Book: 20220915 to 20221204, "The End of the world is just the beginning" by Peter Zeihan

20220915 - Introduction

De-globalization decrease general productivity, but make global economy more robust.

I am surprised that Peter Zeihan said USA would benefit from de-globalization, but it makes perfect sense. USA is in very good geographical location, and almost all other countries would get negative impacts.

20220917 - Section I: The End of an Era
20220917 - How the Beginning Began

For hunting and gathering lifestyle, people cannot stay in one place for more than a few weeks, as there will be no enough food to pick up. They have to keep wandering.

It's hard to find proper location to start farming. The weather needs to be warm, so can do farming all seasons; it needs to have enough water to irrigate the plants; the land has to be easy to protect from other tribes, so they will not be robbed at harvesting time.

So the best place is warm and low elevated river area which surrounded by desert or ocean.

Energy is the key factor to civilization evolvement. Energy utilization improvement brings us food surplus, labour surplus, and then knowledge explosion.

Geography is still important. Initially the best place is low elevated warm river area; then peninsula next to Europe such as Portugal and Spain; then big islands such as UK and Japan; then US.

20220926 - Enter the Accidental Superpower

U.S. has the best geographical location, the best large farm land, the best rivers, the best coastline, proper latitude, and abundant natural resources. The land is large enough, and the population size suits the economical growth. These are the root causes that U.S. became the most powerful country in the world.

U.S. people is smart. They learned a lot from history, such as the rise and fall of the ancient Roman. They choose to help allies to become rich and powerful, instead of conquering the world. Soviet Union chose the latter, and then failed.

20220926 - And Now for Something Completely Different

U.S. is resigning from the role of "the police of the world". So, if some country attacks China's containership in Red Sea, U.S. may refuse to get involved. Then globalization would collapse, and U.S. is almost not get affected.

Allies means separated power. If one power collapse, the others would be fine. For central government, if it collapse, all area collapse.

What if ancient Roman adopted this allies strategy?

20220926 - The Story of . . . Us

200 years ago, children are free labour. Now, they are burden in finance aspect. Is that the reason that young people don't want to have children?

Infant fatality rate dropped a lot in the past 200 years, together with extended life span, make the population keep growing until today. But this is not going to last much longer, as lifespan have stopped increasing, and infant fatality rate is already close to zero.

Home is getting smaller and smaller, which helped pushing up the economy scale.

https://www.statista.com/statistics/1033027/fertility-rate-us-1800-2020/

20221004 - History Speeds Up

The fertility rate of Japan dropped to below 2 in 1975. I think it's 1985 for China.

The population of Japan started to decline from 2009, 34 years after 1975. By 2022, there are 15% of Japanese are over 75.

One Child policy made the fertility rate dropped quickly, much quicker than Japan. In theory, one child policy means the fertility rate is one. 20% of people is over 60 in 13 provinces of China.

Will population collapse affect economy? It surely affected Japan. How about China? Australia? US?

If most of people are over 50+ in developed countries, what would the world look like?

20221004 - Learning a Scary Word

Country specialization means de-globalization would cause huge loss in productivity. De-globalization brings huge loss to countries faraway from other countries, such as Australia and New Zealand.

It is unnatural that there is always full of food and goods in supermarkets. When people forget about this, they lose the fear of war. That could be the direct cause of war.

What could be the reason that some country want to stop international trading, in spite of the consequences and revenges?

With the help of high tech, can we build new factories anywhere in the world quickly?

20221005 - The End of More

Does shrinking labour workforce means shrinking GDP? I don't think so.

First, GDP doesn't matter, what matters is GDP per capita. With the help of advanced technology, such as driverless trucks and robots, less people can do more work.

Second, we will get infinite energy from Solar Panel and Wind, if there is enough low cost battery. And there are infinite material, such as iron and aluminium.

Third, Robots can provide services we need, such as cleaning house and garden, ageing care, etc.

But, robots and AI are not free. Average people cannot make money from it! All profit will go to big tech companies, most likely the giant tech companies in US.

How long will this transformation take? It's depends on the development of AGI. Maybe 15 years (2022+15=2037), I guess.

