The Prof G Pod with Scott Galloway - Peter Zeihan on How the War With Iran Could Reshape the Global Economy

Episode Date: March 12, 2026

Geopolitical strategist Peter Zeihan joins Scott Galloway to discuss the escalating war between the United States, Israel, and Iran – and what it could mean for the global economy. They break down the risk of disruptions to oil supply in the Middle East, why energy markets are on edge, and how the conflict could impact global growth. Peter also explains what the war could mean for China, Europe, and the future of globalization. We’re also now live on Substack.Subscribe at profgmedia.com to get ad-free versions of all our podcasts, the full archive of Scott’s newsletters, and exclusive content including deep dives, livestream conversations, and subscriber Q&As. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Who joins us? Where are you? Are you in Colorado, Peter? I'm home for a change. Yes, Colorado. All right, let's bust right into it. We're recording this on March 9, 2026, just over a week into the United States and Israel's military campaign against Iran.

Iran's clerical leadership confirmed that the son of the late Ayatollah al-Hamini has been chosen as the country's new supreme leader following his father's death in the early strikes. Meanwhile, global energy markets are on edge. All prices have surged past $100 a barrel for the first time since 2022 amid fears that the conflict could disrupt shipping through the Straits of Hormuz. The choke point that carries roughly one-fifth of global oil supply. Peter, how do you see the current moment in this war? Where do you think we are? What's a state of play in your mind? Part of the problem with answering that question is we still don't know what the administration's goals are. There's no way to judge what success or the end might be.

But let me put out two things just to kind of start the conversation off. This is the first time the Strait of Hormuzes has ever been blocked. We're looking at a 98% reduction in traffic, which conservatively means that 15 million barrels a day are not getting out. We're in day 10, and we're at 150 million barrels total so far. We've already had 4 million barrels per day of crude be shut in. So even if the straight were to open tomorrow, that won't come back on within 60 days. So there's already enough damage to cause a global energy-induced recession, even if this stops right now. In natural gas, 20% of global LNG has been blocked.

That all comes out of gutter. That facility takes even longer to bring back online. So putting aside Israel and the United States and Iran and the physical damage and the drone war and all of that the moment, we're already in a global recessionary environment. Starting point. Second, the new Supreme Leader is the son of the old one, and which is the best way to sum this guy up. He's what Don Jr. wishes he was. So he doesn't just have a lot of experience in hiding financial assets behind shell companies. He actually has been in the trenches with the generals and has military experience, much more so than his father. So he doesn't have the gravitaser,

the political cachet that his father might have had after running the country for a few decades, but he's definitely a military leader. And that tells us everything we need to know about the willingness of Iran to accede to whatever it is the Americans to ban upon. And by the way, what the Americans have been demanding upon has changed about every 36 hours since this started. So do you see escalation? Do you think there's an opportunity for boots or not an opportunity, a possibility of boots on the ground or a wider regional war? I mean, part of the problem is when you don't know what the goals are, you don't know what to expect. Two of the more recent things that Donald Trump has said is that he wants to be able to handpick the next leader.

The other one is that he says he demands an unconditional surrender at Iran. both of those are wildly unrealistic options unless you have a million troops in the country and have physically crushed dissent in a way that I would add we were unable to do in Iraq and Afghanistan or Vietnam or Korea. As long as that's our starting point, we have no idea what the ending point is. All we know is that the Iranian will resist because there's nothing it seems that they can do to appease the Trump administration, not to mention that this is their home and they can't just walk away from it. So Trump could wake up tomorrow and say, oh, you know what, we won and we're done. And maybe, maybe the arrangements are like, yeah, that's totally fine. And now we can get along.

Stranger things have happened in the last year. But that is a very specific and very unlikely scenario. So I've gotten pushback, justifiable pushback on my views on this topic. I want to zoom out and get your take on the administration's decision to strike Iran. Do you see, I always like to ask myself, what could go right? Do you see any potential asymmetric upsides to a potential military action in Iran? Iran has been a thorn on the side of the United States for quite some time. And the idea of taking down their military and especially their paramilitary capacity down a few notches, obviously there's some attraction there. But I'm really getting the look that this war was not prepared for. First, on the tactical.

side. We knew they had thousands of shaheds. There's no anti-shahed strategy, either for shooting them down or preventing the components to come in from China. Chinese cargo ships are still docking at Iranian ports, bringing in more equipment. That seems to me one of the first things you should have done. Second, the idea that the Strait of Hormuz is vulnerable is something that has been core to American strategic policymaking since the 1960s. And we've seen no strategy whatsoever and no adaptation whatsoever to deal with the fact that we have 15% of global oil that's just gone now on the front end. If you remember back to Trump won, Trump stacked his cabinet with lots and lots and lots of military folks because they followed orders. But they were trained in their jobs.

