Cheap Energy Helping to Avoid Recession? with Doomberg

Cheap Energy Helping to Avoid Recession? with Doomberg

it’ll help avoid those who have access
to Dirt Cheap energy avoided recession I
don’t know that it will help the uks and
the germanies of the world right now but
in the us. for example we’re swimming in
a sea of abundance of Dirt Cheep very
clean burning hydrocarbons and and again
I don’t know why macroeconomists never
take this into consideration when they
make recession calls in the US for
example um it’s been very clear to us
and we made the call early on that this
is not a recipe that bakes a recession
um this is a re especially when you
factor in the um fiscal um spending that
us is observing ahead of the upcoming
election I me think all of Washington DC
is aligned regardless of party to do
whatever they can to keep Donald Trump
out of the White House and if that means
spending recklessly and having future
Generations pay that mortgage that
they’re going to do it and so you have
huge fiscal stimulus you have um
interest payments going out to
relatively wealthy investors which is
itself another form of stimulus and you
have the world
largest most abundant supply of cheap
hydrocarbons that has ever been known
like the US Energy Miracle is is I mean
Miracle is is an understatement and you
know we we we produce 20% of the world’s
oil and 30% of the world’s natural gas
and we have so much of it we don’t know
what to do with it and the thing that
amazes me that macroeconomists are the
first to say that if oil were to spike
we’d see a recession well if if you have
access to the cheapest hydrocarbons in
the world why is that not bullish for
GDP and economic activity and it
certainly is in the US and I I find it
funny that um people can’t see that like
we we we have we’ve added two and a half
Saudi arabas to the US primary energy
Fleet since the shell Revolution that
I’ve been to Saudi Arabia the sidewalks
are paved in Gold like that this is this
is abundance This Is wealth and it’s
going to find and by the way unlike
Saudi Arabia we have a relatively
sophisticated still forward integrated
manufacturing sector to take advantage
of it and so yeah it’s bullish for the
economy to be swimming in sheap
hydrocarbons and if we made peace I
think we would see a u we would see an
economic economic
[Music]
boomlet on this episode about the finest
podcast I have the pleasure of
welcomeing back doomberg who’s regular
guest you’ve probably seen him before
the famous green chicken who uh you know
really amazing insights into everything
happening in energy and in the world in
general so jber thanks so much come back
on the podcast today and Anthony great
to be back I think this might be my
fifth appearance on your show if I have
counted that correctly I always enjoy it
and looking forward to another fantastic
discussion
today yeah it is you’re the uh you’ve
had the most appearances on the show of
anyone so congratulations I don’t know
if that’s a good thing or or not but one
of my one of my most cherished
accomplishments yeah exactly I’ll send
out the trophy later today but no thanks
thanks for coming on appreciate it uh
so yeah we’ve had a really interesting I
guess period over the past few weeks
lots of geopolitical risks uh you know
globally not just lots of people looking
at the Middle East lots of people
looking at Europe but also you know the
America South America you know Venezuela
threatening Guyana so there’s been lots
of risks circling at the moment so I
guess from your perspective what does
this all mean yeah that if we had to
choose one word for the first you know
four months of 2024 it would be
geopolitical um the geop politics is
dominating Market action at least in
certain key markets that we follow very
closely um I do think that we are taking
significant risks in the west with
geopolitics I think the recent rather
bizar dance between Israel and Iran and
the way that is being portrayed in the
various media markets around the world
has been fascinating for us to observe
um sometimes proxies don’t do what you
want them to do and I think the US is
perhaps learning that both in Ukraine
and in the Middle East it is an
extraordinarily dangerous time um we’re
playing with fire and we find the
entire manner in which we arrived at
this situation to be rather baffling it
it’s truly scary I guess is the word to
use um it it’s it’s just incredible to
watch and and the the most interesting
aspect of it is how little
attention the risks we’re taking is
garnering in the West compared to say
Europe and Middle East and sort of four
newspapers that we can get translations
of but here it’s it’s a giant nothing
burger and yet to the rest of the world
it feels like we’re on the brink of
