Peter Zeihan on How the War With Iran Could Reshape the Global Economy

Geopolitical strategist Peter Zeihan joins Scott Galloway to discuss the escalating war between the United States, Israel, and Iran – and what it could mean for the global economy. They break down the risk of disruptions to oil supply in the Middle East, why energy markets are on edge, and how the conflict could impact global growth. Peter also explains what the war could mean for China, Europe, and the future of globalization. We’re also now live on Substack. Subscribe at profgmedia.com to get ad-free versions of all our podcasts, the full archive of Scott’s newsletters, and exclusive content including deep dives, livestream conversations, and subscriber Q&As. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

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• 2:00Scott Galloway?

  Welcome to 387th episode of the Prop G Pod. What's happening? We are live on Substack. What a thrill. I know what you were thinking yesterday. I'd be better, I'd be in better shape. I could lose this five pounds of belly fat. I have a better relationship with my kids and my husband, resolve all my issues with my parents. If Prop G just was live on Substack. That's where me and my co-host, Ed Elson, Alice Hahn, James King, and Jessica Tarlov, try to make you smarter about the forces moving markets, politics, and society. At profgmedia.com, you can find everything we make, podcasts, newsletters, exclusive content, all in one place. A lot of content. If you decide to pay, so we want to develop a subscription revenue.

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• 3:28Scott Galloway?

  We are super excited about this, and believe it or not, there's more content than not for subscribers than non-subscribers. So folks, I'm like AOL in the 90s. To resist is futile. Subscribe now at profgmedia.com. Also, if the price point is too much for you, and you love our content, please email us at [email protected], and we'll figure out a way to get you a scholarship. Anyways, moving on. In today's episode, we speak with Peter Zeihan, a geopolitical strategist and founder of Zion on Geopolitics. He joins us. Where are you? Are you in Colorado, Peter?

• 4:04Speaker 05

  I'm home for a change. Yes, Colorado.

• 4:06Scott Galloway?

  All right, let's bust right into it. We're recording this on March 9, 2026, just over a week into the United States and Israel's military campaign against Iran. Iran's clerical leadership confirmed that the son of the late Ayatollah Khomeini has been chosen as the country's new supreme leader following his father's death in the early strikes. Meanwhile, global energy markets are on edge. Oil prices have surged past $100 a barrel for the first time since 2022 amid fears that the conflict could disrupt shipping through the Straits of Hormuz, the choke point that carries roughly 1/5 of global oil supply. Peter, how do you see the current moment in this war? Where do you think we are? What's the state of play in your mind?

• 4:44Speaker 05

  Part of the problem with answering that question is we still don't know what the administration's goals are. So there's no way to judge what success or the end might be. But let me put out two things just to kind of start the conversation off. This is the first time the Strait of Hormuz has ever been blocked. We're looking at a 98% reduction in traffic, which conservatively means that 15 million barrels a day are not getting out. We're in day 10, and we're at 150 million barrels total so far. We've already had 4 million barrels per day of crude be shut in. So even if the straight were to open tomorrow, that won't come back on within 60 days. So there's already enough

• 5:25Speaker 05

  damage to cause a global energy-induced recession, even if this stops right now. In natural gas, 20% of global LNG has been blocked. That all comes out of gutter. That facility takes even longer to bring back online. So putting aside Israel and the United States and Iran and the physical damage and the drone war and all of that, for the moment, we're already in a global recessionary environment, starting point. Second, the new supreme leader is the son of the old one. And what's the best way to sum this guy up? He's what Don Jr. wishes he was. So he doesn't just have a lot of experience in hiding financial assets

• 6:09Speaker 05

  behind shell companies. He actually has been in the trenches with the generals and has military experience, much more so than his father. So he doesn't have the gravitas or the political

• 6:23Speaker 05

  Cachet that his father might have had after running the country for a few decades, but he's definitely a military leader. And that tells us everything we need to know about the willingness of Iran to accede to whatever it is the Americans demand upon. And by the way, what the Americans have been demanding upon has changed about every 36 hours since this started.

• 6:41Scott Galloway?

  So do you see escalation? Do you think, do you think there's an opportunity for boots or an opportunity, a possibility of boots on the ground or a wider regional war?

• 6:51Speaker 05

  I mean, part of the problem is when you don't know what the goals are, you don't know what to expect. Two of the more recent things that Donald Trump has said is that he wants to be able to handpick the next leader. The other one is that he says he demands an unconditional surrender out of Iran. Both of those are wildly unrealistic options unless you have a million troops in the country and have physically crushed dissent in a way that I would add, we were unable to do in Iraq and Afghanistan or Vietnam or Korea.

• 7:24Speaker 05

  As long as that's our starting point, we have no idea what the ending point is. All we know is that the Iranians will resist because there's nothing it seems that they can do to appease the Trump administration, not to mention that this is their home and they can't just walk away from it. So Trump could wake up tomorrow and say, well, you know what? We won and, and we're done. And maybe, maybe the Iranians were like, yeah, that's totally fine. And now we can get along. Stranger things have happened in the last year, but that is a very specific and very unlikely scenario.

