In this episode, the ReSolve team is joined by Doomberg, a popular regular on the show, to discuss a wide range of topics including AI, geopolitics, energy, and the financial markets. They delve into the complexities of the emerging multipolar world, the rise of China in the technology sector, the implications of AI, and the potential risks and nuances within different levels of the capital structure.

Topics Discussed

• The rise of China and its implications for the Western world in terms of semiconductors, high computing, and Quantum computing

• The potential of AI and its transformative impact on professional lives and the world at large

• The geopolitical risks, specifically the Chinese intent on dominating the business landscape

• The unique situation of Taiwan as a major producer of semiconductors and its implications for global supply chains

• The challenges of predicting the decisions of nonlinear systems and the impact of major perturbations on politics, energy, society, and culture

• The role of social media in amplifying voices from the edge of the network and the challenges this presents for lay people and experts alike

• The potential for a breakdown in trust between the population and the government-media-medical nexus

• The impact of the changing energy landscape on the U.S.'s geopolitical world view

This episode is a must-listen for anyone interested in understanding the complexities of the emerging multipolar world, the role of AI, and the geopolitical shifts in the global landscape. It provides valuable insights into the intricacies of these topics and strategies to navigate the uncertain future.

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

We are sort of doing a lot with AI in our, sort of, professional lives,

2

and know some people who are knee deep

in the, in the thing, and it's pretty

3

scary what's going on out there, actually.

4

The open source AI is wild, wild

west, zero guardrails, way ahead

5

of open AI and really scary.

6

That's coming, right?

7

You can see what's coming.

8

but at the same time, 40

times revenue is rich.

9

I don't care what your profit margins are.

10

and those margins are a giant prize for

other people to go and, and chip away at.

11

And especially when you mix in

geopolitical risks, like the Chinese

12

intent on putting everybody out

of business because they will.

13

And so we shall see, maybe

this time is different.

14

Mike Philbrick: All right, we've

got today with us one of our most

15

popular guests that we have on

a regular basis, Doom Nation.

16

It's the one and only Doomberg.

17

And, uh, Doomie, you have written on

a wide variety of topics, but there's

18

lots of interconnectivity in these

topics, so I'd love to get where

19

you're seeing the convergence of all

the global forces out there today

20

with respect to energy technology.

21

The geopolitical tensions, how that all

winds into the demand for energy, the

22

demand for energy across the different

dynamics of both AI as well as, you

23

know, the geopolitical theaters that

are ongoing, Russia, Ukraine, China,

24

Taiwan, the Middle East and Israel.

25

So where are you seeing the most

critical pressure points right now?

26

And, and how do you think

they're going to influence?

27

the global power structures, both

from a political sense, from a

28

technological sense, and an energy

sense as we go through the next decade.

29

How are you looping this together?

30

Doomberg: Well, thanks for the softball

to start, but no, seriously, Mike and

31

Adam, it's great to be back with you.

32

I always enjoy our conversation,

so I thought I would begin

33

by at least expressing that.

34

I think if you take a step back

and you do the 10, 000 foot look.

35

really going on at its core is sort of

end of American empire, a world dissolving

36

into multipolarity, the emergence of

China as a ah peer slash superpower

37

on par with or even perhaps even

exceeding the US across some dimensions.

38

And leaders of the sort of old western

unipolar order, not quite coming

39

to grips with what's going on and

responding in ways that, in our view,

40

appear to be accelerating the transition

away from the old, what they would

41

call rules based international order.

42

And into what Xi Jinping and

Vladimir Putin would call sort of

43

a multipolar world of nations, you

know, collaborating and interacting

44

in their own best interests.

45

And that's the sort of big mega trend and

then what you see all around the world.

46

are little flare ups, proxy wars,

indirect confrontations, direct

47

confrontations, but they all sort of

lead back to this fundamental axiomatic

48

shift that we're seeing in the world.

