Doomberg is the pseudonym of the team that runs the top-earning finance publication on Substack. In the famed green chicken’s second appearance on the podcast (the first was May 27, 2022) Doomberg talks about the “bipolarity” of the Biden administration on energy, the “two Chinas,” the formula the team uses for each Substack post, how they built the Doomberg brand, and why they are concerned about the growing political polarization in America.
Robert Bryce 0:04
Hi, everyone, welcome to the power hungry Podcast. I’m Robert Bryce. On this podcast we talk about energy, power, innovation and politics. And today I’m pleased to welcome back for his second appearance on the power hungry podcast, the famed Green Chicken. Doom Berg, welcome back.
Robert, great to be here. loved my first appearance, loving your work watching you grow. Congratulations on the launch of your substack everybody listening should go over and sign up. It’s fantastic stuff. Love your work. And when you reached out to come back on, it wasn’t a complete no brainer. Looking forward to a great discussion.
Robert Bryce 0:35
Well, thanks, there is much to discuss. And I’ve been reading over the transcript of our first talk now, which was May 27 of last year, a lot has happened since then we’ve seen the European energy market go nuts, you know, TTF, selling for $100 per MMBtu at the Dutch trading hub. Now it’s back under $20, fertilizer prices, fertilizer shutdowns in Europe. Now those seems like that fertilizer market has kind of recovered, coal prices went over 400 They come back down. There’s a lot going on what the bring us up to speed. Now. I mean, in terms of kind of the the gyrations that we’ve seen over the last few months and how do you make sense of this? Is this the quiet before another storm? How do you see what’s going on.
So a couple of things, you’ve characterized the situation correctly as usual. The primary thing that happened was Germany in particular, but Western Europe in general, went into the winter, seeking to acquire every BQ of energy they could, regardless of price, and importantly, regardless of carbon footprint. For a good while their coal was actually selling on a b2c basis for a higher price than oil, which is sort of a totally unheard of first time in history event, which told you that there was a mad scramble for primary BTUs and coal when primary BTUs are the main product. Coal has some advantages. It’s a solid, you could store it in a big pile next to a power plant. And then two other things happened. Jeremy did a miraculous job of bringing back on 16 gigawatts of coal power, far more than the market anticipated was possible. And most importantly, it has been an incredibly unseasonably warm winter in Germany. And thank God it has been, you know, contrary to what some trolls on Twitter might suspect we weren’t sitting here cheering for catastrophically cold weather and validation of our concerns about the European energy policy in the form of a true crisis for the population of Europe. I think the fact that they dodged this bullets. I hope that they don’t learn all the wrong lessons from it. Although it seems like they, they are primed to do so. But by large, Germany did a great job of bringing coal back on at one point. Last week, when we last wrote about this subject, some 45% of electricity was coming from the burning of coal. Germany has one of the proudest grids in Western Europe, despite having one of the largest penetrations of solar and wind which as you know, and have documented and others have observed, this is pretty common, you know, and, and so they made a mad dash back to the coal mines, we set it a piece that we wrote recently, the speed and efficiency with which Germany retreated to the coal mines, was on par with the British evacuation from Dunkirk, and
Robert Bryce 3:25
incredibly rapid construction of the LNG receiving terminal as well that which was done in what 120 days or something. It was incredible how quickly they built that LNG plant or LNG receiving terminal as well.
Yeah, what they did was they built the pipelines needed to receive it, it was a floating terminal that was already, you know, construction. But to be clear, when push came to shove, the red tape was cut aside. And they made a mad scramble back to natural gas, coal. And thank God they kept their nuclear power plants on because during the doldrums of Germany, nuclear was producing more energy than wind and solar combined. It we said in a piece, you know, if Greta had gotten her way, the piece was, I believe, was called Mission Impossible. If Greta had gotten her way, and they shut down all of their coal plants, where would Germany be today? If they hadn’t, if they hadn’t reopened them. And so, you know, and on top of all of that, Robert, they spent a half a trillion dollars doing it. And so that half a trillion dollars could have bought them a lifetime supply of nuclear power plants for a whole generation. And instead, they, they wasted it really on one year’s worth of oil, coal and natural gas, they raised the price of coal for everyone else in the world, they raised the price of LNG for everyone else in the world. Pakistan is in the midst of a historic energy blackout right now because they were unable to acquire the incremental cargoes of LNG as we all predicted, so that they managed to get as much coal back online as they did, and that the winter has been incredibly warm, are not validations of the soundness of German energy policy or Evidence of our sort of alarmism in pointing out that this was a catastrophe that could happen. I think, in fact, a pretty strong evidence that if you screw up your energy policy, you have a huge price to pay, both financially and geopolitically. And ultimately, you know, for the for the less fortunate few in the world who couldn’t compete for the market clearing price of all the BTUs that the Germans and the Western Europeans had to acquire ahead of this winter.
Robert Bryce 5:26
It’s just gonna be this what is it? Malthusian ism in the market? Right, we’re not Malthusian ism, I’m sorry, Machiavelli and energy policy, you know, that we’re, we’re gonna outbid you screw you. And that’s effectively what they’ve done relative to Bangladesh and Pakistan. Is that is that my paraphrasing what you’re saying?
They sacrifice their industrial strength as well. You know, it’s very hard to compete when you’re paying the highest price possible for the incremental PTU that feeds your manufacturing sector. And so Germany, which, before the energy crisis evolved, and then the war in Ukraine exacerbated it, Germany was known as a high value add manufacturing economy that leveraged cheap natural gas and domestic coal. And they returned back to coal I mean, so with with natural gas, less of an option via pipeline, they brought it in via LNG, and they bought as much coal as they could, they kept their three nuclear power plants running, we’ll see they have another decision to make here in April, they’d be awfully foolish to shut those off. But I suspect that the German greens will view the lack of a catastrophe as proof of the soundness of their policy, and they will make a renewed push to shut those power plants down. And if they do, it’d be hard to feel sorry for him next winter. If things don’t, don’t turn out to be quite so warm.
Robert Bryce 6:45
Well, let’s talk about next winter, because that has been in the background here, as you’ve been you pointed out the warm winter and these other things that have helped maybe delay the crisis in Europe, but let’s look to, you know, 11 1011 months from now, what is it? Where is Europe simply going to have to be locked into the global LNG market and therefore be paying substantially higher prices than they were for a Russian pipeline? Gas? What what happens next year?
By I think the first of all, a lot of it depends on how and whether there’s a resolution to the conflict in Ukraine. And we’re beginning to see some overtures, of course, immediately denied by the Biden administration, that there might be some calls for peace, we would certainly be pro peace, I’m old enough to remember when being anti war and pro peace was considered liberal. Not all right wing as it is now. And even today, even though natural gas has sort of fallen off a cliff, natural gas in Europe, the Dutch GTF contract is 1850 $19 per million Btus. Interestingly, the ratio of natural gas in Europe to the US has remained stubbornly flat in this sort of six to 9x. So literally, even though it’s come down in Europe, they’re still paying six to nine times what domestic manufacturers in the Gulf Coast of the US or in Alberta are paying for natural gas, which gives them a huge competitive advantage. So you’re saying that’s the that’s the delta between Henry Hub and TTF? Price? The ratio actually? Yeah, yeah, the ratio between them? Yeah, okay. 18 and a half divided by two and change is still six to seven. Right. Right. So and that at the peak of the crisis, you know, it was a little higher than that. You mentioned that TTF touched intraday 100. And I think we were probably around 10. Here on the domestic front, back then, which was a crisis for Biden, by the way, I mean, going from historically two and a half, pre crisis to 10 is going to result in a lot of annoyed voters just ahead of the midterms. And so he did everything he could correctly to make sure that we had domestic supply ahead of this winter, we have plenty we ourselves have had a very unseasonally warm winter, I posted on Twitter that New York, the daily highs in New York routinely pierced the 90th percentile in the month of January and the daily lows are hovering around the average daily highs, historically, this great website that we that we quote this data from, and look, New England is going through a real cold snap this weekend, we’re hearing rumblings already have a few rolling power outages, which we probably won’t see too much in the way of news reporting unless it gets very serious. We hope it doesn’t again, we’re not here cheering for calamity. But I saw New England is basically running the German experiment running the California experiment, Except unlike California, they actually have a winter. And so we’ll see how much oil they’ll be burning this weekend to barely keep the lights on once again. And they’ve been busily shutting down nuclear power plants and postponing or abrupt doing or shutting down natural gas pipelines, all the same shenanigans that we see in Germany. It is amazing, Robert, I wonder how how many more data points will these people need to see before they reconsider the basis of their sort of policy? It’s really crazy. It
Robert Bryce 10:01
is ISO New England is remarkable that it will and part of it they can blame, I suppose part of it on new on New York be by New York’s efforts to block gas pipelines that would take Marcellus gas further north and into New England. But it is amazing. And it’s harkens back to the 70s, where the grid was so dependent on on burning oil, fuel oil and for the power production. That’s what I saw New England is doing that’s how they’re keeping their grid afloat is through liquid hydrocarbons and using those in their generation plants. And it’s, I don’t know, it’s this is supposedly one of the most liberal area it is one of the most liberal voting blocks and all of the US, right, heavily Democratic region, and yeah, and all about climate change and reducing emissions and renewables and the rest of it and yet look at their grid. It’s a total mess, continually teetering on the precipice of blackouts, and they’re burning oil which is produces what not quite twice as much or about a third more co2 emissions than natural gas it doesn’t another it makes any sense.
