level of consistency, that's definitely out of China. Gotcha. Okay. Reddit, to the rescue, has explained that it's really hard. It's really hard actually to dump firmware from a properly protected semiconductor or a microprocessor. So you can't just, like, rip the thing open and attach wires to it and say, ah, that's how this thing works. Let's make these. You can't really do it. And the firmware is almost always heavily encrypted. Hackers might be able to grab it, but then they have to grab all the new designs,

which, what, change every six months and are doubling in power? Well, think of it this way, too. If you've got a high-end chip, let's say you are in China. and you've got a dozen people who can break it down, hack into it, figure it how it was put together, and come up with the plans to do it. Well, that's 12 dudes. You now have to educate 250 million dudes. There's a scale issue. And China does not have an education system that generates people capable of creative thought

in sufficient numbers to engage in a French-style industrial espionage economy. The French could do it because they've been doing this for a very long time. And it's a sticking point in the relations with everyone. But with the Chinese that came from a low base and their education system promotes obedience and memorization. And while there are roles for that in any economy, when that is your definition of your workforce, it's just really hard to move up the value added scale. And even if tomorrow the Chinese invaded Taiwan conquered it without destroying it and they just walked into TSM, they couldn't operate those facilities. they'd just be paperweight. So this idea that China is this technological marvel,

it's going to take us over all right. It just ignores basic math, which I also find it amusing. This is the Jordan Harbinger Show with our guest, Peter Zion. We'll be right back. Thank you so much for listening to and supporting the show.

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Now, for the rest of my conversation with Peter Zion. Going back to Russia and Ukraine, we see these deliberate acts like bombing a civilian hospital during a ceasefire. What is the point of actions like this? What's the desired outcome or potential strategy? I think what's happening is actually worse. We know the Russians are capable of using precision-guided munitions. It's not the primary, but they have them.

I have seen nothing in the war suggests that they're either using them or if they are using them, they know how to use them. I've seen very few precision strikes at all. I've seen satellite photos of airports where there are 60 holes and only one of them is in the runway. That just suggests that this is just part of a general civilian infrastructure destruction campaign, which is exactly what they did in Groszni, which is exactly what they did in Alipo, and now they're doing in Krakow and Meroval and Mikhail and Kiev. And The goal is to destroy civilian infrastructure so utterly, so completely that the population starves, that they feel that they have to go, and that anyone who stays to fight has nowhere to hide. That's how the Russians have been doing war for 20 years now. So if they have precision capability, they're saving that for another day because it's just not relevant to this conflict at this point. Pre-show, I asked you if you knew who John Mearsheimer was. If people don't know, we'll link the video on the show notes.

But this is a guy who's a professor, I think, University of Chicago. and his sort of thesis, his 20 million view video on YouTube, says, hey, this is all NATO's fault. This is the West's fault because Putin's been warning us about Ukraine for years and saying, hey, I need this. It's a security buffer. Why do you keep poking me? And then finally, NATO went too far.

And I'm wondering what you think about that, because it does sound like, hey, maybe NATO did go too far. Maybe we should have just left Ukraine alone after all. Maybe we did cause this problem. You know, it sort of gets in your head, and a lot of people agree with him. All right. So from the Russian point of view, they cannot be secure unless they control all nine of those gaps that I discussed earlier. And when you look at what Russian threatened NATO with just before he launched the war, he listed all the countries that he wanted to be able to write their security policies and make sure that no NATO forces were ever in them ever. Belarus, Ukraine, Georgia, Azerbaijan, Armenia, Turkey, Czech Republic, Slovak Republic, Hungary, Ukraine. Poland, Estonia, Latvia, Lithuania, Sweden. So you would have to give the Russians de facto control over the lives and security policy of a total population that is double that of all of Russians

combined. So from a certain point of view, yeah, he's right, but that's still utter unmitigated horseshit. We will never abide by that, neither would any other countries in between. So essentially, he'd have to swallow all of Eastern Europe in order to get his way. Yeah, I won't. bother you if you give me everything I want and let me do whatever I want with these 300 million people. It's the size of the United States almost, right? I think. What are we 3.30? Yeah, we're similar. Yeah. So we'd have to give him control over this geopolitopopulation size of the United States. And they don't get a say in this. This is a deal between the United States and Russia. That's what he's saying. You can hand over the future of all of these peoples to us. And then we will be happy

