good morning everyone peter zion here coming to you from colorado it is july
11 and today may very well may be the beginning of the end of the german system uh today the gas
flows through a pipeline called nornstream down now that's a subsea pipeline that goes directly
from russia to germany it's one of the few pieces of infrastructure that is not an immediate danger
um from the ukraine war all this these pipes that cross ukraine and belarus from russia to
the european system uh at some point over the course of this next year probably within the
next few months uh they're all going to be shut down because of war damage uh whether that is
because the ukrainians shut them down themselves or because of the russians accidentally hitting
their own infrastructure is kind of irrelevant at that this point it's kind of baked in as a
100 chance really there's there's no way that it's going to last that leaves things like nordstrom as
the only remaining links and the germans worked with the russians over the last 20 years to build
the normstream system to give them some insulation from things like what's going on in ukraine now
and it has not worked it has simply made the germans horrendously dependent now there are
four things that the germans rely upon to be the economic powerhouse that they are
the first are those natural gas flows uh with the shutdown of nordstrom which is obstetrically for
maintenance is what the russians are saying uh in theory they'll be back online on the 21st
but the germans are being blackmailed by the russians to back out of the coalition
that is supporting ukraine nordstrom is the most effective tool that the russians have to do this
uh the liquid pro quo is pretty straightforward you stop providing logistical and political and
military support for the ukrainians or we turn off the gas and never turn it back on
that would generate industry-wide shortages and shortages and heating system and there is
absolutely no way that the germans would be able to maintain their economic model it is
based on access to large volumes of cheap russian energy both in terms of for electricity and as
an industrial inputs to power the entire german manufacturing model so that all by itself could
kill the german system almost overnight well not overnight but within a year but all of the other
things that allow the germans to be successful are in danger too the germans rely on a large
robust highly skilled workforce but germany has one of the fastest aging societies in the world
until now that's worked for them because if you have a lot of people in their late 40s to early
60s you know decades of experience and none of them have kids well they can spend their all their
time working and the state can spend all of their efforts on educating them to make them the most
highly value-added workers in the world but it's a bit of a starvation diet because eventually people
who are in their 40s 60s become in their 60s to 70s and that's where germany almost is now germany
will hit mass retirement this decade and so the model was always in danger and demographic grounds
the third thing that allows the germans to be who they are is access to central european labor all
the way from poland to romania and even further east whenever you're doing manufacturing not all
of the jobs are high skilled some are mid-skilled some are low skilled the person who's bending
the metal for offenders probably not the person who's doing the spark plugs or the transmissions
and to have a successful manufacturing system in a globalized world you need a differentiated
workforce different skill sets different price points and in central europe the germans have
all that they've had all that since the 1990s but that's going away too because just as the
germans are rapidly aging the central europeans are aging even more rapidly
they're still on average a few years younger they won't hit that mass retirement to the latter half
of this decade or the first half of the 2030s but the replacement population the birth rate
in all of these countries is actually lower than it is in germany so it's every bit as terminal
and then fourth you need access to the global system especially when you have an age demography
without a lot of 20 and 30 somethings the way you make it work is you sell products abroad
but the americans have lost interest in that the americans created globalization as a bribe
to fight the cold war we will enable everyone to trade with anyone and sell into any market if you
side with us on security policies but the us has been backing away from that for some time and even
in this reinvigoration of the western alliance and nato and the western relations in general
that the russian attack on ukraine has caused the byte administration has not even floated
the idea of a broad-scale regeneration of the old cold war structures of trading economic
access for security agreements there's just a security deal in place here which means that
when the ukraine war ends as all wars eventually do we go back to where we were where the americans
basically go their own way i'd love for it to turn out a different way but i don't see it
anywho all of this put together suggests that the manufacturing model that has sustained
germany that has provided the tax base that has provided economic growth that has made
the population relatively happy with their situation it's gone and it's going to vanish
within the next year and a europe that does not have a german motor at its heart
is a europe that all of a sudden needs to find a very very different way to function now that can
take us down any number of rabbit holes but we're gonna have to hold off on that for another day