And so when Trump would come up with an idea that maybe wasn't the best, they would try to gently educate. him about what would work and what wouldn't work and why. And Trump hated every single one of those conversations. And in the end, in the end, fired all of the people he brought in from the military. This time, he was out of power. He changed the Republican Party to remove the policy arm. So there's no longer recruitment and training. There's no longer a cadre of Republican people to come into a new administration and help the president. He just brought in people who would never be smarter than him on any topic in any room. And I don't care how smart you are. You can't be the smartest person in the room on every topic. And then, of course, when he became president the second time, he purged the government of the top

6,000 people and really replaced none of them. So there's not a lot of good information that makes it to the president in the first place to help make decisions. But from what I've been hearing is, you know, the position of the intelligence and defense community of the last 45 years is that in an air war against Iran, there's zero reason to think we can affect meaningful long-term change. And even if you're going to do a ground war, you're doing a ground war in a mountainous area that has almost 90 million people, and the U.S. Army cannot do that, period. It appears that all of that was ignored. And so now we're in a situation where he's making policy by fields. And while you can certainly bomb the crap out of the country with the American military,

If you don't have an end goal, don't have a strategy for dealing with the other side's strengths, you're just in a pointless grind. And that seems to be where we are right now. Do you think there's a likelihood they sort of declare victory in leave say we wanted to take out the launchers? We wanted to impair the military infrastructure, their ability to manufacture weapons. We wanted to further, we want to take their capability to enrich uranium back to less than zero. and we wanted to replace leadership, we've won, we're out. Do you think that's a viable strategy? That's absolutely one of the ways that this can go,

because the terms of success are being changed every day. A couple problems with that, though, that we will then be dealing with for decades to come. Let's start with enrichment. We know that as of eight days ago, there were at least 50 different nuclear sites that we knew about that had been hidden and hardened. And let's assume that we got all of those.

We certainly didn't get the ones we, we don't know about. And if you want to build a plutonium bomb, you don't even need an enrichment program. You just need a nuclear power plant, which they have. So unless and until that is gone, they still have the capacity to extract plutonium and go that route. That's problem number one. Problem number two, Iran, as the intelligence community has always warned the American president, whoever happens to be. Iran believed that a nuclear weapon would invite automatic intervention. And so they went with one step back. They wanted a credible nuclear program that didn't have a weapon that, but if you flipped a switch within a matter of weeks to months, you could then have a

nuke. That was their attempted deterrent. After the attacks of last June, the debate within Iran was whether or not that was still a good strategy, because obviously they had been attacked. And so there were signs that they were moving to shorten the window. Now that the Supreme Leader has been assassinated, now that there's a wide-ranging air war, obviously the Iran's think they need to nuke now because they're only option. So if you declare victory and go home, they will have a nuclear weapon within a year if they're really slow about it. So we've changed the strategic balance within the country. We're starting to come to the conclusion that the Supreme Leader, who's now dead, was actually kind of by Iranian standards, a strategic moderate, and we're ushering in a

new generation of people who are a lot more hostile to the United States with good and recent reason to be so. I was like to ask what could go right. Do you mean there's a chance the sun takes a hardline publicly, but reaches out to, you know, offline to, you know, offline to American resources and says, all right, you know, we're going to be neutral. We're not going to be anti-West. I'm going to give you an out. And I'm going to be seen as the guy that got the Americans out of here. Because it strikes me that if we continue to do this and specifically take out their capacity to their oil infrastructure, that he's going to have a difficult time governing over the medium long term after the Americans leave because so many people have their livelihoods