• 7:56Scott Galloway?

  So I've gotten pushback, justifiable pushback on my views on this topic. I want to zoom out and get your take on the administration's decision to strike Iran. Do you see, I always like to ask myself, what could go right? Do you see any potential asymmetric upsides to this, to a potential military action in Iran?

• 8:16Speaker 05

  Iran has been a thorn in the side of the United States for quite some time. And the idea of taking down their military and especially their paramilitary capacity down a few notches, I, you know, obviously there's some attraction there.

• 8:30Speaker 05

  But I'm really getting the look that this this war was not prepared for. First, on the tactical side, we knew they had thousands of shehads. There's no anti-shay head strategy, either for shooting them down or preventing the components to come in from China. Chinese cargo ships are still docking at Iranian ports, bringing in more equipment. That seems to me one of the first things you should have done. Second, the idea that the Strait of Hormuz is vulnerable is something that has been core to American strategic policymaking since the 1960s. And we've seen no strategy whatsoever and no adaptation whatsoever to deal with the

• 9:15Speaker 05

  fact that we have 15% of global oil that's just gone now. On the front end, if you remember back to Trump I, Trump stacked his cabinet with lots and lots and lots of military folks because they followed orders. But they were trained in their jobs. And so when Trump would come up with an idea that maybe wasn't the best, they would try to gently educate him about what would work and what wouldn't work and why. And Trump hated every single one of those conversations. And in the end, fired all of the people he brought in from the military. This time, when he was out of power, he changed the Republican Party to remove the policy arm. So there's no longer recruitment and training.

• 9:58Speaker 05

  There's no longer a cadre of Republican people to come into a new administration and help the president. He just brought in people who would never be smarter than him on any topic in any room. And I don't care how smart you are, you can't be the smartest person in the room on every topic. And then, of course, when he became president the second time, he purged the government of the top 6,000 people and really replaced none of them. So there's not a lot of good information that makes it to the president in the first place to help make decisions. But from what I've been hearing is, you know, the position of the Intelligence and Defense Committee of the last 45 years is that in an air war against Iran, there's zero reason to think we can affect meaningful, long-term change. And even if you're going to do a ground war, you're doing a ground war in a mountainous

• 10:42Speaker 05

  area that has almost 90 million people, and the US Army cannot do that, period.

• 10:51Speaker 05

  It appears that all of that was ignored. And so now we're in a situation where he's making policy by feels. And while you can certainly bomb the crap out of the country with the American military, if you don't have an end goal, don't have a strategy for dealing with the other side's strengths, you're just in a pointless grind. And that seems to be where we are right now.

• 11:16Scott Galloway?

  Do you think there's a likelihood they sort of declare victory and leave, say, we wanted to take out the launchers, we wanted to impair the military infrastructure, their ability to manufacture weapons, we wanted to further, we want to take their capability to enrich uranium back to less than zero, and we wanted to replace leadership. We've won, we're out. Do you think that's a viable strategy?

• 11:40Speaker 05

  That's absolutely one of the ways that this can go because the terms of success are being changed every day. A couple of problems with that, though, that we will then be dealing with for decades to come. Let's start with enrichment. We know that as of eight days ago, there were at least 50 different nuclear sites that we knew about that had been hidden and hardened. And let's assume that we got all of those. We certainly didn't get the ones we don't know about. And if you want to build a plutonium bomb, you don't even need an enrichment program. You just need a nuclear power plant, which they have. So unless and until that is gone, they still have the capacity to extract plutonium and go that route. That's problem number one.

• 12:24Speaker 05

  Problem number two, Iran, as the intelligence community has always warned the American president, whoever happens to be. Iran believed that a nuclear weapon would invite automatic intervention. And so they went with one step back. They wanted a credible nuclear program that didn't have a weapon that, but if you flipped a switch within a matter of weeks to months, you could then have a nuke. That was their attempted deterrent. After the attacks of last June, the debate within Iran was whether or not that was still the good strategy, because obviously they had been attacked. And so there were signs

• 13:06Speaker 05

  that they were moving to shorten the window. Now that the Supreme Leader has been assassinated, and now that there's a wide-ranging air war, obviously, the Iranians think they need to get a nuke now because they're only option. So if you declare victory and go home, they will have a nuclear weapon within a year if they're really slow about it. So we've changed the strategic balance within the country. We're starting to come to the conclusion that the Supreme Leader, who is now dead, was actually kind of, by Iranian standards, a strategic moderate. And we're ushering in a new generation of people who are a lot more hostile to the United States with good and recent reason to be so.

• 13:49Scott Galloway?

