In this week's Stansberry Investor Hour, Dan welcomes Peter Zeihan to the show. Peter specializes in geopolitics and brings a critical perspective on how foreign affairs impact the U.S. market.

Peter kicks things off by discussing why the market hasn't reacted or improved in response to the peace talks surrounding the Strait of Hormuz. He says the reason is threefold. First, the White House acted with very little planning, only using Israeli intel and data. What was supposed to last no more than 96 hours was drawn out into a monthslong conflict. Second, Peter says that President Donald Trump fired numerous ambassadors and policy experts with the intention of not refilling those seats. This has made negotiating more difficult. And third, turning the oilfields back on will take months at best. Peter then says that due to comments made by the Trump administration, Europeans have a growing mistrust of America and are seeing it as a potential enemy...

There was a poll... [that revealed] that only 11% of Europeans consider the U.S. to be an ally... The Europeans realize – believe now – that they're on their own, and that the United States is now actively part of the problem rather than part of the solution. And they see the Iraq war as part of that for the first time in post-World War II history. The United States didn't even alert its allies to a major military operation, much less consult, even though most of the economic fallout is falling on the Allies.

Next, Peter delves into Ukraine and its usage of drones in the war. Drones have and are continuing to become so advanced that Peter considers them part of what he calls the "second revolution of military technology." They're now capable of making decisions on what to target once they arrive at a destination area and cannot be jammed once they've made a decision. And the first-generation ground drones in development could be a game changer for Ukraine. Following this, Peter gives an update on a video he made titled "Don't Be Fooled. China Is Collapsing." He says the Chinese population numbers are not as high as stated, partially due to millions of citizens in the census having possibly been fabricated. Unlike the U.S. and other Western countries, China only has several "touchpoints" that determine that a citizen exists, and these have had falsified numbers in the past. While the official numbers might provide a false sense of security, the population decline will have a massive impact on the country...

All of the missing millions [are] people under age 45... This system can't survive the decade. There are no people. And so when you see this push for them to adopt automation and manufacturing, it's working from the understanding that they just don't have workers. And that only works so long as globalization and open trade remain a thing. And I don't think that's going to survive this year... China is failing because it's running out of people, because it doesn't have the military capacity to secure its supply lines, because it's dependent on consumption in a different hemisphere.

Finally, Peter shares his thoughts on a major transition period. He says that this will be a time of short-term pain, but in the long run, the countries that could weather the storm and emerge first would be the big winners in the new era. The United States was one potential winner, but with hostile work environments with other countries (in addition to globalization universally deteriorating) and an aging power grid, it's facing strong headwinds. Peter says the country will need to double its efforts in manufacturing at home if it wants to have a chance of surviving without other countries, especially if trade slows down or is even severed...

The links that have made the economics of our world possible are breaking, and the demographic transition is on top of that... Industrial construction spending – that's a measure of the money that is putting shovels into the ground to build the things that build things – dropped by nearly a third since the beginning of last year, and about half of what's left is data centers. So today we are going through the most rapid deindustrialization in my lifetime at a time that we need to double the industrial plant... We are not actually doing it.

Click on the image below to watch the video interview with Andy right now. For the audio version, click "Listen" above.

(Additional past episodes are located here.)

The transcript is coming soon.

This Week's Guest

Peter Zeihan is an expert geopolitical analyst. He presents customized executive briefings to a wide array of audiences, which includes financial professionals, Fortune 500 firms, energy investors, and a mix of industrial, power, agricultural, and consulting associations and corporations. Peter has been featured in and cited by numerous newspapers and broadcasts, including the Wall Street Journal, Forbes, the Associated Press, Bloomberg, CNN, ABC, the New York Times, Fox News, and MarketWatch.