we'll never ask for anything again. Yeah. No. Right. That sounds like World War II, except that also didn't work. And we ended up with the Cold War and the Iron Curtain, where people were literally dying to get over across those borders and those minefields because of the drain. That's insane. Looking though at Ukraine now, his army couldn't even handle that level of occupation and control. So what? He would need a secret service also like the Cold War, where you just have repressive secret police in each of those countries? Putin has been playing a week hand fairly well for the last 25 years. He's made threats and been able to get people to give him security advantages on the cheap. He certainly did that with Georgia.

It's like he invaded Georgia while Putin and George W. Bush were sharing a box of the Olympics. So his timing has been good. His approach has been good and he's gotten a lot for very little. But he reached a point where it was no longer a low-cost expansion. And now he's discovering that it's a little bit more involved. I don't think it's going to stop it. But it does mean that that strategy needs a new evolution. How long do we think this conflict goes? I know that's impossible to predict, but any guesses? If you had asked me five years ago, I'd have said he would have captured Kiev in less than a month and the whole country in less than three. Now I'm thinking that the whole country will certainly fall in less than six.

But one of the characteristics of this civilian obliteration program that the Russians are launching is it's not quick. It'll take several weeks to reduce cities the size of Kiev and Kharkiv to rubble. That's a lot of ordinance. and the number of troops that he has in place in Ukraine is wildly insufficient to that task. So you should expect, in fact, I think we are seeing troop movements within Russia proper, moving many, many, many more forces to the border. And we'll probably have a million Russian soldiers in Ukraine before the end of the year. Oh, God, that's so horrible.

It's like watching Sarajevo kind of, but in slow motion and in a grander scale. Yeah, much grander scale. Yeah. And Sarajevo, you know, Bosnia's mountainous. There are a lot of places for the rebels to hide. it's not a perfect comparison when you're talking about Ukraine. Ukraine's got the foreign fields.

And so as long as there's vegetation and as long as there are buildings, Ukrainians are going to be able to hide and snipe and participate in the real war, which is part of why the Russians are going to destroy everything. Oh, man. It's just so awful. It's going to look like Eastern European Afghanistan

2.0. It's just, this is going to be so brutal and horrible. I mean, we haven't seen anything like this in the world since World War II. And even then, the closest comparison would be when the Nazis were going through Ukraine. And there were Ukrainian nationalists who sided with the invaders because they had just been through a several year political repression, genocide, and Stalin caused famine. And from their point of view, anyone was better than Stalin. And then when the Russians came back, everything the Nazis had not destroyed, the Russians then destroyed.

That's the level of what we're looking at here. We haven't seen this since 1944. Oh, man. It's so depressing and so horrific. What do you think of Russian nationalizing U.S. and other foreign assets? It's a bad signal. I mean, it's not a great signal, sure, but there just aren't a lot. The Russian economy was so morbid that they kept most of their physical assets abroad

because it was all about oil and natural gas sales, getting dollars in euros and then, you know, investing them however you can. When it comes to American assets in Russia, I mean, I've said this to investors for years. You should be prepared for your Russian investments to go to zero because that's where this is going to go. It was with every single Russian regime throughout recorded history. This one is no different. So when, what was it, February 22 when the war started, things got locked down really quick. The day that the central bank was sanctioned.

It's like, that's it. Everything goes to zero. Here we are. Yeah. When you're talking of American assets in Russia, you're talking like the embassy? Some oil platforms, I guess, and stuff like that probably. Oh, I see what you're talking about. Oh, okay.

I was thinking American government. I'm sorry. I'm making fun of the wrong thing. Got it, got it. Yeah. Switch targets. Yeah. So Shell and Exxon and BP are the three biggest investors in Russia. Shell and Exxon run the Soklin projects in the Russian Far East. It's all offshore. It's all moving sea ice. The Russians are absolutely useless partners in there. So when Shell and Exxon decided to back out, they're just shutting the projects down and that's it. By the way, a lot of that energy went to China. So China might actually end up getting less energy moving forward.