okay that's it for me until next time everyone peter zion coming to you from my second most
favorite florida city fort lauderdale which where unfortunately i have no free time
because the world is exploding and the particular explosion that i want to talk about today
which is july 8 is the assassination of former japanese prime minister abe shinzo now i don't
have a lot of insight here into what happened specifically he was shot during a political
speech his assailant has been arrested ave did die earlier today bleeding out in the hospital
but i think it's worth putting all of this into context japan japan is a country that has largely
purged political violence from its system now back in the pre-industrial days of the 1800s and before
japan was a radically different place almost primal the samurai controlled most of society
and violence among them was quite common but when industrialization happened the new alliance
of the new businessmen plus the emperor largely purged most violence from the local government
and that included the more literal purging of the samurai class itself this is the the
meiji reserve the meiji restoration for those of you familiar with the time period now at the
national level violence remained because now we're talking about nationalist fascist imperial japan
and that's what brought us to the japanese war machine and the pacific theater of world war
ii with the end of world war ii this strain of political violence was largely purged as well
weapons became very difficult to get a hold of it all in fact in all of calendar year 2021 japan had
one gun related death last week the united states had 220 so having somebody walk up to a podium
with a gun is just not something that happens so that's that's the backdrop of the current moment i
want to focus on two things for today uh first of the all for those of you who are more conspiracy
minded uh let's get you noodling over something tangentially pointing in the right direction so
japan's ruling liberal democratic party of which abe is a member and served as prime minister for
is not a normal center-right party in the way that we think of maybe the republicans or the french
nationalists or something like that it's linked to the survivors and the successors of imperial japan
their roots are firmly fascist and you don't have to go back wow this hair is out of control
you don't have to go back too far to find some sketchy stuff going on in interior
japanese politics specifically to the abe family they're certainly not violence free
it may have fallen from conventional memory but abe's maternal grandfather also with the ldp
was also the target of an assassination back in the 1960s so you know those of you who like
to make conspiracies why don't you run with that second some broader cultural context now i am just
speculating because we don't know anything about the assassin at this moment but japan does not
as a rule embrace change this isn't the united states where the lack of internal barriers to
movement means that we're always interacting with and arguing with one another and where challenges
and change are the norm instead japan is a series of mountainous islands with at best weak
connections among the population centers governing japan traditionally requires the establishment
of a very delicate balance among its various regions its foreign policy under the united states
is globalized order for the last 70 years has been remarkably static focusing on trade and resource
access while part of the american alliance network these dual balances have served the japanese very
well and they're actually reminiscent of many of japan's previous cultural periods
the japanese strive for stability change means a disruption of the balance and that's pretty common
for cultures that are resource poor instability itself is the enemy and so the japanese and
countries like them tend to ignore small changes until those changes build up into something
overwhelming and then it all breaks apart at once the place changes radically and in a searing
matter almost overnight japan is definitely moving towards one of those shake-ups now the american
security guarantee is not what it once was the rise of china has provided a local competitor
demographic implosion in both china and japan and around the world is changing economic models and
the post-war global system has taken japan about as far as it can go everything's up in the air now
if japan is going to have one of those occasional cultural shakeouts now is about the time that you
would expect it to happen which suggests that things are about to get very real
the assassination itself obviously not great is likely not the real problem and just a symptom
of a broader societal shift the last time the japanese had one it didn't end until
the nuclear destruction of hiroshima and nagasaki the time before that it required
the physical liquidation of the samurai as a class when china changes it changes everything
does it wholesale it does it violently and it remakes its region and this time japan is
already the second strongest naval power with the world's third largest economy so the implications
of this sort of shift are going to be massive now there's an entire chapter in dis united nations
dedicated to the rise fall and now re-rise of the japanese system in the post-globalization
era so if you're looking for more that's probably the best way for you to get started until then
yeah i think that's all i have to say today so wow i really got this
under control don't i uh anyway everyone take care and hopefully
the next time i speak to you it will not because of an assassination take care
via septum
you