World War I and it it’s just just really
amazing to watch so yeah that that would
be the thing that has occupied most of
our time so far this
year that’s interesting because I see it
from a UK perspective and yes definitely
uh hear a lot about it but so in the US
not not much at all I mean if you if
you’re on cable news where there always
you know breaking news and fiery red
backgrounds but then people have become
deadened to that but in the the the
common day-to-day periodicals it gets
you know some attention but um nowhere
near what we think it should I mean we
just had a series of ballistic Miss
drone strikes between Israel and Iran
while we’re in the middle of a proxy
direct kinetic war with Russia and
pondering whether we we might not want
to get into one with China over Taiwan I
I I don’t it just we are um about to
record our monthly Doom Zoom for April
for our Pro tier subscribers and and the
title is um geopolitics and War
sleepwalking uh into the abyss uh what
are we doing could we at least have a
congressional debate about the matter
about whether we should be declaring war
on nuclear superpowers we’ve we’ve done
everything except the formal declaration
um I can tell you that the other side of
these strikes proceed themselves to be
basically at war with the US it’s
amazing how we got
here how did we get here because you
said it before we sort of sleep walking
into it it um well I mean the piece that
we have not yet recorded but the first
draft of the slides is done I think
there’s
um two main issues one is we
underestimate our geopolitical
f um the US is still of course a global
superpower and perhaps still the
strongest military in the world
but we have a lot of bloat we have a lot
of waste um we’ve outsourced an enormous
amount of our manufacturing sector if it
weren’t for the energy miracle in the
Shale patch the US would be in far worse
position and the current Suite of
leaders in Washington DC basically did
everything they could to try to stop
that um and so I think there’s step one
as we
underestimate our geopolitical foes and
step
two is we overestimate our own
capabilities I think it’s pretty clear
two years in that the war in Ukraine is
not going as planned that picking or
helping Ukraine when they’re so close to
Russia and our supply chains are so far
away and and outsourced as I referenced
earlier was probably not the wisest move
I think um we’re now beginning to learn
that it’s okay to say that we were
almost able to achieve peace in the
early days of the war and it was
scuttled for whatever reason and two
years on the peace that will eventually
Prevail because it has to will be much
worse than that deal that was on the
table two years ago both for Ukraine uh
mostly for Ukraine but also for the West
um and then the third is we sort of
underestimate the consequences of War um
you know we what we did in Afghanistan
and Iraq and Libya and Syria like it
feels far away but to those people it’s
very real and it seems like we’re you
know in this escalatory spiral now again
it looks like Iran and Israel were
embarking in a fair bit of theater this
week but if that theater had gone wrong
I mean you’re taking enormous risk like
missiles are being shot near you know
nuclear research centers from you know
what are we doing like how did we get
here and H how do we like take a beat
and discuss as a country and and as a
series of allies whether this might be
the wisest course of action I it’s very
befuddling I I don’t have an answer to
it and again you know geopolitics and
Military strategies certainly things
were interesting we write about but it’s
not our core expertise but seems
baffling to me that we’re just sleep
walking into the
abys it’s amazing to think that uh a
good scenario is 400 rockets and drones
being far Israel it’s like what thinking
Rel relief rally you know I mean what
what are we doing like can we just take
a second like the UK is no longer the
global Empire that it used to be why are
we still behaving that way why does Lord
Cameron think that um when he requests
audiences with various legitimate powers
that he will be received as a peer like
China is vastly more powerful than the
UK today some would argue that China is
at least as powerful as the us today in
the presentation again which is not yet
published um we have a slide which has a
bit of a cheeky title like China is the
new arsenal of democracy because the
democracies have outsourced much of
their military industrial complex to
China do we think if we get into a war
with the Chinese that they’ll continue
to supplies arms or the key components
of those arms that will then be turned
around and used against them that’s not
how this
works like I it just I must be missing