  I always like to ask what could go right. Do you think there's a chance the Sun takes a hard line publicly, but reaches out to, you know, offline to American resources and says, all right, you know, we're going to be neutral. We're not going to be anti-West. I'm going to give you an out, and I'm going to be seen as the guy that got the Americans out of here. Because it strikes me that if we continue to do this, and specifically take out their capacity to their oil infrastructure, that he's going to have a difficult time governing over the medium long term after, after the Americans leave, because so many people have their livelihoods connected to Iran's capability to continue to produce and sell

• 14:32Scott Galloway?

  oil. That if, if they leave now, and the majority or a large portion of his oil infrastructure is still, is still intact, and oil stays at, say, 80 or 90 bucks, he's going to have the money to service Neosporin for any criticism of his leadership. Isn't there an incentive right now for him to figure out a way? To be publicly defiant, but privately figure out some sort of resolution?

• 14:58Speaker 05

  That's a lovely thought, but he's only been there for 48 hours and we'll see how good he is at managing the political system. Iran, Iran's a messy place, much messier than Iraq or Afghanistan to rule. About half the country is Persian, the rest are a wide variety of minorities. And the only way the country has kind of held together to this point is to have a million man army to occupy its own population. And so just the mechanics of that are messy. As for oil, right now, well, before this started, they were exporting about a million barrels a day, and that is down from their 1970s peak of over four million barrels a day. So the degree of build out that you would have to have to get to

• 15:38Speaker 05

  a point where they have, as you say, neo spore into spare, that's not going to happen in less than 10 years. That's a long time to be seen as publicly toting up to a government that just bombed you. I don't want to say no, it's the Middle East, strange things happen, but it doesn't strike me as very realistic.

• 15:59Scott Galloway?

  It felt like at the beginning of the war, one of the potential upsides was that there was this sort of informal alliance between the US, Israel, and moderate nations in the Gulf, basically everyone but Iran. Do you think that holds? Or do you think you're going to start to see what felt like potential for a closer relationship with moderate states in the Gulf? Or do you think it's going to get, it's going to fray?

• 16:21Speaker 05

  That is very much in question. We're in a hot war now. There's a lot of ways that can evolve. So at the start, whether you were Kuwait or Saudi or UAE or Qatar or the rest, there was a general belief that they had found a way to get along with Iran. I don't want to suggest that they were friends or allies, but they had figured out kind of a way to grind past one another while the United States and the Israelis were doing their thing. The nature of the weapon system in Iran, we probably should have anticipated this, I certainly did not. They don't have a good chance of damaging Israel. It's too far away. There's too many opportunities for the weapons to be intercepted even before you consider the involvement of the United States.

• 17:05Speaker 05

  And the Shahads are dumb weapons. You give them a GPS coordinate and a really, really good Shahad of which is, they don't have a lot. They fly to that one coordinate and then they have a very short decision tree where they look for silhouette and then they beeline to it. That's one of the reasons why they're not particularly accurate. You can't target a moving ship with that. So the American Navy is functionally immune to the missiles and the drones. In the first 48 hours, every ship the Iranians had got sank, every plane they had got shot down. There's no air force, there's no navy. So if you're Iran, your choices are shooting at Israel, knowing that well over 90% of the weapons are going to get shot down, or shoot at something that maybe you can hit. And so they targeted Kuwait

• 17:49Speaker 05

  and Qatar and Bahrain and Saudi and UAE and even a little bit into Turkey, Azerbaijan and Oman. And in doing that, they've changed the nature of the conflict and the nature of the region. They've probably fired somewhere between 2,000 and 3,000 Shahads at this point. And they have probably exhausted over 80 to 90% of the interceptors that the Gulfis have. One PAC3 missile costs $4 million. One Shahad costs $40,000 to $50,000. The United States can make about 700 PAC3 interceptors in a year. The Iranians can make about 700

• 18:27Speaker 05

  Shahads in a week. So we are literally days away from there being no interceptors. And while you can't hit a moving ship with a Shahad, you can absolutely hit a pumping station or an oil field or a refinery or a loading platform. And so there's a very, very real possibility here in the very short-term future that we just lose the Persian Gulf as a significant source of hydrocarbons from the world. And that's a lot worse than an energy recession. And that will absolutely change the nature of the relationship of

• 19:07Speaker 05

  everyone with Iran and with the Gulfis and with Israel and with the United States. And that might happen this week.

• 19:15Scott Galloway?

  And is that because of choking off the Straits of Hormuz or just production capability?

• 19:22Speaker 05

  At the moment.

• 19:25Speaker 05

  Hormuz is closed, but the oil facilities are physically intact. What I'm suggesting is we might cross the Rubicon on the oil facilities very, very soon because the, the, the strategy that we have to defend against the Shaheds requires ammo that is available in very, very limited supply that cannot be replenished and is very, very expensive. We've basically ignored the lessons of the Ukraine war and Iran's cost benefit ratio here is quite robust when it comes to targeting these things.

• 19:52Scott Galloway?

  It's interesting because I always thought there was asymmetric advantage to us, that I hear these numbers that the number of projectiles they're firing has declined by 83% that they've run out. And what you're saying is we're on the wrong side of this asymmetric warfare, that they can produce these cheap projectiles and we're used to expensive defense systems and we can't keep up with the cheap ones. You think the advantage around projectiles goes to Iran.

