[music]

Hello listeners and welcome to a very

special episode of Geopolitical Cousins.

Uh joining me on this episode of the

podcast besides cousin Marco and myself

is Peter Zion and Matt Gerkin. Um these

conversations were filmed over the

course of the entire day of June 15th um

at Matt's house in Taos, New Mexico. Um

I apologize that it took us a little

while to produce it. Um, it's a long

story that has to deal with a video

editor in Nepal and lots of other things

that are not interesting. It's also uh

rare for us. This was this was really

the first time as the cousins that we

decided to do something in person. So,

we wanted to line up the video editing

uh with the audio editing as well. Um,

if you haven't checked out our YouTube

page, by the way, you can find this

video on YouTube. Uh, the audio content

will be the same, but since we were all

in person, I think it actually does add

something. Uh part one, the prompt for

this uh the the prompt for this episode

was how does the world end in the next

10 years, which was perfectly suited uh

for Peter's appearance and also

challenged me and Matt and Marco to come

up with our own versions of how the

world ends in 10 years. Uh Peter

obviously [laughter] the best at all of

this and us uh going at him. I hope that

the episode is as rewarding for all of

you as it was for us. Um I think I've

said this a few times on the podcast.

Um, analysis can be a very lonely space.

Uh, when you're doing good analysis, it

usually means that your opinions um,

seem a little out there and seem a

little wacky. They only seem clairvoyant

uh, after what you've said comes to

pass. Um, and it also means doing a lot

of work by yourself, a lot of reading by

yourself, a lot of research by yourself.

Um and it was really nice to talk to

other analysts um who have been in

geopolitics for 15 plus years and talk

about how the world has changed and how

has our work changed or not changed or

how has AI affected it or not affected

it. Um things like that. Um so thank you

to Peter, thank you to Matt, uh thank

you to Marco, thank you to the video

editors and the audio editors that

helped us out here. Without further ado,

uh we hope you enjoy these episodes.

Cheers and we will see you out there.

[music]

Okay, very special. Peter, thank you for

joining us. Uh, I don't know if anybody

else is getting like a weird sense of

deja vu. Like I don't remember the last

time the four of us were around a table

or talking to each other.

>> I think it was probably 2000 I'm going

to say 2010

>> probably

>> roughly. Yeah, that window.

>> Yeah. So 16 years ago. 15 16 years ago.

This is the reunion. Uh Peter Peter was

my very first ever boss. I'm so sorry.

>> In the private sector. In the private

sector.

>> Same here.

>> Yeah.

>> In fact, in fact, when Peter offered me

the job and I said, "I don't know. You

know, I've got this other." He said,

"Well, what do you want to be when you

grow up?"

>> I was like 24 years old. [laughter]

>> Well, and Peter was an established

entity at Strathor. Then you guys were

already senior analysts. When I came as

an intern, my first job I I apologize,

Peter, because for a while as an intern,

my job was to come into your office and

bang on the door and say, "Where is your

piece? You haven't sent in your piece."

I remember

>> I very sorry it was not my choice. Uh I

was just doing I was following orders

and you were thrusted around you orders.

Were you

>> there's a deep joke in there that we're

not going to explain.

>> We're not.

>> Um all right. So for this first session

we're going to talk we're going to keep

it mainly geopolitics. We'll wax

philosophical and sentimental at the

second. Uh and we thought what better

way to get the band back together um

than to talk about how the world is

going to end for the next 10 years. So

aggregators we are not saying this is

what is going to happen. We are not the

well you but yeah we're not saying the

end of world is nigh these are

suggestions you know well everybody can

caveat to the

>> the book title I believe is this is the

beginning of the end the beginning of

the end is the book title

>> the end of the world is just the

beginning

>> sorry it's just the beginning yes so I

mean as far as Peter's concerned he's

already answered this question we can

move on

>> that's true

>> the world has already ended

>> but we can go through some very specific

scenarios of how it's all going to

happen so but for the next 60 75 minutes

we're going to get dark and twisty So

the first and we're going to try and hit

three questions. We're going to try and

hit how does the world end in 10 years.

We're going to ask each everybody to say

how will you be wrong in one of your

core views over the next 10 years and

then the least expected most likely

thing that we think is going to occur

over the next 10 years. So that that's

our run of show here for this first

part. Um I will start with Peter

obviously. Peter, how is the world going

to end in that? [laughter]

>> There's so many options. All right,

short version. Um I do deglobalization

and demographics. So very very short

version. The world as it exists today,

global trade as we understand it was a

security paradigm the Americans built to

fight the cold war. We we bought an

alliance and then we did not invest our

economy in it because then it wouldn't

have been a bribe. So every

manufacturing supply chain, all of

globalized agriculture with fertilizer

coming from here, equipment from there,

demand here, production here, all of

that is possible because of the American

security guarantee. And the United

States is no longer capable politically

and militarily

to guarantee that any longer. And we

have seen that. I think the first real

exposure was with Yemen of all places,

which I loathe. Um, because you had

every missile defense system that we

have that is mobile and they couldn't

even protect shipping in the Red Sea,

much less someplace that mattered to

anyone. And we've certainly seen in the

most recent war with Iran, we've now

used half of our global supply of

interceptors. We can't do another Iran

fight at all. Um, that's piece one.

piece too. When globalization happened,

people started taking manufacturing and

services jobs because everyone could

specialize for the first time. All those

jobs are in town. And when you move from

the farm into the city, you have fewer

kids because they're no longer an

economic asset. You play that forward 80

years.

And it's not that we're running out of

children on a global basis. That

happened in the 80s where we're now

running out of 50 year olds. And if

there's no one to purchase the product,

there is no trade.

So it doesn't really matter now where

you poke the system hard. You can do it

in tech, you can do it in a, you can do

it in finance, you can do it in energy.

We're now at a point where the system is

so vulnerable and so overexposed and so

interconnected and so fragile that you

start a cascade of events. And there's a

really real concern right now that we're

going to hit global operating minimums

for oil processing before the end of the

summer and that's more than enough to do

it. So we might not have to wait 10

years and that's just that's the

approximate current event. There's

plenty more out there.

>> What is what does it look like when when

something like that happens like

>> for for energy specifically?

>> Yeah.

>> Mad Max canisters and cannibals. Um, oh,

I wish it was going to be that nice

because that assumes that there's a

supply of it somewhere that you can put

in a canister and on a bus

>> in unused cars. Yeah, exactly. You suck

out the gasoline from like the ones that

were left over.

>> That would be brilliant.

>> You haven't seen zombie motivation.

[laughter]

>> No, it's uh if you're going to take the

energy route specifically, uh, liquid

fuel is what allows global transport to

happen. It's what allows regional

transport and local transport in most

cases to happen. We can talk about why

EVs aren't going to work at large.

Separate topic. Um, you remove the

mobility.

Uh, and there is no trade. There's

really not even regional distribution

even within a major country. Now, keep

in mind with everything you poke at,

there's different highs and lows based

on the country. So, the United States is

now not just a net exporter of oil, but

we export 5 million barrels per day of a

refined product. So that gives the

United States a lot of options that

nobody else has. But what we would gain

there and maybe with agriculture, we

would suffer immensely on the

manufacturing side.

>> Tech,

>> tech for well tech requires everybody.

