Peter Zeihan

It has been a long time coming, but we have arrived at the end of the world. Decades of demographic degradation are now manifesting as chronic shortages of labor and capital. Globalization isn’t simply past its peak, it is disintegrating with accelerating speed. A fleet of ends beckon: global energy, global agriculture, global manufacturing, integrated Europe. China. But an end to this world does not mean an end to the world, simply that the rules of the game and the lists of winners and losers are changing. As the environment rearranges it’ll be a (very) bumpy ride, but we stand at the launch of the greatest period of growth in North American history.

For the past decade, Peter has been discussing the nature, strength and weaknesses of the international system. How post-World War II institutions, geography and demographics have made our world our world…and how it was never going to last. Well, we are now at that world’s end. Any number of factors – the Ukraine War, the fall of China and Germany, energy breakdowns, supply chain collapses, workforce shrivelings, financial contractions, and so on – would independently be sufficient to break the international economy. And they are all happening at once. We were always going to get here, and here we are. So let’s discuss what happens next.

For the past three decades, our world has known ever-rising volumes of money. Whether from Wall Street, the Federal Reserve, Europe or East Asia, this rising tide of capital at ever-cheaper rates has defined the post-Cold War era. It’s ending. Now. For geopolitical and demographic reasons, the globalization of finance is in its final months just as the overall inflows are dissolving for demographic reasons. This isn’t momentary. We will not return the capital structure of the 2000s and 2010s within our lifetimes. The questions now become how deep the crash will be, which sectors will suffer the most, and what islands will be able to weather the coming financial storm?

Manufacturing is an endlessly specialized and complicated venture, with most manufacturers directly or indirectly sourcing components from around the country and world. But what if the ability to sail components from site to site becomes compromised? What if capital availability proves insufficient to update industrial bases as technology evolves? The successful manufacturers of the future will be those who can command access to raw materials, capital, labor and markets – within defined areas of proximity. Such days are nearly upon us. Differences in COVID recovery and demographic structures are intermingling with failing Chinese relationships to push manufacturing in an entirely new direction.

Modern agricultural patterns are the result of three largely unrelated factors: low-risk global trade, insatiable Asian demand, and unlimited cheap credit. Within the next five years, all three of these trends will not just evaporate, but invert. When that happens, the only thing that will hurt more than the gradual loss of demand will be the sudden collapse of supply. However, none of this impacts the American producer – it therefore will be the United States that will reap the benefits of its productivity and stability for decades to come.

Americans believe that their greatest days are behind them and that a series of new powers is rising up to displace them. On the contrary, America’s best days — militarily, economically, financially and culturally — are still ahead of them. In fact, many of the states that the Americans feel are up-and-comers — most notably China, Russia and India — are merely experiencing a historical moment in the sun courtesy of factors utterly beyond their control. Most of the powers of tomorrow are countries that the Americans either have very little knowledge of. The major powers of 2030 will not based in Beijing or Moscow, but in Jakarta, Buenos Aires, Warsaw, Istanbul and Mexico City.

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