Chris’ note: Most folks are down about the economy right now. And that’s understandable. We’ve just been through record inflation and a brutal bear market.

But what they don’t see is that, right now, two economic trends are colliding. And despite the drumbeat of bad news in the mainstream press, the collision is about to kick off an economic renaissance in America.

So, this week at the Cut, I’ll be focusing on that megatrend. We’re calling it America Reborn.

First, America is re-industrializing. Companies are reshoring manufacturing. This is bringing jobs back home. Meantime, American energy producers are scaling new heights.

We’ll get into it all this week… including how you can profit.

We’ll kick off today with the 30,000-foot view from geopolitical strategist Peter Zeihan. His new book, The End of the World Is Just the Beginning, shows how the globalized world order in place since the end of World War II is shattering… And how some nations will go backward as a result.

But it’s not all bad news. As he discussed in his recent Q&A with colleague Nomi Prins, the U.S. won’t just escape the carnage… it will also boom…

Q&A With Nomi Prins and Peter Zeihan

Nomi: Congratulations on your New York Times bestselling book. It’s called The End of the World Is Just the Beginning.

As the title suggests, you say globalization is ending. Can you break down this important trend for our readers?

Peter: International trade is a relatively new idea. It began in the wake of World War II. And it didn’t happen by magic…

Before the war, trade was something you did within your empire. You didn’t trust other nations to provide you with components, inputs, or raw materials. You made and sourced everything within your borders.

In wartime… even if you weren’t actively involved… you could become collateral damage. You could lose access to your overseas markets. And your imports would dry up.

So empires kept everything in-house. Those empires competed. And those competitions brought us World War I and World War II.

After World War II, the U.S. tried something new. We guaranteed all civilian trade. We used our navy – the only one of sufficient size and reach to patrol the world – to make sure no one else could go after your commerce.

That allowed every nation – no matter their military status – to access any market easily, cheaply, and safely.

Trade went from just a few high-end luxury goods to include raw materials and other essentials. Countries that had struggled to feed themselves could now import grain. And they could pay for it with exports – whether manufactured or mineral.

After 70 years of expansion, we all became specialists. And we got the widely integrated and diversified system we have today.

Nomi: We all live in the globalized world you describe. So it’s hard to see how it’s affected us. What impact has globalization had on us?

Peter: In a world where everything is based on what you make at home, you tend to not be very sophisticated. Most people work in agriculture. These are the economies we had for millennia.

But when you globalize, you create new manufacturing and services jobs. People go to where the value-add jobs are because that’s where the income is. The countryside empties out. Cities erupt.

And that changes our world big time…

On the farm, kids are free labor. In the city, they’re just really expensive habits. Adults aren’t dumb. So, as we move to the cities, we have fewer children.

Play that forward for 75 years, and we’re not just running out of kids – most of the world ran out of them 40 years ago – but we’re also running out of adults.

We’re looking at a systemic breakdown on two fronts…

Demographically, there aren’t enough people to produce and consume goods. And geopolitically, the U.S. is leaving the party. The security that has overridden everything about globalization is now over.

Either of these is a deal killer, and they’re happening at the same time. Right now.

So, whether it’s capitalism or communism or fascism, we don’t even have an economic model to describe what we’re going into… much less a way to manage it.

Nomi: How does this connect with the big economic issues we face today – record inflation, rampant energy crises, and fragile supply chains?

Peter: They’re all closely connected. There’s a huge amount of integration today among all the economic sectors.

Think of manufacturing. It doesn’t work unless the megacities of East Asia can import the food, energy, and raw materials they need. They lack domestic supplies. That requires not just a global energy and agriculture sector… but also a global transport sector.

Everything is tied together. When you start pulling threads out, the whole system starts to break down.

Nomi: Our readers want to know what this means for them. We talked about the global economy… What does all this mean for the U.S. specifically?

Peter: We’re at the leading edge of a massive inflationary boom in the U.S. I say boom because the U.S. must double the size of its industrial plants to make sure we get the stuff we want and need.

This is a good problem. It means high growth and high inflation together. Most people are just obsessed about the inflation part right now. They forget that bringing manufacturing home instead of relying on imports will also bring explosive growth.

But for the rest of the world, you’re talking about losing access to raw materials, agriculture, and transportation. And if the U.S. doubles industrial plants, that means a matching loss of industrial activity somewhere else.

So a few years from now, I see a world in which the U.S. – after some hiccups – has shorter, simpler supply chains closer to home in a captive market with the world’s largest consumption base.

And that’s super positive for the U.S. and all those allies nearby.