Oh, wow. rather than more. And then BP was the partner with a company called TNK back in the 2000s, which eventually got bought up and gobbled into Rosneft. So they're now a minority shareholder in Rosneft. So the assets that the three of them have, it's highly questionable whether the Russians can operate any of them, certainly not in the case of the Soklin projects. So we're actually going to see, assuming nothing else goes wrong. So I mean, no sanctions, assuming no boycotts, assuming insurance is unaffected. We're going to see an absolute reduction, very rapid, rapidly in Russian output anyway, because the Russians' new projects that they brought in the last

20 years, they're not in Western Siberia, they're in Eastern Siberia. They're smaller, they're deeper, they're more remote. And Russians do not have the technical skill to do it. They've been relying on Western companies. So will the Western companies who invested in the sector lose everything? Yeah, I'd argue they already have. But it's not like the Russians are getting much because they can't make any of it work. We're going to see echoes of that through. a lot of the Russian economy this year. I want to talk about poop, Peter, namely fertilizer. How bad is this going to affect the food supply? Because I know that Ukraine and Russia are producers. It's horrible. Yeah. So we have phosphate shortages because the Chinese are terrified

about food shortages. So they've blocked all exports. That's going to last for at least the rest of this year, probably all of next year as well. We have a nitrogen fertilizer shortage because nitrogen fertilizer is synthesized from natural gas. We were already looking at high natural gas prices nearing record levels before the Russian invasion, and Russia is also the world's largest exporter. So a lot of fertilizer producers per nitrogen have already stopped operating in Europe because they can't afford the gas anymore. And then 40% of the world's potash comes from either Belarus or Russia, and that has now been stopped. So we're looking at a chronic shortage globally of all three, and we know that means that a lot of poorer farmers around the world

are not going to use fertilizer or not going to use enough. And for everyone else, it's going to just be the single largest line item for them, so they're not going to be able to afford to do anything else. So we are looking at the beginning of a multi-year food shortage, multi-continental in scope. And of course, Ukraine is going from the world's fifth largest exporter to a net importer, and it will not come back for at least a decade.

Wow. Wow. That's incredible, 10 years. totally makes sense. I mean, we'd have to start rebuilding tomorrow if we're going to get there, maybe even within that time frame. The U.S. and Canada, I assume, will be fine because we produce a ton of our own slash get a bunch from Canada. But I don't know. Is that the whole amount? Mostly okay. You're right. Canada's where we get most of our potash. We produce most of the nitrogen ourselves. And the phosphates that we don't source within North America, either come from Morocco or Israel, and those supplies are safe. But remember, there is no tool to cut off American food exports, so food at least for now is still in a semi-globalized environment. And in that environment,

you're going to feel the pain. But it's not like we're going to be dealing with food lines or food shortages here in the way that the sub-Saharan Africa or maybe South Asia, maybe parts of China, and definitely the Middle East. Well, they have to rebuild that black seaport in Odessa, which I assume is going to be destroyed at some point. Yeah. As soon as McLeia falls, and I don't know when that's going to happen, but the Ukrainians have really been holding on to a degree that, I would have never guessed was possible. But McLeive is kind of the last stop on the road to Odessa.

Odessa is the world's largest wheat offloading facility. Watch the bridge. There's one bridge through McLeiv, and it's the only bridge between it and the sea. And then you have to go like another 100 miles north to get to the next one. If the Ukrainians blow up that bridge, everything has a little bit more time. But that's about the only bit of good news, if that's the right phrase. Are we going to see Arab Spring-like regime changes in countries that, end up with this food insecurity? Oh, no, no. It's not going to be nearly that positive. We're talking

about food prices that are significantly higher. We only had a tripling of food prices in the Middle East the last time we had any sort of disruption. This is going to be at least twice as bad. Really? Oh, my gosh. Yeah, I mean, Russia's primary export market is the Middle East. Ukraine's secondary market is the Middle East. That's just not happening this year, and that's independent of the fertilizer program. Oh, my gosh. So that knock on effects is probably a whole different podcast, but that sounds like this is really going to get really bad. Yeah, that's a big part of my life right now is just figuring out how long it's going to take to get placement systems up online. I'm not done, but spoiler alert, you're talking a minimum of five years. Oh, my God.