to Iran's capability to continue to produce and sell oil, that if they leave now, and the majority or a large portion of his oil infrastructure is still intact, and oil stays at, say, 80 or 90 bucks, he's going to have the money to serve as Neosporan for any criticism of his leadership. Isn't there an incentive right now for him to figure out a way to be publicly defiant, but privately figure out some sort of resolution? That's a lovely thought, but he's only been there for 48 hours, and we'll see how good he isn't managing the political system. Iran's a messy place, much messier than Iraq or Afghanistan to rule. About half the country is Persian. The rest are a wide variety of minorities, and the only way the country has kind of held together that to this point is to have a million-man army to occupy its own population. And so just the mechanics of that are messy. As for oil, right now, well, before this started, they were exporting about a million barrels a day, and that is down from their 1970s peak of over four million barrels a day. So the degree of buildout that you would have to have to get to a point where they have,

as you say, Neospore and despair, that's not going to happen less than 10 years. That's a long time to be seen as publicly toadying up to a government that just bombed you. I don't want to say no. It's the Middle East. Strange things happen. But it doesn't. strike me is very realistic. It felt like at the beginning of the war, one of the potential upsides was that there was this sort of informal alliance between the U.S. Israel and moderate nations in the Gulf, basically everyone but Iran. Do you think that holds or do you think you're going to start to see what felt like potential

for a closer relationship with moderate states in the Gulf, or do you think it's going to get, it's going to fray? That is very much in question. We're in a hot war now. There's a lot of ways that can evolve. So at the start, whether you were Kuwait or Saudi or UAE or gutter of the rest, there was a general belief that they had found a way to get along with Iran. I don't want to suggest that they were friends or allies, but they had figured out kind of a way to grind past one another while the United States and the Israelis were doing their thing. The nature of the weapon system in Iran, we probably should have anticipated this. I certainly did not.

they don't have a good chance of damaging Israel. It's too far away. There's too many opportunities for the weapons to be intercepted, even before you consider the involvement of the United States. And the shaheds are dumb weapons. You give them a GPS coordinate and a really, really good shahed of which is they don't have a lot. They fly to that one coordinate, and then they have a very short decision tree where they look for silhouette, and then they beeline to it.

That's one of the reasons why they're not particularly accurate. You can't target a moving ship with that. So the American Navy is functionally immune to the missiles and the drones. In the first 48 hours, every ship the Iranians had got sank, every plane they had got shot down. There's no air force. There's no Navy. So if you're Iran, your choices are shooting at Israel, knowing that well over 90% of the weapons are going to shot down, or shoot at something that maybe you can hit. And so they targeted Kuwait and Qatar and Bahrain and Saudi and UAE and even a little bit into Turkey, Azerbaijan.

and Oman. And in doing that, they've changed the nature of the conflict and the nature of the region. They've probably fired somewhere between two and three thousand shaheds at this point, and they have probably exhausted over 80 to 90 percent of the interceptors that the Gulfies have. One pack three missile costs four million dollars. One shahed costs 40 to 50,000 to 50,000. dollars. The United States can make about 700 pack three interceptors in a year. The Iranians can make about 700 shaheds in a week. So we are literally days away from there being no interceptors. And while you can't hit a moving ship with a shahed, you can absolutely hit a pumping station or an oil field or a refinery or a loading platform. And so there's a very, very real possibility here. in the very short-term future that we just lose the Persian Gulf as a significant source of hydrocarbons from the world. And that's a lot worse than an energy recession. And that will absolutely change the nature of the relationship of everyone with Iran and with the Gulfies and with Israel and with the United States.

And that might happen this week. And is that because of choking off the Straits of Hormuz or just production? capability. At the moment, Hormuz is closed, but the oil facilities are physically intact. What I'm suggesting is we might cross the Rubicon on the oil facilities very, very soon, because the strategy that we have to defend against the Shaheeds requires ammo that is available in very, very limited supply that cannot be replenished as very, very expensive. We've basically ignored the lessons of the Ukraine war, and Iran's cost-benefit ratio here is quite robust when it comes to targeting these things.

It's interesting because I always thought there was asymmetric advantage to us that I hear these numbers that the number of projectiles, their firing is to climb by 83% that they've run out. And what you're saying is we're on the wrong side of this asymmetric warfare, that they can produce these cheap projectiles. And we're used to expensive defense systems, and we can't keep up with the cheap ones. You think the advantage around projectiles goes to Iran. Well, let's break it into two categories here. If you talk about, missiles, there you need a 50-ton truck that is specially modified in order to take the missile in the first place and get into position to fire.

