the global economy is going to be in recession maybe even depression we are at a break point
where globalization is collapsing and the demographics of so many countries are
turning uh we've always known demographically speaking that this was going to be the decade
where the old economic model of globalization was going to fail we've always known it's coming
the the covid epidemic sped things up and ukraine has put in a hard stop so so we're
there this this is the year it's all breaking down something to keep in mind when the americans
created globalization it was done as a bribe we were trying to convince countries to join us
against the soviets so you can participate in any supply chain participate in manufacturing
access any market access our market if in exchange you ally with us against the soviets
india didn't join india has been relatively pro-soviet in fact the indians were pro-soviet
even when the soviets were gone what that means is when globalization collapses india doesn't have to
fall all that far because india never invested its economy into the international network
and since you have functional boycotts not boycotts not the word since you have functional
control if you want it over who gets persian gulf energy india is going to suffer yes unavoidable
you may not have invested your entire economy in it but it there's no way that you can break
the imports in the export system of the world without feeling something that goes for the us too
but india is going to hold the control to the gates of the persian gulf and to think that india
won't take advantage of that and get some benefits from that i think is being very very creative so
we're all going to have to learn to think a little bit differently in this world we're devolving into
but india is one of a half a dozen countries in the world that is actually reasonably well set up
not for the current age but for what's coming and every competitor you competitor you have
is on the other side of that ledger you've got to look at why this war is actually
happening why it's happening now so i think the best way to approach it for an indian audience is
to think about it from your point of view where does india concentrate most of its armed forces
in punjab because you have a land bridge between populated indian populated pakistan and that is a
security threat well russia has nine pune jobs and unfortunately for the region the people
who live in russia's punjabs are not russian so the only way that russia feels it can be secure
is to expand out until it reaches these bridges these gateways to its core territories and then
hunkers down its forces in the gap just like you do every single day it's just that they have to
do it at nine places and that means occupying a number of countries with a combined population
that is greater than russia's so russia can never be like the united states it can never be like
india it has to be more like germany where it has to have a forward positioned military stationing
policy simply in order to give it what it feels is the minimum necessary security for it to
exist and in that sort of environment it is very aggressive because from the russian point of view
this has to be done and it has to be done now the russian demography is collapsing and this is the
last time that the russians are going to have a sufficient number of young people to attempt
this sort of effort so two things from this number one there will be no peace talks that
matter because the russians aren't interested and second ukraine is not the end of the story
the russians are going to push past ukraine into a number of other countries to their west which
is going to generate a conflict with nato at some point and we can talk about what that's
going to look like we can talk about what the native countries are doing to try to stop it
but this is what at stake here we're talking about the russians needing to get under their
thumb at least another 140 million people the first 50 million just happened to be ukrainian
and in the case of the russians remember their demographics started collapsing 30 years ago
so the young and their educational system collapsed at the same time so the youngest group
of people who actually have a skill set are now in their late 50s putin's pushing 70. uh and the only
people at the end of the soviet era who really understood what was going on were the the fsb the
kgb agents because they had been in charge of the late system where for gorbachev trying to go and
drop off putin as an extension of that line well if you combine the demographic problem with the
information vacuum there's only like 150 people left in russia who are in their political elite
this this is their this is their last window from any number of measures and so no main may 9th it's
going to be a nice little party they're going to have they're going to celebrate but they're not
going to stop the war they're going to keep pushing and pushing and pushing and we are
now in an artillery conflict and that is something where russian equipment and training actually does
very well uh from a human point of view it's horrific but in terms of military
capacity we're in a stage of the war now that is actually playing to the russian strengths
the russians are to be to be perfectly blunt pretty racist uh and the russians have had an
immigration policy they have two actually so in the first one they just started attracting
all of the ethnic russians from the parts of the soviet union that were now independent countries
whether that's ukraine or kazakhstan or uzbekistan that brought them about 20 million people over the
course of the last 30 years and that's pretty much tapped out there are very few russians
left anywhere in the world that are not in say the european union now and really don't want to
move back to russia where their standard of living would be a third of what it is now
the second one is they have an informal program that attracts migrants to do certain jobs
especially construction and agriculture that mostly tops the taps the central
asian states most notably kyrgyzstan tajikistan and kazakhstan that has been more successful
but these people are never going to be russian citizens they're there as migrant labor
and anyone beyond kind of that ring of the old soviet influence moving to russia's a tough call i
mean low standard of living very difficult climate crumbling infrastructure minimal social services
it's not the sort of place that you move because you want to move up in the world it's the sort of
place you move because there just isn't anything better on offer and i'd say that even with some
of my more dire predictions for for east asia there's not a lot of people who want
to take them up on that offer well at the late soviet period particularly once we got to 1989
the soviet industrial base collapsed it was never very efficient and as soon as there was
any access to the rest of the world people went with goods that were cheaper and higher quality
so the entire soviet industrial base collapsed in on itself even before the soviet union ended
well the russians at that point were producing roughly 11 million barrels a day of crude
and when internal demand dropped and there wasn't sufficient external demand in order to make up
the difference pressure started building up back through the pipes all the way to
the well head and when it reached the wellhead the russians had a very simple choice to make
do we keep running it and it risked the entire pipe system busting and having leaks the entire
4 000 kilometer length of the pipes or do we shut it in so they shut it in but russia's oil
production is in the permafrost so the pipes go down through that frozen layer as long as the
liquid is moving that's not a problem but once it stops it starts to do what liquids do under