• 20:17Speaker 05

  Well, let's break it into two categories here. If you talk missiles, there you need a 50 ton truck that is specially modified in order to take the missile in the first place and get it in position to fire.

• 20:26Scott Galloway?

  Launch capability.

• 20:28Speaker 05

  Exactly. And that's not, that sort of launcher system is not something that you can just whip up in an afternoon. That requires work. A lot of the components have to be imported. And so the United States has for solid reasons, Israel for solid reasons, has gone after the missiles first because per unit they can cause a lot more damage. They're a lot more difficult to intercept because you basically get them on their terminal approach and that's it. And that's what the PAC3s are for. Shaheds, their launch system is a little rail that you can bolt onto the back of a pickup and it takes one welder about four hours to put one of those together. And they have a lot more Shaheds than they have missiles. So on the missile side of the equation, we're actually in reasonably good shape. The Iranians stored a lot of these things underground in places that we knew, so we

• 21:13Speaker 05

  just collapsed the entrance and, you know, don't have to worry about those again. But you can make a Shahed in a garage. It's got components that are styrofoam and plywood. They're really hard, easy to put together. They fly in a straight line. They're fairly easy to intercept with any number of weapon systems, but if you keep firing them a few hundred a day, which is exactly what is continuing to happen, eventually enough are going to get through to make a difference because we will run out of interceptors.

• 21:38Scott Galloway?

  We'll be right back after a quick break.

• 21:51Scott Galloway?

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• 25:10Scott Galloway?

  Iran has been punching below its weight class for a while. I love this stat you just threw out that they used to produce 4 million barrels a day, now it's 1 million. And a more stable Middle East, a neutral, not necessarily a pro-West Iran, but more stable one, vastly more production, lower oil prices, biggest tax cut or increase is pretty much around the price of oil. Essentially a moderate alliance, peace in the Middle East where everyone, you know, I always thought that once October 7th has calmed down, you might see a normalization of relationships between the two biggest economies, Saudi Arabia and Israel. Iran no longer the largest state sponsor of terror. I saw a lot of upside here. It sounds to me like if you were, and you may be, I know you advise corporations on

• 25:53Scott Galloway?

  geopolitical concerns, but if you were advising the US government, it sounds to me like your basic advice would be, end this thing as quickly as possible. Am I putting words in your mouth?

• 26:02Speaker 05

  God, I would love to say that it was that simple. We've crossed the line now. Iran has to change their strategic policy based on the concept that the United States can come for them at any time. That that means more, at a minimum, it means a nuclear program that has a deliverable weapon. We've entered a much riskier part or stage of this. Now, if you compare the tools that they were using before that we really hated, most notably paramilitaries operating throughout the region, that is at a four decade low now because of what the Obama, the Trump and the Biden administration did in cracking down on their oil sales. Without the money, they weren't able to keep flushing these groups with the resources

• 26:46Speaker 05

  that were necessary in order to control them. And so there are now very few places in the Middle East after 10 days of war, where we're seeing this sort of sectarian violence that we used to see during the war on terror because the Iranians just don't have the cash. So the picture is evolving, but by going for the throat, we've encouraged them to reach for different tools.

• 27:06Scott Galloway?

  And I think the key number here is 100, and that is oil spiked to about 112 bucks last night. Now it's around 100. Talk about the second order effects here. You saw, I mean, for example, we saw the Kospi, the essentially the Dow of South Korea off six and a half percent as we're focused on gas going up 50 cents a gallon here. We have markets crashing in Asia. What are the second order effects of $100 triple digit oil?

• 27:32Speaker 05

  Well, let me start by saying that the market reaction yesterday was too much. Basically, we had our first energy assets targeted. The Israelis went after some oil depots around Tehran and everyone thought that meant that oil production infrastructure was gone. That is not what happened and that's why we saw quite a big drop back. But the overall theme that this is a really big deal is a solid point. Right now, the Persian Gulf at normal exports about 20 million barrels a day, which is half of internationally traded oil. Roughly eighty percent of that goes to East Asia with China being the number one country to take it, India number two, Japan number three, Korea number four.

• 28:12Speaker 05

  Uh, based on whose numbers you're using, most countries in the East Asian rim have 200 days of import cover that Indians don't have nearly that much. And there is a debate as to whether or not the Chinese oil reserve exists. Uh, Chinese numbers, we just don't know, but they may have as little as 40 days of import cover. So if this conflict lasts for, let's just take a number, a month, that's enough to probably break the economic models of most of East Asia. And if we have the physical assets that produce the crude takes significant damage, then East Asia is gone and it never comes back with China being the first one to go

• 28:57Speaker 05

  down because they just don't have sufficient alternatives from anywhere else. And that assumes that the Europeans do not continue with their crackdown on the shadow fleet of Russian tankers, which has been accelerating massively over the last two months.

