The Economy and Geopolitics

[Brat]

My daughter's husband mentioned Peter Zeihan several years ago. He has published several books that explain global economics from WWII forward. He also publishes nuggets and old lectures on YouTube. I am particularly interested in his thoughts about (and predictions of) the unraveling of supply chain economics, the implosion of China, and the prediction that the US will draw back from protecting international shipping.

His latest book is "The End of the World is Just Beginning, Mapping the Collapse of Globalization".

He observes that most of our inflation is not US consumption driven but the result of global forces in oil and resources. He predicts that manufacturing that has been outsourced internationally will be brought back to North America - a process that will drive up inflation for 4-5 years but will result in deflation when achieved.

One classic comment about development globally is that people are moving from rural communities to cities, that children in rural areas are extra hands but in cities they are expensive pets. Demographically China is imploding, the US is doing fine.

 

[frayne]

The guy has numerous you tube videos and seems to have a pretty firm handle on the demographic side things. That said, he is a prognosticator whose crystal ball is as cloudy as anyone else's.

 

[Chuckanut]

The guy has numerous you tube videos and seems to have a pretty firm handle on the demographic side things. That said, he is a prognosticator whose crystal ball is as cloudy as anyone else's.

+1

By all means read the book if one wishes to do so. It may teach the reader something, or get her thinking in ways she has not thought before.

The best way to see if the author knows his/her stuff is to look at some of thier past predictions and see if they came true. So..... who wants to volunteer?

In December of 2019 who predicted a pandemic in 2020? In November of 2021, who predicted a new war in Europe in 2022? What about all those experts who predicted that Telsa would go belly-up by the middle of 2019?

And even people who have been uncannily accurate in the past seem to lose their ability at some point. Or, are they like the one in 256 people who will flip heads eight times in a row? Just lucky?

We don't know what we don't know.

 

[Bigdawg]

In December of 2019 who predicted a pandemic in 2020? In November of 2021, who predicted a new war in Europe in 2022? What about all those experts who predicted that Telsa would go belly-up by the middle of 2019?

I did not predict the pandemic and I didn't predict Tesla going belly up (it didn't) but I was all over Russia invading Ukraine. Hard to believe more people didn't see that coming. The one I got wrong was China going into Tawain. Thought that would have happend already. But China seems to always be the slow moving glacier compared to the rest of this hurry up world we live in.

I digest all of this information/insight/prediction and decide if it impacts my life or not. Mostly it does not. Most of it is not actionable for me or my family.

 

[dixonge]

He predicts that manufacturing that has been outsourced internationally will be brought back to North America - a process that will drive up inflation for 4-5 years but will result in deflation when achieved.

That's not a prediction, it's already well underway!

"Almost four in five corporations companies have already shifted production to the US and at least 15% are considering it due to high tariffs and ongoing supply chain challenges, Kearney's report shows. "

https://businessinsider.mx/made-in-...ng-manufacturing-back-to-us-2022-7/?r=US&IR=T

 

[travelover]

.........The one I got wrong was China going into Tawain. Thought that would have happened already. But China seems to always be the slow moving glacier compared to the rest of this hurry up world we live in. ...........

I think this is going to be a big one. The hiccup of delayed supplies from China during the pandemic put the world into a tail spin. What will be the effect if / when China moves on Taiwan and we shut down commerce with them in protest? They already manufacture everything including critical pharmaceuticals. There will be a scramble here to rebuild manufacturing and other outsourced capabilities.

 

[JDARNELL]

I could see moving production back on shore but what is the connection to deflation unless we have a technical breakthrough?

 

[Chuckanut]

That's not a prediction, it's already well underway!

"Almost four in five corporations companies have already shifted production to the US and at least 15% are considering it due to high tariffs and ongoing supply chain challenges, Kearney's report shows. "

https://businessinsider.mx/made-in-...ng-manufacturing-back-to-us-2022-7/?r=US&IR=T

All manufacturing does not have to be shifted back to the USA. Other countries like Mexico, Brazil, etc. could be used also. I would think that diversifying our sources of production is probably a good thing on several levels.

 

[Brat]

No one predicted the pandemic, not even the hosts of "This Week in Virology". I recall one guest initially brushing it off but another commenting "Watch what they are doing, not what they are saying."

Zeihan predicted Putin's war on Ukraine a couple of years ago after Russia seized Crimea in 2014. Peter predicted that Russia's next move would be an all-out invasion of the wider Ukraine and because Russia also has a demographic problem (# men of fighting age shrinking) it would come soon. He isn't sure who will win. I listened to the following YouTube: Virtual Spy Chat with Chris Costa Guest Malcom W. Nance (July 7 broadcast), the Ukraine invasion has been anticipated for years.

Zeihan doesn't think China will invade Taiwan for logistical and economic reasons. He predicts that because of the shrinking population, disrupted manufacturing (covid), and resource issues (food, oil) the country will break up within the next 10 years.

My mention of North America included Mexico, in fact, he thinks Mexico will be a major manufacturing center (but fails to address the issue of cartels). My nephew was recently hired as a supply chain specialist focusing on Mexico for a major manufacturer.

Recently I have heard Zeihan talking about Russian natural gas and its impact on Germany, also fertilizers. Grains currently consumed are from last year's crops. Once they are used up ... hunger will destabilize many countries (including China).

IMHO raising US interest rates does not address the core issue of the international market. It increases the value of the dollar visa ve other currencies but at least it provides a better return for bond/mm fund investors (not enough but whatever).