Wow, there’s far better uses for oil to to burn it to produce electricity. Natural gas is far superior fuel, or burning to produce electricity, nuclear power, as I’m sure you know. And look to Iceland, oh, England, the organization’s credit, they have been ringing this bell for a long time, this is not their fault, right? They are the they can only react to what the politicians give them. This is not an isolate New England crisis. This is a New England political crisis, a crisis of ignorance, actually, a crisis of anti science. And you know, every time one of these calls never happens, and nothing big, you know, transpires, they just keep rolling the dice. And so, eventually, unfortunately, there will have to be some amount of pain felt by some amount of people a certain critical mass before a reconsideration of the policies as mandated by the voters. Now to Joe Biden’s credit, you know, he didn’t want high natural gas prices in the US and he didn’t want high gasoline prices in the US and he did everything he could in 2022 to bring those prices down, contrary to the wishes of the environmentalists, because you know, low prices Stokes demand demand means more co2 emissions, yada yada yada. Biden understood politically that $5 gasoline and $10 per million Btus natural gas was going to mean a wipe out in the midterms. million barrels a day from the SPR was released. The Freeport explosion of the LNG export terminal was kind of slow rolled back into production, wink wink, everybody smiles. We trap a lot of gas domestically, US natural gas back now to box or oil, you know, $3.50 cent gasoline across the country is tolerable. He knew he’s an old school politician. He knows where the threats really are. But the environmentalist probably can’t be too happy with him.
Robert Bryce 12:45
Although they still seem to be firmly in control of energy policy in this administration, and you have that great line. But in the battle between physics and platitudes, physics remain remains undefeated, which has kind of become one of your trademark lines. Here is one of the questions I’ve written down. I was going to ask it later. But you what is it that there’s this disconnect, it seems to me fundamentally in between the parties and the Wall Street Journal had a very good piece about this. It was Gerald. Gerald Baker, I think Gerard had a piece in the journal I think was a week ago and talking about how the Republican Party has become the party of the working class that among white, non college educated males, they’re overwhelmingly voted for Republicans and the Democrats and the Republicans. The Democrats have fashioned themselves for years as being the party of the working class. And yet, then when it comes to energy that seems to be completely lost. Is that your read? How do you see the political divide on that?
Yeah, so I think Joe Biden has tried to have a foot in both camps. Again, when you’re 40 years in DC, you know, you become skilled at survival, rather than anything else. And he plays footsie with the environmentalists. And he certainly gives them all kinds of candy in the environment, you know, the inflation Reduction Act and so on. But there’s some things in the inflation Reduction Act also for carbon capture and sequestration at natural gas plants, a piece we wrote about the rice families endeavors with this, that power, you know, right that had carbon capture is in a natural gas power plant and if their technology works, and I hope it does, and I wish the rice family well, they’ve got a great track record of creating value for their shareholders. They were kind enough to make the CEO of the new company available for an interview for us, which was great for an alternative media site like ours. That always means a lot. Biden cut deals with mansion, mansion, whatever you think of uh, you know, the Biden understands that he will not succeed politically with gas at the pump above $5 a gallon and natural gas above 10 and did what he had to do. At the same time with been watching the solar situation workout, as we’ve written about a lot which is, you know, they’re against slave labor, which we all should be at the same time they’re pro solar installations and yet we may Nothing here because we seated the entire manufacturing sector to China. And we have all of these solar panels piling up at customs because we’re enforcing our anti slave labor laws. At the same time that reducing demand for solar via all of the incentives and the inflation Reduction Act. You know, we wrote a piece many months ago called Silver zugzwang. Something has to give like you can’t, you can’t both be opposed to slave labor. Understand that China controls 98%, of polysilicon, ignorant and wavering, and then still expect to stoke significant demand for solar domestically in the US without having a local domestic supply kit manufacturing capability. And so there’s a lot of bipolarity in the, in the Democratic White House, the administration. And that’s driven by Biden’s visceral understanding of how retail politics works, which has been finely tuned over 40 years, at the same time with his need to placate the sort of extremists in his progressive environmental base. And that’s how you get sort of these mixed signals. Look, if you’re an environmentalist, what justification Can you ascribe to Biden releasing 1 million barrels a day of oil from the Strategic Petroleum Reserve? Right, thereby reducing the cost of oil. And by definition, economics 101, increasing demand, the decision to release a million barrels a day of oil from the Strategic Petroleum Reserve was probably at the margins accountable for more incremental co2 emissions than any other policy the administration put into place last year.
Robert Bryce 16:32
Well, and they had the the double impact of really effectively screwing domestic producers, right, because that takes a million barrels of demand away from their potential market. Right. So maybe that is the delta. Maybe that is
saying producers are producing record profits? Because if he hadn’t done that oil would have been 150. Yeah,
Robert Bryce 16:52
no. And that’s the remarkable thing I’ve talked to, you know, few people in the oil patch, and they said, We’re making more money than we ever have this. Which is really, I don’t know if irony is the right word. But it’s one of the facts in play here that they are doing. They’re doing remarkably well. Well, let’s
be clear to to the OPEC producing nations and the domestic big oil producers $80 to $90, Brent $80, and $90. WTI is right down the middle in the sweet spot for them. Yeah, it’s high enough that they can print cash, but not so I’ve seen that you have a political revolt. They don’t want $150 oil, right? They don’t want $300 oil, they might benefit from it in the short term. But these companies, as you know, tend to take longer term time horizons, it’s a capital intensive industry, you have to, you know, the the conservative nature of the long term pricing forecasts when they make these billion dollar decisions and the net present value calculations they have to make. They’re not modeling in $80 a barrel right now. They’re modeling 4550 $60 a barrel, downside risk, right? And so if they could, if you could price out $80 A barrel for the next three years, there’s not an oil producer in the world that wouldn’t walk over tax to take that deal. Sure. So in a way, Biden has sort of stabilized the price at $80, a barrel, which has been a boon for these producers. Yeah.