• 29:13Speaker 05

  This is one of the many, many things that I identified 10 years ago when I basically talked about what would end globalization. This is one of them that would do it without any of the help, any help from any of the others. And now we're here.

• 29:24Scott Galloway?

  It feels as if what you're saying in terms of, I mean, it feels like hundred dollar oil is probably good for Russia and very bad for China. Is that an oversubstitution?

• 29:33Speaker 05

  If they can continue to export with what the Europeans are doing with the shadow fleet, they may be about to lose four million barrels a day of exports.

• 29:40Scott Galloway?

  So say more about Europeans getting in the way of the shadow fleet?

• 29:44Speaker 05

  Yeah. So we've gone from nobody wanting to touch it for a very various reasons to now we have every couple of days, another European country taking another tanker. Sweden was the last one to take a ship off the weekend. Belgium took one last week, uh, France the week before. Uh, they're building up the legal and institutional infrastructure to do it by the book from their point of view. And of course, the United States has gone after the Venezuelan flotostation fleet and the Indians have taken a couple of ships from the Iranian shadow fleet. So this is the last year for that unless we have a starkly robust change of policy in the not too distant future and having the Persian Gulf removed from the equation might be what pushes them in that direction.

• 30:26Speaker 05

  But we're kind of in this perfect storm here where the shadow fleet is looking really wobbly. The Persian Gulf for the moment is gone. And one of the things that everyone in the world forgets is under the 2015 omnibus bill during the Obama administration, the US president got the authority to, with the flick of a pen, shut off all oil exports. No review, no congressional approval or consultation required. So we're in a situation here where the world might lose Persian Gulf, Russian and American crude all at the same time. And there would be a show when that happens.

• 31:04Scott Galloway?

  Who are the winners so far here?

• 31:07Speaker 05

  It's too soon to tell. Israel certainly thinks that they are a winner because they've gotten the United States to basically fight their war for them. Russia at the moment, with the shadow fleet still in play, looks good at the moment. Urals crude trading in India is already priced higher than all the international benchmarks because of the demand. And then, of course, the United States, because we have that clause that allows us to remove ourselves from global energy. And anything that wrecks Europe and East Asia at the same time will really hurt us from a consumables point of view, because our manufacturing hasn't been built out. But longer term, this is a society ending event potentially for a lot of countries, but not here.

• 31:49Scott Galloway?

  So it feels as if Iran, justifiably, is sucking all the media oxygen out of the room right now. What are you focused on? What do you think is the most important thing geopolitically occurring outside of Iran right now?

• 31:59Speaker 05

  Outside of Iran, Ukraine is getting a really interesting, very, very short version. Starlink was being allowed to be used to guide Russian cruise missiles and drones long term, about allowing them even hit moving targets. So you take a Shahed, whether it's a Russian Shahed or a Iranian Shahed, and if you put a portable Starlink on it, you can guide it in real time all the way to the last second. And so the restriction is on straight line flight, go away. The idea that you can only target something that you've chosen at the time of launch goes away. And they were literally hitting moving trains with these things.

• 32:43Speaker 05

  After the Ukrainians proved to the world using the equipment recovered that Starlink was basically actively aiding and embedding in mass murder, Starlink changed some of their policies and they you can no longer use Starlinks in the theater in a moving way and you have to be part of a white list. And in doing that, they basically gutted the ability of the Russians to communicate to and from and among the front. And so in the last month, the Ukrainians have been on the offensive throughout many parts of the front and actually captured a lot of territory. It's kind of underlined how these new technologies, number one, aren't under government control, they're under private citizen control. And two, their

• 33:25Speaker 05

  ability to be extended and removed can have massive impacts on strategic decision making. The Russian ability to communicate among their forces pre-war was pretty poor, and that's one of the reasons why the first year of the war went so badly and how the Kirson counteroffensive, for example, was so humiliating for them. They then basically used Starlink wholesale. They've been using Western platforms to communicate. And so now that some of those have been removed, they really don't have a fall that plan that is more sophisticated than radio and radio can be tapped. So I don't want to say we're suggest suggest that we're seeing a collapse of the front. That's way too extreme. There's a lot of minefields.

• 34:07Speaker 05

  It's not that simple. But their ability to manage the front has just dissolved in the last month.

• 34:12Scott Galloway?

  And so are you hopeful that we might see a settlement? It strikes me that the peace plan offered by the Americans was basically a Russian peace plan. And it feels as if we want ideally, we want to see Ukraine in a position of strength when they negotiate what ultimately might be a peace plan. Where do you think, if you were to speculate where we would be in a year in that conflict, what is your, what is your thesis?