No,

>> there is no tech without global trade at

all, especially on the higher end. But

on the energy question, um

>> if you can move that's great. But if you

can't fix or replace anything, it's a

different world for you too. you might

uh not descend like other countries.

Other countries if the oil situation

goes away for many of them that also

means the agricultural system goes away

and you're now talking about

de-industrialization

and every population on the planet uses

industrialized agriculture to exist in

its current form. So we're talking about

for a lot of places some sort of neo

dark age sort of situation where a 50%

reduction in the population is probably

one of the more positive cases.

>> But so just to be clear like the the

catalyst for us let's leave out the oil

you know the disruption of core movies.

Let's just say that's just that's just

the one that's on my mind at the moment.

>> Yeah that's right. Um so you're saying

the catalyst for this scenario is just

uh like demand

slowly falling off the cliff like global

final demand

>> just gets

>> that is one of them. Yes.

>> Keep in mind that the deglobalization

break and the demographic break while

they're related in cause it doesn't

matter which one happens to shatter the

whole thing. It's just really

unfortunate that it's they're happening

at the same time.

>> We're going to have

>> they're correlated. I mean in many ways

really

>> demand for deglobation.

>> I I'm just saying that one of them can

completely break and the other one

hasn't broken yet and we still end up in

the same general place on the

demographic situation. Um we all know

Japan is the oldest fastest aging

country in the world.

>> No.

>> Right. Well maybe not

>> South Korea too, right?

>> Yeah. Actually the Japanese have

improved a lot but it's still pretty

bad. Anyway, uh 2025 to 2035 was always

going to be the decade where the

majority of the advanced world and a

significant minority of the developing

world ages past Japan. So, this was

always the last 10-year period. It's

just we're overachievers and we're doing

it early.

>> Interesting.

>> I would have thought more fireworks, you

know, this

>> we can get that. You know, if you're

going to go to war to get something and

interconnection is how you make it work,

what does the war achieve? So, Russia is

one of those weird countries where if it

actually wins everything it hopes to do

in Ukraine and then repeats it in Poland

and the Balts, it actually solves some

of its geographic problems and

demographic problems even. But like

China,

you import everything and then you

export to everywhere. What war can you

possibly launch that will help that?

No, I mean that's interesting. I mean we

could talk about ideology overcoming

economic interest though, right? So

that's but no, a little bit of that

going on right here,

>> right? But I I think it's interesting

because there is something that you're

saying that I think resonates with me.

One of the reasons that we got, you

know, World War II in many ways was the

Great Depression and there was like

massive disinflation.

>> And so I'm just thinking

>> disinflation. No, no, just deflation.

>> Deflation. Yeah, deflation. Like

negative prices. And you're you're

basically explaining a world where

there's two things that are happening at

the same time. Deglobalization. But

let's like double click on exactly what

that means. I think that we are rushing

towards the 2030s where there's want on

the deflation because part of

deglobalization is rebuilding supply

that's just in case as everyone likes to

talk about. It's not just in time

inventory. So we're creating these

redundancies

of goods and like critical goods, not

critical goods. No, no, but but like

it's funny you say that because your

other side of the we actually don't need

that if demand if global final demand is

collapsing, you know, like you don't

actually need just in time inventory,

right?

>> Um yes and no. I I buy your deflation

thesis, but I think it's also a se

fairly inflation thesis at the same

time.

>> Well, at the beginning it is because

while you're building No, no. like in in

the in the in the runup like everyone's

trying to build a semiconductor fab now.

So that's I hear I hear you. Just keep

in mind that if you go back to the 20s

and the 30s, you're talking about a very

different supply chain system that maybe

had two countries in now high-end

semiconductors is 60.

>> Yep. No, for sure.

>> And if you pull one out,

>> but what I'm getting at what I'm getting

is we're trying to solve for that

problem. Like that is a problem that

everybody knows, right? Like like you

know it's in the economist like the fact

the supply chain

>> sorry just the way you said that was

>> I know. Well, [laughter]

um

>> yeah, I don't read more anymore either.

>> I'm since 21. You know what I mean?

Like, but like so um the the point is

everybody knows this. We're all rushing.

So, I'm trying to get like the way that

this actually would happen. And I think

the way it would happen is that right

now we're trying to solve a problem

which is that interconnected supply

chains are vulnerable. What we're not

what we're missing and where you

actually bring something new to the

table is that but demand is going to

collapse too. So we're going to we're

going to happen to live in a world five

six years from now where we've built all

this supply for some sort of an event

that may not ever happen. We suddenly

have all this unnecessary supply but

demand actually starts getting

collapsed. So why is that bad? Deflation

is bad.

>> Horrible. Just keep in mind that things

aren't going to line up that cleanly. So

you can have individual countries or for

lack of a better word alliances of

countries that have a self-contained

supply system that you might get some

deflationary events in there because of

over supply for that population. But in

places where you've got the massive uh

supply chains that span multiple

continents doesn't really matter what

happens because an intermediate good is

of no use unless you have access to all

the other steps. So you can have massive

deflation in particular steps and still

inflation when it comes to finished

goods,

>> right? That's right.

>> We'll get the worst of all worlds.

>> I see that. But I'm even I'm I I'm even

saying like let's be optimistic about

your p about your pessimistic view. And

>> I haven't even given you the downside

yet.

>> But I

>> this is my base case.

>> My downside is just deflation is is

politically unsustainable, right? For

most societies.

>> Well, I wouldn't say unsustainable.

Deflation cause a break in the political

system.

>> Yes. Yeah. So like even if we don't get

you're saying look complexity this is

like uh what's what was the name uh uh

Homer Dixon wrote the ingenuity gap

>> you know and this is very similar to

what you're saying like there's the

world's become over complicated we don't

even know how it works and supply chains

became extremely overp

profofessionalized over complicated but

I'm just saying even if you don't get

that one thread breaking the fact that

you're introducing the demographic

component from a demand side leads us

down a path that will make the 2030s

kind of look like the 1930s. You know,

too much deflation, too much political

polarization. I

>> hope it's that good.

>> I don't know if that's good. I mean,

that's

>> Well, it's again, it's the two supply

chain steps versus 2000.

>> The degree that we have to fall back to

get to a point of equalization is

extreme compared to what it was then.

Well, I mean, deflation, I think, is

written I I I expect it. So, I think

after the initial inflation, I think

we're getting that's where we're headed.

>> Yeah. You're also assuming a degree of

continuity that allows to build us that

industrial plant and uh industrial

construction spending in the United

States is at the lowest it's been for a

while. Uh we are currently

de-industrializing at the fastest pace

in my life right now.

>> So, we're that specific concern

isn't on the table at the moment. Are

there

>> I would love to have that concern.

>> Are there relative winners and losers in

this?

>> Absolutely. So,

>> but then it's not the end of the world

though. Like we need like you know

humanity ends.

>> Oh, is that is was that the scale we're

after? You can go as dark as you want.

>> I mean you Yes, I'm going that way.

>> You're saying like the end of the

current world system?

>> Yeah. The end of the world system that

currently supports roughly 8 billion

people.

>> So, yeah. And sad. Best case scenario,

we lose a billion. A billion and a half.

Best case scenario, threequarters of the

population of the world takes a step

back technologically and globalization

breaks into a series of regional systems

with regional powers that hopefully

don't fight one another too much.

>> Yeah. So your best case scenario is

basically Thanos like snaps his fingers

and and half of half of all

>> I got worse than that. I'm just I went I

went darker.