Launch capability. Exactly. And that's not, that sort of launcher system is not something that you can just whip up in an afternoon. That requires work. A lot of the components have to be imported. And so the United States has for solid reasons, Israel for solid reasons, has gone after the missiles first because per unit they can cause a lot more damage. They're a lot more difficult to intercept because you basically get them on their terminal approach, and that's it. And that's what the pack threes are for. Shaheds, their launch system is a little

rail that you can bolt onto the back of a pickup, and it takes one welder about four hours to put one of those together. And they have a lot more shaheds than they have missiles. So on the missile side of the equation, we're actually in reasonably good shape. The Iranians stored a lot of these things underground in places that we knew, so we just collapsed the entrants and, you know, don't have to worry about those in again. But you can make a Shahed in a garage. It's got components. that are styrofoam and plywood. They're really hard, easy to put together. They fly in a straight line.

They're fairly easy to intercept with any number of weapon systems. But if you keep firing them a few hundred a day, which is exactly what has continued to happen, eventually enough are going to get through to make a difference because we will run out of interceptors. We'll be right back after a quick break. Support for ProPtchi comes from Lisa. If you've ever slept on a mattress

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This is a paid sponsorship. Iran has been punching below its weight class for a while. I love the stat you just threw out that they used to produce 4 million barrels a day, now it's 1 million. And a more stable Middle East, a neutral, not necessarily a pro-West Iran, but a more stable one, vastly more production, lower oil prices, biggest tax cut or increases pretty much around the price of oil. Essentially a moderate alliance, peace in the Middle East, where everyone, you know, I always thought that once, October 7th has calmed down. You might see a normalization relationship between the two biggest economies,

Saudi Arabia and Israel. Iran no longer the largest state sponsor of terror. I saw a lot of upside here. It sounds to me like if you were, and you may be, I know you advise corporations on geopolitical concerns, but if you're advising the U.S. government,

it sounds to me like your basic advice would be end this thing as quickly as possible. Am I putting words in your mouth? God, I would love to say that it was that simple. We've crossed the line now. Iran has to change their strategic policy based on the concept that the United States can come for them at any time. That means more, at a minimum, it means a nuclear program that has a deliverable weapon. We've entered a much riskier stage of this. Now, if you compare the tools that they were using before that we really hated, most notably paramilitaries operating throughout the region, that is at a four-decade low now because of what the Obama, the Trump, and the Biden,

did in cracking down on their oil sales. Without the money, they weren't able to keep flushing these groups with the resources that were necessary in order to control them. And so there are now very few places in the Middle East after 10 days of war, where we're seeing this sort of sectarian violence that we used to see during the war on terror because the Iranians just don't have the cash. So the picture is evolving. But by going for the throat, we've encouraged them to reach for different tools. And I think the key number here is 100, and that is oil spike to about 112 bucks last night. Now it's around 100. Talk about the second order effects here. I mean, for example, we saw the cost be, essentially the Dow South Korea off six and a half percent. As we're focused on gas going up 50 cents a gallon here, we have markets crashing in Asia. What are the second order effects of $100 triple digit oil? Well, let me start by saying that the market reaction yesterday was too much.

Basically, we had our first energy assets targeted. The Israelis went after some oil depots around Tehran, and everyone thought that meant that oil production infrastructure was gone. That is not what happened. And that's why we saw quite a big drop back. But the overall theme that this is a really big deal is a solid point. Right now, the Persian Gulf at normal exports about 20 million barrels a day, which is half of internationally traded oil.

And roughly 80% of that goes to East Asia. with China being the number one country to take it, Indian number two, Japan, number three, Korea number four. Based on whose numbers you're using, most countries in the East Asian Rim have 200 days of import cover, that Indians don't have nearly that much, and there is a debate as to whether or not the Chinese oil reserve exists. Chinese numbers, we just don't know, but they may have as little as 40 days of import cover. So if this conflict lasts for, let's just pick a number, a month, that's enough to probably break the economic models of most of East Asia.