Robert Bryce 18:15
Well, let’s switch back to what you’ve been focusing on. Well, you mentioned several of the pieces you’ve written recently. And you have one just I think, to today, or I think it was out today about AMC theaters and the shenanigans of the company CEO Adam, Aaron, you’ve done. You’ve written recently on deep sea mining, you’ve written about crypto, you’ve written on natural gas stoves. You’ve talked, we talked about, you know, energy. And so what makes a doom burnable? Article? I mean, you obviously have a very wide range here. And I you know, I’m interested in a lot of things and I’ve the attention span of a fruit fly, I want to write about everything. What is it that in this massive data stream that you’re dealing with and trying to make sense of, as we all are? What do you how do you decide whether this is the piece you’re going to write now? What is it that makes you like today, the AMC Theaters piece, what share why now? What is what is what what pulls that trigger for a different topic at any moment,
as content creators as what we do full time, like you, we consume a lot of other people’s content. And the quintessential Bloomberg piece is born from an overseas an observation we make, that we think is important that the rest of the world has not yet hit upon. So once we have that observation, then we do the next level of digging. Is there a piece here? So will our will our paying subscribers be interested in learning about this? So the quintessential Doonbeg piece teaches you something you didn’t know, makes you laugh at least once in a way that isn’t silly, and then makes a provocative statement or two without quite edging up to polarization. Those are the sort of the three grand ambitions we shall teach without being self-indulgent, we shall be funny without being silly. And we will be provocative without being polarizing. Our analysis of our ideal clients is that they’d like to learn, they like to laugh, and they don’t want to be talked down to. And so if they can think about something differently, they can laugh once and learn something, we have achieved our brain ambition. So on the MCPS, it is actually incredibly difficult to quantify the sheer amount of dilution that Adam Aaron has subjected a shareholders to because of two for one split, and then a reverse 10 for one and, you know, apes versus AMC, and so on and so on. And so our observation was, he has diluted shareholders by a factor of seven. And when he gets his way, he will have the ability to do it by a further factor of 3.8, which means he will have diluted his shareholders from the beginning of COVID. To today by a factor of 27. Nobody’s ever put that out there in a piece. That’s the big insight. That’s the AHA. So once we have the AHA, the learning, then the next thing becomes, what’s the opening? How do we entice people? Let’s deliver the meat and how do we close it? And that’s the timber piece. So Mission Impossible. We’re watching Greta being carried off at this, you know, small hamlet in Germany that’s about to be destroyed to make way for the giant are getting machines hold off. It
Robert Bryce 21:17
was more like she was playing from the cops. Hey, cops could stand next to Greta we okay. Yes. And she’s standing there smirking, like, cute. Like, you know,
what that piece? The Insight was? What if she had gotten her way? For all of the flak we’ve been getting about, hey, you know, the natural gas prices in Europe are down by 80%. Nevermind that we were talking about the crisis, long before they reached that $100 movie BQ Apex blow off top. So we decided to write a piece? What if they got their way? What if Germany wasn’t burning any coal and had shut down their nuclear power plants? The absurdity of it. So, and again, it’s gonna we’d like to write about a wide range of topics, like energy is what we’re most known for, probably because we came onto the scene at a time of an energy crisis and had some expertise to add. But we’re interested in all kinds of things like deep, deep sea mining, for example, like you talked, you’ve mentioned earlier, a piece we wrote called sunken treasure. It’s just absurd to ask that people would think that you could reach down miles under the sea and scoop up rocks the size of a fist and then ferry them to the shore and process them like we do at any other mine in the world. And then somehow, this would be the panacea. And the Insight is, in what we call the grift been the standard sleight of hand is people will conflate resource base with reserves. And that’s you know, a resource is nothing more than the amount of material around and reserves are what is economically viable. And the latter is often a tiny fraction of former. And so the one sentence summary of a piece is what we we spend a lot of time thinking about. So I’ll walk you through a Bloomberg piece because you’re a substack author, and we share this passion, the social preview for our peace, the little one sentence that describes the peace, when it goes out, is the first thing that we we try to figure out because that’s actually captures the essence of the piece on one set. So for today, with the gong show piece that we wrote about AMC, the social preview is if enormous shareholder dilution is good, surely, ginormous. Shareholder dilution is even better. That just shows the absurdity of it. Right, right.
Robert Bryce 23:35
Up here for just a second to say that about the social preview. So I met some writers for oh, it’s not Babylon B. What’s the other? The the other? The onion? Yes, yeah, I met I met these guys at South by Southwest, a long time ago now. And it was at a party and they introduced themselves and I said, Hey, and then one of the guys I’d read his article that day, and I was I forgot what it was. But I was telling Oh, I said, you wrote that it was brilliant. Anyway, he said, at the onion, all they do is when they go into meetings, they they they write the headlines, and if and they find the funniest headlines, and then they write the article, so it’s not, it’s like they don’t you know, they’re just looking for the gag. And once they have the gag, then they’ll write this article to support the gag. And I thought, I mean, it never occurred to me before. But anyway, so the social preview comes first, I think the same way what’s the headline, but
the next is the title. So I literally have taped on the lamp above my desk, in big font is the title. Great. So you had a piece that went viral, that you published on January 26. I loved it. It is a great title. The billionaire’s, behind the gas bands. And that’s the perfect title. Gas bands are hot. Everybody likes to dump on a good billionaire. This ma cracy yada, yada yada. So that’s great, and that’s why your piece went viral. So once we have the social preview We settle on the title. And we love our titles sunken treasure for the deep sea mining circling tether or circle is coming out of the dark alleys of stable coins and tether is still hiding from the law. Home Cooking which was the the piece we did on gas stoves or a hole near you for the piece we did on heat pumps because like that drove home like they’re coming for your home Robert right that’s all fun and games when you’re looking at the cities and Boy they’re really screwed in in the Northeast in California they’re coming for your home now a home there you that’s why we love that type of that piece. Right The next thing we do after we have the social preview and we have the title is the thumbnail for the piece and are the editor in chief of doom berg is a brilliant talent and is the in house Photoshop expert. And we spend a lot of time on the thumbnail why? The thumbnail is what causes people to click
Robert Bryce 25:55
right you have to have the right the right image
it should tell the story. So if you look at Gong Show, which is the AMC hyperinflation of their, you know the their dilution of shareholders. I have Adam Aaron’s face sub, you know, photoshopped on top of that infamous image from the Wymer hyperinflation of a guy holding Deutschmarks on a wheelbarrow. And we put the chicken in and and the Photoshop has just the right amount of wrong his face is too big for the body and the color is off a little bit. And then and only then that we have the social preview the title or the thumbnail. Do we then write an outline? What are the if we had to write this piece in 10 sentences, what would it be? And we write those sentences out. And then we decide where we’re going to cut the free to paid for maximum enticement. And then we write paragraphs around those sentences. And we get our charts and our photographs embedded in the piece. We edit it for a full day, three solid rounds of editing, and then we publish. And that’s how Bloomberg piece is born. So I already have the next one teed up, I’ll give you a preview. Sure. We’re going to write about how the NRC needs to be abolished. Amen. Brother, Nuclear Regulatory Commission, you’ve written about this in the past. And we’ve got a great title, what you ready for it, I’m bringing it nuclear waste. And we’re going to just detail the sheer number of offices that they have, and directors and subdirectories. And then we have the bios of all the commissioners, and there’s only one that is even tangentially trained in the field of nuclear technology. And all of these people are getting full pensions and benefits and Cadillac health care plans, there’s 3200 of them. They’ve not approved a single nuclear reactor in 40 years. And we’re going to close the piece by saying, for a fraction of that cost team, Bloomberg could run the NRC, we’ll just say no to everything. It’ll just be the small team that we have. And we’ll save the taxpayer a lot of money, like so the amount of waste and time and bureaucracy and 12,000 page applications, it’s obscene. And so we’re going to that’s the piece nuclear waste.
Robert Bryce 27:59
And that new scale power just got their reactor approved. If I did a short video on this, they spent it was six years $500 million. They had to pay to the NRC. And what was it 2 million pages of supporting documents and their application was 12,000 pages. They
exist to shut down the nuclear power industry. Therefore, save all the money and just allow me to say no to everybody, that’s going to be basically.
Robert Bryce 28:27
So it’s very well, it sounds well, I’ll just say it, it sounds formulaic, but the formula works, you’re clear, you’re clearly kicking ass the formula has given you that you’re the top earning, I just looked at to get a top earning finance publication on substack. You’ve grown like kudzu, I was looking at my my notes from a year from last May. At that time you had what was it? 70,000 followers on Twitter. And now you have what was it? 200,000 just to remark on, yeah, 235,000. but who’s counting? No, you had 85,000? Then you have 234,000? Let me jump to Twitter, then. Because we talked about that as well. Back in May of last year. Why is Twitter important to you? Why why is that platform important? And what do you think about Elon Musk and his? Yeah, management there.