>> You went really dark.

>> What is this? Again, this is my midcase.

>> What what what is your worst case? Let's

let's plum the depths in the marker to

give us even more darkness.

>> You guys know the revolution of military

affairs. You guys know that term. So 80s

early 90s we started applying digital

technologies to military stuff. We got

satellites and cruise missiles and GPS

and all that. We're now going through

the second generation uh where you can

load a decision tree into a military

platform at the moment a drone and you

fly it off. You're in control of it

until it gets to a certain point and

then you release it. And with the tech

that we have today and when I say we I

mean humans um it can then follow around

finds its target

>> because you know

>> yeah just this is the US doesn't have

this to be clear. This is what the

Ukrainians have developed in just the

last couple of months.

>> Um the technology required to make that

will survive this fall back. There's

nothing about that. It needs global

supply chains at all. And so you can see

military force being democratized.

At the same time, what supports the

normal way of life goes away. And today,

remember, these drones didn't exist four

months ago at all.

>> Yeah.

>> Those drones have a range of about 700

miles. And the Iranians have already

deployed a few of them. So any physical

infrastructure within 700 miles of

potential foe you basically need to

write off.

>> So that's where like I like that one. So

now we're getting like you know

>> again base case

>> like who these

>> well and and you can apply it to other

things too like it's one of the things

that keeps me up at night the

democratization of all these

technologies that suddenly a kid in

their mom's basement can use because

there's no responsibility on it. But you

got to look at the supply chain that

allows it to exist. And if that is

durable in a del globalized scenario,

then you've got something you can really

worry about.

>> Yeah. Especially like when you start

thinking about potential actors that

start using this, you can't just say

like, well, they'll get it from Ukraine.

No, no. They're going to have to build

this themselves.

>> This is too by the way.

>> Yeah. Yeah. But I mean the chips though

that I don't understand the component

there because that is international as

you pointed out.

>> Sure. So, um, extreme ultraviolet

technology developed by ASML. They're

the only country in the world that makes

the lithography machines. They're about

the size of a bus. You use them to etch

the chips. They're the only ones who

make them.

>> And so, any chip that you have, little

oversimplification, that is 7 nanometers

or smaller in the etching has to use

EUV. And anything that uses EUV has at

least 100,000 supply chain steps. uh of

which there are 2500 companies involved

who only make one product I'm sorry 400

companies involved that only make one

product for one end user.

>> So you remove a few of those and the

whole thing stops and this is touching

60 countries. So we're going to lose all

of that uh if we rebuild the supply

chain in a more demographically stable

geopolitically stable area. That's a

30-year program because it took us 60

years to do it the first time around.

dumber chips that use direct

ultraviolet, older technology. There are

a number of companies that do it. The

Chinese do it and the Chinese suck at

semiconductors. Um that level of

technology uh with plenty of exceptions

is pretty durable to a deglobalized

scenario. Uh and these new memory drones

I call them all use that tier and not

even the advanced part of that tier.

Mhm.

>> So, we've got this new technology that

is potentially very very destructive

that is probably going to remove Russia

as an energy exporter this year and then

God knows what it's going to do to the

rest of the front once they turn the

Ukrainians turn their mind at something

else.

That's going to go global easily.

Easily. Best guess is that the hits on

US uh military assets in the Gulf during

the Gulf War, which the US has really

been playing down, were all these memory

drones because once they make once the

drone gets in the area, it looks around,

it makes a decision once and then it

goes. You can't jam that. Your only

option is physical interception.

And that's that's here. That's now.

>> Well, I mean, but that does work though.

>> It works very well.

>> No, no. What I mean is like physical

interception does work.

>> Yeah. Oh, yeah. Yeah. You can still

potentially shoot it down. We just need

interceptors which we don't have

anymore.

>> Well, I mean we do. They're too

expensive and we spent them and like

there's ways to intercept them with like

>> we have used half of our global supply.

>> Why not counter drone?

>> The country that is leading in counter

drone is Ukraine and the United States

is not cooperating building up.

>> What I'm just saying is like it is a

solvable problem. Like

>> I mean but can the United States go and

capture the people that we need in order

to do that? Because I would imagine it

could.

>> Well, we're actually very good at

capturing people now. I don't know if

you saw that. So the the to for an

intercept

to make sense

>> you're probably going to need five or

six drones fired for everything you're

trying to take down. And that makes it

very easy for the attacker to just send

concentrated against a single target. U

I don't want to say it can't work

because it hasn't been invented at scale

yet. But that seems to be the weakness

to where we are that the Ukrainians have

already identified. Uh because they've

brought some of their interceptors which

are about the size of a duffel bag. You

can just tote them wherever you want.

And their hit rate is maybe half of say

a pack three out of a Patriot system,

but they've only got a range of about 20

kilometers and they're fairly slow. So

you only get one shot at everything

coming in. So you have to take lots of

shots. I'm not saying it can't be

>> improved, but the offensive curve is so

much steeper right now. But that's

that's what I actually think is um very

interesting because on one hand drones

can't occupy territory.

>> Absolutely not.

>> Right.

>> But they're really good at deoccupying

territory.

>> That's right. That's right. And I think

um and also it basically means that you

don't want to put all your eggs in one

basket. I.e. aircraft carriers

Burke destroyers like there's all sorts

of like platforms that America has that

are just very expensive. The war becomes

like cheaper.

>> Yeah. Now, one thing we do have going

for ourselves, ships specifically, ships

move. And so, you're never going to hit

it with a shahed because shaheds you

give a program, you program a

destination to and it goes to it, the

ship is moved by then. The only tankers

that were hit during the Iran war were

the ones that had been at anchor for

three or four days and oh, it's still

there. Send one.

>> Um, how long that will last is unclear.

>> Well, your point is that they're memory

drones. They can actually do a decision

tree and choose it,

>> but you have to get it to the general

area first.

>> Okay. Yeah.

>> And when you're talking about a ship,

you're talking about not having much of

detection radius cuz it's on water.

>> So like for example, the Ukrainian

acoustic signature system on their

border for picking up shahads as they

come in. That means that they get a

warning of 10, 20, 30, 60 minutes and

they can concentrate their defense on

the vector. You can't do that on water.

>> And so you just because the ship moves.

Now that might change. And one of the

things we're seeing in the Black Sea is

they now have these um the babies

>> with a range of 1500 km so they can

loiter.

>> Yeah.

>> And if they combine that with the memory

drones,

>> they haven't proven they can do it yet.

>> And the problem is just geography

because like a ship that's on the water,

a drone that's on the water just doesn't

have much of a detection radius. You

need to pair it with something else.

>> Yeah. What what I was getting at is that

in particular when you start talking

about sea drones I mean it you know

makes things like blockades more

effective but interestingly all this

also makes offensive operations less

effective not more I mean you can

destroy well you can destroy things

>> you're correct about that but like

>> you know you still have a problem right

if you're fighting somebody else who has

the same technology occupying land

becomes very

>> very difficult

>> which is which is interesting because it

kind of freezes the world

>> I wouldn't call that defensive though I

would just call that I What's the old

Roman term? The march. A zone where no

one can effectively hold.

>> But what I'm getting at is that it's a

world where the weak like shall inherit

the meek inherit the world because like

you can defend yourself from stronger

powers and it actually becomes very

difficult to have these, you know,

territorial ambitions in this world.