And if we have the physical assets that produce the crude takes significant damage, then East Asia's gone and it never comes back, with China being the first one to go down, because they just don't have sufficient alternatives from anywhere else. And that assumes that the Europeans do not continue with their crackdown on the shadow fleet of Russian tankers, which has been accelerating massively over the last two months. This is one of the many, many things that I identified 10 years ago when I basically talked about what would end globalization. This is one of them that would do it without any of the help, any help from any of the others. And now we're here. It feels as if what you're saying in terms of, I mean, it feels like $100 oil is probably good for

Russia and very bad for China. Is that an oversimplification? It's only good for Russia if they can continue to export. With what the Europeans are doing with the shadow fleet, they may be about to lose four million barrels that they have exports. So say more about Europeans getting in the way of the shadow fleet? Yeah, so we've gone from nobody wanting to touch it for various reasons to now we have every couple of days another European country taking another tanker. Sweden was the last one to take a ship up the weekend. Belgium took one last week, France the week before. They're building up the legal and institutional infrastructure to do it by the book from their point of view. And of course, the United States has gone after the Venezuelan flato shadow fleet. And the Indians have taken a

couple of ships from the Iranian shadow fleet. So this is the last year for that, unless we have a starkly robust change of policy in the not too distant future. And having the Persian Gulf removed from the equation might be what pushes them in that direction. But we're kind of in this perfect storm here, where the Shadowfleet is looking really wobbly. The Persian Gulf for the moment is gone. And one of the things that everyone in the world forgets is under the 2015 omnibus bill during the Obama administration, the U.S. President got the authority to, with the flick of a pen, shut off all oil exports. No review, no congressional approval or consensation required. So we're in a situation here where the world might lose Persian, Russian, Russian, and American crude all at the same time. And there would be a show when that happens. Who are the winner so far here? It's too soon to tell. Israel certainly thinks that they are a winner

because they've gotten the United States to basically fight their war for them. Russia at the moment, with the Shadowfleet still in play, looks good at the moment. Urals crude trading in India is already priced higher than all the international benchmarks because of the demand. And then, of course, the United States, because we have that clause that allows us to remove ourselves from global energy. And anything that wrecks Europe and East Asia at the same time will really hurt us from a consumables point of view because our manufacturing hasn't been built out.

But longer term, I mean, this is a society-ending event potentially for a lot of countries, but not here. So it feels as if Iran justifiably is sucking all the media oxygen out of the room right now. What do you focus on? What do you think is the most important thing geopolitically occurring outside of Iran right now? Outside of Iran. Ukraine is getting really interesting. Very, very short version. Starlink was being allowed to be used to guide Russian cruise missiles and drones long term,

allowing them even hit moving targets. So you take a shahed, whether it's a Russian shahed or a Iranian shi head. And if you put a portable Starlink on it, you can guide it in real time all the way to the last second. And so the restriction is on straight line flight go away. The idea that you can only target something that you have chosen at the time of launch goes away. And they were literally hitting moving trains with these things. After the Ukrainians proved to the world using the equipment recovered that Starlink was basically actively aiding and embedding in mass murder, Starlink changed some of their policies. And you can no longer use Starlink's in the theater in a moving way. And you have to be part of a white list. And in doing that, they basically gutted the ability of the Russians to communicate to and from and among the front. And so in the last month, the Ukrainians have been on the offensive throughout many parts of the front and actually captured a lot of territory. It's kind of underlined how these new technologies, number one, aren't undergovernmental.

control, they're under private citizen control. And two, their ability to be extended and removed can have massive impacts on strategic decision making. The Russian ability to communicate among their forces pre-war was pretty poor, and that's one of the reasons why the first year of the war went so badly, and how the Kiersen counteroffensive, for example, was so humiliating for them. They then basically used Starlink wholesale. They've been using Western platforms to communicate. And so now that some of those have been removed, they really don't have a fallback plan that is more sophisticated than radio, and radio can be tapped. So I don't want to say we're suggest that we're seeing a collapse of the front. That's way too extreme. There's a lot of minefields. It's not that simple.

