Skip to main content

Assume you have a can opener!

One of my favorite demographers is Peter Ziehan, an American thinker who has for the past decade been right more than he has been wrong.  His most important contribution is to the impact of history and demography on economic and political power.

In a nutshell, his conclusions are that China, Russia, Korea, and Germany are in deep trouble, but that France, the UK, and the US are well positioned.

The failure points for China and Germany are the same -- demographic collapse and energy shortage.  Of course, both countries face different specific challenges but the reality is that both are energy dependent for their growth, both have plummeting birthrates, and both rely on the American security umbrella to succeed, and provide cheap transport.

The Americans no longer need the rest of the world, already the US has withdrawn the 6th fleet from the Middle East, and has only about 1,000 advisors left in the region.  It is estimated that by the end of 2023, the US will have no skin in the game in the Middle East -- and nature abhors a vacuum.  Contenders to replace the Americans are Saudi Arabia, Iran, and Turkey.  For the first time since WWII, the US has lost interest outside of North America.  It is a net energy exporter, it is a food exporter and a raw material exporter.  Finally, the US has the most attractive demographics of all of the OECD.

Ziehan's prediction is that China will be done by the end of the decade (as will Russia) because of population collapse, and that doesn't take into account any additional risk that faces the economy (at the end of an incredibly long energy supply route, heavily dependent on food imports, and is having a fight with America -- the country that has for the past 60 years provided the world with its trade security umbrella and for the past 40 years China's primary export market.

But Peter is not always right...

PZ has an issue with electric vehicles, mainly because of the issue of supplies of goods necessary for the construction of EVs, specifically Lithium, copper, and rare earth metals essential in the manufacturing of electric vehicles (BTW Rare Earth metals are not "rare" it's in the context of rare-earth oxides...).

In the past month, Tesla made two important announcements:

(1) Tesla will begin processing Lithium ore directly in the US and ecologically.  This is a major shift since the issue of pollution in processing is one of the many dirty secrets of electric vehicles, and

(2) Tesla's new motors will be manufactured with zero rare earth metals!

It is one of my major criticism of PZ's analysis, he has a deterministic view of the world that is based on long historical trends -- e.g. his reading that the invasion of Ukraine was inevitable because of Russia's paranoia, and that there is no option but to fight Russia to the death in Ukraine otherwise, future land grabs by the Russians will end with nuclear exchanges.  He's almost certainly right on that issue.

However, PZ has a blind spot with technological improvements.  The rare earth metal issue is one of the most important weaknesses of EVs -- but their removal from future Tesla engines is a massive shift in the sector.  Considering that Tesla doesn't protect its technology with patents, it is almost certain that other manufacturers will follow Tesla's lead.

We all suffer from the disease we fail to see the certain long-term implication of technological changes or changes of use.  In 1900 there was an issue with stables in NY City, and how dirty and unpleasant they were, yet within 15 years the issue was gone (different pollution).  In 1900, 99% of all vehicles in NYC were horse drawn carriage.  In 1913, 99% all NYC vehicles were ICE powered. The can-opener analogy is the "assumption" one makes about the future based on history.  Sometimes the assumptions are wrong!









Comments

Post a Comment

Popular posts from this blog

Ok so I lied...a little (revised)

When we began looking at farming in 2013/14 as something we both wanted to do as a "second career" we invested time and money to understand what sector of farming was profitable.  A few things emerged, First, high-quality, source-proven, organic farm products consistently have much higher profit margins.  Secondly, transformation accounted for nearly 80% of total profits, and production and distribution accounted for 20% of profits: Farmers and retailers have low profit margins and the middle bits make all the money. A profitable farm operation needs to be involved in the transformation of its produce.  The low-hanging fruits: cheese and butter.  Milk, generates a profit margin of 5% to 8%, depending on milk quality.  Transformed into cheese and butter, and the profit margin rises to 40% (Taking into account all costs).  Second:  20% of a steer carcass is ground beef quality.  The price is low, because (a) a high percentage of the carcass, and (b) ground beef requires process
Post a Comment
Read more

21st century milk parlour

When we first looked at building our farm in 2018, we made a few money-saving decisions, the most important is that we purchased our milk herd from a retiring farmer and we also purchased his milking parlour equipment.  It was the right decision at the time.  The equipment dates from around 2004/05 and was perfectly serviceable, our installers replaced some tubing but otherwise, the milking parlour was in good shape.  It is a mature technology. Now, we are building a brand new milk parlour because our milking cows are moving from the old farm to the new farm.  So we are looking at brand new equipment this time because, after 20 years of daily service, the old cattle parlour's systems need to be replaced.  Fear not it will not be destroyed instead good chunks will end up on Facebook's marketplace and be sold to other farmers for spare parts or expansion of their current systems. All our cattle are chipped, nothing unusual there, we have sensors throughout the farm, and our milki
Post a Comment
Read more

So we sold surplus electricity one time last summer...(Update)

I guess that we will be buying an additional tank for our methane after all.   Over the past few months, we've had several electricity utilities/distributors which operate in our region come to the farm to "inspect our power plant facilities, to ensure they conform to their requirements".  This is entirely my fault.  Last summer we were accumulating too much methane for our tankage capacity, and so instead of selling the excess gas, that would have cost us some money, we (and I mean me) decided to produce excess electricity and sell it to the grid.  Because of all the rules and regulations, we had to specify our overall capacity and timing for the sale of electricity (our capacity is almost 200 Kw) which is a lot but more importantly, it's available 24/7, because it's gas powered.  It should be noted that the two generators are large because we burn methane and smaller generators are difficult to adapt to burn unconventional gas, plus they are advanced and can &qu
Post a Comment
Read more