The Absent Superpower: Peter Zeihan on the Global Order in Collapse

Lena: So, Miles, you mentioned that Bretton Woods was a bribe to fight the Soviets. But why is it specifically falling apart now? I mean, the Soviet Union collapsed in the early nineties. Why did it take another three decades for the U.S. to start packing up its toys and going home?

Miles: That’s the "belated" part of Zeihan’s analysis. For a while, the U.S. just kept the system running out of habit and a sort of post-Cold War inertia. But the fundamental math has shifted. Under Bretton Woods, any country—even former enemies like Japan or Germany—could access any resource, anywhere, and sell it to the American market without needing a navy to protect their own trade.

Lena: Right, because the U.S. Navy was the "global policeman" making sure nobody got pirated or blocked at a chokepoint.

Miles: Precisely. But look at the friction lately. At the G7 summit in Canada back in 2018, the tension was palpable. The U.S. started levying steel and aluminum tariffs on its own allies. Zeihan argues this wasn't just a "Trump thing"—it’s an American thing. The U.S. is realizing it no longer gets a strategic return on the trillions it spends maintaining global security. If the U.S. isn't getting a "security dividend" from its allies, why should it keep paying for their prosperity?

Lena: It’s a transactional turn. Zeihan points out that by 2016, both major U.S. presidential candidates were arguing about how much to pare back trade, not whether trade was good. The consensus has shifted from "global leader" to "North American fortress."

Miles: And that shift is permanent because the U.S. has achieved the one thing that used to keep it tethered to the rest of the world: energy independence. Back in 2006, the U.S. was importing 12.4 million barrels of oil per day—more than Japan, China, and Germany combined. Back in 2006, the U.S. was importing 12.4 million barrels of oil per day—more than Japan, China, and Germany combined. The U.S. will make the United States a net exporter of crude oil in the current calendar year. When you don't need the Middle East for oil, and you don't need a global alliance to stop a superpower that doesn't exist anymore, the "bribe" becomes a burden.

Lena: So the U.S. is basically saying, "Thanks for the help with the Soviets, but we’re good now. Good luck with your own shipping lanes." That leads us to the technical engine behind this shift—the shale revolution.

Lena: Most people think of shale as just "more oil," but Zeihan talks about it like it’s a total rewiring of the American economy. He calls it the "greatest evolution of the American industrial space since at least 1970". What makes it so different from traditional drilling?

Miles: It’s the difference between a lottery and a manufacturing process. Traditional oil is about finding a "pool" and hoping it’s big. Shale—using hydraulic fracturing and horizontal drilling—is about turning the rock itself into a source. It’s predictable. It’s fast. In the past decade, the total North American energy shortfall narrowed from 10 million barrels a day to about 2 million barrels a day.

Lena: And that creates a massive "capital" advantage, right? Because the U.S. isn't sending hundreds of billions of dollars overseas every year to buy oil from people who might not even like us.

Miles: Exactly. That money stays home. And it’s not just about the oil—it’s the natural gas. Shale produces a massive surplus of ethane, which is the feedstock for the entire chemical industry. There’s been a "chemical boomlet" since 2011, with $200 billion in announced projects in the U.S.. We’re talking about massive ethane crackers—like the $1.9 billion LACC project in Louisiana—that are being built because American energy is so cheap it overcomes the high cost of American labor.

Lena: I saw a stat in the materials that 68% of these new projects are actually funded by foreign companies or joint ventures. So even the rest of the world realizes that if you want to manufacture anything involving plastics, paints, or fertilizers, you have to move your factory to the U.S. to get that cheap shale gas.

Miles: It’s a "re-industrialization" of the United States. While the rest of the world is facing energy crises—like we’ve seen in the Middle East with "Operation Epic Fury" disrupting the Strait of Hormuz—the U.S. is building "city-sized" plants in Texas and Pennsylvania. Zeihan’s point is that shale doesn't just make the U.S. independent; it makes the U.S. the most attractive place in the world for capital to hide when the rest of the world gets dangerous.

Lena: And that danger is the "Disorder" we keep talking about. When the U.S. stops protecting the tankers, the global price of oil doesn't matter as much as whether you can actually get the oil to your shores. And for the U.S., the answer is "yes," because it’s already here.