20221005 - Messy, Messy Models

Japan and all other developed countries need young population. Similar things happened in the major cities of China. However, there are not many high-educated young people who are willing to migrate to other countries.

The analysis of COVID19 is disappointing. The damage caused by COVID19 is overestimated.

1. Die of is not Die with.

2. Mortality rate should be based on the infected cases, not the confirmed infected cases.

3. Mortality rate of the people under age 60 is close to zero.

But the impact the COVID19 brought to the world is real. It drastically accelerated de-globalization. This is very bad news to export-led countries, especially if those countries are aged countries.

20221007 - The Last Bits of More

The author didn't talk much about innovation. I think the future may not need so much labor force.

The strange coincident is, US is also the major source of innovation. The future governments may keep printing money to buy products and services from those big tech companies, which are more likely to be US companies.

20221007 - Quick Note from the Author . . . and Moscow

De-globalization slow things down. Innovation accelerate the procedure. When these two twist together, I guess, innovation wins.

20221012 - Section II: Transport
20221012 - The Long, Long Road

Why ancient China is so much developed compare with ancient India? Geographical condition decides it!

Transportation on land is awful. To go cross mountains is almost impossible. This is same to everywhere in the world before industrialization. We have to rely on water for long distance transportation. Most of the places don't have roads, and ancient Roman spent 600 years to build a few long roads!

Can engine change this? It brings us cars, ships and planes!

20221013 - Breaking Free: Industrializing Transport

Ship helped a lot. With the help of ship, we only need a few people to deliver 1000 tons of goods to 1000 km away place in a few days. But it can only go along major rivers, and it's pretty slow.

Railway improved it a lot, but railway itself is expensive. Without trucks, it's still inconvenient.

Internal combustion engine is the decisive factor to change transport industry. Motor is not much better.

So, the key to reduce transportation cost is self-driving.

20221014 - The Americanization of Trade

Engines reduced the cost of transportation, but geography is still very important. Deliver something from a big city to another big city, is much cheaper than deliver it between small cities with same distance, and whether the city is with high quality port next to ocean also brings huge difference.

Can self-driving technology and almost free sustainable energy eliminate this difference? No. Time is also money.

How about the Black Swans? Is small cities better than megacities if WW3 break out? If megacities cannot get enough food, can small cities still get it?

Globalization means maximizing productivity, and minimizing cost. The cost is the fragility of the whole supply chain.

20221015 - The Great Unmaking

Regions can deindustrialize far more quickly than they industrialized, and the critical factor is what happens to transport. p137

China, Middle East, Russia. Three countries are highly likely to break global peace.

Can workerless factories solve this problem? It is possible in developed countries, and it will take decades even it is possible.

From this point of view, USA is safer place than Australia and New Zealand.

Why does USA start to resign as Global policeman?

20221016 - Harbours in the Storm

The weakest point of globalization is transportation. 

Globalization means productivity maximum. It create most value based on the same global resource. That's the reason that people's lives got so much better in the past 77 years. However, it's coming to the end.

Shale oil changed US's dependency of oil. With the help of sustainable energy, US eventually lost interest in Middle East.

With the shrinking GDP share, it's harder and harder for US to act as global policeman. I doubt that US would send troops oversea ever again. They surely still provide weapon or money to support allies, but that's it.

What if Iran lock down Red Sea again? Will US send troop to Iran to fight them?

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WTTNTUS2&f=W

In 2021, renewable energy sources accounted for about 12.2% of total U.S. energy consumption and about 20.1% of electricity generation.

https://www.eia.gov/tools/faqs/faq.php?id=92&t=4

https://www.visualcapitalist.com/u-s-share-of-global-economy-over-time/

20221017 - Section III: Finance

20221017 - Currencies: Navigating the Road Less Travelled

When use precious metal pegged currency, it could be heavy burden if economy grow faster than the metal mining. Then deflation of the currency would damage the economy.

This is a big problem to all ancient empires, including ancient Roman and ancient China. Even USA had to give up Gold Standard in December, 1971.

Then, governments are inclined to print out too much money, which also damage economy.

How about MMT? MMT is based on the value created by a state, instead of base on tax the government collect every year.