But their ability to manage the front has just dissolved in the last month. And so are you hopeful that we might see a settlement? It strikes me that the peace plan offered by the Americans is basically a Russian peace plan. And it feels as if we want, ideally we want to see Ukraine in a position of strength when they negotiate what ultimately might be a peace plan. Where do you think, if you were to speculate where we would be in a year in that conflict, what is your, what is your thesis? There weren't a lot of people who saw the Ukraine war coming. I was one of them. I was probably the most optimistic for the Ukrainians' chances. And even I thought this was all going to be over in a year. Here we are in year five. So any forecasts that I make on that is going to be

very loosey-goosey that I have very low confidence in. The technology is changing. The political alliances are changing. The Starlink thing. Who could have even imagined that five years ago? What I will say is that not once in Russian history have the Russians ever negotiated an end to a conflict unless they had already won or already lost. And the idea that this somehow is going to be different is stupid. from the Russian point of view, they have to reach the Danube, the Carpathians, the Vistula, and the Baltic, and they will not stop until they get there. And any talk of talks is just that. It would simply be an opportunity for the Russians to insist that somebody else give them something that they haven't been able to capture it militarily. And then as soon as they're ready, they push again. And anyone who tells you otherwise really doesn't understand the Russians. It strikes me that the core competence of Russia is, you know, the media is, and I need the land acknowledgement.

Every death of an American servicemen or servicewoman is a tragedy for their families. We've lost seven people, and it's got a disreport, a lot of warranted media mentions and people outraged. What are the Russians losing? A thousand people a day? to that. I mean, it just strikes me that the Russian capability to endure loss is kind of their core competence. And I'm reminded what Masayoshi's son, the head of SoftBank said, who would you rather be in a fight against? Someone who's really smart or someone who's really crazy? He said, you want to avoid the fight with the guy who's crazy. Do you think that it hurts us, that quite frankly, we just don't seem to

have a willingness to endure much suffering? You know, the United States has not been an a position where it's back been to the wall since the Civil War. So honestly, we've not been tested in a way that a lot of cultures in the world have faced in the last century, century and half. It's just not something we've ever had to deal with. I mean, the last existential, external war that we fought was with Mexico. That wasn't a Syrian experience for most Americans. You really have to go back to the war of 1812 for us facing an external. force that really could have had us. So I don't think that's a fair comparison personally. The United States military since before the World Wars has been designed to project power out.

And if you're going to project power out, you will never win on the numbers. You have to win on technology and reach and speed and lethality and being able to choose the time and place of the fight. And if that is what you're doing, you spend a lot more money per person in order to project than you would by just putting a gun in someone's hand and sending them charging the front. And so when we do suffer casualties, it's magnified. That's absolutely true. But that's by design almost. We show up with an aircraft carrier. Everyone else shows up with a donkey. It's a different type of fight. And thoughts on Europe, which has just been in sort of a, it feels like a self-induced coma for the last 30 years. Impact on Europe? If Persian Gulf crude really does go away, they're going to have to make a

really hard decision about Russia and Ukraine. If you had asked me five years ago, whether or not they would have stood up to the Russians in the way they have, I would have laughed at you, because they had taken every opportunity in the previous two decades to give in the Russians at every opportunity, especially on energy politics. And it's only with the Ukraine where they realize this really is about their long-term survival. But if all of a sudden the only other source of crude on the planet goes away, then a lot of them have some very difficult decisions to make. They're not nearly, nearly as energy-intensive as in the United States. It's they probably get the same amount of GDP for half the crude, but that doesn't mean that they don't need it, and that doesn't mean that there's a

good solution. Green Tech in Europe as a rule doesn't work nearly as well as it doesn't say the United States, they don't have the equivalent of the Great Plains or the American Southwest that are good for wind or solar. And so even if they were to somehow magically wave a wand and everyone had an EV, they just wouldn't be able to do much. They don't have the charging capacity. Even if the infrastructure was there, the climate doesn't help them there. And so their future is probably coal, specifically lignite, and that will be a bitter pill for them to swallow. But if your choice is your environmental goals or your national security, I know what the Germans and the polls will select because they really don't have another option. But we are certainly looking at the end of Europe,

Inc. as a major manufacturing presence in the world. At the same time, we're looking at the end of China, Inc. as a major manufacturing presence in the world. And either of those issues would be globe-spanning catastrophe in their impacts, and to have them both at the same time, At the same time, we have a global energy crisis. Not to put too point on it, but I wrote a book about this. And it's a little frustrating that I haven't retired before it came true. So here we are. Say the war does not go well.