So I think Twitter is important to a certain point. And then once you get big enough, it’s you get pretty diminished returns is our experience. So first of all, Twitter’s pretty toxic place, and we should all admit that it’s filled with trolls and all kinds of noise relative to the signal. And we have experienced pretty substantial diminishing returns on Twitter. Not sure if it’s because of Elon taking it over and the changes that he’s made. I I understand some of the frustrations with those on the conservative side with the unfairness with which the prior owners of Twitter handle things I would counter by saying it’s very difficult to truly sort of monitor a social media site was all kinds of junk on there wouldn’t want to do it. Don’t envy it. Wish Elon Well, I love Twitter. Twitter has been great. The point of Twitter actually is once you sort of get big enough on Twitter, then other people sort of want to have you on podcast. And so if we think about the customer journey, so your ideal customer, somebody who follows ROBERT BRYCE listens to the podcast, heads over to your substack. And then maybe someday decides to pay you for your substack if you go pay that begins with an impression which Twitter is great at creating. But really, the next generation is an engagement. And then after that, maybe they’ll give you their email, and then eventually, they’ll decide that you’re worth paying, they become big fans of yours. Those are your ideal clients, and you want to find as many of those as possible. So in a way, Twitter is a home for for paydirt. If you’re running a goldmine, so the way we like to think about things is the formula, which we’re not ashamed to say we have a formula, people like to read, things that are on brand that are consistent, that achieve our brand objectives. And we’ve been very open with our audience about our intent to become better at it and to be a professional and and the people who do this very well do have a former. You sort of think of the journey of that customer experience, from impression to engagement to email subscriber to pair that that journey is kind of like your sluice box, right. And you’re concentrating your Pader, to more and more higher purity gold until at the end of the week, you’ve put enough dirt on the front end, and you roll up the mats and you take it to the Gold Room, and you wait. And you see how much gold you have. This interaction with you today and your audience is the highest quality form of engagement that a content creator can have. So this is a far superior level of engagement than somebody liking a tweet, retweeting a tweet or commenting on a tweet.
Robert Bryce 31:48
Because because it’s in depth and shows the quality and the quality of the discussion and the intellect or
whatever, and they might get to like you and they you might make them laugh, and they might want to support you because they believe the same things you believe in. And all of this has to be authentic. Of course, like a lot of content creators are having an aversion to marketing themselves, because they feel it cheapens the product, I would say it only cheapens the product if the product is cheap. So it only becomes a gimmick if the product isn’t any good. So we pride ourselves on producing the very best product we can, which is our pieces. And the market will tell us whether we’re right or not. And the way they’ll tell us just through our retention, and our growth. And like it’s one thing to trick people into paying you it’s another thing to keep them because you’re actually creating something good. And if you’re creating something good, it’s not really a trick, you’re just creating something good and offering it for sale. And they can do their buyer do they want it’s the ultimate free market capitalism, which I’m all for. And if our pieces weren’t any good, we wouldn’t have had the growth that we’ve had. And so I’m proud of the pieces. I’m biased, of course, because I participate in their creation. So the weakest form of an impression is somebody scrolls on Twitter. And they see Robert Bryce’s face flashed by, and they see that you’ve published a video, but they just keep scrolling. That’s an impression. That’s the very front end of the Robert rice sales funnel. And engagement might be they like it because they like you. And they broadly know what you’re up to. And they hit retweet, but they don’t listen to the video. But it’s still an engagement. The next level of engagement is they stop and they press play on the video and they hear you you’ve got the phone in your hand, you’re speaking with confidence square jawed handsome American, blah, blah, blah, and they like it. And then they like and they quote retweet it and say this is a great video. My followers should watch it. And then the highest quality form of engagement is they see you on Christopher’s podcast. And they decide I’m going to go ahead and download that podcast of the couple. And listen to Robert Bryce. Because I like what this guy has to say. Then they say, oh, Robert Bryce has substack, I’m going to head over to Robert rice.substack.com and give this guy my email. Now you’re free, right? Now they’re going to get all kinds of value for that email. And then a time will come if you so decide that you want to go behind the paywall in some form. And then the vast majority of those people will pay you. They’ll just take what’s free and move on. And that’s okay, that’s right, but a portion of the will. And so, ultimately, that’s the difference between sort of the gold nuggets and the black sand. Sure, in your paper. And so this crater business is all about generating impressions, engagements, high quality engagements, getting an email, converting to pay. Last thing I’ll say is, you really want to identify who your ideal clients are, and listen to them very, very carefully. There’s lots of people who would never set up to do and Berger would never be a paid subscriber. They have all kinds of opinions. And they’re interesting, but they’re not particularly compelling. What a paid subscriber sends us an email with feedback, or suggestion or a question. We’re on it. Because our objective is to define to find to entice and delight our ideal clients. And by definition, our ideal clients are the people who are willing to pay for our work.
Robert Bryce 35:00
So when you look at those pieces, then you know, I was tracking your work you’re getting, you know, hundreds of likes many cases, hundreds of comments, or is that do you know, when you hit that ideal? Are you how close? Or I’ll ask it this way? How closely are you looking at those numbers on each piece that you publish?
We are I’m not. Okay, as a team we are. But my job is to create pieces, Drudge editors job is to is to convert them into great pieces. Our editor also happens to be so chief of operations. And that’s the person who goes through all of that. And I will look but the more I look, because you could get sucked into the negativity the trolls on Twitter should the real prism for me, and my sort of daily behavior is does this help the next piece be the best piece we’ve ever written? And I my belief, my my strong desire, and is that every piece we publish is now the best piece we’ve ever written. They might not be people might not agree, they might like an old piece that we wrote. But we would never publish garbage. Right. And so like Gong Show, I’m thrilled by that piece, I’ve read it. Here’s how I know that I’ve written a great piece after it’s fully edited and loaded. I’ll read it 10 times before I hit publish, because I like it. And so this is put this as my authentic passion. This is what I was meant to be doing. You can’t fake it. It doesn’t feel like work. I get to write these numbered pieces. I’m already and my biggest challenge to be totally honest with you. is dealing with the comments after I published a piece. Yeah, because I’m already on to the next one. Right? Yeah. So I can’t wait
Robert Bryce 36:35
to read Clemente. He’s the editor at real clear energy. And I talked to him about these sometimes. I said, Well, so do you look at these numbers? No, I don’t I don’t even I’m on to the next thing. I don’t want to look at them. And I’ve been had some of the same attitude. I don’t want to look at the comments. I don’t want that. But I do. So I’ll ask you. So are you writing for yourself? Or when I think about when I write and I’ve been at this a while. I generally think I’m writing for my late mom, my mother’s dead now several years. But I think who’s my target who I want to, I want to make sure she can understand it the first time, right? And so that’s kind of who I’ve been, maybe I’m thinking about the customer who my ultimate substack payer would is wrong. I think my mom might, she might subscribe. But that’s who I generally think about when I’m writing about who am I trying to satisfy? Or who would I you know, an average reader that doesn’t know much about the Migratory Bird Treaty Act, or even NGOs behind this climate. Do you have someone in mind? Are you writing for yourself? Both,
so I wouldn’t ever write anything I didn’t wholeheartedly believe Sure. And then I didn’t. And by the way, first person to admit when it made a mistake, go back and say, oops, you know that I was wrong on that. Let me write that, for example, I was very critical of circle, and their stable coin USDC. And I’ve come to believe that they’re actually back dollar for dollar that, you know, a layer has done a good job, and so on. So we wrote that piece like, hey, certainly, like these guys have convinced me that they’re fully back. But if you only write for yourself, and you are unwilling to do the marketing and so on, then that’s a hobby, right. And the work was never presented as a hobby. Turmeric is a business, it is our intent, that Dubard be the thing we do for a living that feeds our family. We’ve been very honest about this from the beginning, we will eventually go paid. And when we go paid, we will do this as a profession. And we will put our consulting business on runoff, which we have done. And we are full time content creators now doing the work of our lives, writing these Dilbert pieces. If you’re going to create a business out of it, it comes with a certain expectation of professionalism. And so we write with our ideal clients in mind. So we’ve created character sketches of our ideal clients with fake bios, and what do they look like? So one of them we’ve set another podcast is a character we developed who doesn’t exist, a fellow named Brett. And when we write these pieces, and when we edit them, we will ask ourselves, does this delight Brad? Does Brad need to be led all the way to the water? Or can we leave a little off and let him draw his own conclusions? Or Jen or pick your favorite character that we’ve created? We literally sat around and created these characters, and said, Does this delight Brett? does this teach something to Brad or does Brad already know this?