Currency is all about trust. From shells to precious metal to fiat currency. Meme decides how crowd move.

20221019 - Adventures in Capital

Ancient Japan's "Tokusei Rei" is similar to MMT without clear claim before releasing the government debt.

https://www.japanese-wiki-corpus.org/history/Tokuseirei.html

Good debt (for production) may get dissolved, but not the bad debt (for consumption). Japan, Korea, Taiwan and China all follow this principle.

Such a combination of growth, profits, and control enabled the Asians to have occasional semi-planned debt crises to shake out the worst financial imbalances without risking their political or economic systems. p183

This is the reason that investors should not invest in Asia financial market. They focus on production. When export declines, economy is in big trouble.

EU is in worse position comparing to Japan, as so much credits were wasted, and no solution to repair the system. As all countries use euro, the whole financial system is low productive and fragile.

The major problem of the financial system of US is fraud. But fraud is not institutional problem, and normally get self-corrected quickly.

Infinite fiat currency supply keep interest rate low, and encourage innovation. Without it, EV, reusable rocket, sustainable energy, AI, etc. would evolve mush slower.

20221019 - Disaster Is Relative

Based on GDP, China's M2 supply is much larger.

https://twitter.com/peterzeihan/status/1468968227552198662

20221019 - The End of More, Redux: Demographics and Capital

In generally, people over 40 are richer than people under 40. But people over 60 are less likely to invest in stock market. So most money come from people between 40 to 60?

I don't buy it. I think MMT changed everything starting from 2012 in Japan. So there is always more than enough money supply. The current interest rate hike will not last for long time.

At supply side, technology advances will give us lower cost goods and services. UBI is possible by tax contribution from robots.

20221020 - A Credit Compendium

Don't agree about the credit expansion problem, if it let GDP grow quickly.

And yes, there is some serious problem with China.

In 2021,

Japan M2 Money Supply 8.6 Trillion USD, GDP 5.1 Trillion USD.

EU M2 Money Supply 15 Trillion USD, GDP 23 Trillion USD.

US M2 Money Supply 22 Trillion USD, GDP 23 Trillion USD.

China M2 Money Supply 37 Trillion USD, GDP 17.5 Trillion USD.

20221020 - Finagling Future Financing Failures

Fiat currency is not real resource. The fiat currency which has enough production to support it, is real resource.

What if the production is done by millions of robots? Can that support fiat currency? I think it can.

20221027 - Section IV: Energy
20221027 - Harpooning Progress

Petroleum took 70 years to replace whale oil!

Now I understand why Russia like natural resource so much. Not long time ago, natural resource means wealth, energy and money.

20221028 - The Order’s Order for Oil

Before the discovery of the low cost shale oil and sustainable energy, USA heavily depended on oversea petroleum. To solve that problem, they have to maintain global order to create many oil exporters.

Things have changed.

20221029 - The Map of Oil: Contemporary Edition

There are two major oil exporter area: Russia and nearby countries; Middle East eight countries.

There is one neutral area: North America, including USA, Canada, Mexico;

Other areas all rely on oil import, especially North Asia, including China, Japan, Korea and Taiwan.

Deglobulisation affects oil import and export directly and immediately.

Apart from Transportation, drilling technology also plays important role in maintaining oil supply.

https://energyeducation.ca/encyclopedia/Energy_density

20221030 - There’s More to Oil than Oil

"Power of Siberia" natural gas pipeline only provides China very limited natural gas. In December 2021, it delivered less gas than December 2020.

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/lng/012022-china-data-total-natural-gas-imports-rose-20-in-2021-on-strong-energy-demand

I am surprised that the author doesn't mention the electricity required for refinery plants.

Regarding the economical feasibility, the author seems assume that the cost of solar panel and battery are fixed. I believe only high latitude area need support of nuclear power plants, if there is no enough wind.

Solar farm and wind farm with huge battery can deliver electricity to cities through power grid. Greentech is not about whether we can make it, but more about how to do it. We don't have any other choice.

I think that capital-poor world will never arrive after d-eglobalization. Zero interest rate is the long term trend.

20221031 - Fuelling the Future

Sustainable energy is the only solution to fuel the future.