Are we going to see starvation deaths or just massive civil unrest for both? You break down globalization, what this whole talk is just a very small part of. You break that down, and yeah, we've exceeded the pre-industrial carrying capacity of the planet. It's only with fertilizes that we're able to keep 8 billion people alive. And so if you remove the industrial level inputs that allow that to happen, we will have famine. It will be worst in the Middle East, probably second worst in China, because that system hasn't fully broken down yet. And then it's a toss-up for number three between sub-Saharan Africa and India-Pakistan. The only reason that Indian-Pakistan, I think you're going to come out of this okay is with the first stop out of the Persian Gulf,

soap oil, natural gas, they're okay-ish. And they have on multiple occasions shown that if they just throw a bottomless supply of people at their agricultural sector, they can get sufficient production by substituting labor for fertilizer. Now, that has other economic problems, but it does mean that mass famine can be avoided to a degree. Oh, this is going to get so bad. Oh, my gosh. What advice would you then have for the regular citizen in the east and the regular citizen in the West to prepare for what's coming? Well, India, some of the decisions that the Indians have made over the last 50 years that we look at is just economically silly. Like every time the farmers throw a fit, they back away from whatever the modernization program was. And that has always been dumb in a globalized world.

And a non-globalized world that's actually pretty smart. I like to say that India has looked more or less like it has today since the time of the 5th century AD in the Hindu kingdoms. And nothing as small as the end of the world is going to change how India functions. This is just India. In the West, what we think of as the geography of agriculture is changing radically because they're shutting down nitrogen fertilizer fabrication in Europe because they can't get the natural gas at a price point that makes sense. And then, of course, phosphate is from the east and potash is from the other side of a new iron curtain. So you're looking at the European continent and all of the former European colonies having to radically over how they even decide agriculture functions and how energy

functions. And we're only in the very, very beginning of that unwinding. Do you think the U.S. will ban exports on U.S. oil to stem the oil prices? Oh, yeah, yeah, no doubt. Biden is populist. Trump was a populist. Obama was a populace. You see a trend here. And so if you have an American president who thinks he can ban the export of crude oil in order to protect American consumers from high oil prices, they'll absolutely do it. So we can have a ceiling here of about 70. and a floor everywhere else is at least 150, probably closer to 200. Wow. Wow. And that's in countries that are developing so that, of course, they can withstand that type of price shock much less than we can here. We're talking about going from people

whining on their evening news about how much it costs to fill up their SUV to people who can't do anything. And then we will find out just how engaged Americans want to be. because if we can show to ourselves that we can drop oil prices at the price of everyone else, or an insulated economy, where the military position of last resort and first resort for most countries that puts the United States in a fundamentally different position than we were during the Cold War, where we had to carry the burden in order to fight the Soviets, if we decide to remain involved, knowing that there's a high economic cost and very low payout chances,

just doing it because it's the right thing, that's a different America, and that is the America, to be perfectly blunt, we haven't seen for the last 15 years. I would love for that to happen. I do not have high hopes. Yeah, that's very interesting. I mean, can the EU take that mantle? I mean, Germany is increasing their spend. Well, everything is changing in Europe right now. I mean, the Germans doubled the defense spending in three days after 25 years of whittling it down. So it's entirely possible that we could have this just complete change of attitude on Europe to all things.

But it would take that. And we're going to have a sort of. situation in the not too distant future where the Russians are going to try to lever key NATO countries out of the coalition in order to prosecute the Ukraine war, we have to see what they do before anything else. They're going to try in what letter key? Think of it as a crowbar. There's a couple of pipelines that go directly to Turkey and Germany that won't be interrupted by sanctions, won't be interrupted by the war or sabotage. And the Germans will give the Turks the option of keeping the lights on in exchange for some security favors. Wow. What an interesting. entirely massive, disgusting mess this is. What about all these people talking about how the