something that’s what we keep telling
ourselves like what are we missing there
must be some key piece of the puzzle
that we’re missing but I don’t think we
are because the same people who are The
Architects of disastrous energy policies
which are plainly and
predictably guaranteed to fail are the
same people that were the architects of
the sanctions policies which we wrote
about very early on that they would
backfire not just fail but backfire and
they have and it occurred to us a few
months ago but those same architects of
the energy and and sanctions policies
are are writing the the military
strategy and why would we think that
just because we don’t know as much about
that Vector that they would be somehow
more capable over there and frankly our
perusal of the international Affairs in
the past three or four months has has um
has been rather frightening is the word
I would use like we are we are
sleepwalking our way into the abyss it
it’s truly
mindboggling it does seem to have been
it’s sort of like
a I don’t know how you’d say it it’s
it’s almost like oh we’re good you’re
bad you know we have to do whatever we
can to stop you but rather than I feel
like there was a pragmatic approach
previously and let’s be clear like the
empirical evidence of who’s good and who
isn’t is it’s let’s just say it’s
cloudy I mean it’s not like we have the
most pristine track record of leing
behind uh utopian democracies after uh
Wars that we’ve gotten involved in um
you know this is and that is I
think a bit understated I mean I’d be
very curious to hear from you like what
what does the UK press think like like
do do people in the UK know that China
is like vastly more powerful than them I
was very interested to see how gping
treated ol Schultz when he arrived
in in China you know like and we we
acting as though we’re the King of the
Hill and I I think the word of 2024 for
the second half year ought to be a
little humility you know
like I I I don’t know it just I’m not
I’m legitimately anthy I’m at a loss for
words yeah I think from yeah from the UK
perspective but I feel like this is a
global phenomenon where every that
happens everyone blames their own
politicians or everyone will uh you know
they don’t look at things from a Global
Perspective they look at very insular so
say inflation oh prices have gone up
it’s our Pol politicians fault probably
but also it’s this massive Global
complex sphere of things that are
actually influencing it so sometimes I
don’t know if that’s the same in the US
people just look at it from a US
perspective rather than from you know
trying to Interlink all the dots
together yeah that makes
sense yeah so what does this mean for
energy um our s it’s not a laugh matter
but no no I mean I think there’s always
the question of what does mean for
markets and that’s the business we’re in
um I think if you look across the
primary energy complex today you will
see that it is either over supplied or
well
supplied and one of the primary energy
um inputs is trading at substantially
elevated prices correcting for energy
content compared to the others and that
is oil so natural gas and coal are
trading at you know well supplied to
oversupplied type price levels whereas
oil is still trading in the mid 80s um
low 90s for Brent as recently as a
couple of days
ago our view is in the absence of these
two Wars which is what they are there
are two Wars one in the heart bed of a
major um energy ecosystem in the Middle
East and the other uh tangling with one
of the most important energy net
exporters in the world and a nuclear
superpower um if it weren’t for those
two Wars I think oil would be trading
for sub
50 we arrive at that price by inspecting
the landed LG costs in Europe and
multiplying by you know some factor of
like 5.6 basically which corrects for
energy content and at roughly $10 a
million btu landed LG in Europe um
that’s roughly a 55 to $60 oil price um
and since oil is the Le you use you know
so in that range I think there’s a
there’s a a geopolitical risk premium
embedded in the price of oil that
comparing it to the energy corrected
landed cost of LG gives you some insight
into and whether that’s expanding or
Contracting gives you a rough read on
the where the markets are heading and so
like what we saw just you know um
overnight for example um when it looked
like Israel had made a serious
Counterstrike against Iran for
Iran’s largely symbolic strike against
Israel um oil oil spiked right and then
as it became clear that perhaps this
might be the end and we saw oil you know
um Dro several percent from the
overnight
highs and and and so the the jaws of
Arbitrage between natural gas which is
less impacted by what’s going on in the
Middle East at least by the Market’s