That's kind of what

>> very difficult to hold it. Very easy to

make it so nobody else can.

>> Y area denial, you know, that's what

drones ultimately are. Basically

everything looks like Cheschnia.

>> Yeah.

>> Yeah.

>> Uh can I ask you one thing and then I'll

I'll start batting around here. You said

that the Chinese suck at semiconductors.

I just I want to ask you a little bit

about that because Huawei was left for

dead. They're still around. They

announced that thing to great fanfare.

Ta's law. We don't need Mo's law

anymore. We got Ta's law. Um can they be

good enough to cover?

>> Sure. Yeah. Yeah. Yeah. No, it's like

the idea of stacking chips instead of

getting smaller. That makes a lot. Well,

and also like your point is

[clears throat] 7 nmter chip and below

like whatever. This is a world of 20 to

40 nanometer chips which Chinese

>> Chinese I would argue can go up to 28 nm

>> by themselves pretty well. Now keep in

mind that the purification required for

a lot of materials they still can't do.

So that's that's not a blanket

statement, but it's they're pretty good

at that level.

>> But this is what what I think is really

important to understand and this goes

back to our conversation earlier, you

know, uh while we were waiting for

Peter. Um, I think that the amount of

technology you need to effectively

become relevant geopolitically is

actually much lower than people think.

>> Sure.

>> Like even AI systems, I mean, when

you're talking about decision trees,

this isn't like this, you know, it's

more complicated for you to ask Chad GBT

to do an interior design on your K uh

kitchen remodel than for a memory drone

used to chat GPT.

>> No, exactly. Well, and to your point and

so, you know, it's a world where like I

think overemphasizing the the tech stack

that's at the top 5% is a mistake

>> without Well, sorry. You can keep

emphasizing if you want. I'm not

disagreeing,

>> but the middle matters. The middle

matters. You know, this is my point.

Like, everybody thought, you know, the B

administration was obsessed about

restricting Chinese access to 5

nanometer chips, and it's like, well,

who cares? wars are fought between 20

and 40 and then some three star general

that probably can't even fire up their

outlook would tell you, "Yeah, but

future wars are actually won with five

nanometer ships." And then Peter Zion

shows up, he's like, "No, actually

future wars will be fought with spears

and these drones." You know, that's the

point.

>> This is how fast things have changed.

But we're not fighting wars like we did

even during the Biden administration

when they were doing those things. At

least from my point of

>> But the level of technology you need is

not like, you know, it's less than what

you have in your smartphone.

>> That's kind of the point. I mean, well,

keep in mind that the United States

dominated military activity in the let's

call it 30 nanometer to whatever the

high-end is for 30 years. And so, we've

become used to that being the norm. But

that's not today's technology. That's

yesterday's technology. So, of course,

other countries are moving into that.

And a lot of them are moving into it in

a different way than we did it.

>> Yes.

>> Well, that's where incumbency hurts, you

know.

>> Well, that and we were always fighting

from the other side of the planet. with

us was always about range and precision.

For people in the Eastern Hemisphere,

it's not.

>> Okay, Marco, how is the world going to

end? And

>> well, you know, I'm I'm going to end the

world. Like, I'm not going for this like

Dark Ages thing, you know, like

whatever. Dark Ages was so fun, you

know, the Camaron. Like, read that if

you want to see how fun it was. Um, so

look, um, where do I want to go? I want

to go to Nuclear War. Like, I mean, I'm

I'm just going to work with what's

what's in front of me. Like Peter is

like the fancy like Japanese fusion

Mexican chef who's bringing all these

new ingredients. I'm just going to stick

like

>> stick with the basics.

>> Yeah, I'm going to go with pasta and

meatballs, baby. And I I need a lot of

nukes to blow up. So that's what I need,

right? So how do I get that to happen

where I'm going to I'm going to say

history rhymes, right? And so I need uh

a global power to um be on the brink of

collapse and I need it to incentivize

uh a scramble. So I need a sick man of

Eurasia.

>> And I know I'm going to I'm getting a

lot of nodding heads here. Can't imagine

you're talking

>> feel like I do.

>> Well, I mean like you were my first

boss, Peter. So like this is going

exactly where you know it's going. So

look what caused World War I, right? It

took like 80 years to happen, but it was

the sick man of Europe. it was the

Ottoman Empire uh basically creating a

power vacuum, right? Or when you create

power vacuums, it like you know sucks

other countries in and uh I think the

>> I probably disagree with that assessment

but continue.

>> But like the biggest power vacuum out

there, territorial vacuum is Russia.

>> Yeah.

>> Um

>> the heartland.

>> Yeah, exactly. Minder.

>> Hate that.

>> I know. I do too. But it's it's hard to

>> It is It is

>> It is not hard. Anyway, [laughter]

>> look, the thing is the thing is Russia's

got um a lot of problems on its hands.

First of all, I mean, Peter just

basically um articulated why they are

legitimately losing the war in Ukraine

>> at this moment.

>> At this moment, I mean, things could

change, but I find it very fascinating,

by the way, I'll bring this up later,

too, that Vladimir Putin could only

mobilize once in December of 2022. That

was the only time he attempted it. That

tells you everything you need to know

about the social uh stability and the

political acumen and the political

support for the regime quite frankly. Um

if that political support was based on a

quid proquo like I get to conquer half

of Ukraine or more uh but nothing

happens to you domestically like you

will your life will be just the same as

well. You can go to the same grocery

stores that Tucker Carlson loved you

know and and and uh eat the same crumbly

>> such a [ __ ] I will never forget him

going through the grocery store and

pointing at the brown bread and be like,

"Oh my god, amazing." Like, "Dude, come

over. I'll bake you with sourdough

loaf." Like, this is not hard.

>> Um, by the way, you could do you guys

could do that in his barn.

>> I would love to, Tucker. I'm I'm here,

man. You want some bread? I'm here.

>> But listen, listen. My point is all of

this is collapsing. And if you study

history of Russia, you know, people

think Russians are very good at war.

They're not. They're good. They're very

good at tolerating pain,

>> suffering,

>> and they're very good at when they get

invaded, right?

>> You got huge uh supply lines.

>> Mean,

>> it was [laughter] mean.

>> You got supply lines, you know, so you

can

>> No, you have winter and you have space

>> on offense. I mean, like I struggle to

remember an epic offensive war that

Russia, Soviet Union, or Russian Empire

won. It's it's a struggle. You got to go

back in time. So,

>> well, it's

>> and it happens after every single time

they're on.

>> I disagree with a lot of your founding

points, but I think we're going to get

to the same conclusion.

>> Look, every time that I can remember

that Russia went on offense, Crimean

War, the original one, Alexander II came

in because Nicholas the first

[clears throat] might or might not have

committed suicide.

>> Yeah, but that was a tech gap. The other

side was industrialized. The Russians

weren't. Of course,

>> but doesn't matter why they lost. My

point is what comes after the losses.

Yeah, this is where I'm landing also to

very important here is that there was a

reform movement in the wake of the

Crimean War.

>> That's what I'm getting. If you don't

have a leadership that is reform

oriented, then that decision-m might not

touch

>> Alexander the second emancipates the

serves, right? The second one that I can

think of is 1905 with the Japanese. That

was the beginning of the Duma

>> industrialized versus

non-industrialized.

>> But again, like

>> the beginning of communism, right?