Robert Bryce 39:18
And how old is Brad and where does he What does he drive?
Yeah, probably you can imagine, you know, our demographic 50 to several cars, including a sports car on the side to Country Club memberships now. But you get the point. Like we’ve created those level of details. We have some young kids that are college who may have been misinformed about you know, pick your favorite climate change propaganda. I happen to have children of college age and so it was easy for me to write that character sketch because one of our ideal clients is my son, who I would love that. I would love if my son read Bloomberg more regularly than he does. But it is what it is. I can’t
Robert Bryce 39:59
It’s my kids who read my stuff. Hey, Jacob, have you read my beat? Oh, no, hey, Michael. I’m gonna do it and like, like, I’m your dad, and I rated every eighth grade paper you ever did and helped?
Let’s be happy to catch the doober check. Yeah, not necessarily super interested in reading all the pieces at this stage in their life, and you can’t force it as all parents know you just right, but. But the point is, to your original question, you have to write authentic pieces that you believe in, but it’s okay to keep your ideal clients in mind as you do. So. Yeah. And then again, if you want to write this is where we get a bit of pushback, because we are very good at marketing, we take pride in marketing our pieces, we built this business through the prism of what we call the five pillars of demand creation is one of those, as you and I have discussed offline, and we’re not ashamed of it. It this is America, this is capitalism. And we built this from a couple of keyboards and and a standing start on Twitter, we’re proud of it, we’re proud of the work we’ve done. And the market is telling us the extent to which we will be successful. And that’s the way it should be if we if we weren’t catching a tiger by the tail, we wouldn’t have had this success. And we’ve done nothing but try our best to help every other content creator who’s come our way to share our learnings, and, and so on. And I think that’s just a great way to live. And so it is amazing that in 2023, you can create a living online, it takes it, the barrier to entry is zero. But the barrier to success is very high. Anybody can start a blog, anybody can start a substack. Anybody can start a podcast, you’ve poured your heart and soul into this podcast. And it shows it’s on brand. It’s well produced. It’s intelligent conversations. It’s directed towards your ideal clients, even if you’ve done so subconsciously. And I would say the pivot towards consciously directing it to your ideal clients is the next level of performance.
Robert Bryce 41:56
Well, this is one of the so this just following up on this, because this is one of the things and we have talked about this online offline. But what we talked broadly about it, but you have a lot of experience in business, what makes for a successful brand, because you’ve created this brand wholecloth, you’ve created your ideal client and your ideal paid client. And you’ve helped other content creators, what makes a successful brand versus one that’s not successful?
Yeah, this is a great question and one that we’re very passionate about. So what is a brand, a lot of people don’t actually know what a brand is. Many people think a brand is a logo, or a slogan, a color scheme, a palette, a font, it’s none of those things. A brand is nothing more than the gut feeling you induce in your ideal clients, when they interact with your product. And when enough of your ideal clients express the same gut feeling, then, and only then can you say you have developed a brand. So our brand is not the Green Chicken. Our brand is not the name Timberg. Our brand is not our color scheme, or our chart palette, or any of those things. Our brand is the gut feeling that we induce in our ideal clients when they interact with our product. And when we started doing Berg from the very beginning, when we created our character sketches of Brad and Jen and my son, we decided what is the gut feeling we wish to induce in those clients because you can’t actually proactively try to induce it if you don’t even know what it is. So the gut feeling we decided that we wanted to induce in our ideal clients is the following. When a Dubard P shows up in their inbox, they say to themselves, Oh, I get to read that. Not I’ll probably read that. I’ll print it out and see if I get to it. No, I get to read that. And that’s a good feeling. And that’s the brand. And we’ve had many, many subscribers say we look forward to seeing your pieces show up in my inbox Thursday at 5am Eastern time is when we publish. And that is a validation of our brand ambition. And the way we decided to do that was the three prongs of our brand. Earlier, we will be funny without being silly will be provocative without being polarizing, and we will teach without being self indulgent. And in our ideal clients, if we could capture all three of those in every piece, they will have the feeling of Whoo, I get to read that. So here’s a great example. I see power hungry podcasts come up, I get to listen to that. I’m gonna put that on my podcast. And I’m gonna be driving out to the lake this weekend. And I know that the length of the drives this podcast is going to cover me and I’m going to learn something new because I love what Robert is doing. No as a general rule, Oh, I get to have that product is a great brand. And so like but there are other brand ambitions that you might have like don’t when you see a McDonald’s french fries, your gut feeling might be Wow, that’s a really tasty french fry. Yeah, like that’s a brand, right? McDonald’s french fries are better than French fries. Like I don’t care what anybody says. That’s a key element of their brand. And so a brand And most content creators, we wrote a piece all the way back when we were still free. It’s a great piece. I love it. All my pieces are like children at this point. The piece was called these chairs aren’t going to sell themselves. And it was about brand. And we wrote about the Eames lounge chair, which is sort of the quintessential example of like ship marketing. I don’t know if you’ve ever sat in an Eames lounge chair. But when you do the gut feeling that is inducing you, as this is the perfect piece of furniture. Now that chairs expensive, but the gut feeling that’s inducing you, as the people who made this chair are brilliant, and I’m gonna buy the furniture I can afford from them. Because it’s an Eames product. Right? Right. And, and they cared very deeply about brand. And in fact, as we sit in so
Robert Bryce 45:48
it’s another way when I’m when I hear you Sorry to interrupt, but there’s, there’s a delight there. That means you go back to what you were saying that there’s a delight in that. Well, I see this chair behind me here. Gary weeks is a furniture maker in Wimberley, Texas, and we had his table with stools
pleases you to look at it. And
Robert Bryce 46:09
it’s incredibly well made. That’s great. And it’s a delight to sit in the chair. But and when I sit in, I think, Tim, listen, you know, and I don’t say that about many chairs. But I like that idea of so the brand that an ideal brand delivers some kind of delight, then is that a short way to
that’s a really great way to create a successful brands, there are other ways you might deliver outrage. And lots of people who do great content generating by delivering outrage. Well, I
Robert Bryce 46:37
think that’s some of what motivates me, because I’ve you know, I look to support on the outrage of, you know, like golden eagles wins. So
do we sometimes, right, we but I’d say we’re probably 70% delight, 30% outrage, and we try very hard to make sure that when we express outrage, we’re 100%. Right? Right. Because nothing will destroy the brand more than being wrong as something as important as something that you’re telling your subscribers, they should be outraged about. Again, back to the ideal client, but the lighting or outraging or making them laugh. You know, comedians brand might be brilliantly funny, like we,
Robert Bryce 47:15
but it’s touching something deep, that it’s something that it’s going to affect some reaction from your client from your your will. So let’s talk about being wrong. Okay. So let me just shift here. So when we talked last, and I interviewed Peter Zion on the podcast, as well, and he and several others have talked about this, but in March 20, slash year, March 26, you and your peace farmers on the brink, you talked about the possibility of famine, and you outlined all the things that were happening, and since then we’ve seen, you know, shutdown of a lot of the fertilizer capacity in Europe. I’ll cut to you know, I could read back what you’ve written there. But were you wrong on famine? Or is this your delayed reaction? Are we still going to see food high? We’re seeing massive increases in eggs. Of course, we’re right now we’re seeing commodities across the board have gone up dramatically? In many cases. Were you wrong on famine? Or is this going to start to happen? What is your take on that? Now, when we