49

And I think 50 years from now when

historians pen what has transpired, in

50

this sort of post COVID era, I think the

decline of US omnipresence and dominance

51

is probably going to be the lead headline.

52

Mike Philbrick: And who, who

comes in for that vacuum in

53

the, in this multipolar dynamic?

54

Doomberg: Well, that's the great

question of the day, isn't it?

55

Um, and, and so, you know, as everybody

ponders how the pieces on the board will

56

shift and be played, you, you're seeing

at least for the moment a bifurcation

57

between sort of the Atlanticists

Anglo American old, old, old guard and

58

those lining up with Russia and China,

the BRICS countries, for example.

59

And I think this explains a lot

of the market action in energy,

60

which we've written about dozens

of times, and in fact in gold.

61

Ah Gold scares me how much it's going up

in a straight vertical line at the moment.

62

The weekly chart of gold is

just parabolic, at this point.

63

And there's moves afoot that

can at least explain that.

64

So, for example, this week in a vastly

under reported story, at least in the

65

Western media, the many of the leaders

of the BRICS countries are gathering,

66

in Kazan for a meeting hosted by Putin

to, what many believe, roll out an

67

alternative, means by which imbalances

in international trade will be settled

68

going forward and, and part of the hype,

the hope amongst gold bugs, the belief

69

amongst sort of those skeptical of the U.

70

S.

71

and the old system, is that gold will

play a major role as a neutral reserve

72

asset once again in the settlement

of imbalances in international trade.

73

And if that were to happen, the theory

And recent price action in the metal might

74

seem to be supportive of this theory.

75

The theory is that the price of

gold as measured in US dollars needs

76

to go much higher, in order for

it to effectively serve that role.

77

And in so doing it would replace US

treasuries and some European debt as sort

78

of the existing neutral reserve asset.

79

And the argument goes that the moment

the West, froze, sanctioned, and,

80

and is talking about seizing Russian

reserves, the neutrality of those.

81

Assets went out the window and anybody

who has ever been the subject of criticism

82

by the US or the Western powers or fears

they might one day be has to take a

83

hard look at where they're putting their

excess foreign reserves and Is a U.

84

S.

85

Treasury bond or bill truly

neutral, in a world where the U.

86

S.

87

is sanctioning everybody, and

weaponizing its privileged

88

position as the holder of the U.

89

S., of the global reserve currency?

90

And so, if gold is going to be at

the heart of some new system, and

91

it remains to be seen, I will be

watching, With bated breath, what

92

happens at Kazan like everybody else.

93

And I should say, as an owner of an

uncomfortably large amount of gold, I'm

94

pondering, whether I need to be hedging

or at least putting in some, some rolling

95

stops because things don't go up forever.

96

We're all, we've all been in the business

long enough to know what happens in

97

the aftermath of such Icarus prints.

98

and, and might Kazan be

a sell the news event?

99

who knows, but that

that's high on the board.

100

And so once you sort of have

that, that grand theory of

101

what's going on in the world.

102

Certain events become a

little easier to understand.

103

It's a good working model

for interpreting the news.

104

and we shall see.

105

I, I think it's very clear that

we have a bad event in Kazan, and

106

then in a bit more of a slow motion

catastrophe, we have NATO on the

107

cusp of losing a war against Russia.

108

And let's not kid ourselves.

109

I mean, this is a war

between NATO and Russia.

110

And Russia is winning.

111

And how NATO responds to losing

that war is one of the great

112

risks on the board going forward.

113

And so, lots of different

ways we could take this.

114

We've written about it from a

variety of different angles.

115

We have an alternative view on the Middle

East that we wrote but didn't publish.

116

I'm happy to go over that.

117

and of course, the confrontation with

China, which involves intellectual

118

property, semiconductors, AI, energy.

119

It's all intertwined and so we could pull

on the string any way you guys want to go.