>> Exactly. 1916 1917 was seen as a war of

imperialism, offensive war. Didn't have

to fight that war. That was a war of

choice. Boom. Communism. You go fast

forward to Afghanistan. What happens?

Fall of the Soviet Union, Cheschna, fall

of Yelen, Ukraine, fall of Putin. After

every single failed offensive operation

domestically, they they suffer. So, I

think that the part of my forecast

that's easy to kind of make is that I

think that there is disruption coming to

Russia. You know, that's that's where

I'm like that. Now, why does it go

nuclear? Well, first of all, you need a

lot of nukes to end the world. And

Russia has a lot of like I know it's

kind of like obvious.

>> You're looking at the candidates. Okay.

>> Yeah. And I mean like Russia's in a

state of disarray.

>> Very How many hydrogen bombs would you

actually need to destroy the entire

world?

>> Define destroy. Like make city make

every city with over two million people

uninhabitable.

>> I don't know.

>> Probably a lot. If you're going to use

city flatteners, you'd need at least

10,000.

>> 10,000. Okay. So, the Russians are like

what, halfway there?

>> Yeah. Well, more than halfway, but mo I

think

>> I'd still call that the end.

>> Yeah. I was going to say I think that

>> like I'm willing to give him wiggle room

on that detail.

>> I think the strategic air command when

they did this with Eisenhower and

Kennedy and Johnson, every single time

the conclusion was that the radiological

disasters awful

>> associated with it would kill upwards of

500 million 700 million people.

>> Yeah. You take out 10 spots with city

flatterers in just the United States,

you throw us back 30.

>> And by the way, by the way, you can feel

free to stack our doom scenarios. So

like Peter's point is like look, we're

we're we got no operating margin here in

global supply chains. Give me one nuke.

You know what I mean? Like there you go.

>> Oh, let let me let me stack on your

problem with some additional problems.

Um the countries that normally

>> uh develop nuclear arsenals are the ones

who don't think they can win a

conventional fight.

>> That's right. And with the United States

going all woohoo on strategic issues, we

now have Finland, Sweden, Germany,

Poland, and Romania openly debating not

whether how to get a nuclear arsenal.

>> That's right.

>> So, when we do get to the point that the

Russians get a little twitchy, there

will be some other people twitchy there

with them. Um, if I was to put a a stab

in the map, uh, there is no version of

Ukraine that can ever be secure so long

as the Russian cities above Bogarod and

Rastavandon are continue to be

physically connected to the rest of the

Russian Federation. Those are the two

uh, transport hubs that are being used

for the entire military operation. So if

if Ukraine does manage to push forward

and push through this, they will

continue pushing until those two cities

are no longer a problem.

>> Plus Barus on the north as well. I mean,

might as well

>> Bell Barus is different. Um it's much

more roundabout. I'm not suggesting that

it couldn't fall in it, but these two

cities have to go uh one way or the

other. And now you're talking about a

physical invasion of the motherland. And

that's a very different political

conversation for Moscow.

>> And by the way, I don't even like that's

one scenario. The other scenario is just

that the countries around Russia, you

know, once once this chlorotic political

system starts to erode, there's plenty

of countries around Russia that may want

to participate in its dissolution.

>> Finland,

>> the Europeans, the Europeans are on one

side, China, Turkey, you know, like and

so anyways, I I fear that over the next

10 years, the biggest geopolitical issue

is actually going to be this weakness of

Russia. I can even see a world where us

in the west were actually propping a

regime in Moscow in which happened with

the Ottoman Empire by the way in order

to ensure that it's an operating um you

know vacuum filler so as not to allow

others to come in.

>> I find that unlikely primarily because

the Trump administration has gutted all

the people who are capable of thinking

that way.

>> Well, I mean like you know things come

and go.

>> Those people Yeah, those are

replaceable. That's just notation of

personality.

>> I mean like five years in five years you

don't know what what goes on but what

you can say is that like if a vacuum is

a problem right if it's a problem and by

the way what's great about your thesis

is like you're setting up a stage for

the rest of the world for the rest of us

like the supply chains are at risk.

>> Sorry I got I got to open up this a

little bit more like

>> for this next statement just

>> makes my comment sex here but also the

mic. It's the mic. It's the mic. My

point is look we're already we got no

no real like slack when it comes to

supply chains. If you suddenly lose like

20% of world's nickel production and by

the way you don't need collapse of

regime in Russia for this to happen.

Look at the output of oil or nickel or

any other commodity out of Russia in the

'90s. It's not like Russia completely

collapsed. It still had the Duma. It

still had the president. It was still,

you know, Yelson was running around and

they had elections, you know, and yet

look at what production of all the

things the world needs. Russia to do.

Look at what happened to it. It didn't

do well. Halfed. Halfed. All of it.

>> I'm going to inject my joke here for a

little levity. These two heard it

earlier. So, Peter, you're going to

really be my guinea pig here. So,

Vladimir Putin dies and he goes to hell.

>> Um, and he's he's sorry, Vladimir. And

and he's in hell. He he gets released

for good behavior for for a night

>> because the bar is low.

>> Exactly. So, so they let him go to

Moscow and do whatever he wants for a

night. So, he goes to a bar in Moscow

and orders a vodka and he starts asking

the bartender questions. The first

question is, "So, is Crimea still still

ours?" And the bartender says, "Yes,

Crimea is ours." He say, "Is the

Dawnbast still still ours?" I say, "Yes,

the Dawnbass is ours." And then he works

up courage. Is Kev is Kiev still ours?

And says, "Yes, yes, we have Kev.

That'll be eight, please."

[laughter]

>> Sorry. actually. But there but there's

something important about that which is

that and I think this complements what

you're saying but you I don't know that

you would take this approach but

>> the EU as a concept needs to expand. It

needs to take border territories that

could be a problem and it needs to

absorb them and Ukraine has been sort of

an example of that. But obviously they

ultimately did want to take Bellarus and

others. And in a period where Russia is

receding, there's probably going to be a

continued impetus for Europe to expand.

And the reason for that is to absorb

those dangerous territories. In other

words, rather than dangle out the this

no man's land as an enticement to Russia

to be aggressive because they're they're

weak and crumbling and lashing out, it

would be better to absorb them and

continue this sort of forward march of

the European project.

>> The digestion of the unstable

territories

>> and that's the thing. So, but the but

conventionally the industrial capacity

of Europe is so much more superior to

Russia's that conventionally they're

weaker and then that pushes them into a

sort of like mo like a muskavi or like a

a core uh nuclear armed but very uh you

know very weakened state that's losing

its strategic depth to an entity that

actually could succeed ultimately maybe

not in bringing MCA into the EU but

effectively neutralizing and setting up

a public

>> I'm going to say this tongue and cheek

but you You can hear German geopolitical

theor theorists from the 1930s saying

the answer to the Russian question is

Leven realm. We have we need we need

aggressive European expansion.

>> Well, no and it's the thing that no one

would think about. Also, and let me just

say for those who are saying, well,

yeah, but Europe is old and they're not

aggressive. But look, Charles the 12th,

Napoleon, Hitler, I mean, you have

plenty of examples of this, like you

would say, a revealed preference that

Europe wants to invade Russia. They do.

They always

>> But you know what? I don't even think it

doesn't have to. Oh, yeah. No, the West

had to pull Poland back in like 1921.