U.S. dollar might not be the reserve currency anymore because China and Russia and maybe India are starting to consider settling oil in different currencies, they're going to build their own block. What do we think of this? So I never treated that with much sincerity. And the Russians are asking the Indians to pay for the oil in rubles. And nobody wants rubles, not even the Chinese who technically have a currency swap agreement with one rubles. What you want for a global currency is a country that has a deep financial pool that doesn't care about the day-to-day motion of the currency and honestly doesn't trade very much because then they'll have a vested interest. So any country that doesn't match those three is going to manipulate their currency

to their own best interests when it comes to trade. So the idea that there's a power out there that is actively involved in the energy markets that can suddenly become this impartial arbitrar is silly because there's nobody. The United States is kind of the perfect match because its energy needs are met within North America or within the United States proper for most things. So I really don't take it seriously at all. We talk about this every time that there's a turn of the page in history, but there's no reason to expect a change. Perfect. Peter, there's so much more. We'll have to do another one with you. I'll pick up a couple of your books and read those and we'll have even more wide-ranging discussion, but I really thank you for your time and expertise. This is

fascinating. Really appreciate it. No problem. If you're looking for a little bit more, the new book does come out June 14. The title is The End of the World is Just the Beginning. Great. Yeah, let's do another one for that book. Sounds good. All right. Thank you so much. You're about to hear a preview of the Jordan Harbinger Show about how you can be affected by ransomware and cyber attacks on the rise now all over the world. We still don't know just how deep the Russians are into our government systems. So it's going to be at least a year or more before we can stand up and confidently say we've eradicated Russian hackers from nuclear labs, the Department of Homeland Security, the Treasury, the Justice Department. How do you trust that any of the software you're using is secure and not a Russian Trojan horse? We live in the glassiest of glass houses. That makes

escalation, you know, that much more of a risk. We're getting close enough that I think we're going to see a cyber attack within the next four years even. That costs. substantial loss of life. For more with Nicole Pearl Roth on what the U.S. should do to push back against cyber warfare, check out episode 542 on the Jordan Harbinger Show. Super interesting episode. Probably could have gone on for another hour and a half, two hours, but alas, we only had so much time.

I highly recommend Peter's newsletter. We'll link to that in the show notes. I also recommend the BBC's Ukraine cast if you're following Ukraine, which I think many of us are. It's a daily podcast with news wrapups and analysis from Ukraine and about Ukraine. It's really, really interesting. I'm hooked on that myself. I will also link to that in the show notes. Predictions, unfortunately, I think we're going to see some siege warfare, such as we saw

with Sarajevo or possibly even Grozny, which is worse. Sarajevo, if you were around in the 90s, you probably know there was a lot of shooting into the cities, snipers, rocket attacks, things of that nature. and it was essentially a death trap for the inhabitants. Grosny was leveled by the Russians in Chechnya and then rebuilt. So neither outcome is going to be good. And also a few of you might be wondering about this conspiracy theory that we mentioned regarding Vladimir Putin and the Chechen war.

So many people, a lot of scholars think this, not just cooks, but like people who've written bios on Putin and books and research him a lot, think that Vladimir Putin actually blew up apartment blocks in Moscow in order to pin it on Chechen separatists and start the second Chechen war, which, and in that war they leveled Grozny in Chechnya. And so a lot of folks think that that was a false flag operation designed to get people so angry that they supported another war in Chechnya. And so that's kind of the same game plan that people think he's got for Ukraine where he says, hey, they've got chemical weapons there. And then Russia may use chemical weapons and then blame Ukraine. It's the sort of

disinformation playbook, except, wow. I mean, killing apartment blocks full of your own people to support a war. That's some real next level dictator-ish right there. If you're in Kiev right now, if you're fighting in Kiev, you know, it's going to be quite a slog and really ugly on a historical scale, unfortunately. I also think we may see the use of chemical weapons and massive civilian deaths. This doesn't take a lot of insight to see this is the way it's going so far. Chemical weapons could be right around the corner, especially as Russia loses steam, they're going to have to resort to more blunt instruments that can hit a wider landscape or get people out of buildings and rubble that they can't get to,

especially as they start running out of soldiers and infantry that will actually fight. Although nothing has stopped Russia in the past from incurring extremely heavy losses on the human side. They just can withstand and tolerate extreme loss of life. We've seen that in every conflict they've ever been in. And of course, we're going to see this all streamed live, unlike any other conflict in history because we're talking about a well-connected European society with developed infrastructure and a cosmopolitan population who's very savvy with technology. As you heard with Yuri, their internet over there and cell phone networks are better and faster than what I have here in Silicon Valley. So we're going to see a lot of live video coming out of their podcasts,