current view um those jaws sort of
tighten up a little bit today during the
day as as prices normalized and oil came
back in and some of that risk premium
has been taken out um these types of
sort of market indicators for
geopolitical events are very temporary
by the way I mean I think the market has
decided for example one of the most
interesting observations in the market
is gold is reacting as an as a as a risk
uh riskof um flight to safety whereas
Bitcoin hasn’t been so when gold spikes
into these headlines we’ve seen Bitcoin
collapse into these headlines which is a
fascinating observation for which I
don’t
have much in the way of an explanation
for but it’s just interesting to observe
we we we enjoy observing Market
reactions to these types of headlines
and and for a while they can be pretty
instructive as to how the market is
pricing the risk aspects of certain
geopolitical events so what we’ve
observed is oil higher gold higher
Bitcoin lower but lower um if it looks
like World War II is imminent and when
headlines AC cross the screen that
indicate that World War III perhaps um
has been postponed then we see the
reverse price
action okay that’s interesting so you
mentioned there that uh you you know if
there was no war or it would be what $55
or so looking at the current ETF price
is that I’m assuming if there was no war
then there’d also be a pipeline a lot
more pipeline gas going to Europe as
well so could it potentially even be
lower than what what well yeah I mean we
are in a we are in a relatively over
supplied situation look natural gas in
the premium Basin today is trading for
What minus two bucks I looked at earlier
this week like they’re paying people $2
milon BTU to take away natural gas
because there just so much of it um I’ll
look up the exact numbers as we’re
talking here but um natural gas across
the entirety of North America spot
prices are ranging between you know um
negative prices in waja and maybe a buck
60 Buck 70 um prices in Alberta and
Canada are uh even cheaper um the uh
Alberta Hub is at 98 cents a million PTU
it’s just really incredibly cheap hydroc
look 98 cents per million PTU is $6 a
barrel oil
like that’s like the cheapest most
plentiful source of uh clean burning
hydrocarbon energy the world has ever
seen in the absence of geopolitical risk
all it has no business trading in the
80s um like waha Hub right now spot
price uh at the waha Hub in Texas in a
perum basin is minus
a126 I think it uh minimized out atus
$44 a million btu earlier this week now
of course these are just spot prices
this these are very volatile
um but still as an indicator of of
energy
prices yeah on on the 15th of April um
spot price for uh natural gas in the
permium Basin was minus $354 for moving
BTU if you can believe it um and by the
way natural gas is very valuable we use
it to make fertilizer we use it to heat
homes we use it to produce electricity
many many heavy Industries rely on it
it’s a key input we believe the the um
tsunami of dirt cheap natural gas to be
had in North America is one of the
primary reasons why the US will avoid a
recession ahead of the upcoming election
and we made that call early and I think
it will prove preent um and eventually
as we wrote recently people will begin
to switch their engines and you’ll see
more and more Long Haul trucks being run
on compressed natural gas and more
mining tractors and and dump trucks
being run on compressed natural gas and
mobile power plants inserting themselves
into the various uh sh fields in order
to power the extraction of the energy
using natural gas as opposed to diesel
you know a diesel at $4 a gallon and
natural gas
free it won’t be long before people
switch engines in order to do the same
work for much lower variable cost and so
this will all find its equilibrium at
some point but it is truly a remarkable
time you know we have this contrast so
again to your question you know what
what would oil be if we had peace with
Russia and the land Pipelines flowed
freely and it was announced that
nordstream would be
repaired and uh we had peace in the
Middle East yeah I mean oil would be 30
$25 a barrel and by the way on an
inflation adjusted basis correcting for
like 1983 or 1984 um in government
inflation data that Bloomberg uses for
its uh inflation adjustment factors it’s
$10
oil in a peace world now we’re not in a
peace World we’re in fact we’re in a
world on the cusp of World War II and so
it makes sense that oil is trading where
it is because it would be the the
primary um fuel that would be impacted
although on our radar of things to worry
about is um Qatar you know and and the
natural gas the raslen industrial site
in Qatar is responsible for a huge
amount of lngg export capacity and um if
