A geopolitical analyst’s message to farmers for 2024: “Hire and borrow, hire and borrow, hire and borrow.”

“We are in the cheapest and most abundant labor environment we are going to see for 22 years, and the cheapest capital we’re going to see for 12,” said Peter Zeihan, author of several books, including “The Accidental Superpower,” “The End of the World is Just the Beginning” and “Disunited Nations.”

“If you’re preparing for any sort of expansion down the road, there is no reason not to frontload that,” he said.

Zeihan has spoken at various industry events in the Pacific Northwest. He spoke by phone to the Capital Press about a broad range of topics — foreign and domestic — on Dec. 13.

“It’s a big world, there’s a lot going down right now,” he said.

Baby Boomers

Half of Baby Boomers, the generation of people born between 1946 and 1964, had moved into retirement in the fourth quarter of 2023.

That puts “extreme stress” on labor and capital markets, because the Boomers liquidated their retirement savings into cash and Treasury bills, “which has made it difficult for really, anyone, who wants to borrow money,” Zeihan said.

“We’re only in the first year of that transition — it’s going to be much rougher” in 2024, Zeihan said. “This is a trend that’s going to last for over a decade.”

In 2024, he expects the market to realize the effects aren’t coming from the Federal Reserve or natural business cycles.

“This is just how things are now,” he said. “That’s going to adjust a lot of expectations.”

Overall trade outlook

2024 is “going to be a little rough.”

“We’re in late globalization — it’s clearly failing, but it hasn’t failed yet,” Zeihan said.

It’s “probably the last good year” for countries that have been “coasting” on globalization, availability of capital, bottomless demand and the price-insensitive demand of China, he said.

“Brazil’s not done — Brazil will be done,” he said. “This is probably the last year where Brazil is a large-scale, serious competitor on all things. After this year, they’re going to have problems with fertilizer, financing and China, and all of these perfect circumstances that have allowed them to become the producer they are now will fail. But that’s not 2024, that’s probably a little bit later.”

Farm bill

Of the two U.S. political parties, the Republican party is farther along in its restructuring, but the outcome remains unclear, Zeihan said.

“Until we get through this political reshuffling, it’s really hard to see any specific bit of legislation in a broader context, because it all gets sucked down into the maw of infighting,” he said.

He points to bills for aid to Ukraine and Israel as examples: “Here are two things that are clearly in America’s best interest. Israel is a democratic ally in a non-democratic area full of enemies, and Ukraine is fighting a war against the Russians so we don’t have to be in a nuclear confrontation with them. These are slam-dunk strategic decisions, but they’ve gotten wrapped up in domestic politics, and the farm bill’s going to be no different.”

Does he foresee a bill by the end of 2024?

“I just don’t know,” Zeihan said. “The Ukraine bill should have been decided in an afternoon of just going through some technicalities, and here we are, almost two months later.”

Presidential election

“Trump will lead the Republicans into the second or third worst showing ever,” Zeihan predicted.

He anticipates a Biden win — “as long as he doesn’t die, which is a non-zero risk.”

He doesn’t foresee the election having much impact on trade.

“Trump is the second-most economically protectionist president we’ve ever had. Biden is No. 1,” he said. “In terms of international economics, the two of them have almost an identical policy. The only difference is tone.”

Peter Zeihan website

https://zeihan.com/