Lena: Beyond just energy, Zeihan uses this framework of geography and demographics to predict which countries survive. He has this really grim view of the "greying" of the global population. How does that link back to the collapse of trade?

Miles: It’s a one-two punch. First, you have the U.S. stopping the "bribe" of free trade. Second, you have the rapid aging of the entire global population. Think about it: a healthy economy needs young people to buy things—houses, cars, diapers. But in places like China, Russia, and even parts of Europe, the youth population is shrinking so fast that consumption is dying.

Lena: So you have countries like Germany that built their entire "Golden Age" on being an export machine. But if the world is too dangerous to ship goods, and there aren't enough young people elsewhere to buy them, that model just… breaks.

Miles: It does. And it’s worse than that because of how capital works. When people are in their 40s and 50s, they save for retirement. That creates a glut of cheap capital. But as those people retire, they move their money into safe, low-risk assets or just start spending it. The "cheap money" era of the last few decades was a demographic fluke. We’re moving into a world where capital is scarce, and because the U.S. is demographically younger than its peers and energy-independent, it’s going to hog all that capital.

Lena: Zeihan mentions that Canada has the "world’s second most distorted and fourth fastest-aging demographics", but for the U.S. itself, it’s actually a bit of a "leg up" compared to the terminal situations in places like Japan or Italy.

Miles: Right. Japan was a "latecomer" to the modern world and had to master automation because they refused to allow immigrants. They’ve adapted better than most, but they’re still an island nation dependent on resources that are 5,000 miles away. If the U.S. Navy isn't there to keep the path to the Persian Gulf open, Japan has to use its own navy to fight for every drop of oil.

Lena: It’s a return to "realpolitik"—raw power and geography. If you can’t protect your trade routes and you don’t have a young population to drive your own internal market, you’re basically a "loser" in the Disorder.

Lena: Let’s talk about China. A lot of people see them as the next superpower, but Zeihan is incredibly bearish. He focuses on two specific "vulnerabilities": demographics and their financial system.

Miles: China is in a race against time that they’re probably losing. Their youth population is contracting so sharply that it’s eroding the very viability of their export-led model. You can't be the world's factory if you're running out of workers and the world's consumers are also disappearing.

Lena: And then there’s the energy problem. Zeihan points out that China is nearly 6,000 miles away from the Persian Gulf. Their navy only has about 30 surface ships capable of operating more than 1,000 miles from shore. If the U.S. stops guaranteeing the safety of the tankers, China is one blockade away from an industrial collapse.

Miles: Exactly. They’re "twisting in the wind," as Zeihan puts it. Their entire rise happened because the Americans allowed it under the Bretton Woods system. Now that the U.S. is backing away, China has to find a way to secure the Strait of Hormuz and the Indian Ocean on their own, while also dealing with an internal debt bubble that makes the 2008 U.S. crisis look small.

Lena: He mentions that the U.S. is actually moving toward a trade war with China that feels like the "anti-British policies" of the early 1800s. It’s not just about economics; it’s about breaking a competitor’s ability to function in a world where the U.S. no longer cares about global stability.

Miles: And that’s the "absent" part. The U.S. doesn't have to defeat China in a traditional war. It just has to stop helping them. If the U.S. stops protecting the global commons, China's "superpower" status evaporates because they can't feed their people or power their factories without global access that they can't personally defend.

Lena: It really reframes everything. We think of China as this unstoppable force, but in this framework, they’re one of the most fragile players because they are so "export dependent" and "resource poor" in a world that is regionalizing.

Lena: If China is fragile, what about Europe? Zeihan is pretty blunt—he says without U.S. involvement and "strategic sponsorship," there is no European Union.

Miles: Europe is in "flat-out denial". The EU was designed for a world where the U.S. provided the security and the markets. Germany, specifically, is the heart of this. They are an "export-oriented economy" in a world where trade is becoming dangerous.

Lena: Germany’s geography is fascinating in this context. They sit in the middle of the Northern European Plain—no real defensible borders. Historically, they either "hope no one comes for them" and get crushed, or they "attack first" and get crushed. Bretton Woods was the first time they could be a global economic power without having to be a global military power.