wrote that piece, it’s very important to be authentic. We said, The best case scenario, the one we’re hoping for is a year from now, we will look back at that piece and say it was a little alarmist. Because when you’re sounding the alarm bell, that the thing you’re warning about doesn’t materialize is the definition of success. And this is where a lot of content creators in this sort of skeptical side can fall into a trap. Classic example would be if you’re a short seller, you’re become you end up cheering for negative outcomes. And it’s difficult for people who don’t know us that well to believe that that was actually what we meant, but we set it at the time. I believe we even wrote about it in the piece, when you’re raising the flag to say we have a serious problem here. And then a bunch of interventions happen that abate the worst case scenarios. That’s a victory that’s not being quote, raw. We were highlighting that a convergence of situations, especially for international farmers, and emerging market farmers was causing serious distress in the food chain. And victory for us would be as a result of that piece or other people, maybe somebody else read it and they have some actual power, they do something about it, that the situation would be abated. Now to your broader question of getting things wrong. We have a discipline mistake management system. Mistakes will be rare. It made it to correct it and learn from and as long as you have that mindset, and there’s no real sort of critical mistake you can make. We can back to the whole Germany situation. We were warning about heading into the winter and we said I remember doing a space’s with Marco Popovich. And he was, you know, saying this is going to be no big deal. And we were saying I hope you’re right. But here’s the risk they’re taking. And I said on that space, like we have 1000s of subscribers in Europe and we don’t want any of them to have a hard winter and if they get through the winter, that would be great. We would sell it write that. And we would love nothing more than to be called an alarmist when we’re done. People forget that part of it, of course, and they only remember the pieces where you were raising the alarm. And that’s fine. And so I would say that, in pockets, we were right. In other areas that governments around the world have intervened and done Herculean things to take the worst case scenario risks off the board, which we applaud. But it doesn’t change the fact that the mistakes were made. That put us in that situation, I’ll close with a phenomenon in sort of, in statistics called the expected value, the expected value is the probability of something occurring times the consequence of it. And so for example, let’s take the German winter, the probability of a severe societal impact was high. But the winter has given them reprieve. So it actually didn’t happen, you should manage on the expected value, not on the realized value, because eventually the die is not going to turn up in your favor. Right? See. And the biggest mistake that the German government can make and Western European leaders can make is to learn all the wrong lessons from a near miss. So again, we come from industry, you know, root cause and effects, analysis of safety incidents is drilled into our DNA. And one of the things we spent almost all of our time on was studying deeply all of our near misses. Wow, this person almost got deeply injured. Right? Luckily, they managed to step off the ladder before A, B and C happened. But if they hadn’t, they might have died. What can we learn from that? What we shouldn’t learn from that is, it’s no big deal because they didn’t die. And what you should do is internalize the lessons. And so to your original question, we’re not afraid to be wrong. We’re the first to admit when we’re quote wrong. And if we’re accused of being alarmist, because we helped raise the flag of awareness on a certain critical issue before it became a catastrophe, all the better. Well, and I think
Robert Bryce 51:57
some of the points that you made in that piece about high diesel prices, reductions in fertilizer production, all of those are still very much potentially in play. Right. And I’m just looking at the graph on trading economics here. price of soybeans is double today, what it was in early 2000. I haven’t looked at the corn market. But I mean, which I think is a good segue into talking about commodities more broadly. And we talked about investing. You’re you’re one of the you’re the top earning finance publication on substack. But you’ve made it clear you’re not an investing, but you’re not an investor guide or providing investment advice. Are you bullish on ag commodities? Then we talked, I asked you about what you were you were putting your money and you said, Our philosophy is threefold. We are in money and Fiat, which everyone has to we earn by buying real real assets like gold? Yeah, we say and we invest privately, in companies and people that we know. I’ve had Adam Rosen schwag was on the podcast recently talking about commodities, particularly energy, commodities, base metals. What’s your view on broadly on that? I know this isn’t investment advice. But you we’ve talked about family talked about ag commodities. Are you bullish on those? How do you see the that investment horizon or the next over the next five years, given all the tumult we’re seeing in the world,
broadly speaking, we are bullish energy commodities, and to the extent that AG and metals are, you know, solid embodiments of energy. We will be bullish those as well. Regardless of the the daily price swings, natural gas in the US or oil overseas or pick your favorite, the world is not investing enough capital to produce enough prior energy to maintain the standard of living that most of us are accustomed to, which means given the price elasticity demand that we are structurally bullish energy and physical embodiments of, of, of primary energy. Now you can be smart about it. We have long said that manufacturing businesses that are energy intense, that are based in North America that can back integrate into the world’s cheapest natural gas are going to be printing cash if they can sell their products on the global market. So fertilizer producers here are going to do better than fertilizer producers in Europe. Plastic producers on the Gulf Coast are going to do better than plastic producers in Europe, or in or in China, frankly, you know, they’re paying for LNG and coal at market rates. And so by and large at the highest level, what would we need to see to say that the primary energy crisis is fully abated? We would need to see the classic signs of over investment of capital at the majors. And it’s just not there. Robert, like nobody
Robert Bryce 54:53
and that was one of the points. Rosenzweig said he said is under loved and under invested sector and I mean I was just look He had some like when Permian producer was looking at it, its price to earnings ratio is less than eight, and it’s paying a dividend of 12%. Yeah, I mean, it’s like, and they’re buying back stock left and right. And they’re and Rosen drag just made some good points about these companies are not going to over drill like they did last time they saw the shale revolution, they saw that movie before, they’re not going to repeat it, they’re not going to just go and drill every well they can because the market isn’t going to reward them for more production. And the Biden administration might punish them. So they’re going to return cash to shareholders, which to me, I mean, he typified it, I thought in a very good and succinct way than ways that I hadn’t thought about before. But I asked that because it leads to the next point, which you’ve written about crypto you’ve written about Fiat is Is it is it you said you save cash, a lot of people are talking about this. But in terms of what were what makes sense in terms of investment, philosophy, we’ve talked about commodities Is this the sector that just makes the most sense to you given the debasement of currencies around the world.
So again, we earn in Fiat and we save in real assets, and we invest privately, those are the three ways that we,
Robert Bryce 56:04
you know, gold, and gold was one of the ones you mentioned, gold,
land, productive, and otherwise, forest land, we have a small business that we participate in where we we buy rural land and harvest some of the lumber and then you know, resuscitate the property and sell it. The real asset, like an acre of land is an acre land and not making any more of it. Gold is another favorite. No, we’ve even talked about at some point at the right price, we could be motivated to park a couple of percent of our net worth in something like Bitcoin, in the sense that at least it’s it’s an asset that isn’t hyper inflating in quantity. It has a it has a limited size, and that’s interesting to us, and there’s enough people who think it has value that eventually becomes valuable. But for our investing purposes, we prefer to invest in privately held companies where we know the management team or our skills in our network, and our investment, play a role in the success of that company. And in the private markets is not for everybody that there’s a lot of zeros, we’ve had a lot of investments that didn’t work, and then you have some that payback 40 times and doesn’t take too many of the ladder to make up for all of the former’s right and, and so, but you have to be an accredited investor, as you know, and that’s not for everybody and deal flow matters and seeing the right deals, and there’s lots of hucksters in the space and you don’t have the protections of the SEC and, and the filings and then if you’re What are you going to sue somebody? If they do you’re wrong like this? It’s challenging. It’s not for everybody. We have some experience in this space. And it’s worked out well for us. But broadly, we look for opportunities where we understand well, first of all, are they delighting their ideal clients? This is a mindset that works everywhere. Now, if you’re a price taker, then you have to look at structural advantages, you know, what’s, what’s the Capitol look like? And so on, and so on. What is your competition? What’s your location, all of those things?
Robert Bryce 57:54
Gotcha. So let’s talk about demographics a little bit, because this is one of the things that I mentioned Peter Zion, and he’s been on the podcast, and I’m sure you’re familiar with his work. And I’m long term bullish. I’m very proud of us, I think us still is in the best house in a bad neighborhood. We got favorable demographics, favorable geography, where energy is cheap, we still have the rule of law. But he’s been talking to science has been talking about both China and Russia now for some time, particularly China and very bearish on China. Is is there in particularly when it comes to demographics? And Russia’s demographics are absolutely terrible, right? high suicide rates, low birth rates? What’s your view on this? Because those two countries are so important, both in terms of landmass in terms of global economics, you’ve spent a lot of time in China. How do you see those two countries evolving over the next few years, given this rising tension with the West, the US versus Russia, US versus China? How do you see that playing out? And do you? Are you bullish China? Well, how do you view China more broadly?