if if somebody were to fire some
missiles into that site things could get
pretty hairy for natural as well at
least on the LG export
markets yeah it’s because it’s quite
interesting because I’ve been hearing
that it’s actually quite a tight Market
I guess globally maybe uh so say if
there were any issues then potentially
uh globally there might be a bit of a
bit of a gap in in Supply is that
correct tight market for what gas or oil
uh LG and the and I guess that’s more in
the near term we have we have a glut of
LG now um that’s why ttf is nine bucks a
million BPU down from a 100 intraday
high of during the apex of the crisis
and more to come um but the interesting
phenomenon of course is geopolitics is
driving the glut of natural gas in the
US because much natural gas in the US is
produced as a byproduct of oil in the
peran Basin and that’s where the prices
have gone negative because they’re
swamping pipeline off capacity but they
they they are motivated to keep
producing oil because oil is in the $80
a barrel type price range
um ironically the cure for low natural
gas prices in the US is a lower Global
oil price which would then cause these
co-producers these producers of
associated gas and other light
hydrocarbons to dial back to drilling
because the profitability of doing so
will be diminished so this unique
geopolitical um risk premium embedded in
the international oil prices is deeply
bearish for North American natural gas
both in Canada and in the US and and as
we’ve written one of the biggest
beneficiaries of all of this is Mexico
who has ample land pipelines into the
peran and is quickly building out uh
manufacturing and uh electricity
producing capacity to absorb as much of
this free basically free dirt cheap
hydrocarbons they can get their hands
on yeah and Canada is not looking to
take advantage of what they have so then
that’s uh provides more opportunities
for yeah true a business case for LG
exports at these prices
so yeah hey everyone sorry for
interrupting I just wanted to extend a
massive thank you uh to you for for
listening and tuning in and and for your
support over these three years so we’ve
had uh you know hundreds of uh guests
that we’ve welcomed on the podcast we’ve
uh had millions of views with uh
hundreds of thousands of different
people listening in so uh I just wanted
to thank you you know I started this as
a student uh I’m now currently working
uh and
I’ve always done this on the side just
because I have a passion for it and I’ve
enjoyed it and probably similar to
yourself you listen to all these uh you
know different YouTube channels and
podcasts with people uh listening to
different guests that that’s how I
started and I uh just wanted to S of
take the plunge and be able to have the
opportunity to speak to these people and
you’ve made that happen so thank you
very much uh just myself don’t make any
money from this and it’s really a
passion project so thanks for uh
supporting that that passion of mine uh
if you wanted to support the channel uh
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really appreciate that um but otherwise
thanks so much if you can believe it
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subscribe to the podcast so uh yeah if
you can great if not no problem at all
thanks for listening and yep let’s get
back to the show interesting to see okay
uh and uh so quite yeah not very tight
at the moment and then I guess lots of
Supply coming on as well as you said in
Qatar and other you know Canada and
other places actually in in the next few
years so do you think prices go lower
for uh LG specifically well I think they
will eventually equilibrate um in the
long run coal oil and natural gas will
trade for roughly the same price
corrected for energy and
Logistics um and so there’s a band of
logistics that’s wider for natural gas
than it is for oil than oil is for coal
Coal is the easiest thing to ship around
it’s a solid put it on a very
rudimentary boat and off you go liquids
a little more challenging then gas very
challenging so there will be a wider
spread for natural gas and than than oil
and coal but in the long run things that
do the same thing can’t sell for
different prices
indefinitely and um we will change the
engines because all of these things are
burned to produce heat to do
work and those who are the recipients of
the work are relatively agnostic to the
fuel source and so um there’s money to
be made and facilitating the closure of
of that Arbitrage which is something
that we’ve been profiling in a couple of
our pieces um and it’s good to have that
kind of like a clear-cut Jaws of
Arbitrage to um to to be the Tailwinds
into your sales if you’re going to make
a private business decision for example