 

[Youngblood]

I just purchased his book 'The End of the World is Just Beginning, Mapping the Collapse of Globalization'. Like someone mentioned above, I'm interested in learning to think of global problems differently and would like to read Zeihan's perspective on them. I understand there is a bit of prognostication on his part, but I found his viewpoints interesting.

 

[Koolau]

He observes that most of our inflation is not US consumption driven but the result of global forces in oil and resources.

Likely true, but the US has (IMHO) made decisions not to enhance oil supplies and it could have. Because the current administration wants to end FFs, increasing oil supplies has not been a priority. Not taking a stand on right or wrong - just sayin' that a choice was made not to enhance oil supplies. It WAS a choice.

 

[FLSUnFIRE]

I just purchased his book 'The End of the World is Just Beginning, Mapping the Collapse of Globalization'. Like someone mentioned above, I'm interested in learning to think of global problems differently and would like to read Zeihan's perspective on them. I understand there is a bit of prognostication on his part, but I found his viewpoints interesting.

Added to my reading list as I enjoy alternate perspectives.

 

[cyber888]

That's not a prediction, it's already well underway!

"Almost four in five corporations companies have already shifted production to the US and at least 15% are considering it due to high tariffs and ongoing supply chain challenges, Kearney's report shows. "

https://businessinsider.mx/made-in-...ng-manufacturing-back-to-us-2022-7/?r=US&IR=T

I doubt it will drive up inflation. That's pretty 'old school thought' as it does not take into consideration AI and Robotics. When you consider Artificial Intelligence and Robotics automation, that will drive down costs in US manufacturing due to economies of scale. There are already Robots flipping burgers and making Pizza. Many US Companies are already shifting to this when they could not find workers during the pandemic.

 

[Midpack]

My daughter's husband mentioned Peter Zeihan several years ago. He has published several books that explain global economics from WWII forward. He also publishes nuggets and old lectures on YouTube. I am particularly interested in his thoughts about (and predictions of) the unraveling of supply chain economics, the implosion of China, and the prediction that the US will draw back from protecting international shipping.

His latest book is "The End of the World is Just Beginning, Mapping the Collapse of Globalization".

I was intrigued by his YouTube videos so I checked out the book. It started well but seemed to get a little far fetched and some assumptions weren’t well supported IMO (came out of thin air) so I quit reading about half way in. Seems he’s well versed in population and demographics and may be extrapolating a little too freely from there? Everyone who makes predictions highlights the ones they get right, and conveniently ignores the many they get wrong…so grain of salt.

Along the same lines I found Homecoming: The Path to Prosperity in a Post-Global World by Rana Foroohar a more worthwhile read.

Peter Zeihan was interviewed by Joe Rogan where Zeihan again predicted the collapse of China. This time Zeihan says it will happen within ten years. Zeihan has been predicting China’s meltdown since 2005. He repeats the call for China meltdown and possible breakup or breakdown multiple times. In 2010, he said it would happen within 3-5 years.

Nextbigfuture agrees that China under President Xi is screwing up. I also agree that China screwed itself royally with the one-child policy. The demographic decline will be a 1-2% per year economic headwind from now to 2050 because of a declining working-age population.

https://www.nextbigfuture.com/2023/01/here-is-what-peter-zeihan-got-wrong-on-the-joe-rogan-show.html

https://www.nextbigfuture.com/2018/11/peter-zeihan-makes-bad-predictions-with-bad-premises.html

 

[marko]

+1

The best way to see if the author knows his/her stuff is to look at some of thier past predictions and see if they came true. So..... who wants to volunteer?

In December of 2019 who predicted a pandemic in 2020? In November of 2021, who predicted a new war in Europe in 2022? What about all those experts who predicted that Telsa would go belly-up by the middle of 2019?

.

+1. I wish there was a compilation of predictions proven true/false by all these expert talking heads.

Not just finance but in general. "We're all gonna die/The world as we know it is over/etc". Global cooling 1970, global warming.

Nobody ever goes back to call these people out. "Hey, in 1989 you said there'd be no food, well??"

 

[target2019]

+1. I wish there was a compilation of predictions proven true/false by all these expert talking heads.

Not just finance but in general. "We're all gonna die/The world as we know it is over/etc". Global cooling 1970, global warming.

Nobody ever goes back to call these people out. "Hey, in 1989 you said there'd be no food, well??"

I don't think it will help to find that list. I read a recent thread about the OP book in the Reddit r/geopolitical sub. Proponents of a popular author just deny that he/she said it. I think that is a very human response, to dismiss information that is critical of a belief.

Reading a book is rewarding in and of itself. But many popular books on complicated subjects give the appearance that the author must have authoritative credentials. After all, look at this shiny book cover, or youtube video with slides.

The actual danger, IMO, is that some people have always been attracted to sensationalism, and just don't have the desire to go deep, and possibly critique what is placed before them.

 

[Chuckanut]

I doubt it will drive up inflation. That's pretty 'old school thought' as it does not take into consideration AI and Robotics. When you consider Artificial Intelligence and Robotics automation, that will drive down costs in US manufacturing due to economies of scale. There are already Robots flipping burgers and making Pizza. Many US Companies are already shifting to this when they could not find workers during the pandemic.

About a decade ago some of the textile manufacturing that had been moved to China was moved back to the Carolina area. But, instead of factories full of hundreds of people operating machines that produce the cloth, the jobs are different. Often they require other skills that are needed to keep the machines working - electricians, technicians, etc. along with sales and accounting people.

SC Ready, a workforce training program in South Carolina, is helping Keer recruit and train local electricians, technicians and fabric sales representatives. One third of the program applicants are former textile workers who want to get back to the industry.

Read more at: https://www.charlotteobserver.com/news/business/article9148256.html#storylink=cpy