pressure and expand a little bit and it busts the rivets and it busts the pipes so all of the wells
that were shut down in the late 80s early 90s were shut down forever we're starting to see that now
we're starting to see a situation where the pipes are backing up refineries are going offline
because they don't have anywhere to sell the crew to no one's picking up their crew to places
like novorossiysk on the black sea and very soon certainly within two months the russians are going
to have to shut in production and that production will be gone for decades because the last time
this happened in 1988 to 1992 they didn't get it back up online until this last december
so one way or another the world is going to have to get used to four to five million barrels per
day of less russian crude later this year maybe the russian income is absolutely going to tank
but i would argue that we were already there one of the features of the new sanctions programs is
the russians have a hard time spending whatever hard currency they earn they can't do it through
normal means they have to like get physical cash and transfer it and doing that for imports
that come in the numbers of you know billions of dollars a month that's difficult so the russians
are already facing that cash crunch even with oil still coming on coming out i'm far more concerned
about the broader international implications for us having the largest oil interruption ever
but remember the russians see this as an existential crisis this war had to happen
and nato had to resist it so i don't want to say anything like it's going according to plan because
that's that's not what i'm after here but this is something that has been inevitable for a long time
and now it's imminent now we're here and for the russians it's not about money and if there's one
thing that binds all the russian citizens together it's a celebration of privation
this this is not a country that is in the indian or the british or the american tradition
where economics trumps politics other way around security is always paramount the russians
they've expanded a lot of output to new fields since 1990 most of that work was done by either
bp or the western oil services firms they're all gone now so you should expect the remaining
russian output to steadily decline over the course of the next couple of years anyway so for example
the stockland projects that the chinese are really interested in they're the most advanced projects
in the world to produce oil and natural gas for a pipe and natural gas for lmg they're all going
to get shut down this year not because of backed up pipes but because the people who know how to
operate them are leaving so 45 million barrels a day going west to europe goes offline in a couple
months another two or three million barrels a day from eastern siberia most of which goes to china
goes off this year next year well let's go through the candidates um canada needs a new pipeline
minimum two years if it's going to meaningfully increase output oil sands are not like drilling
a normal well you actually have to mine it that's a lot of infrastructure so canada really you're
talking a three to five year solution to get another million barrels a day out of canada
uh venezuela after 20 years of in many cases deliberate mismanagement most of
the reservoirs have suffered permanent damage uh if you were to stabilize just stabilize um
venezuela is right now that's a 10 billion dollar project that'll take at least a year
you might might be able to get 300 000 barrels out if you really push it this year but you're talking
about another 10 billion dollars of investment into a country that is sketchy at best at the
moment uh iran's a little bit brighter if the sanctions were to disappear tomorrow iran would
probably be able to bring another four to five hundred thousand barrels online within 12 months
but you also need to bring in a huge amount of investment in a country that tends to confiscate
investments the iranians like to say that the only reason people don't deal with iran is the
sanctions but that's not true iran has the world's like second or third most uh that's what i'm
looking for constrictive investment regimes and so even when everything is open even when you get a
country like italy or france who really doesn't care about the politics it's still a very long
hard slog so you're not going to get a million barrels out of iran in any less than two years
that's everybody i mean opec has minimal spare capacity now in the united states pros and cons
first the pro we were in the midst of an oil built out even before this happened so we were probably
going to be seeing another million barrels a day within the calendar year that will probably
increase by about half now and considering the environment we're in that's great however
it's nowhere near enough so if everyone who can be brought in is brought in we're still
talking about a shortage in excess of three million barrels a day this year and then
next year probably going up to five it's very difficult for me to see a scenario where that's
going on where oil prices stay below 170. and considering that the biden administration is not
incredibly popular and it's a midterm election year in the united states i think it's very highly
likely that the united states is going to play is going to ban oil exports or at least restrict them
in order to sever the american energy price environment from the global one
now that'll keep prices relatively low and mild in the united states
but that's going to remove another three million barrels a day of consumption capacity
of production capacity from the rest of the world so the rest of the world is going to have
to get by without american and russian oil at the same time and that's going to rewire everything
okay i think you're gonna like this one okay so if the americans are gonna remove themselves from
the global energy market the europeans are the ones that in the short term are facing
the biggest problem because all that russian crew that was going west is crude that they used to use
so the europeans are going to have a very simple choice i mean they can petition the united states
for a little bit of help and the us will send refined product to try to take the edge off of
it but it won't be nearly enough the europeans are going to need an alternate energy source
so they will go south they will start interfacing with their former colonies throughout the african
continent and making sure that those flows go north to europe instead of east to asia
the next country the kick line is india if there's minimal russian crude and minimal african crude
and minimal north american crude all of a sudden india is looking at a global shortage that is
greater than total indian production but india is the closest major country to the persian gulf
and any tankers that leave the persian gulf have to sail by india to get to east asia in that
environment india is the only country in the world with the military economic and political capacity
to interface with the persian gulf from a period from a point of strength so i think it's going to
be very easy and very necessary for india to go to kuwait and the emiratis and and the saudis and
arrange a direct transfer deal so i prices will probably be uncomfortably high that's going to
be unavoidable but you're not going to have a problem with actual supply that's going to be
for countries for the east because if you remove all this oil from the market then the entirety
of the shortage falls to the last country in line and that's china we may be in china's last year as
a manufacturing power already because if they can't keep the lights on nothing else matters
this time passing zero seven zero four one four zero like an rgb lincoln via septum
you