Miles: And that era is over. Zeihan argues Germany now faces a choice: massively de-industrialize to match their weak military, or massively re-arm to protect their exports. Neither option is great for European stability. And the Euro itself? It’s basically an "undervalued Deutschemark" that helps Germany but has turned the rest of Europe into a "dependency system".

Lena: Then you have France. Zeihan actually likes France’s chances. They have a younger population, they’re less dependent on exports, and they have a navy that can actually project power. He sees France as a "waking superpower" that might actually do better as the EU falls apart because they can dominate their own neighborhood again.

Miles: It’s a return to the old 19th-century "balance of power" games. Germany tries to create a "Germanocentric NATO in miniature" with Poland and the Czech Republic, while France looks to the Mediterranean to build a new imperial sphere. The "peace" of the last 70 years is the exception, not the rule.

Lena: And Italy? Zeihan says they’re "about to crash" because of their debt and demographics, but the Po Valley might survive as a "Fascist island" that just hand-crafts luxury goods for the few people who can still afford them. It sounds like a movie, but it’s all based on where the "capital and industry" can actually be protected.

Lena: We’ve talked about the big players, but what about the rest of the map? Zeihan identifies some surprising "winners" in this fragmented world. For instance, he’s quite high on India and Brazil, right?

Miles: Brazil has a wealth of natural resources and is far from the "major conflict zones" of Eurasia. Argentina has the geography to be a major agricultural power if they can just get their politics together. But the real "winner" is often whoever is closest to the U.S. orbit. Mexico, for example, is "twisting in the wind" with trade negotiations, but they’re still fundamentally tied to the most stable market on Earth.

Lena: And the Middle East? This is where it gets really dark. Zeihan predicted a "Next Gulf War" centered on the Strait of Hormuz. He argues that as the U.S. pulls back, countries like Saudi Arabia and Iran will have to fight directly for control of oil flows because no one is there to play referee anymore.

Miles: We’ve already seen echoes of this with "Operation Epic Fury." Israel and Iran targeting each other's energy infrastructure—like the South Pars gas field or the Ras Tanura processing facility. Zeihan’s point is that missiles don't "respect political boundaries". When the U.S. stops caring about the global oil price because we have our own shale, the Middle East becomes a "single theater of operations" where everyone is striking everyone else’s pipes.

Lena: It’s a total disruption of maritime security. Shipping through the Strait of Hormuz has already come to a standstill in some of these scenarios, driving insurance costs so high that trade effectively stops.

Miles: And that’s the "Disorder" in a nutshell. If you’re a country like Egypt or Jordan, you’re just caught in the crossfire of a regional struggle for survival. The only way to win is to not need the stuff that’s being blown up—or to have the military power to take it by force.

Lena: So, if I’m an investor or a business leader looking at this "roadmap" Zeihan has laid out, what’s the move? It feels like the old advice of "diversify globally" might actually be the worst thing you could do.

Miles: Exactly. The "global" part is what’s breaking. You have to think in terms of "regionalization." If your supply chain relies on a component from Southeast Asia that has to pass through the South China Sea, past India, through the Persian Gulf, and into Europe—you don’t have a supply chain. You have a prayer.

Lena: So the move is "near-shoring" or "friend-shoring." Moving production to places that the U.S. Navy will actually bother to protect—which is basically North America. Zeihan points out that Canada and Mexico are "family," even if the relationship is testy. Canada, for instance, trades more with the U.S. than with the rest of Canada.

Miles: And look at the "shale advantage" again. If you’re in an industry like chemicals or manufacturing, you want to be where the energy is cheap and the capital is safe. The U.S. is becoming a "chemical superpower" because of shale. Investing in American infrastructure—like those $200 billion in chemical projects—is a bet on the only "safe" zone left.

Lena: Also, pay attention to demographics. Don't bet on countries that are "greying" out of existence. If a country doesn't have a youth population to consume or a workforce to produce, their "growth story" is over, no matter how many factories they have today.

Miles: And finally, realize that the "safe" global order was a historical anomaly. We are returning to a world where geography matters more than ideology. If you’re a business, you need to be asking: "Can I defend this? Can my partner defend this? Or am I relying on an 'Absent Superpower' to do it for me?" Because that superpower isn't coming back to help.