Peter Zeihan Makes Bad Predictions With Bad Premises

Peter Zeihan is a geopolitical strategist who specializes in global energy, demographics and security. He has been quoted in national and international media on a variety of geopolitical topics.

He makes a prediction in the video below about the breakup China and collapse of Germany. He bases this prediction on the assertion that the world has only been ordered from the start of Bretton Woods to today. This is from 1944 to today. On 15 August 1971, Bretton Woods ended when the US pulled out of the gold system. Zeihan is referring to the Pax Americana period. Pax Americana (Latin for “American Peace”) is a term applied to the concept of relative peace in the Western Hemisphere and later the world beginning around the middle of the 20th century. It was caused by the preponderance of power enjoyed by the United States. Although some would also credit several powers having nuclear weapons.

The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western Europe, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states.

Zeihan ignores the Pax Britannica. Pax Britannica (Latin for “British Peace”) was the period of relative peace between the Great Powers during which the British Empire became the global hegemonic power and adopted the role of a global police force. Between 1815 and 1914, a period referred to as Britain’s “imperial century”, around 10,000,000 square miles (26,000,000 km2) of territory and roughly 400 million people were added to the British Empire. Britain’s Royal Navy controlled most of the key maritime trade routes and enjoyed unchallenged sea power.

Zeihan Predictions

Zeihan postulates that because the US economy is not needing much world trade that the US will abandon protecting the world’s sea routes and world trade will collapse.

The US will not need to import oil by 2020. This is asserted by Zeihan and Nextbigfuture agrees that the US will not need to import oil by 2020. This will drive the percentage the US economy that is world trade down from 7% now to 1 or 2% when Canada and Mexico and Central America are excluded.

However, Nextbigfuture notes that the US will start exporting large amounts of oil, coal and liquid natural gas. Nextbigfuture does not believe that the fracking will stay at breakeven between production and demand.

Zeihan predicts that America will withdraw from its global cop role.

Zeihan predicts that without America as cop that world will go into fighting and chaos and world trade will collapse. This will be followed by the collapse of countries.

Zeihan predicts that Germany’s economy will collapse to one fourth its current level without trade in a world of Chaos.

Zeihan predicts China will break apart without world trade or will be united but very poor.

Zeihan has an implicit prediction that neither China or any other power would step into any power void left by the withdrawal of the USA.

Zeihan also predicts the rise of Japan, Turkey and Argentina in a world of Chaos.

Why Zeihan Predictions are Crap

Which countries are Itching for Wars? Which wars were being prevented by Pax Americana?

Nextbigfuture asserts the US has been a lazy and selective and sometimes ineffective global cop.

Syria was itching for a civil war. And America did what? The Syrian civil war was stopped? The Syrian civil war happened anyway.

The US protected Taiwan from being bullied by China back in the 1990s. Is the US going to step up for Taiwan now or in any future conflict? Was their oil or trade reasons why the US did step up to protect Taiwan? Was it part of the Anti-soviet cold war deal?

Russia wanted to attack Ukraine a few years ago. What happened there with Pax American? Russia did attack and took Crimea.

Zeihan says Germany collapses without Pax Americana. Germany imports more than half its energy. OK from where? Russia, Norway, and the United Kingdom are the largest exporters of oil to Germany. Russia would send Germany more oil and natural gas without US interference. Germany is the world’s largest natural gas importer, as 22.6% of its primary energy use comes from gas. Germany imports gas from the Netherlands and Norway. In addition, gas comes from Russia via the Nord Stream; in 2016, Germany imported 49.8 billion cubic metres (bcm) of gas from Gazprom. A terminal in Emden opened for gas from Norway in 2016.

Germany and France swap electricity over their grid. Germany dumps overproduction of solar and wind electricity and France provides nuclear power when Germany needs it.

France and Germany would disconnect their power relationship? Russia and Norway would not provide oil and gas to Germany.

China could not protect its shipping trade without the USA? China is biggest trade partner of Taiwan, South Korea, Japan and many other Asian countries. Is Zeihan saying that there will be wars in Asia without the USA military providing security? Which wars? How does China’s trade get messed up?

There was up to 30% of GDP involved in World Trade During Pax Britannica and 10% before

More of the World GDP is involved in trade from 1970 to today. However, expansion of world trade is also attributable to the invention of containers. The containerization of the world.

Nextbigfuture does not believe the assertion that the US will withdraw from global management or sea lane protection.
Nextbigfuture does not believe the assertion that the US will not need or want trade. As stated, the US will develop large exports of fossil fuels.

If US Withdraws its Military?

Nextbigfuture does not believe that the US only gets involved in managing the world purely out of economic self-interest. Under Trump there is more America first and America self-interest driven decisions. However, the US military-industrial complex wants to be active to perpetuate itself.

Travel and Tourism is Important and Thrives in an Ordered World

Zeihan ignores travel and tourism and its importance. Or it is implied that it also unnecessary or that it too will get wrecked or that somehow it will be unaffected with world trade collapse.

The travel and tourism industry is one of the largest industries in the United States, making a total contribution of 1.5 trillion U.S. dollars to GDP in 2015. The industry was forecasted to contribute more than 2.6 trillion U.S. dollars by 2027.

Global tourism generated $7.6 trillion for the global GDP in 2014, making it one the world’s fastest growing and largest sectors. The travel and tourism industry is the world’s largest commercial service sector industry.

Thinking only Sea Lanes When Rail, Air, Pipeline, High Power Lines and Truck Matter as Well

Air cargo transports over US$6.4 trillion worth of goods which is 35% of world trade.

China has a rail route to Europe. On 2017, this moved about 2% of China’s trade but projections are this could increase to 10-15% in ten years.

China is building pipelines to get oil and gas from Russia and other sources.

China is building a super electric grid to move up to 150 power plants of electricity from Russia and China to Jopan and South Korea.

Japan, Turkey and Argentina will Rise as Future Great Powers

Zeihan said Japan will dominate Asia. Japan will dominate China. Implied is that Japan will dominate India.

Here is a link to my article about Zeihan having a history of predicting China’s collapse and getting it wrong and I covered the wrongness of Zeihan in regards to China and Japan. Nextbigfuture disagrees about the Zeihans predictions.

Zeihan said Turkey will be a great power in Europe and the Middle East.

Zeihan said Argentina will dominate South and Central America. I have an article about how bad the Zeihan prediction is for Argentina to dominate South America. I compare Argentina and Brazil.

Japan has a low level of stabilization with a badly aging population.

Turkey is at the bottom of the emerging market list. Turkey’s economy is forecast to grow 0.8 percent in 2019, down from an estimated 3.5 percent this year, according to a Bloomberg survey of economists. Inflation reached 25.2 percent in October, the highest level since 2003, eroding real yields.

Some People in the Comments Defend Zeihan and his Predictions

I will agree that Zeihan has decent population pyramid analysis and some of his other analysis and problem identification is useful.

However, I do not agree with the end predictions and conclusions that emerge after the analysis.
I have listed what are some Zeihan predictions and I have put up counter predictions. So we will see who is right.

There does need to some time ranges on the predictions.

Several geopolitical and economic observers have predicted the breakup of China. Others have predictions about the USA and other countries. Many are not as specific to exact times and precision on conditions for easy accurate – inaccurate – right – wrong judgments.

Here is a link to my article about Zeihan having a history of predicting China’s collapse and getting it wrong and I covered the wrongness of Zeihan in regards to China and Japan.

I have an article about how bad the Zeihan prediction is for Argentina to dominate South America. I compare Argentina and Brazil.

I will form up some falsifiable geopolitical and economic predictions.

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