so any company um that is um
providing end users the opportunity to
burn natural gas to do the same work
that they’re currently burning diesel to
do is going to make a lot of money with
this spread until the spread closes but
in the end what will happen when it’s
all done is we will have a far more
efficient and
flexible uh market for these primary
fossil fuels and so the equilibrium what
must eventually happen band of prices is
very clear the key questions are you
know which way do the Jaws close and how
long will it take and what are the cost
of facilitating that closure and then
that’s you know the the economy can be
modeled as a giant um you know deflation
machine it eventually
takes expensive things and makes them
cheaper and and makes you know takes
cheaper things and makes them more
expensive especially if they can both do
the same
work yeah and it seems like these prices
sort of China and India starting to come
into the market a little bit more so
that could be you know as you said it’s
competing with with coal currently for
uh or or getting to that level at least
for uh from a value perspective yeah and
even hydrocarbon you know the rain
levels in suan Impact coal prices in in
Appalachia right that the the market for
primary energy is um relatively
interconnected and highly inelastic and
so shortages or gluts in one of the
primary energies eventually finds their
way into the others and by the way
during times of glut the jaws of
Arbitrage tend to close down and during
times of shortages the jaws of Arbitrage
tend to close up and right now there’s
an Arbitrage gaping wide Arbitrage
between the price of oil and the price
of landed LNG and we believe that has to
close down so we would be cautious oil
of course one geopolitical catastrophe
away from a 30 40 50 hundred spike in
the price of oil so I mean it’s not like
you should go and sell calls against the
price of oil or some kind of a witer am
trade like that but broadly speaking all
things being equal correcting for
geopolitical Black Swan events um when
you have a glot of energy which we kind
of do um today both coal and natural gas
in particular very well supplied um
price anomalies tend to close in the
downward
Direction it’s actually my next question
where where does this all go if we see a
sort of World War II and I guess you
know you could see even say a bation of
the global economy between East and West
yeah well I would view World War II as
sort of a economic Singularity through
which you cannot see or predict what
comes on the other side of it you know
in a regular Singularity if if that
isn’t an oxy ironic phrase um the laws
of physics break down at that point
source in the middle and it really does
you know good to try to model what
happens on the other end of it and I
would say if we truly have a tactical
exchange of nuclear weapons between the
US and Russia or Russia uh the US and
China or Iran and Israel all bets are
off nobody who well first of all you
shouldn’t really care what happens to
the economy in that circumstance but
anybody who thinks they know how that
chaotic series of you know TI fortad uh
exchanges would ultimately end is is is
deluding themselves um our strong
preference is we we don’t run that
experiment okay that that makes sense
but uh it seems like what we’ve talked
about especially if uh crude continues
to come down as geopolitical risks are
sort of soften uh good for the economy
it means there’s going to be low
energy prices moving forward so is is
that going to help I guess the world
avoiding the recession well it’ll help
avoid those who have access to Dirt
Cheap energy avoid a recession I don’t
know that it will help the uks and the
germanies of the world right now U but
in the US for example we’re swimming in
a sea of abundance of Dirt Cheep very
clean burning hydrocarbons and and again
I don’t know why macroeconomists never
take this into consideration when they
make recession calls in the US for
example um it’s been very clear to us
and we made the call early on that um
this is not a recipe that bakes a
recession um this is a re especially
when you factor in
the um fiscal um spending that us is
observing ahead of the upcoming election
I mean think all of Washington DC is
aligned regardless of party to do
whatever they can to keep Donald Trump
out of the White House and if that means
spending recklessly and having future
Generations pay that mortgage that
they’re going to do it and so you have
huge fiscal stimulus you have um
interest payments going out to
relatively wealthy investors which is
itself another form of stimulus and you
have the world’s largest most abundant
supply of cheap hydrocarbons that has
ever been known like the US Energy