So I enjoys I hands work, I consume it, he entertains me, and sometimes he teaches me something. Sometimes I think he is a bit extreme, but you know, a glass house with a rock here, I would say on China’s demographics. So first of all, any Western analyst who claims to understand China is probably probably being a little small. But I would offer this dimension.
Robert Bryce 59:19
It’s an incredibly complex situation there. I’ve mentioned it before, but that that that thing where when who Jintao was escorted out, I mentioned it before on the podcast where Xi Jinping is sitting there and they escort who Jintao out in front of everyone. I mean, it was like, wow, I mean, there’s an opera playing out right out of the movies. Yeah, just some kind of the expressions on their faces and the complexity of what was going on and how, just who Jintao was looking around like you’re doing this now. Well, I mean, it was just I’m sorry, I interrupt but no, no.
I would just say since I hands demographic argument, I think you need to add a certain dimension, which is what is the growth of the middle class in China. So if you’re just being an observer, and you’re just being cold, and you’re being an analyst, the total number of people probably doesn’t matter as much as the total number of people who make it to the middle class, or, you know, make it to the cities and work in factories and consume and grow. So you could have the total population of China peak, but the population of the middle class in China, so grow for another decade or two, and I think there is a sort of economic dimension to the population, which is an average that maybe some of Zions work overlooks. But I would say,
Robert Bryce 1:00:34
that’s an interesting point. So you’re saying that it’s maybe not the total number of people, but it’s the total number of people who are coming into a, an ability to consume and to be middle class and productive
produce, and all that stuff and get a college degree, all those things? Now good. I will just say, upfront, as I always do, when I speak about something that I’m not an expert on design, he knows more about, you know, demographic trends, and he has forgotten more than I know, so I’m the last person to critic criticize him in his absence here, I’m not being critical. My experience in China, is that the sort of two China’s there’s the cities in the rest of the country. And and there’s, unfortunately, when you have a population, that’s, I would argue China can’t even measure its population accurately. It’s, if you’ve never left Shanghai or Beijing, it’s difficult to get an assessment of what’s actually going on in China. Right, right. When you see these stories of these massive floods, and all this other, how many people die? You’ll never know. It just are they even in the system? Right? And so it is, I would just My instinct is to be cautious on applying the same sort of parameter across all of the people in China, as it pertains to the impact of those population changes on the western economies, which is what science is trying to articulate. But, again, last person to criticize the man, he’s a he’s got a great flair about him, I enjoy his stuff, even when I suspect that maybe he’s not right, I still consume it. Because why not? That’s the work with him.
Robert Bryce 1:02:02
Yeah. And what about Russia, because Russia faces a lot of structural challenges. Now we have the embargo on their exports, some of this is going to affect the diesel market, which you’ve written about before. It’s something that’s fascinating to me, because this is the fuel. This is the fluid that drives the global economy. And they’re in the war with Ukraine, they’re throwing more people at it. What’s your what’s your broad take on Russia? Do you have one?
I would No, I mean, I do, I would lump Russia in with Canada and Australia, as large area countries with an enormous amount of resources and relatively small population bases. And it’s testimony to the various political infrastructure that they have, that the standard of living, say in Canada is much higher than it is in Russia, right. And so if you just look on a per capita basis, the average Russian is amongst the wealthiest on the planet, except it’s all underground. And they don’t have any claim to it, because you know, their political structure. And so there’s the current equilibrium. And then there’s the thermodynamic end state, on a per capita basis, Canada, Australia, and Russia should be amongst the wealthiest in the world. And Russia is in that category. Now. They have Vladimir Putin as a leader who is obviously paranoid and worried about being invaded, even though it’s 2022. And who’s who’s going to be, you know, rolling over the hills to invade Russia. But you know, that’s what he believed. And we gave him all the cards and energy. So he felt emboldened, and he rolled over into Ukraine, which I’ve been saying all along, is a terrible mistake, a miscalculation, a blunder? The evidence is, I think, pretty incontrovertible on that point, but the world needs is commodities. And that is his trump card, and he’s playing it. But ultimately, with the right political leadership and the right contract law and freedom of expression and democratic ideals. There’s nothing that stops Russia demographics or not from becoming a very wealthy nation. It’s politics. And that’s the warning shot for here in the US. Like if we get our politics wrong, we too, could see a decrease in our standard of living that the average Russian citizen might be confronting today. And we said a lot if we could just draw a circle around Canada, US and Mexico, what a superpower that would be. Right? The NAFTA trading area is it’s got fertilizer and oil and gas and coal. That’s what
Robert Bryce 1:04:25
that’s what Zions points is that he thinks very bullish on Mexico and US Mexico trade. But just to finish the piece on point on Russia because it’s to me it’s interesting is that for all of the sanctions and the rest of it that the US that uranium, the enriched uranium, hey Lou still coming out of Russia and their oil exports have not declined despite all the talk about it. So it’s just I mean, it’s hard to predict of course, but I’ve just wanted to get your get your take on what where it is now because there’s so many different levels being played here between them, you know, with the conflict but yet the commodities have are still flowing.
Here’s what we’ve learned for highly inelastic commodities like oil, fertilizer, gas, wheat. sanctions don’t work. They don’t work because all a sanction does is embolden a middleman was willing to break the law. Right? And there’s no shortage of those. So classic example, Saudi Arabia burns a lot of its domestic oil production to create electricity. Right, all of a sudden, Saudi Arabia is importing a lot of Russian oil to burn to create electricity and exporting the oil it was otherwise burning to create electricity on the open markets. The net net is that oil is finding its way to the open markets. You talk about the diesel shortage, India’s buying all the Russian oil they can and their refineries are running full steam, and where’s that diesel going on to the open markets, right. So ultimately, sanctions on high inelastic commodities, and a friction cost that wouldn’t otherwise be there. And we’ve argued from the beginning, like from the earliest of the of the war, that sanctioning the volume is stupid, we should not be trying to stop Russian commodities from getting to the market, we should be encouraging it. And we should be flooding the market ourselves. Because what’s going to affect his revenue is price, not value. Right. And, you know, in the commodity sector, it doesn’t take much of an oversupply to crash prices, we saw minus $37 a barrel oil when COVID was hitting, and we had no place to put the stuff and so on, and so on and so on. We should be pumping temporarily to placate the environmentalist, pumping as much as we can, and encouraging him to pump as much as he can, because that will crash price. And that will impact his revenue when you are trying to stunt the volume. If that’s
Robert Bryce 1:06:42
artificially limit the price, which is what the EU is done, right? Oh, we’re gonna, we’re gonna know you can only sell it for $16.42 on
how we think that maritime insurance is the moat, not the inherent energy content and the life giving standard of living that it gives I get older who we let’s go back. Let’s let’s take the Greta. Right scenario, what if we had been successful? What if we had taken half of Russia’s oil exports off the market? What would the price of oil we’d be thrown it all is about it. But if we took half of his exports off the market, the price of oil would more than double and he would make more revenue. This is it can only be that people who have never worked in the commodity sector concocted this foolhardy policy of sanctioning the volume, right? I’ve been in the commodities, it’s a 2% supply shortage is a 50% increase in price which goes straight to your bottom line. Right? The converse of that is also true, a 2% over supply crushes the price. So in fact, there are entire government regulatory agencies that make sure that you’re not colluding to try to put your customer your your competitors out of business by flooding the market is called dumping anti dumping laws, right? If we want to crush your competitors revenue dump, right? This is all well known. And it boggles the mind that people think that if it can stick to the extreme, we could we bomb every single oil producing wells in Russia today, or shortly after the Korean War happened. What happens to the price of oil? Right? $500 a barrel? Yeah,
Robert Bryce 1:08:16
this is bad. This would be bad to go back to Joe Biden, this would be bad for the Biden’s reelection. reelection possibilities. Well, Dubard, we’ve been talking now for just over an hour, in fact, an hour and eight minutes by my clock here. Just a couple last questions, if you don’t mind. So we talked and we’ve covered a lot of issues. We’ve covered a lot of issues when you’re on last time. What are the issues? If you look broadly around the world? What are the ones that concern you the most right now we’ve talked about food, we’ve talked about energy, whatever, there are the things that are pressing and the terms in your mind that concern you the most at the moment?