It damages the U.S. reputational. But China, who is totally import or energy independent, or dependent, most Asia energy dependent, Russia bogged down on a war. Obviously, this is not good for Iran. it continues to be an economic impairment for Europe. It's like the U.S., which is energy independent, very strong internal consumption economy, no one bombing them,

even if we lose damage reputationalally across the globe and a phrase our alliances, aren't we kind of like the U.S. dollar right now, and that is everyone should post the dollar, but where else are they going to go? Even if things go wrong here with this war, and the whole world is diminished, Aren't we the least diminished of the world's superpowers?

Two things on that. Number one, from an economic point of view, the only real weakness the United States has is in manufacturing, whether it's the primary processing of raw commodities, like, say, cobalt or lithium or whatever else, or cars or jets and everything in between. We're a services economy. We design the systems that everybody else uses,

but we have not built out the industrial plant that is necessary for us to fly so low, in the world. We started working on some of that under Biden. It collapsed under Trump, too, because of the tariff policy, because no one knows what the rules are. We've literally had 6,000 tariff changes in the last year. And so businesses basically stopped building things. They'd finished what they started, but no one is starting anything new. And so we're really going to get sucker punched in this specific scenario, which I think is a realistic conversation to have, because we will now have to do all of that while we have a show.

shortage of everything that would have allowed us to build it faster before. As for the dollar, long term, two oceans, globally dominant military, strong population, young population, consumer-based population, the need to double the size of the industrial plant. All of those argue for a strong dollar going forward. But until 11 days ago, we had an erratic policy on regulation on tax. Rule of law was being broken down. We were We're deliberately breaking our trade relations with countries that are integrated into our manufacturing system. All of the short-term issues argued for a weaker dollar. You throw a war, and all those minor details really don't matter anymore.

Because we're really looking at the bedrock of what allows the rest of the world to function being broken actively here. And so, yeah, there's only one place to put your money, and it's here. We'll be right back. The game begins in three, two, one. Ready or not two, here I come. Only in theaters, March 20th. After surviving one deadly game, Grace and her sister Faith must now face off

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So the thing about war is that your enemy gets a voice, and there's always an X factor, and it feels like war in the Middle East is X squared factor. There's just, you just don't know what's going to happen, right? Or you know the unknown is likely to become visible. Have you thought about or thought through any potential black swan events, whether it's Europe selling our debt and spiking inflation or a nuclear detonation? When you think if you're, I imagine you're asked to assess risk for some of your corporate clients, What are the risks that we're not saying right now?

I'm not worried about a debt thereop. Let's say everyone around the world decided to sell their bonds at the same moment. And so they start trading at 20 cents on the dollar, maybe even below. The U.S. Federal Reserve in 30 seconds can expand the money supply and they just retire all of it at 20% of the cost. I mean, honestly, from an economic point of view, that would be lovely. I would love it if everybody did that at the same time. That would be fantastic. So not worried about that.

Nukes two weeks ago wasn't really worried. Now I see that as a very realistic scenario because if you're a run and you've got you're a dead supreme leader and you're being demanded to surrender unconditionally, why would you not build and use a nuke? Delivery to the United States would be the complication. It suggests it would need to come in on a cargo facility into a port where the service. screening is on land and not at sea, and that would argue most strongly for Houston or New York City. Those are the logical places to do it. And that has gone from something I really didn't even worry about it all to something that all of a sudden is one of the leading scenarios. Is there a country that you think plays a leadership role here in, whether it's Oman or being

sort of the Switzerland here that can somehow get cooler minds to prevail? Is there a nation or a hero we need right now that we weren't expecting to hear from? There is no country and no leader who Trump respects enough to serve as a mediator. In fact, Trump thinks that he should be the only mediator, period. So I find that unlikely. For the new guy in Iran, he's a very, very violent, militaristic individual. He hasn't been in charge long enough for us to know what his geopolitical preferences are. But I find it difficult to believe that as he's building up his institution of the