120

Adam Butler: Well, why don't we start

with the, Meeting in Kazan, because I

121

agree this has been, oddly underreported,

and I think many people are looking

122

at this incredible surge in gold after

it kind of broke out above that 2,

123

100 per ounce level, earlier this year

after a 12 odd year consolidation,

124

and are scratching their heads.

125

Do you have any Any further insight

into what the proposed reserve basket

126

might look like for this new, I guess

monetary collaboration among those

127

who are becoming more fearful of US,

monetary dominance, I guess, or, you

128

know, using, using monetary policy.

129

Yeah, weaponization.

130

Yeah.

131

Doomberg: Sure.

132

So I should say up front all of our

requests for comment into Vladimir

133

Putin have been met with silence We

are we are not connected in any way

134

shape or form to anybody that matters

we just read the news and try to

135

connect dots like everybody else, but

136

Adam Butler: Is Putin leading this though?

137

Is he,

138

Doomberg: He is yeah, he the the

rotating presidency of the BRICS

139

countries is Russia And that's

why he's hosting the meeting.

140

And it is a press conference he

gave last week, again, which never

141

gets covered in the West, but you,

you can find dark corners of the

142

internet to learn about such things.

143

And one of the things I, again, before

I dive into this answer, like we read

144

propaganda from all the countries, because

if no other reason, it's interesting to

145

learn what they're telling themselves.

146

and the fact that very few people

read anything other than what, you

147

know, they can find in the Western

media is kind of a scary development.

148

You can go and read Chinese

readouts from meetings with U.

149

S.

150

government officials and see what the

Chinese are telling to themselves and

151

it's scary sometimes actually like

and so if you do that, you can see

152

that in their domestic audiences,

they are already in World War III.

153

And that would surprise some people

in the West, but back to the meeting.

154

From what we could gather again.

155

Just open source and you know

Investigations, there's going to be

156

something which is going to be called

the unit which is an odd choice of

157

names, but nonetheless it is apparently

going to be a basket of currencies

158

of BRICS countries and 40 percent

backed by gold And this will all be

159

settled on some form of a blockchain,

a central bank digital currency

160

created for and used by central banks.

161

and this will be used exclusively

to transact in and amongst the BRICS

162

countries and to settle, imbalances,

in those trades as they arise.

163

And so if Saudi Arabia is selling

oil to China and Saudi Arabia is

164

buying a bunch of Chinese goods with

the proceeds from those sales, they

165

have to net out at some imbalance.

166

It's pretty rare that you'd land

on the number and presumably this

167

new mechanism, which is not a

US dollar, it's not a currency.

168

I think this is a source

of a lot of confusion.

169

the mechanism for settling such trade

imbalances could in theory involve

170

gold as at least a partial neutral

reserve asset in such a construct.

171

Now, this is well beyond our expertise.

172

It seems a complicated system.

173

reports that these countries have

been working on developing such a

174

technology and such an implementation

have been out there for years.

175

and I think that the, the Ukraine war, has

just accelerated those efforts and we may

176

see some kind of a culmination of that.

177

Now we wrote up a long shot piece

where we made a prediction that

178

maybe Lula in Brazil might derail

the whole thing and we were, keenly

179

interested yesterday when news broke

that he has decided he's not going to

180

be attending the meeting in person.

181

and when we wrote that piece called,

Neighborhood Watch, we caught

182

a lot of flack for it actually

because it was pretty speculative.

183

but we like to speculate once in

a while, and if this one turns

184

out to be true, it could be one

of our better calls of the year.

185

But we shall see.

186

there was a lot of similar hype

going into the last such meeting in

187

South Africa, you may recall, and the

meeting disappointed, at least from

188

the perspective of, of the gold bugs.

189

And one of our views, and the reason

why we wrote Neighborhood Watch, is it's

190

not like the British and the Americans

and their allies haven't been down

191

this road before and are completely

out of, tools and weapons they can

192

deploy to scuttle the whole thing.