• 34:36Speaker 05

  There weren't a lot of people who saw the Ukraine war coming. I was one of them. I was probably the most optimistic for the Ukrainians' chances and even I thought this was all going to be over in a year. Here we are in year five. So any forecast that I make on that is going to be very loosey goosey that I have very low confidence in. The technology is changing, the political alliances are changing. The Starlink thing, who could have even imagined that five years ago? What I will say is that not once in Russian history have the Russians ever negotiated an end to a conflict unless they had already won or already lost. And the idea that this somehow is going to be different is stupid. From the Russian point of view, they have

• 35:20Speaker 05

  to reach the Danube, the Carpathians, the Vistula, and the Baltic. Again, they will not stop until they get there. And any talk of talks is just that. It would simply be an opportunity for the Russians to insist that somebody else give them something that they haven't been able to capture militarily. And then as soon as they're ready, they push again. And anyone who tells you otherwise really doesn't understand the Russians.

• 35:45Scott Galloway?

  It strikes me that the core competence of Russia is, you know, the media is, and I need the land acknowledgement, every, every death of an American serviceman or servicewoman is a tragedy for their families. We've lost seven people and it's got a disproportionate, a lot of warranted media mentions and people outraged. What are the Russians losing? A thousand people a day? Two thousand? I mean, it just strikes me that the Russian capability to endure loss is kind of their core competence. And I'm reminded what Masayoshi Son, the head of SoftBank, said, who would you rather be in a fight against? Someone who's really smart or someone who's really crazy? He said, you want to avoid the fight with the guy who's

• 36:28Scott Galloway?

  crazy. Do you think that it hurts us that, quite frankly, we just don't seem to have a willingness to endure much suffering?

• 36:38Speaker 05

  You know, the United States has not been in a position where its back has been to the wall since the Civil War. So honestly, we've not been tested in a way that a lot of cultures in the world have faced in the last century, century and a half. It's just not something we've ever had to deal with. I mean, the last existential external war that we fought was with Mexico. That wasn't a serene experience for most Americans. You really have to go to like back to the war of 1812 for us facing an external force that really could have had us. So I don't think that's a fair comparison personally. The United States military since before the

• 37:21Speaker 05

  world wars has been designed to project power out. And if you're going to project power out, you will never win on the numbers. You have to win on technology and region, speed and lethality, and being able to choose the time and place of the fight. And if that is what you're doing, you spend a lot more money per person in order to project than you would by just putting a gun in someone's hand and sending them charging the front. And so when we do suffer casualties, it's magnified. That's absolutely true, but that's, that's by design almost. We show up with an aircraft carrier. Everyone else shows up with a donkey. It's a different type of fight.

• 38:02Scott Galloway?

  And thoughts on Europe, which has just been in sort of a, it feels like a self-induced coma for the last 30 years. Impact on Europe?

• 38:11Speaker 05

  If Persian Gulf crude really does go away, they're going to have to make a really hard decision about Russia and Ukraine. If you had asked me five years ago whether or not they would have stood up to the Russians in the way they have, I would have laughed at you because they had taken every opportunity in the previous two decades to give in to the Russians at every opportunity, especially on energy politics. And it's only with Ukraine where they, where they realized this really is about their long-term survival. But if all of a sudden, the only other source of crude on the planet goes away, then a lot of them have some very difficult decisions to make. They're not nearly, nearly as energy intensive as the United States. They probably get the same amount of GDP for half the crude.

• 38:56Speaker 05

  But that doesn't mean that they don't need it, and that doesn't mean that there's a good solution. Green tech in Europe as a rule doesn't work nearly as well as it does in, say, the United States. They don't have the equivalent of the Great Plains or the American Southwest that are good for wind or solar. And so even if they were to somehow magically wave a wand and everyone had an EV, they just wouldn't be able to do much. They don't have the charging capacity, even if the infrastructure was there, the climate doesn't help them there. And so their future is probably coal, specifically lignite, and that will be a bitter pill for them to swallow. But if your choice is your environmental goals or your national security, I know what

• 39:39Speaker 05

  the Germans in the polls will select because they really don't have another option. But we are certainly looking at the end of Europe Inc. as a major manufacturing presence in the world. At the same time, we're looking at the end of China Inc. as a major manufacturing presence in the world. And either of those issues would be globe-spanning catastrophe impacts. And to have them both at the same time, at the same time, we have a global energy crisis. I don't have to put too much of a point on it, but I wrote a book about this. And it's a little frustrating that I haven't retired before it came true. So here we are.

• 40:17Scott Galloway?

  Say the war does not go well. It damages the US reputationally, but China, who is totally import or energy independent or dependent, most Asia energy dependent, Russia bogged down in a war, obviously this is not good for Iran. It continues to be an economic impairment for Europe. It's like the US, which is energy independent, very strong internal consumption economy, no one bombing them. Even if we lose damage reputationally across the globe and a phrase or alliances, aren't we kind of like the US dollar right now? And that is everyone should post the dollar, but where else are they going to go? Even if, even if things go wrong here with this war.

• 41:00Scott Galloway?

  And the whole world is diminished. Aren't we the least diminished of the world's superpowers?