presidency, that his first thought will be to reach out to a third party. And even if he did, I'm not sure who that could be. The only country that really has any influence in it's very, very thin, would be China. And Xi is a little bit like Trump in that he's purged the system around him to such a huge degree that he's not getting good information either. So all that leaves us with is Putin. And we're already seeing some of the differences on the front line in Ukraine because the Iranians were primary weapon suppliers to Russia during the Ukraine war, and that has gone to zero overnight. So assuming that Trump has any awareness of that, it's difficult for me to see Trump accepting Putin as a mediator either. I just don't see who it could be. There are plenty of

countries that might offer good offices and, you know, be not the broker, but just host the talks, but no one who can intervene on either side. It's funny. The U.S. used to be the operating system trying to, you know, securing the supplies of the roots of oil, settle in dollars. That was the deal we cut with all the allies during the Cold War. We keep the oil flowing. You're on our side. And our laws, our IP protection, kind of the... the operating system and protecting or suppressing or keeping in check rogue nations. And it feels to a certain extent like we are now that rogue nation. Is that fair? Rogue nations are ones that violate the existing order. And if there is no existing order,

is anyone really a rogue nation? I've got lots of beefs, professional, strategic, and personal with the Trump administration. I don't make a lot of, I don't put a lot of effort into hiding in that. But globalization was always going to fail. The global demographic picture was evolving in the direction where there just weren't going to be enough young people to do the consuming that would make trade possible. And the idea that the United States would continue to hold up the ceiling in a post-Cold War world when there was no agreement as to who the bad guy was, that was always going to fail. And between 2025 and 2035 is always the decade that I have identified my entire professional career about when it was all going to break. Trump is speeding

that process up. He's compressing it. And that's going to cause a lot of pain in a lot of places in the United States, just for one. But to think it wasn't ever going to happen, I think, is deluding ourselves. We were always going to get to some version of where we are now. and where we're about to be. So let's bring this home. When your clients ask you to give them the state of play in the U.S. economically and in terms of the political landscape, what's your answer? Yeah, well, I mean, economically, I've been telling them for several years now that if you're dependent on China, you just should assume that that all goes to zero and you get none of it back.

And I've actually let go a couple of clients recently who just refused, because it's a waste of my time at this point. The question now is whether or not you can build out manufacturing plant in an environment of extreme regulatory uncertainty in the United States. This is by far the most hostile administration in my life to the business community because of all the constant ambient chaos changes. But this is what we have to deal with. So you have to find a way to expand your production lines to take in the steps that are not in the Western Hemisphere. And you have to do it now. and yes, that's going to be expensive, and yes, capital is more expensive than it was, and yes, labor is more expensive than it was even before you consider the immigration crackdown,

but this is just the environment that you have, and there is no going back to the East Asian Rim, and maybe by the end of this year, there's no going back to Europe either. So you have to deal with what you have, and what you have is here, and that involves Trump for better or for worse. But we're now at the moment where we've run out of prep, time and the day has arrived. Do you have any predictions for 2026 in terms of the midterms or who you think will be the Republican or Democratic nominee in 20A? I do not. The Republican Party is gone. The National Security Conservatives, the fiscal conservatives, the business conservatives,

the law and our conservatives have all been ejected from the party. It is simply Trump now. So assuming that Trump is still alive when we get to that point, he will have. handpick whoever it is, and whoever it is will then have to tow the line with him on everything until such time as the election happens. Because if they don't, he will then change his choice. And he retains a cult-like devotion from Maga, and he will be able to do that without a problem, no matter what his mental state happens to be. Democrats are simply chaotic. They've lost the Hispanics. They've lost organized labor. They've lost the... the youth vote. So the idea that either of these sides can win ever again is kind of funny,

but someone has to lose more. And so I have no prediction whatsoever because they're just in a race to the bottom in terms of their capacity to attract anyone. The strength on both sides is their ability to repel voters. And I can't tell you which one is worse right now. Peter Zion is a geopolitical strategist and founder of Zion on geopolitics. I just, you are really, one of the things I love about America is that you can, we mature such interesting people and give them the opportunity to have influence and make good livings. And you are just, you were built in a factory from parts of lesser people who do that.

I'm really just, I'm fascinated with you as our people and very much appreciate your time here, Peter. This episode was produced by Jennifer Sanchez and Laura Jinnar. Cammy Rieke is our social producer, Bianca Rosario Ramirez, is our video editor. And Drew Burroughs is our technical director. Thank you for listening to the PropG pod from PropG Media.