phone calls, TikToks, everything. I also unfortunately, of course, predict that Zelensky won't make it through this conflict. I think we're going to be putting roses near his statue in Kiev in 20 years. I'm not trying to be a downer in any way. I'm trying to be a naysayer. Of course, we're rooting for him, but it's just impossible that the Russians don't have it out for him. And eventually they are going to destroy all of Ukraine looking for this guy and for the rest of the fighters. They're not going to rest until they find him unless he goes into exile and runs the war from another country,

which so far hasn't been his style. A lot of people have asked me why a no-fly zone isn't that simple or easy. I see it's a trending Google search as well. a lot of crap information about this everywhere. The short answer is a no-fly zone doesn't just mean we scramble some jets or the EU scrambles some jets and then Russians can't fly or drop bombs. What it means is shooting down Russian planes. Not only that, of course, killing the pilots of those planes as well.

It means destroying infrastructure that allows them to launch air attacks and sorties. So we would have to execute strikes on SAM sites, a surface-to-air missile sites, inside Russia proper, all over Ukraine, destroying, Russian personnel killing Russian personnel inside and outside Russia. We're going to have to strike anti-aircraft batteries inside Ukraine and long-range missile systems elsewhere in Russian-held territory, including in Russia proper. So it's just not something you can do. It's essentially a declaration of war. And Russia can't come close to competing with the United States when it comes to air power, when it comes to long-range weapons and sophisticated weaponry. They just have nothing

on the United States. Hell, they barely have anything on Ukraine other than the ability to tolerate massive losses and launch more bombs because they've built up a military. I mean, so this type of thing would immediately escalate to tactical nuclear weapons and beyond because they have no hope. They would get absolutely obliterated, as Peter said. So the quickest way to escalate this thing into a global conflagration of nuclear proportion is to do something like enforce a no-fly zone. As much as it seems like the answer to this, it's really a terrible idea unless I'm missing something. Also, I'm not sure how clear Peter was, and a lot of people are going to be asking about this, but one of the reasons that we're going to see extremely high oil prices in sort of weird waves is we've lost all the

Russian crude on the market, right? So we're seeing high gas prices here in the United States, and Biden can play the card where he can stop all U.S. exports. I think Peter mentioned this during the show. So what would then happen is U.S. producers of oil, especially shale and things like that, would flood the U.S. market lowering oil prices. Yes, we'd have to rejigger some refineries. Yes, the companies would be really pissed off about it, but it doesn't really matter. It's something that is written into the law. This isn't even a wild, crazy thing he would have to do. That would lower U.S. oil prices. But then you have no Russian crude oil and no U.S. oil on the international market. So places that don't produce their own oil and rely on any Russian or any U.S. oil or any other

imports for that matter at all are going to see $200-plus barrels of oil because of supply and demand, purely supply and demand. Prices will go way up. So unless you're keeping your own oil in your own country, you are going to pay through the nose for oil. No idea when that'll happen, but essentially, once Biden needs to lower gas prices, he can play this card. And I would be surprised if he does not play this card. Then again, this conflict has been full of surprises. Olaf Schultz, Germany's chancellor, and Biden surprised Russia and everyone else for that matter. I don't think anybody, especially Vladimir Putin expected Germany to sanction them because of energy dependence. They've got that huge pipeline, Nord Stream 1 and 2.

They did not expect that to get canceled. Nobody expected Germany would rearm for the first time since World War II. 2% of the German budget, which is now their defense budget, is an enormous amount of money. And they will end up with a major fighting force within a few years with the help of other Western countries, especially the United States, with money and budgeting like that. So that's going to be great for a full participation here in World War III. And it's just been an incredible, in every way, unreal, surreal ride. I mean, Putin's actions have consolidated almost the entire Western world.

We have Sweden and Finland discussing NATO membership. I never thought that would happen. We have Germany rearming and NATO and the entire West sending arms to Ukraine. It's almost unbelievable. Putin has done what no Western leader has been able to do for decades and decades and decades. which is unite the West. So, congrats, Putin. You've made America.

And the rest of the West, great again. Not quite what you had in mind, was it? Big thank you to Peter Zion. All links to all things, Peter. We'll be in the show notes at Jordan Harbinger.com. Please use our website links if you buy books from any authors you hear on the show. That does help support this show.

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