As the first step, use battery to replace peak power plant, and use EV, solar panel and wind turbine to reduce  fossil energy.

Eventually, with the price drop of battery, we would use less and less fossil fuel.

20221107 - Section V: Industrial Materials
20221107 - Disassembling History

The upfront cost of green-tech is pretty high. But for long term, it could be much cheaper. At the moment, high quality solar panel and lithium can last 30 years, and they last more than 60 years.

20221107 - The Essential Materials

I didn't know that the industrialization and urbanization of China consumed so much iron, aluminium and copper. Maybe "world factory" is not the major reason of natural pollution. Industrialization and urbanization are the major causes!

Most of the metals can be recycled. Hopefully that can prevent civilization collapsing.

20221108 - The Future Materials

The author should do more research before claiming that each Tesla consumes around 20kg of cobalt. Actually it's 4.5kg in 2018. In 2022, at least half of Tesla cars use LFP, which means no cobalt or nickel.

At the moment, green-tech is more like the primitive stage of other "new" technology, such as steam engine. Solar and wind power and battery look not better than natural gas power plant. But what will happen in 10 or even 5 years? Green-tech would need less and less cobalt and nickel, and much more electricity will come from sustainable energy, which leads to much less CO2 emission. From the other end, there is no way to make fossil power release less CO2.

The author cannot see the compound effect of the evolvement of science and technology. How would that affect the conclusion of this book regarding de-globalization? Advance technology is based on software and chips. That means automated assembly line, self driving and robots. How will that affect de-globalization?

20221108 - The Always Materials

Gold is for jewellery and central bank reserve. Moly is not "always material".

Lead battery is replaced by Lithium and other battery, so Lead demand will keep dropping.

20221108 - The Funky Materials

Platinum is my favourite metal for jewellery. Cheaper than gold, and it can last forever, and its melting point is much higher than gold.

I am surprised that we don't have better way for rare earth refinery after 100 years of evolvement. Does that mean that chemistry doesn't progress in the past 100 years?

20221108 - The Reliable Materials

Nickel gives us stainless steel and lithium battery.

99.95% purity of Silicon gives glass. Seven 9 give us solar cells, ten 9 give us computer chips.

Uranium means nuclear weapon and nuclear power.

Zinc prevent iron from rusting.

These materials are not likely to be in shortage in post-globalization age.

20221108 - This Is How the World Ends

I don't think that hyper finance model is cheating. It's (accidently) better understanding about finance, or we can put it this way: it's the advantage of government when government competes with international companies.

No one likes to see that US military force to be deployed everywhere in the world. But if US refuses to get involved in other region's conflicts, the world will panic!

20221112 - Section VI: Manufacturing
20221112 - Crafting the World We Know

How did Industrialization Revolution change the world? Two steps.

1. Energy

2. Specialization, which leads to scaling, high productivity, etc.

Globalization is the result of ultimate specialization.

FSD Beta V11 just got released. Can autonomous driving replace huge ship, at least for Eurasia continent?

A semi truck is around 40 ton, with around 25 ton load, one 40 foot container.

A large container ship can carry around 5k 40 foot containers.

Deliver a 40 foot container from Shanghai to Berlin is around $2k in 2019.

Tesla semi truck can run 800 km with one full charge, let's assume 300 kwh, and $0.2 per kwh.

Let's assume that we can buy one Tesla semi truck at $250k, and its lifespan is around 2M km.

Transport from Shanghai to Berlin by train, is around 8400 km.

8400/800*300*0.2=$630

8400/2000000*250000=$1050

The minimum cost to deliver a 40 foot container from Shanghai to Berlin is $1680. Insurance cost, maintenance, and other cost will surely double this number.

So, NO. Self-driving cannot compete with large container ship. But it's much faster and cheaper for short distance land transportation.

20221113 - The Map of the Present

There are three major manufacturing and consumption area.

1. Japan, Korea, Taiwan vs other countries, including China and southeast asia.

2. Germany, UK, France, North Europe vs other countries in Europe.

3. US, Canada vs Mexico and other countries in South America.

We cannot ask the low income countries always stay in low income status. What if all developing countries start to catch up with the living standard in developed countries?