193

I wouldn't count them out.

194

the trend may be going in one

direction, but that doesn't mean

195

it's, permanently in that direction.

196

And so this is why when I wake

up and every day gold is up 30 an

197

ounce, it makes, makes me a bit

anxious, to be honest with you.

198

Adam Butler: Well, did Gold run in advance

of the South African meeting as well.

199

Doomberg: I forget, not like

this, to be honest with you.

200

I just know that the hype into

that meeting was pretty strong.

201

I'd have to go back and check the

chart, but this is unquestionably

202

a straight line up, right?

203

I mean, you, you're looking

at the same chart I'm seeing.

204

I mean, this.

205

This run from, I'm just going to pull

it up right now, but this run from

206

2600 to 2740 in the past two weeks

has just been vertical and that's

207

not

208

Adam Butler: it's almost been a straight

209

May, you know, there was a, there was

a small pause there for a week or two.

210

And a lot of the, I think long term gold

bugs who've been burned so many off.

211

I love, um, I often quote Don Cox who

said that the best trends emerge in areas

212

where those who know it best love at least

because they've been disappointed at most.

213

Doomberg: Yeah.

214

Adam Butler: And it was interesting

to watch all the long term gold

215

bugs express skepticism on this

breakout to all time highs.

216

And they were, they were bearish on

this and they were waiting for a major

217

pullback, which never really materialized.

218

And that, you know, I think a lot

of even the long term gold bugs

219

have been caught wrong footed here.

220

And it's just amazing to

see, you know, retail hasn't

221

really caught onto this trend.

222

There's almost no coverage.

223

It's just beginning.

224

To make it into the mainstream media.

225

I know Mohamed El Erian, was out

in a piece either this morning or

226

over the weekend about gold and

what this might have to say about

227

geopolitics and the monetary system,

the banking system, et cetera.

228

But it's just remarkable how little

coverage this has gotten and energy,

229

despite this unbelievable move higher.

230

Doomberg: Yeah, look,

231

Mike Philbrick: one of the, it's one

of the favorite trades you can get to,

232

especially when we saw the ETF balances

actually shrinking into the breakout.

233

Doomberg: yeah, and

234

Adam Butler: I was working on that.

235

Doomberg: that's presumably because

central bankers are accumulating and

236

And so look, I I'm uncomfortably long.

237

My sort of weighted average cost basis

238

and during the volatility around the

recent rate cut, I took about 20 percent

239

of my position off just to manage risk.

240

but I still hold an uncomfortable

amount of gold and I'm pondering

241

whether I shouldn't be hedging or

maybe putting in a trailing stop,

242

for some portion of the position.

243

I'll always have a large position

on because I don't actually view

244

Gold as a, as a speculation medium.

245

It's more of a savings medium.

246

And that's why when your savings vehicles

double in value, you have to ponder what

247

it actually means for the U S dollar.

248

and that's really my concern because

most of my net worth is tied up

249

in U S dollar denominated assets.

250

And so I don't want to wake up tomorrow

and see gold at 6, 500 because yes,

251

my heads will have paid off, but on

balance, my portfolio will presumably be.

252

Much worse off.

253

I'll probably be doing better

than my neighbors because as you

254

said almost nobody owns gold But

it's still a tricky situation.

255

So I'm fortunate in the sense

that I didn't miss the run up But

256

when when a position grows like

this on you, you do have to ponder

257

risk management at some point

258

Adam Butler: So which do I, yeah.

259

So which besides the, the BRICS

countries themselves, what

260

other countries are lining up?

261

In, you know, support of this new

international trade reserve unit.

262

Doomberg: Yeah, so there are dozens

of countries applying to join BRICS.

263

That's another outcome of this

meeting There's another potential big

264

outcome of this meeting that we're

keeping an eye on and that's whether

265

China and Russia formally sign up

to build the power of Siberia, too.