Like that that's a the postw World War I

conflict between Poland and the Soviet

Union is like unbelievable. But what all

all I would say is like we don't have to

go that far. I just think you know

>> like you said it's a power vacuum.

>> Well, let let me yeah nudge yours a

little bit. The EU in its current form

has no future primarily because of

globalization and demographics.

>> They're an export union now. They've

aged out from being a consumptionbased

system. But everything else you said I

agree with completely which just means

that the evolution of the EU is not a

financial monetary economic trade union.

It's a military political union and

that's a different beast.

>> I would argue it's been that for like

the last 10 years. I mean that's why

>> they've been moving in that direction.

>> Well, and we know that they've made like

mentally or psychologically the the mil

the shift to wanting strategic autonomy

and military.

>> The question is how do you get from

here?

>> But but what's interesting is that it

points in a direction that could be

reminiscent of Stalenrad. I mean because

you ultimately you you want the caucuses

as well.

>> Yeah.

>> And Russia's always willing to fight

over that.

>> It also points in the direction of

imperialism.

>> Yeah.

>> In subsaran Africa. Yeah. I mean that's

>> but you know No, but that would actually

be a good thing in this situation

because rather than Europe exploiting

the collapse of Russia, we'd have Europe

exploiting North Africa and nobody

>> I think is what he's saying is they're

equal opportunity.

>> And if you look at the European empires,

>> yeah. Yeah.

>> So really the only question is in this

specific scenario whether the Brits come

along or not.

>> Yeah. Yeah.

>> My my point is also I think that we're

staring at a world not far off into the

future. I think next 5 years where you

know stability Russia becomes really

critical to the west.

>> Agreed.

>> And uh you know like I always joke with

some of my clients and so on when when I

say something they say well I don't see

that happening. Nonlinearity is like

built into geopolitics. I mean, we have

a guy who was member of al-Qaeda on

Cristiano Mur in CNN giving an interview

in a tie. You know what I mean? Like, I

mean, this is

>> not just a tie, $300,000 watch

>> and great taste.

>> He's made it.

>> He's made it.

>> I mean, so, you know, if you said to

somebody in 2002 like, "Hey, a former al

Qaeda militant will be running a country

in the Middle East and we will welcome

him." You would have said, "Come on,

bro. Like, you can't go that far." I

literally think that, you know, whatever

comes after Putin in Russia, it will be

disarray and that disarray will be the

greatest risk to humanity.

>> Yeah,

>> that's kind of what I'm getting at. I

>> I I think it's a valid theory because if

you look at where Hitler came from, the

belief was that if Hitler had had access

to nuclear weapons that he would have

ordered their use and I think that's a

legitimate theory that's coming from

Churchill, but like his behavior aligns

with that constantly offensive response

to negative information on the field. I

go ahead.

>> Well, no, I'm just saying that if you

look at where Hitler came from and then

psychologically, I mean, you're talking

about this the darkest corner of the

German Empire produces an essentially

fanatical ideology that actually winds

up in the height of power with access to

the m the the military, the the medal.

>> I love that you just called Austria the

darkest part of the of the German

Empire.

>> Well, no, but specifically No,

>> I think you meant time.

>> They're very offended, by the way. Any

Austrian who's watching is not happy.

>> Every Austrian who's watching knows that

there's a little figure of Austria that

juts out near the very three out of four

of them are Serbians. But go ahead.

>> But it's also but it's also social

class, right? He was from the lower

middle class and they were getting like

they perceived that they were declining

in their social status. And what I'm

saying is for sure in a world where like

many of the Russian elites who are

saying that we should co-opt or

collaborate with Europe, we should

reverse Putinism, we should collaborate

with Europe and just, you know,

backtrack and abandon everything that

Putin was doing. But you're going to

have this virulent faction of uh

holdouts who believed in the war and

believed in everything that Putin told

them and actually are still technically

in power too because because they Yeah,

I'm going to break with you on that

part. I agree with the rest. So, um,

Putin built the current elite

>> based on whether or not he believed they

believed what he believed in.

>> Uh, and whether or not he could

completely manipulate anything that he

said and did.

>> Yeah.

>> Um, the last [clears throat] time

someone was admitted into that elite was

before I met you two.

>> Yeah.

>> So, the youngest of them are in their

mid-50s now.

>> Yeah.

>> And they're now just dying because

they're old and the total elite now is

barely over 100 people. Blown up. Well,

but but the point is we're not going to

be able to predict who this individual

is. The point is is that the individual

who emerges as the strong man order.

>> So what we're talking about is if Putin

were just to vanish tomorrow, they'd all

kill Igor Set because he's the only one

of the hundred that has any ambition.

>> And then they would argue among

themselves who was going to be in charge

and they' probably run it by committee.

It would be inefficient and then we'll

have some backstabbing and that number

gets widowed down pretty quick. Uh but

these are the people who hold all the

lovers of power.

>> That doesn't sound stable to me.

>> It's not. It's not for your scenario to

happen, which I think is the right way

to think about it is this group is

incapable of running an aggressive

policy. They can do a car, but that's

it. But here's which means we get

somebody from the outside from a

regional point of view and then grows

out and we're all of a sudden in 1921.

>> But here's the thing. Okay, it's all but

we can we can broaden the discussion

though because we're not going to know

the individuals. But what we know is

that there will be a deal with Europe

and the West and it will be a betrayal

of Russia in the way that Germany felt

that Ger the Nazis felt that Germany had

been betrayed at Versail.

>> So that's that's the key.

>> So but I think

>> but with nukes

>> exactly back to yours which means the

nukes will be used but that doesn't

necessarily mean they're going to be

used against Ukraine or Britain first.

>> No internally going to be used

internally.

>> Yeah. But that's what I'm getting at

what Peter just referenced.

>> But why would you want the radiological

disaster in your

>> You'd rather have that in the Chetchins

running to Moscow.

>> Exactly. Well, I mean, you're talking

about people who are not from the

powers. They're talking about people

with a regional outlook. And I'm not

saying that they won't nuke anyone else.

I'm just saying if you start going back

to the red versus white and the civil

wars of Russia, the degree of barbarity

they've always been willing to bring on

one another has always been on the

outside.

>> Yeah, let's double click on this.

>> But but what you would Okay. Okay.

>> That's key. like you know like this by

the way this happened in the '90s just

in a very like

>> civilized way you know like various

parts of like Russia were not for all

intents and purposes

>> under Moscow's control

>> yeah like and then we're not talking

Chachchna we're not talking Dagistan

we're talking about like Tatarstan yes

we're talking like you know parts of

Russia where just Russians living

>> and so uh and then okay so the '90s

weren't really barbarous but the red

versus white was that was that 1920s

early 1920s period where if you

superimpose that kind of conflict, I

think in today's context that starts

looking very bad.

>> I but I think if if Russia's collapsing

internally and they're embroiled

internally and even if they're using

nukes in in a civil war, which I find

hard to believe, but let's say, right,

but I still don't think that gets us to

the end of the world. I think what you

need is you need Europe to expand

>> and Russia to be conventually being

defeated by Europe and facing the the

eternal Russian nightmare which was to

be absorbed by Europe.

>> I would just argue it can be both.

>> Yeah, it can it can be both.

>> Russia is perfectly capable of an

internal

>> I just need nukes to be used guys. Can't

we just agree nukes were used?

>> I have high confidence. But what I'm

getting at is that you will have you you

do have a clear pathway that we can all

identify which is for a ideologically

perverted leadership to restore order.