My guess is manufacturing automation. But that means pessimistic future of developing countries.

20221120 - The Map of the Future

China is trying their best to build many more warships and aircraft carriers. Will that guaranteed them containership safety?

The people migrated from central Europe to Western Europe are not likely go back. They will stay in Western Europe, so the demographic is not that bad there.

What if Tesla Optimus and Boring Tunnel works well in a few years?

Low cost labour is not necessary anymore, and mountains don't hinder transportation. Then what would happen? People in different country get different living standard, forever.

20221121 - Manufacturing a New World

A lot of analysis I don't agree.

>>1. Mass-production assembly lines are largely out. p375

As oversea import stops, the local assembly lines need to produce more.

>>2. Reducing economies of scale reduces the opportunities for automation.

Demographic collapse leads to more opportunities for automations.

It's a bit like the result of Black Death.

>>3. The pac of technological improvement in manufacturing will slow.

Talented people are more likely migrate to better place, such as U.S., and U.S. also have pressure to develop new innovation to handle the stress from post-globalized world.

Only God can make a tree. In post-globalized world, everyone will try to change to adapt to the new world. It more likely that Cold War is everywhere. Cold war means stress, and that push technology progressing quickly.

Will developed countries continue to help developing countries in post-globalization era? It's easy to donate some money, but what poor area people really need is factories. Can developing countries just build factories to make products for themselves? I think it's possible, but goes slowly.

20221126 - Section VII: Agriculture
20221126 - What’s at Stake

In post-globalization age, technology is still there. Surely people cannot get so much variety of food, and their living standards will drop a lot, but I don't think many people will die from famine. Synthetic fertilizer and pesticide are so critical, and food shortage is so dreadful, I believe people will find a way to solve the problem.

I believe the real threat is global warming, which leads to extreme weather and less food production.

20221127 - The Geopolitics of Vulnerability

I think Mr Zeihan overestimate the damage that de-globalization brings to us. Agricultural machines are not that complicated. A lot of countries can make and maintain them.

But surely there will be less varieties of food in supermarket, and all food will be much more expensive even if they are still available.

20221127 - Avoiding—or Accepting—the Worst

It's not going to be so bad. As the book mentioned, one calorie from meat equals to nine calorie from plant. Most of people in the world still will get basic food supply, if the global warming and extreme weather doesn't leads to too much food reduction.

Famine always leads to war. What will China do? The future doesn't look good even to South East Asia.

20221201 - Mitigating Famine

Hopefully wheat, corn and potato can mitigate famine.

It's hard to imagine that international trading stops, especially if that may cause famine.

20221202 - Expanding the Diet, Shrinking the Diet

Wheat. Corn. Soy. Rice.

Rice is not row plant. It needs much more labour and water, which make itself vulnerable.

Will China get abundant fertilizer and pesticide in the future?

Good to know that white rice is brown rice without bran.

20221203 - Agriculture and Climate Change

Mr Zeihan believes the major impact of climate change is precipitation. I agree.

Rice farming will reduce because of too much rain, wheat farming will reduce because of too less rain. However, many other better land will be used to plant rice and wheat.

The changes won't come over just a few years, and we act fast. Many people will live in worse condition, but most of people will survive.

However, the author missed the impact from melting glaciers. Initially there will be more water in rivers in summer, then rivers will broke in dry season. That's disaster even in US.

20221204 - Feeding a New World

How bad will de-globalization be? Why countries cannot sign agreement to maintain containerships running?

If that hurts Russia, China, Iran, etc. so much, surely all bad guys want to keep "globalisation".

20221204 - The Long Ride of the Third Horseman

Some countries will fall soon, such as Russia and Middle East eight countries. The question is, will China fall?

If China is going to fall, surely it won't just fall quietly. Many other countries will be pull down. That's horrible.

Hold on, will Russia and Middle East be happy to fall quietly?!

The elites will flee away, and the remaining people start to do nasty thing to other people and the environment. They want to survive, and don't care about anything else. How about nuclear war?!

20221204 - Epilogue

Can USA survive the global chaos? Be even better?

I hope so.