266

There's all manner of behind the

scenes jockeying going around for

267

major, major energy, precious metal

and currency moves that will affect

268

things over the next decades.

269

And that's why it's a really fascinating

time to watch the news and in our case

270

to be privileged enough to be able

to write about it for an audience.

271

Um, so there's no shortage of

things for us to write about.

272

That's for sure.

273

but beyond the BRICS countries, the

gold is being accumulated by people in

274

India, by people in China, like citizens.

275

and, and if you're in Argentina, for

example, I mean, what are you trusting?

276

Are you trusting the peso?

277

Are you trusting gold or, or Bitcoin?

278

And frankly, I mean, Bitcoin is,

is to some people that the sort of

279

modern digital version of Bitcoin.

280

At least holding some

attributes comparable to gold.

281

not, not for us, but I understand why.

282

Intellectually, I understand

why some people feel that way.

283

and so, but again, like when you just

see Here's what this reminds me of.

284

when we first started writing about

uranium and nuclear in a big way, uranium

285

was 30 a pound and, we were, you know,

motivated to do that because our friend,

286

Cuppy had a piece on it and the physical

uranium thrust was coming, you know,

287

just getting on the scene and uranium

kind of went straight up for a long time.

288

Right.

289

And then it hit like 107 to 110.

290

I forget where it exactly popped out.

291

And I didn't have any

uranium at that point.

292

Cause I generally don't

like to own things.

293

And nobody on the Doober team likes

to own things that we write about.

294

The one exception being gold because

we're not affecting the price of gold.

295

and uranium sort of topped out and it

felt a bit like an interest print and

296

we, we cautioned on a few podcasts

appearances that maybe if you've

297

enjoyed this run from 30 to 107.

298

maybe you might want to manage

your portfolio a little bit

299

and take a bit of risk off.

300

And it did have what I would

consider a healthy consolidation.

301

And I'm not calling that that's

what's going to happen in gold,

302

but it has a very similar feel.

303

You know, the FinTwit

crowd is very excited.

304

This is it.

305

This is the big one.

306

I'm seeing all kinds of cup and handle

charts on silver in particular right now.

307

Adam Butler: Yep.

308

Doomberg: Floating around on on thin

twit Our friend Tony Grier was out with

309

an interesting call this morning that

you know He has no position or view on

310

silver and he's more than happy to just

watch it You know as he said sit in the

311

stands with a beer a pretzel at no view

And so we'll we shall see I mean silver

312

in particular is kind of like natural gas.

313

It's the devil's trait I mean lots of

people lose lots of money Trying to

314

time entries and exits into silver.

315

So it's not what we typically do.

316

but, there's a lot of, well, compared to

the crickets and the empty cemetery that

317

gold and gold bugs have been experiencing

for a decade, it's natural to look

318

at even the small amount of coverage

it's getting now with great caution,

319

because we're just not used to it.

320

As you say,

321

Adam Butler: Yeah.

322

So do you think just to close the loop

on this part of the discussion, do you

323

think that China and Russia both need to

sign on to this new unit for it to have

324

any chance of being a successful venture?

325

Doomberg: I think, as many

countries as possible need to

326

sign on and sign on quickly.

327

And then it gets a momentum of its own.

328

And so I do think that this

is a critical week for it.

329

I think if for whatever reason,

the party is sort of slowed, then I

330

think it could be fatal in our view.

331

This is a, about as good a time as

any for Putin to make this gambit and

332

for Xi Jinping to make this gambit.

333

The NATO is on its back foot.

334

elections all over the

West are leaning right.

335

we have a pretty important election

in the U S here in the next two weeks.

336

Um, I watched with interest the results

from Moldova overnight, which I'm sure

337

you guys were paying very close attention

to, but, it was a fascinating Set of

338

results and accusations and so on.