Miracle is is I mean Miracle is an
understat and you know we we we produce
20% of the world’s oil and 30% of the
world’s natural gas and we have so much
of it we don’t know what to do with it
and the thing that amazes me that
macroeconomists are the first to say
that if oil were to spike we’d see a
recession well if if you have access to
the cheapest hydrocarbons in the world
why is that not bullish for GDP and
economic activity and it certainly is in
the US and I I find it funny that um
people can’t see that like we we we have
we’ve added two and a half Saudi arabas
to the US primary energy Fleet since the
sh Revolution that I’ve been to Saudi
Arabia the sidewalks are paved in Gold
like that this is this is abundance This
Is wealth and it’s going to find and by
the way unlike Saudi Arabia we have a
relatively sophisticated still Ford
integrated manufacturing sector ready to
take advantage of it and so yeah it’s
bullish for the economy to be swimming
in cheap hydrocarbons and if we made
peace I think we would see a um we would
see an econom economic
boomlet yeah and despite the uh chess
fashing in in uh Washington they’re pump
pumping all the pumping the oil pumping
the gas and not slowing down there yeah
we still got 90 nuclear reactors or
whatever it is um and Lord knows we’ve
installed far too much renewable energy
for our liking but it’s there and it’s
installed and it’s it’s you know that
the capital has been expended um and uh
we’re seeing I think you know a pretty
resilient economy over here much to the
surprise of some people who were
anticipating a
recession yeah so there’s been a lot of
talk recently about the impact that uh
AI clouds uh Computing and blockchain
will have on sort of electricity needs
moving forward into the future do you
see that as a a potential risk it’s
going to be very high demand or do you
think it’s there’s
plenty I think um having had a fair bit
of firsthand experience with AI tools as
we’ve explored them because we view them
as inevitable they’re extremely
powerful um really
revolutionary um Ain to the first time
we used internet explorers you know back
in the day or played with an iPhone so I
don’t think it’s hyperbole to say that
this is a transformative technological
Revolution that we’re observing and
participating in and it will require an
enormous amount of power and we have
written um several months ago that we
believe that the need to power data
centers would be the thing that enables
nuclear power to facilitate its
Renaissance and I think we’re beginning
to see that play out now you know AI is
certainly a bubble there’s all manner
of
undeserving but wildly valued companies
that have latched on to the AI Mania and
this is what we see all the time the big
question for investors is you know when
the inevitable popping of this temporary
bubble occurs um who are the winners
that are still there and selling for
depressed prices that you’d want to buy
and hold for the next 20 years right
like almost cliche of course but Amazon
and and Microsoft back in the day after
the do com bubble I mean there’s going
to be winners and mostly losers and and
a lot of people will lose a lot of money
um but the underlying impact on energy I
think is pronounced in real and
represents a real challenge to uh the
whole concept for example of a public
grid I think we’re going to see a boom
in private grids where you you build
your local SMR dedicated
to the the suite of of data centers
you’ll build in a small area um I think
we’re going to see a very modular grits
you know gridlets pop up all across the
US um as the technology companies simply
won’t be denied in their quest to
continue climbing up that celian
singularity curve of exponential growth
computing
power yeah really interesting and you
could see it happening a lot around the
peran uh where there’s extremely
ridiculously cheap
energy and we’re seeing data centers pop
up next to nuclear power plants and
Deals being cut in that regard it was
very fascinating to see Amazon’s entry
into the space which is kind of a bell
weather company um so yeah I think this
is the future um a bit of a distributed
um series of grids customized for the
bespoke needs of data center developers
because if we just keep tacking on these
data centers to the existing grid we’re
going to crash we’re going to crash it
we we don’t know how to build large
infrastructure projects
anymore yeah we require trillions of
dollars of upgrades to the and and
endless environmental lawsuits that are
intolerable to the there’s going to be a
civil war on with sort of the
progressive environmental left you know
big Tech is kind of viewed as Lefty and
um and then the environmentalists and
the big Tech will win because they’re
more powerful um and I do believe one