• 41:05Speaker 05

  Two things on that. Number one, from an economic point of view, the only real weakness the United States has is in manufacturing, whether it's the primary processing of raw commodities like, say, cobalt or lithium or whatever else, or cars or jets and everything in between. We're a services economy. We design the systems that everybody else uses, but we have not built out the industrial plant that is necessary for us to fly solo in the world. We started working on some of that under Biden. It collapsed under Trump too because of the tariff policy, because no one knows what the rules are. We've literally had 6,000 tariff changes in the last year. And so businesses have basically stopped building things. They've finished what they've

• 41:47Speaker 05

  started, but no one is starting anything new. And so we're really going to get sucker punched in this specific scenario, which I think is a realistic conversation to have, because we have, we will now have to do all of that while we have a shortage of everything that would have allowed us to build it faster before. As for the dollar, long term, two oceans, globally dominant military, strong population, young population, consumer-based population, the need to double the size of the industrial plant, all of those argue for a strong dollar going forward. But until 11 days ago, we had an erratic policy on regulation, on tax, rule of law was being

• 42:30Speaker 05

  broken down. We were deliberately breaking our trade relations with countries that are integrated into our manufacturing system. All of the short-term issues argued for a weaker dollar. You throw a war and all those minor details really don't matter anymore because we're really looking at it, the bedrock of what allows the rest of the world to function, being broken actively here. And so, yeah, there's only one place to put your money and it's here.

• 43:02Speaker 05

  We'll be right back.

• 43:11Speaker 00

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  I'm not giving up. I am selling the building.

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  Or not.

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• 44:06Scott Galloway?

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• 45:16Scott Galloway?

  So the thing about war is that your enemy gets a voice and there's always an X factor. And it feels like war in the Middle East is X squared factor. There's just, you just don't know what's going to happen, right? Or you know, you know, the unknown is likely to become visible. Have you thought about or thought through any potential black swan events? Whether it's Europe selling our debt and spiking inflation or a nuclear detonation? When you think if, if you're, I imagine you're asked to assess risks for some of your corporate clients. What are the risks that we're not seeing right now?

• 45:47Speaker 05

  I'm not worried about a debt, Darab. Let's say everyone around the world decided to sell their bonds at the same moment. And so they start trading at 20 cents on the dollar, maybe even below. The US Federal Reserve in 30 seconds can expand the money supply and they just retire all of it at 20% of the cost. I mean, honestly, from an economic point of view, that would be lovely. I would love it if everybody did that at the same time. That would be fantastic. So not worried about that. Nukes, two weeks ago, wasn't really worried. Now I see that as a very realistic scenario because if you're Iran and you've got your dead supreme leader and you're being demanded to surrender unconditionally,

• 46:29Speaker 05

  why would you not build and use a nuke?

• 46:35Speaker 05

  Delivery to the United States would be the complication. It suggests it would need to come in on a cargo facility into a port where the screening is on land and not at sea. And that would argue most strongly for Houston or New York City. Those are the logical places to do it. And that has gone from something I really didn't even worry about at all to something that all of a sudden is one of the leading scenarios.

• 46:59Scott Galloway?

  Is there a country that you think plays a leadership role here in being, whether it's Oman or being sort of the Switzerland here that can somehow get cooler minds to prevail? Is there, is there a nation or a hero we need right now that we weren't expecting to hear from?

• 47:16Speaker 05

  There is no country and no leader who Trump respects enough to serve as a mediator. In fact, Trump thinks that he should be the only mediator, period. So I find that unlikely. For the new guy in Iran, he's a very, very violent militaristic individual. He hasn't been in charge long enough for us to know what his geopolitical preferences are. But I find it difficult to believe that as he's building up his institution of the presidency, that his first thought will be to reach out to a third party. And even if he did, I'm not sure who that could be.

• 47:59Speaker 05

  The only country that really has any influence, and it's very, very thin, would be China. And Xi is a little bit like Trump in that he's purged the system around him to such a huge degree that he's not getting good information either. So all that leaves us with is Putin. And we're already seeing some of the differences on the front line in Ukraine because the Iranians were primary weapons suppliers to Russia during the Ukraine war, and that has gone to zero overnight. So assuming that Trump has any awareness of that, it's difficult for me to see Trump accepting Putin as a mediator either. I just don't see who it could be.

• 48:43Speaker 05

  There are plenty of countries that might offer good offices and be not the broker, but just host the talks, but no one who can intervene on either side.

• 48:53Scott Galloway?

  It's funny, the US used to be the operating system trying to securing the supplies of the routes of oil, settle in dollars.

• 49:01Speaker 05

  That was the deal we cut with all the allies during the Cold War. We keep the oil flowing, you're on our side.

• 49:06Scott Galloway?

  And our laws, our IP protection, kind of the operating system and protecting or suppressing or keeping in check rogue nations. And it feels to a certain extent like we are now that rogue nation. Is that fair?

• 49:21Speaker 05

  Rogue nations are ones that violate the existing order. And if there is no existing order, is anyone really a rogue nation?