339

And so it feels like the time is now

if not now when but but again We shall

340

see we are sort of informed speculators

sitting on the outside of this trying

341

to make sense of what's going on

342

Mike Philbrick: So this is, this

is sort of the, just to, just to

343

bring it around when we were talking

earlier about the sort of multipolar

344

dynamic that is sort of emerging.

345

This is a key part of that.

346

Doomberg: Yes, it is the the key part of

347

Mike Philbrick: correct.

348

I just want to, for the viewers, I

want them to understand that this

349

is what you mean by that earlier on.

350

Doomberg: Here's the history.

351

Here's some history for you.

352

Okay, Putin and China have been

openly declaring this since

353

the global financial crisis.

354

I mean our friend Luke Roman who

writes the force for the trees and

355

tree rings really great provocative

newsletter comes out once a week.

356

he's been highlighting this speech

given by the head of the Chinese

357

Central Bank in the aftermath of

global financial crisis calling for

358

this exact series of developments.

359

What happened next?

360

Putin dumped all of his treasuries in

the aftermath of the Crimea invasion

361

and and the scuffle in Georgia.

362

dumped all his treasuries, and he

just assumed that, you know, Europe

363

would never, anything to his mostly

Euro denominated reserves because they

364

required, Russia for their energy needs.

365

In fact, the entire German industrial

national business model is predicated

366

on access to cheap, reliable natural

gas and oil and products from Russia.

367

So he, in his wildest dreams,

never imagined, that, His Euro

368

reserves would be sanctioned by

the Europeans over the Donbass.

369

And I think the reaction to what he calls

the special military operation and what

370

we in the West have been calling the

war in Ukraine, I think surprised him.

371

and probably surprised the Chinese and

probably surprised Modi and the Indians.

372

And so I think that the sanctioning

of those reserves, which shocked

373

everybody, frankly shocked us.

374

I mean, we wrote a piece, I believe it

was called on the cusp of an economic

375

singularity in the weeks afterwards.

376

And then we've been saying that the

sanctions, won't work and are designed

377

to backfire from the very beginning.

378

but Putin saw what Europe has done and

everyone else saw what Europe is doing

379

and how the war was being spun over here

versus the way it was being spun in their

380

own countries and everybody reads history

through their own lens of propaganda,

381

and I think this has been the catalyst,

the catalyst, so that the war in Ukraine,

382

again, which the Russians call Special

Military Operation, the SMO, if you will,

383

that's going to be the seminal event

that if, you know, there is a shift.

384

In the U.

385

S.

386

financial system's role in global trade,

it will have been both the incursion into

387

Ukraine and the West's reaction to it

that will be seen as the pivotal moment.

388

And this meeting will, if it does

produce what we're speculating it

389

might, will be viewed as a natural

culmination of a decade plus worth of

390

work and history that has evolved in the

aftermath of the global financial crisis.

391

Adam Butler: So how do you anticipate

the US and I guess to a more limited

392

level of importance the EU and

Britain, should Putin be successful

393

in bringing this venture about?

394

Doomberg: Well, it's an

interesting question.

395

Europe in particular

is in the hurt locker.

396

They have become the victims, the

primary victims, outside of Ukraine.

397

Of course, let's not confuse ourselves.

398

The biggest, the biggest victims in all

this are the people of Ukraine and the

399

country of Ukraine, which is heading for

a very, very challenging and potentially

400

terrible winter, we should say.

401

setting Ukraine to one side, if you look

at the US, China, Russia and Europe,

402

the biggest loser by far is Europe.

403

it has largely done the bidding of

the US and paid all the price for it,

404

while the US has basically benefited

economically by supplying the continent

405

with relatively expensive energy, and,

and that has been exchanged for the cheap

406

energy that Europe had built its entire

business model on, Germany in particular.

407

And so, if you just look at Germany,

I mean, they, they they've been

408

severed from energy, their industry

is uncompetitive, and even the auto

409

sector is moving to China, right?