helpful way to model the human endeavor
is to assume that we will arrange our
economy or rearrange our economy in
order to stay on that cellan exponential
growth in computing power chart that is
so famous from his book The Singularity
is near and having that as a mental
model has proved very useful for the
past 25 years and I don’t know why it
won’t continue to be for the next 10
yeah great Insight so dunberg thanks so
much for your time today really
appreciate it um last question is what
is one message you want people to take
away from our conversation uh boy what a
message from our conversation it’d be um
it would be helpful if we um perhaps
indulged in a bit of humility over here
in the west um and and pondered whether
our posture is commensurate with our
power um as the rest of the world climbs
maslov’s high gear of needs and wishes
to um exploit the the the undeniable
human endeavor of of increasing
standards of living and so on and
there’s plenty of room on the planet for
everybody and and I think we’re we’re
living in an old sort of
colonialism new superpowers uh of the
world as peers and not necessarily
geopolitical
enemies yeah great it’s not a win or
take all world there’s a iron can win it
doesn’t need to
be but uh it seems like we’re headed
that
way yeah definitely yeah Z back thanks
again so if anyone wanted to find out
more about your work we see uh doomberg
tocom there is that the best place to
find yeah we were talking before we hit
record that we’ve um ejected a squatter
from doomberg dcom and now we’re the
proud owners of that domain it’s still
the doomberg substack but now we have
our own Don name name for for people to
find us more easily and so if you head
over to doomberg dcom you can see
everything that we do our newsletter our
podcast appearances like this one be up
there um our doomberg Pro tier which is
a fun additional product that we offer
and we got a few other products in the
works um stay tuned but um we’re we’re
doing a few things with the doomberg
brand and um it’s really truly fun and
and and really appreciate the
opportunity to be here with you Anthony
and looking forward to making it a half
dozen yeah definitely hopefully we’re
we’re still here in six months with year
political stuff but uh well yeah I I
really enjoy everything that you do so
uh thank thanks for keeping it coming
and yeah I’m I’m looking forward to see
what you guys do in the future so thanks
again thanks thanks Anthony great to be
with you again hey everyone thank you
for listening I really appreciate the
support uh if you got value out of this
really appreciate if you could like
subscribe or or comment you know good or
bad feedback I’m always open to that but
it really helps with the channel uh as I
said before only about 14% of people
actually subscribe to this channel so if
you were to that it would really help it
could mean we could continue to grow um
if not thanks for watching and see you
on next show and you also might like uh
this video right here all right thanks
again

Interview recorded – 19th of April, 2024

On this episode of the WTFinance podcast I had the pleasure to welcome back Doomberg.

During our conversation we spoke about the current geopolitical situation, why this is highly inflating oil prices, how oil would be $50 without war, in-depth analysis of the gas markets, the US energy miracle and more. I hope you enjoy!

0:00 – Introduction
2:57 – What does the current geopolitical factors mean?
6:04 – How have we gotten into the geopolitical mess?
8:37 – Missiles and drones are a positive outcome?
10:37 – Who are the good guys?
12:17 – What does this mean for energy?
15:54 – Could oil be lower than $55 with no oil?
20:02 – Is there a tight gas market?
23:21 – Will prices for gas go lower?
27:30 – What happens during a bifurcation of the global economy?
28:04 – Low energy help prevent recession?
31:14 – What impact will data centres have on electricity?
34:59 – One message to takeaway from our conversation?

The group started writing Doomberg in May of 2021 to highlight the fundamentals missing from many economic and policy decisions, and it quickly grew to be one of the most widely read finance newsletters on Substack.

This publication is their passion, and the content is borne out of the team’s deep experience in heavy industry, private equity, and the hard sciences. Family offices and c-suite executives hired them to deliver innovative thinking and clarity to complex problems – they operate as though their subscribers share those same expectations.

Read their full bio here – https://doomberg.substack.com/about

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WTFinance

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