It

>> doesn't even have to be ideologically

perverted. It can be doing what is

logical for I don't know

>> minsk no because use

>> this dog is dead. I think we've killed

it.

>> Okay I'll

>> we both agree there's many ways to get

there that are mutually reinforcing and

really bad

>> and and we're doing great. So Matt, how

does the world end in the next 10 years?

>> All right. Look, well, first of all, I

was going to go down a similar route and

I have to say something about linearity.

>> Well, no, no, I've got I've got

something more.

>> Okay, good.

>> Linearity because it is true and I think

those of us who have actually like been

embroiled in geopolitics for a long

time, we know that you don't want to

fall into that trap of just projecting

things forward. But we have a 10-year

time horizon in this discussion.

>> Oh, that's true.

>> Which does force a certain amount of

linearity. And that's why I think you

were right to point to Russia because

>> it's like

>> on a 10-year time frame actually things

probably will be somewhat linear. It's

going to be nonlinearities within a a

general trajectory that we can we can

sort of observe. Okay. But what I would

say about going back to World War I and

World War II is it's not just the power

vacuum, the emergence of a power vacuum

at the same time as the emergence of an

expressive power which was Germany

attempting to unify and create a

continental empire. So they wanted to

exploit the vacuum. And the only power

that can fill that role is China. Now so

that now everyone's going to think, "Oh,

okay. Well, now we're going to start

China hate hour, right? But that's not

what I'm doing. I'm not I'm not saying

that. So, for example, I wouldn't say

that Chinese leadership shows the

characteristics that Russian leadership

where they could become ideologically

fanatical within the next year. Maybe

>> they could, but what I

don't defend it, don't

>> what I would say more of is just the

enormity of their capability. We've

talked somewhat uh in previous sessions

about this, but like industrially

manpower and there's all kinds of

imbalances going to poke at it.

>> Yeah. You don't have to go.

>> Yeah. Yeah. Exactly.

>> There's different ways to hate on China

and I think Matt and Peter like

disagree.

>> Yeah.

>> Certain flavor.

>> But let me say, let me say what we can

observe is that this China, the

Communist Party China has been absorbing

the buffer states gradually piece by

piece. And it was, you know, it was

Tibet in 2008, it was Sing Jong in 2011,

it was Hong Kong in 2019. There is a

methodical

recreation of a Chinese empire. Taiwan

is obviously the missing piece, etc. But

I'm not saying Taiwan causes world war.

What I actually think is more likely is

simply that Russia is going through

this.

>> China is attempting to absorb Russia as

effectively some kind of satellite state

and solve its resource problem. But what

interestingly what this creates is a

dynamic that when China takes Taiwan and

however they do it, the problem is that

Japan and South Korea panic and they go

nuclear. And so then what we have is a

world where you're reviving all the

ancient animosities between China and

Japan. And then the final ingredient is

the decay of deterrence. So this

connects with either your scenario or my

scenario is that we always talk about

the postw World War II environment as

one where like trade is expanding,

globalization, and so nobody has any

wars.

>> But there was also the belief that there

was a revolution caused by nuclear

weapons that created strategic stability

so that nobody was going to actually use

them. Mutually assured destruction. And

what we're seeing with the advance of

technology, first of all, countries are

willing to fight wars, including by

attacking nuclear powers. But second of

all, they might innovate new

technologies that enable them to attack

the second strike response. So all I'm

saying is that if you create a powder

keg in Asia with knowing that there's a

battle over influence in Russia, knowing

that that there's going to be a battle

between the US and China over Taiwan.

You know, you you create an overall

context of a powder keg, but you're

simultaneously losing strategic or

nuclear deterrence. That to me is like a

it's a World War II scenario. I don't

know if it's an end of the world

scenario. World War II would be bad

enough for me.

>> I mean, I'm glad you brought it up.

>> Fair.

>> Yeah,

>> I'm glad you brought it up, Matt,

because I was I was afraid we were all

going to go like super sexy and super

weird and then no one was going to like

point out that like China and the US

don't like each other, you know, like

the obvious. And we should spend some

time talking about that as well. I mean,

I think uh [clears throat]

>> yeah, I mean uh we do have a 10year time

horizon. This isn't a hundred, right?

So, like it's interesting to me though

that you're trying to fit what's

happened over the last 10 years into the

paradigm of Chinese expansionism.

>> You know, like I struggle to agree with

that necessarily. Like I don't really

see it like, you know, Shinjiang and

Tibet were part of China. Like

>> they suppressed, you know, domestic sort

of angst. Like I don't

>> I don't see that as qualifying.

>> Hong Kong and even Hong Kong, honestly.

Like I mean I was in Hong Kong like

March, you know, whatever. like it's

it's fine, you know. So, I don't I don't

see that as rising to the level of like

the way Japan's progressively went, you

know, Korea, Manuria, you know,

>> but the but the point I would make to

this is that we often if we there's the

World War II paradigm where you have a

madman or a fanatic.

>> Well, that's the World War I paradigm is

actually perfectly rational people.

>> I agree with you.

>> Perfectly rational countries all whose

interests happen to be colliding.

>> Well, what I was getting at,

>> yeah,

>> is that um it's interesting. I mean, 10

years is both short. So, I understand

you're like you want some linearity.

>> Yeah.

>> Uh but I also think it's long enough

that like the current regime in China

may evolve.

>> You may have somebody who counters

what's going on in the United States of

America with President Trump. Maybe

China's ready for a little bit more of

that kind of European style nationalism,

you know, like and that's where you kind

of add a little bit of like hot cayenne

pepper into your brew that gives some

spice to it.

>> Yeah. And and actually I can be I can be

a little bit more specific like if we

want to like first of all I think the US

is more likely to be led by a democratic

and internationalist administration that

actually does want to defend Taiwan.

>> Second of all I think yeah you know I

have no idea.

>> Yeah we don't know.

>> The other thing is parties are gone.

>> The other thing is Taiwan itself I think

they'll probably have a leadership

change in 2028 and I think they'll

actually engage in a 4-year negotiation

with China that will look like a very

positive environment where they're

negotiating a trade deal. It looks like

it's going that way. Yeah. But here's

the thing. When it comes to giving over

their service sector, they won't do it.

Even the Gument. So, what that means is

they're not going to let China run their

telecommunications or their banking or

their tech or any of these domestic or

legal services. You name it. They're not

they don't want China to actually run

Taiwan. So in around 2032 when you have

the Taiwanese election, the whole

question will be do do the people of

Taiwan want to um approve effectively

referendum on this new big trade deal

with China. And I think Gument Tong

might win or might lose. But I think the

point is is that when we get to 2033,

we're going to find out that the Gument

Tong is not going to give the crown

jewels. And at that point, I think China

could turn in a much more aggressive

direction because they will have seen

that even when the Gulman tongue is

back, even when they negotiate a trade

deal, even when they do all the things

that they're supposed to be doing

politically, they still don't actually

control Taiwan. And that's where it goes

in

their security architecture, then I

think we have a problem in the 2030s.

Go for it, cuz I know you're going to

shred.

>> Yeah. Let's start with the military

equation because I think that's the

simplest.

>> Um, the South Koreans have developed a

new drone uh just two months ago called

the Zayen that basically uses their

version of DRAM instead of the cheap

NAND. And it is has a decision tree with

10,000 steps.