I think one of the things that concerns me a lot is the combination of the political polarization of the US. And the sort of hyper segmentation of how people consume the news. So we have silos in this country, that believe completely orthogonal things, based solely on the social media algorithms desire to maximize dopamine hits, engagement and outrage. And so I have friends, because you know, I kind of live in flyover country and I have a foot in the sort of rural door but I have a lot of friends from industry and from the universities that I used to lecture at that are sort of more progressive and and I have family members who you know, only watch CNN or only watch him embassy or MSNBC or only watch Fox News and they have completely orthogonal things, right. And nobody tries to take time to listen to the other side, to listen to coherent arguments and come up with their own conclusions. And I do believe that the US is among the more polarized countries in the world correcting for the power and influence that has on the global economy. And we’re at a very dangerous time. And this actually is probably the issue that scares me even more than energy shortages or food shortages or those types of things.
Robert Bryce 1:10:11
So you’re worried you’re worried about the broadly, I guess, putting the political risk of political dysfunction in the US? Yes.
In our society is among the least capable of, you know, look, if you’re in Argentina, you’re used to hyperinflation, you’re used to, you know, governments coming and going, our society has had really an unblemished several decades of a pretty good time. It’s we’ve never had war here. Outside of the Civil War, we’ve always had plenty, yes, there are people who are doing better than others. And but you know, to be poor here is different than being poor. In most other countries. There’s a lot of great things about America, I know that you’re pretty patriotic. And so my, I worry, mostly, that the manner in which people are consuming information has become so hyper polarized, that we’ve lost our ability to have an intelligent conversation, a polite debate, you know, we’ve been criticized for going on certain podcasts where we completely disagree with the podcast house, but our prism is as follows. Are they expressing authentically held beliefs in a polite manner? And if they are, then we’ll go on their show. And that’s our commitment to the podcast as we will express our authentically held beliefs in a polite manner. It’s okay to disagree with people. And and we’ve lost that in our society. And that bothers me.
Robert Bryce 1:11:30
That’s an interesting way to think about it. I’ve just one one counterpoint, which is, are we paying just too much attention to Washington, I think about this Catholic priest told me a long time ago, he said the church isn’t Rome. And we’re here in the US. We talk a lot about Washington and Washington isn’t America, and I live in Austin. It’s a pretty wealthy city, right. But trash still gets picked up here. You know, the local government still works pretty well with state governments in the US still works pretty well. I just it’s an observation. I’m not necessarily picking a fight with you on that at all. I agree. Do we? Are we just paying too much attention to Fox and CNN? Because they’re the media outlets and the media loves to talk about the media? That’s what they do. Right. But yeah, but overall, I think for all of those faults, still at the basic government level, where I’m touching, government still works pretty well. Just an observation
problems scales, and gets worse from local to county. Agree, the Fed are good. And I would say the size of the federal government relative to the GDP continues to grow unabated.
Robert Bryce 1:12:33
Does the debt concern you? Yes.
I mean, ultimately, it certainly does. I mean, I’ve heard all kinds of smarter people than me, tell me why it’s not a big deal. And so far, they’ve been proven right? I would have guessed long ago, that $30 trillion, would have been deemed on sustainable and we would be hyper inflating. But I would have been wrong. Because we’re the reserve currency and the demand for dollars, goes well beyond the US citizens need for them, and yada yada yada. I now understand those arguments. I was not prescient enough to have made them a priori. But I will say, as the federal government continues to grow, and the like I’ve lived in Chicago, I’ve lived in Houston. I’ve lived in Philly, and I’ve lived in the rural parts of the country and the chasm is just growing. Yeah. Austin is one of these sort of hybrid cities, which still has a foot in both. And it has a lot of its sort of historical culture. Love Austin, love going to Austin next time I’m there, we’ll have dinner. But the chasm is widening like Washington DC, is unrecognizable, relative to Montana. Yeah.
Robert Bryce 1:13:35
That’s the divide that I see that one that really concerned me is the urban rural divide. And that’s a political one. It’s left, right. It’s church goers versus non church goers. It’s a very much a geographic divide. And it’s one that I talk about. It’s one of the reasons why I care so much about land use and renewables and the fact that these elites and these big NGOs and the big banks and corporations are trying to force these local communities to accept wind and solar projects they don’t want and the locals are fighting back. But the last two things and my guest, of course, is Doom Berg, the famous Green Chicken whose second appearance on the power hungry podcast, you know, the last two questions. Doom Berg, I always ask them, What are you reading these days? What’s on the top of your book pile?
Actually, I’m reading rereading Thomas gold’s book, the deep, hot bios. I’m sure you’ve ever read it? Yeah. It’s always been in the back of my mind as to whether we could write about that book in the in the form of a Bloomberg piece. I think he makes a pretty compelling argument, it probably would be a controversial piece I don’t quite feel comfortable yet writing it, but for those that are unaware, Thomas Gould was a professor at Cornell and a brilliant scientist who had a reputation for entering into fields that weren’t his expertise and making provocative hypotheses that turned out to be correct. And the subject of the Deepak biosphere is his hypothesis. That oil is in fact not dead dinosaurs but oil is primordial and oil is a biotic and that the debris that we see in oil is actually from subsurface life and biology, eating methane with loosely held oxygen in the rocks and creating oil as what he would call a renewable resource. And if he is right, it means we have vastly more oil, more oil than people think we do. And our whole thinking around the area is dead wrong. It’s a controversial book, I find it a very intriguing book. And so that is the book that I’m currently reading The Deep hot biosphere by Thomas Gould. Last thing I’ll say about the book, he makes a very interesting observation, which is, in our search for life on other planets, it is likely that we have been what he calls surface chauvinistic, because the, the conditions that appear on the surface that would support life are quite rare. But his hypothesis is the conditions subsurface, that would support life are probably pretty prolific. And we could look at planets that we think are dead, but 1020 30 miles below the surface, it might be teeming with life. And so those are the types of books I like to read, I like to be provoked, I don’t want to be just fed my biases. And that’s a pretty good book.
Robert Bryce 1:16:02
It’s an interesting hypothesis. And my friend Jesse, also Bell, who’s been on the podcast, he’s he was a friend was Tommy gold and talks about that work a lot and extremophiles. And you can look at some of the oil fields in the world, the current field being one example where it should have been exhausted a long time ago, it hasn’t been punishing. Yeah, exactly. So last question, what gives you hope?
What, what gives me hope is that I get to get up every day and do what I love doing for a living, that we, you know, in America still. And in the global economy that is developed with the proliferation of the internet and the democratization of content creation. What gives me hope is that even we can create a life where we have an extraordinarily high, get to have to ratio. So what does that mean? We have designed a life where we try our best to only do things that we quote, get to do, like, I get to be a guest on your podcast. And when we’re done, I get to start reading the next piece, because I’m excited about it. I can’t wait to write nuclear waste. And I’ve been able to minimize the amount of half twos, I don’t like doing my taxes, so I can afford to pay an accountant, for example. And so in America, and in the West, in general, we live still in relatively capitalist systems, where merit matters. And if you work hard, and you play by the rules, and you pay your taxes, and you do right by the people that come into your life, you too can create a life where your ratio of get to half to as maximize our objective as infinity. We’ll never quite reach there but to the point to the extent that we can asymptotically approach it. Life is good.
Robert Bryce 1:17:34
Well, that’s a good place to stop. My guest again, has been Doom Berg, the world famous Green Chicken, and purveyor on substack you can find them on Bloomberg dot some substack.com You should definitely subscribe Dubard thanks again for coming back on the power hungry podcast always great fun talking to you. Same to
you, Robert. Have a great rest of your day and congrats again on your substack launch and looking forward to meeting him as your next piece as well. Awesome.
Robert Bryce 1:18:01
And all of you in podcast land. Tune in for the next episode of The Power hurting podcast until then, see you