• 49:33Speaker 05

  I've got lots of beefs, professional, strategic and personal with the Trump administration. I don't make a lot of, I don't put a lot of effort into hiding that. But globalization was always going to fail. The, the global demographic picture was evolving in the direction where there just weren't going to be enough young people to do the consuming that would make trade possible. And the idea that the United States would continue to hold up the ceiling in a post-Cold War world, when there was no agreement as to who the bad guy was, that was always going to fail. And between 2025 and 2035 is always the decade that I have identified my entire professional career about when it was all break. Trump is speeding that process up.

• 50:16Speaker 05

  He's compressing it and that's going to cause a lot of pain in a lot of places in the United States, just for one. But to think it wasn't ever going to happen, I think is deluding ourselves. We were always going to get to some version of where we are now and where we're about to be.

• 50:36Scott Galloway?

  So let's bring this home. When your clients ask you to give them the state of play in the U.S. economically and in terms of the political landscape, what's your answer?

• 50:44Speaker 05

  Yeah, well, I mean, economically, I've been telling them for several years now that if you're dependent on China, you just should assume that that all goes to zero and you get none of it back.

• 50:56Speaker 05

  And I've actually let go a couple of clients recently who just refused because it's a waste of my time at this point.

• 51:03Speaker 05

  The question now is whether or not you can build out manufacturing plant in an environment of extreme regulatory uncertainty in the United States. This is by far the most hostile administration in my life to the business community because of all the constant ambient chaos of changes. But this is what we have to deal with. So you have to find a way to expand your production lines to take in the steps that are not in the Western Hemisphere and you have to do it now. And yes, that's going to be expensive. And yes, capital is more expensive than it was. And yes, labor is more expensive than it was even before you consider the immigration crackdown. But this is just the environment that you have, and there is no going back to the East Asian rim. And maybe by the end of this year, there's no going back to Europe either.

• 51:48Speaker 05

  So you have to deal with what you have, and what you have is here. And that involves Trump for better or for worse. But we're now at the moment where we've run out of prep time, and the day has arrived.

• 52:03Scott Galloway?

  Do you have any predictions for 2026 in terms of the midterms? Or who you think will be the Republican or Democratic nominee in 2028?

• 52:12Speaker 05

  I do not. The Republican Party is gone. The national security conservatives, the fiscal conservatives, the business conservatives, the law and order conservatives have all been ejected from the party. It is simply Trump now. So assuming that Trump is still alive when we get to that point, he will handpick whoever it is. And whoever it is will then have to toe the line with him on everything until such time as the election happens. Because if they don't, he will then change his choice. And he retains a cult-like devotion from MAGA, and he will be able to do that without a problem, no matter what his mental state happens to be. Democrats are simply chaotic.

• 52:55Speaker 05

  They've lost the Hispanics. They've lost organized labor. They've lost the youth vote. So the idea that either of these sides can win ever again is kind of funny. But someone has to lose more. So I have no prediction whatsoever because they're just in a race to the bottom in terms of their capacity to attract anyone. The strength on both sides is their ability to repel voters. And I can't tell you which one is worse right now.

• 53:29Scott Galloway?

  Peter Zion is a geopolitical strategist and founder of Zion on geopolitics. I just, you are really, one of the things I love about America is that you can, we mature such interesting people and give them the opportunity to have influence and make good livings, and you are just. You were built in a factory from parts of lesser people who do that. I'm really just, I'm fascinated with you as our people and very much appreciate your time here, Peter.

• 54:08Scott Galloway?

  This episode was produced by Jennifer Sanchez and Laura Janer. Kami Reek is our social producer. Bianca Rosario Ramirez is our video editor. And Drew Burrows is our technical director. Thank you for listening to the Prop G Pod from Prop G Media.

• 54:29Speaker 10

  This podcast is supported by Anthropic, the public benefit corporation behind Claude. Everyone's got a hard question about AI. Anthropic was built to surface those questions and share what it finds along the way, because there's hope in hard questions. Ask yours at claude.ai/spotify and keep thinking. That's claude.ai/spotify.

• 54:57Speaker 06

  I'm not giving up. I am selling the building.

• 55:02Speaker 07

  The final season of FX is the bear.

• 55:06Speaker 08

  The restaurant is flooded.

• 55:08Speaker 09

  Everything's either gonna be okay. No, stop!

• 55:12Speaker 08

  Or not.

• 55:14Speaker 09

  We are outgunned and we are outmanned. We have each other.

• 55:19Speaker 07

  FX is the bear, the final season. All episodes now streaming on Disney+.

• 55:25Speaker 11

  This episode is brought to you by Snapdragon. Take the leash off your laptop with a processor that gives you long battery life. Work on the go. Jump between back-to-back calls. Stay locked in from morning to midnight. Get maximum performance even when unplugged. Finally, the freedom to move across the room or across the world is here. Snapdragon, that's how. Go to snapdragon.com/laptops. Snapdragon branded products are products of Qualcomm Technologies, Inc. and/or its subsidiaries.