The End of the World is Just the Beginning
Peter Zeihan

Summary

A book on geopolitics and how the world is about to be in for a rude awakening as globalization disintegrates written one of the world's foremost geopolitical thinkers

Rating: 5/5

Notes

We have been living in a perfect moment and it is passing

Geopolitically and demographically speaking, for most of the last 75 years we have been living in a perfect moment

The American-led order is giving way to disorder

The 2020s will see the collapse of consumption, production, investment and trade almost everywhere while globalization shatters into pieces

The ‘American story’ is the story of the perfect geography of success. That geography determines not only America’s power but also America’s role in the world

No country that has ever industrialized has ever managed the process without crippling social and political mayhem. Industrialization is necessary and unavoidable, but it is hard

We all come to think of the post cold-war world as normal. It is not

Globalization was always dependent upon America’s commitment to the global world order and that order hasn’t served America’s strategic interests since the Berlin wall fell in 1989

Every country that has a population crash w/ more old folks than children and runs out of young adults - these counties will never recover

China will go from pre-industrial levels of health and wealth to post-industrial demographic collapse in a single lifetime, much like rest of the world

If/when global flows of products and food are interrupted, the population and political and economic maps will change

De-globalization doesn’t simply mean a darker, poorer world, it’s something worse - an unraveling

The period of 1980-2015 has simply been a unique, isolated, blessed moment in time. A moment that has ended. A moment that will certainly not come again in our lifetimes

We grew up in a world of more, now we’re going into a world of less

All economic models are systems of distribution: who gets what, when and how

We are entering a period of extreme transformation w/ our strategic, political, economic, technological, demographic and cultural norms all in flux at the same time

America (w/ the Mexicans) face the least traumatic adjustment to the world-which-will-soon-be. America’s population is young enough to transition over decades to the rest of the world which will face severe population collapse

Transportation is the ultimate enabler of globalization

Russia’s grain exports at the end of the 1800s was directly related to them building their rail network

While the industrial revolution made it much cheaper to ship products from A to B, it took the American global order to make transport much safer

The solution for water transport isn’t simply more or bigger ships but more and bigger ships

The defining trait in globalization is safe, cheap transport. Inhibit that and everything simply falls apart

China’s embracing of narcissistic nationalism risks spawning internal unrest that will consume the CCP. It’s what has happened repeatedly in China’s history when the government can’t supply people with goods

Everything we know about modern manufacturing ends the first time anyone shoots a commercial ship

The Europeans are more dependent on energy imports than the Asians

The defining characteristic of the new era is that we will no longer all be on the same side

The rules of finance in the 2020s will change again into something we’ve never seen before

Currency is about trust and not a store of value

Launching a global currency system requires 2 things - 1 is a single economic and military structure spanning multiple continents and 2 is a large enough vault of precious metals to back the currency

• America supplied the Allies with resources during WWII and was always paid in golf so the American ‘s had the largest gold reserve in the world post WWII

The Chinese financial model is endless money printing, even more than the Americans

Europe never recovered from the pooping of its Euro Bubble with Greece in 2012

The European system (Euro) is going through the motions until the common currency shatters

When capital is cheap enough, pigs can fly. Once!

Author’s bullish on Indonesia

Inflation will continue to be all over the world

Expect a lot more populism

Several oil production zones face complete collapse in the years to come

After the cold war, the Americans had become economically trapped in their own outdated security policy

Oil is a huge inelastic good meaning decreased supply and increased demand leads to wild price swings

Expect oil prices to be wildly erratic

We need to green the grid before we expand it

The days of reliable inexpensive oil shipments are coming to an end. We’re entering a world Jack Sparrow would find familiar. This is not a game for the weak

Greentech requires 2-5 times the copper and chromium of traditional methods of generating power as well as manganese, zinc, graphite and silicon

Iron ore is the most important material as it is the base material

China is the global iron ore market importing 3x the next country

Bauxite is integral as it is the raw material to aluminum

¾ of world’s copper ends up in some sort of electronic application

Cobalt is absolutely necessary for future batteries (almost all from Congo)

Rare earths are used in almost everything in the modern era

China does 90% of the global rare earth production and processing

80% of the world’s largest quality quartz that make electronic grade silicon comes from a single mine in North Carolina. America will soon have resource control of the base material of the digital age

China makes lower-end products compared to its Asian counterparts

Europe is reliant on exports and mostly to America

Most Chinese firms cannot function without American participation

Colombia may be the next massive hub for workers for North America

SE Asia without China will enter manufacturing in a big way

Combine Japanese tech, military and wealth of India and SE Asia’s manufacturing potential, demographics and industrial inputs and you might have one of the great alliances of the 21st century

The Chinese are utterly dependent on German machines to maintain their industrial behemoth

‘Food is fleeting but hunger is forever’ - agriculture is the most important factor as governments have fallen more to food failures than anything else

Everything became possible after humans learned to grow wheat

Natural gas and oil are essential to all nitrogen-based fertilizers which is essential to all agriculture

Farmers need phosphate and potassium fertilizers for most food (also potash - Canada is big supplier)

France, US and Canada have enough food, fertilizer and equipment to continue producing their own products

The absolute biggest loser of a food shortage will be China

Likely in excess of 1 billion people will starve to death and 2 billion will suffer chronic malnutrition while some 2/3rds of China faces one of the two fates

The history of the next 50 years will be the story of how we dealt with, or fail to deal with, the coming food shortages and how those shortages will create their own consequences

Mexico should thrive in the 2040s as they have a great demographic set up

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