So, it's the closest thing to a fully

autonomous system we're probably ever

going to get. And to think that the

South Koreans and the Taiwanese are not

comparing notes with the Ukrainians

every single day.

>> Yeah. So if if you're talking about five

years plus from here, uh the Taiwanese

military will be able to easily defeat

anything that the Chinese throw at them

without any help from us.

>> Well, they just nuke them.

>> I mean,

>> if that is the solution, that is the

solution.

>> But also, like, wait a minute. Let me

push back on that. Like, you know, I

I've been hearing people say like

China's on the brink of collapse and

then suddenly their EVs are running

around and they're they're good. Like

you made a point earlier that the the

drones that are really good like the bar

is really low. Yeah. Like the Ukrainians

are making these like as they go from

like a van on the next to the the

trench.

>> Yep.

>> So like China seem like

>> if there's anything China's good at,

it's like making consumer electronics.

You know what I mean? Like so

>> but the South Koreans as tech friendly

as they are of sharing the high-end RAM,

they won't.

>> Oh no, 100%. I agree with you. But like

can't you overwhelm? Okay. So fine. So

like the the super

>> just remember any version of Taiwan

falling requires a sea invasion and

there's just no way.

>> Yeah,

>> there's just no way if those drones are

powerful enough and they will be within

>> I'm guessing like

>> but remember why the US didn't invade

Japan? It was the same dynamic. They

nuked them instead. And and the idea

that

>> also if the idea that China can mobilize

and Taiwan will not have enough time to

build a couple of dozen nukes is silly.

>> Yeah, that's true.

>> If the Chinese are going to get to that

point, not only does a sea invasion

Japan, they lose Beijing and Shanghai.

>> I'm going to put my neck out here and I

know I'm going to get negative comments

for this, but I feel I I feel like the

question is is actually like um I agree

with you on the capacity. It's about

whether there's Taiwanese will to do so.

The thing about the Ukrainian

>> Taiwanese the only way the Chinese can

mobilize is to basically send a call out

to everybody. They can't miss that. They

will know with weeks of advanced notice.

They probably need four days to make a

move.

>> No, I I agree with you on the capacity.

The question is whether if and when

China makes that mistake because I think

it would be a strategic mistake. Is

there a Zalinsky who was out on the

streets of Taipei being like we're ready

come on down or is it going to be you

know what we don't want to go through

all this death and destruction?

>> Yeah there's a thousand ways that that

can go but when it becomes clear that

troops are getting on ships and starting

to sail

>> it doesn't matter we get to the nuclear

war.

But I'm going to but I'm going to step

back one more time though because the

nature of the question like what I'm

saying that we need to be more humble

about our ability to forecast and just

say that you know in 1910 or if you're

Norman Angel and you're writing about

you know how

>> there will never be a war again.

>> There will never be a war again and then

it so happens World War I happens right

what you would want to do is not

identify specifically that the Arch Duke

of Ferdinand is going to get

assassinated. What you would want to do

is just observe the complex. No, no, but

but but Matt, Matt, actually, actually,

>> you're 100% right. But bad example. You

know why?

>> What?

>> Uh cuz number one, don't [ __ ] with the

Serbs.

>> Yeah.

>> Well, that was that was in the decaying

That was in the decaying.

>> What am I getting? No, I that was a

joke.

>> I think you don't just have TDSDS. I

think you have post-traumatic Serbian

disorder. I think every single post

actually if you had asked someone in

Europe in 1878

>> what would start the war

>> they would have said Bosnia and

Herzugamia

>> like this was a problem right like this

was constant problem

>> and so so you're absolutely right like

we're all sitting here trying to figure

out the way the war starts and it might

be like the obvious one it's Taiwan like

to your point

>> or in other words it's the absorption of

a territory

>> well it's absorion but it's it's also

the the most obvious territory everyone

was obsessing about. So like since 1878

they were holding congresses in Europe

trying to figure out how the Ottoman

Empire who's going to have this piece of

territory Austrahungary, Russia, this

Serbia, you know, and then it ended up

being like, "Oh [ __ ] World War I

started in Sievo." Like, who knew? Like,

no, everybody knew. Everybody knew for

30 freaking years. We knew that's what

was going to happen.

>> Yeah. Yeah. Yeah. No,

>> you know, that's that's to your point.

>> Yeah. I think that's fair. And and and

again, the issue is that Taiwan, like I

always try to tell people that Taiwan is

Cuba. If the Confederate army had

relocated to Cuba and then taken the

nuclear weapons from the Soviet Union,

you know what I mean? Like that's what

Taiwan is like. If it has to be this war

is very likely to happen with nukes.

>> Yeah. You see a gentleman about it, you

know?

>> So what but what I'm saying is this a

perspective. This is not an arbitrary

The reason why it's an obvious conflict

is because it's a territory that needs

to be

>> No, I don't think you have to sell it. I

think we're we're sold.

>> No, I'm not. No,

>> you're not sold. No, I've never thought

of the

>> You think they'll just be able to defend

themselves?

>> Well, no. I mean, that's what I think

now. I didn't think this two months ago

because the technology was not going in

that direction. Now I'm just like, "Holy

[ __ ] this is so easy." Um, no. But

before this, I was definitely didn't

think there was going to be a war. Uh,

>> China is the most dependent upon the

globalized system of any country on the

planet.

>> And Australia now has the offensive

firepower to end China's connection to

the world. So does Singapore, Malaysia,

Indonesia, Taiwan, Vietnam, Japan, the

United States, India, Iran, Pakistan.

>> But that's where Russia actually becomes

really critical for China. It does, but

it's not enough.

>> Some of their resources.

>> It may not It may not be enough. But

what I would always just say to that

though is that wars have always started

because a nation is pursuing an

objective, not because they did a

rational holistic like assessment of

what

>> and so I'll get I'll get to that in a

minute. I'm getting there. So 80% of

their energy is imported.

>> 80% of is from the Persian Gulf. And

we're seeing some wobble this year, but

I mean that's that's a lot.

>> Uh

80% of what they use to grow their own

food is imported.

>> Yeah.

>> Yeah.

>> The base% of their national income comes

from exports.

>> Well, if they

>> 20% of their income comes from

>> Let me rephrase that. Their hard

currency earnings.

>> Yeah. Okay.

>> Which is not as important as GDP.

Anyway, bottom line is all of this is

dependent upon the the world being

permanently accessible.

>> Any conflict with Taiwan ends that

>> but hold on a second Peter. Wait wait

wait.

>> You're revealing like vulnerabilities of

China that I think um you know

>> would speak to insecurity.

>> Exactly. And that like reduced

>> doesn't solve any of it.

>> Doesn't matter. Neither did Bosnia for

AustriaHungary. you know, like

>> they thought could they could bully

either their way and it would just go

>> to the to the point of nonlinearity and

just like, you know, if if this goes

sideways domestically, like the what

we're really getting at is that

let me let me go to 30,000 ft. A lot of

these scenarios require almost like an

absence, not a rationality, but absence

of like, you know, reason thought

because like if you sit down and

reasonably say, well, there's this new

technology that now the Taiwanese have.

Well, we don't want to mess with that.

Like what what ends up happening is you

need the reason that I start my scenario

with Russian, you know, sort of post

Ukraine political disaster is that you

you need to introduce a level of like

nationalism of passion of non, you know,

and that's to your point.