410

And so if the molecules get rerouted to

China too, which is why I mentioned the

411

power of Siberia too earlier, because

that takes molecules that had been

412

going and were intended to keep going

to Europe and reroutes them permanently

413

to China, then they've lost their

molecules and they've lost their industry.

414

Both of which have gone to China.

415

and the only truly sort of economic

beneficiary of all this is, is

416

the US, but Great Britain and

Europe are energy vassals now.

417

And we suspect that the European

union is probably not going to

418

survive in its current state.

419

this is a rather unnatural

state for Europe.

420

Europe is a collection of nations

that normally don't get along with

421

each other all that well, which

is why there's been so many wars

422

on that continent over the years.

423

And to assume that you can

just impose this sort of super

424

bureaucracy out of Brussels.

425

on all of these nations with

centuries of history and

426

culture was always a challenge.

427

And now Europe seems to be

breaking apart at the seams.

428

We're seeing country after country,

what the traditional media are

429

calling, you know, far right parties

gaining a plurality of the vote,

430

but being denied any parliamentary,

benefits that would normally come

431

with being the leading party.

432

Party to receive the votes.

433

They're pro in the in the name of

saving democracy We see an awful lot of

434

undemocratic things being done to parties

that are popular and look Populism in

435

its name is a reaction to unpopular

policies And if you don't want the rise

436

of quote unquote far right parties,

then maybe you should govern better.

437

I think it is perfectly normal That

populations who suffer the consequences,

438

because it is the average person

that suffers consequences of bad

439

geopolitical and economic decisions,

not the elite, it is perfectly

440

predictable, that they would revolt.

441

And I think Brexit, the first election of

Donald Trump, these are all consequences

442

of what we would call a crisis of

confidence among Western leaders.

443

Adam Butler: So, in the, in the context

of a Europe who has largely made all the

444

sacrifices, To impose these penalties

against Russia, and relied on the

445

friendly, cooperative support of the U.

446

S.

447

in taking this stance.

448

How would you view, or how do you

think that Europe would view a Trump

449

presidency versus a Harris presidency

given, I think, Trump's pretty clear

450

message that he wants to take a less

outwardly collaborative, perspective

451

with both, you know, less friendly and

historically more friendly trade blocks.

452

Doomberg: I think they're in complete

and total panic at the prospect of

453

Trump presidency, at least the current

batch of leaders who are clinging

454

to power across the European Union.

455

I think Donald Trump, much like

too many on the left in the U.

456

S., is their worst nightmare.

457

because he will have a very

narrow window of opportunity

458

to, to reset everything, right?

459

now he, he happens to have a pretty

naive view as to his ability to do so, to

460

quote, end the war on day one, I think.

461

That's more election talk.

462

And I think the reality of governing

is always more challenging than

463

the ease with which you can

critique the existing leadership.

464

which is why we'd like to say,

you know, be careful to not be

465

the dog that catches the car.

466

So what are you going to do after that?

467

Like, I think the fatal mistake that

was made by Biden and, Van der Leyen

468

and Boris Johnson and Justin Trudeau

and the whole batch of Western leaders

469

was, once again, as It seems like we

are intent on proving to ourselves

470

every 50 years or so, although it's

been a little longer this time.

471

the Russian society, its military

industrial complex, its technical

472

prowess, and its unity were

radically underestimated by the West.

473

They thought this would be quick,

that there would be a regime change.

474

I remember listening with some horror

as analysts that people respect and

475

are widely listened to were proclaiming

that Russia was a technological paper

476

tiger and that the pullout of Western

energy service providers would lead

477

to a collapse in their production

of energy and so on and so on.

478

This was all nonsense.

479

Anybody who has competed with

Russians, worked with Russians, hired

480

Russians understands that whatever

you think of Putin, the country of

481

Russia itself has enormous resources,

has enormous industrial potential,

482

and has a history of being invaded.

483

And so one thing the Russians have

figured out how to do is to march

484

from east to west and carpet bomb

towns and villages along the way.

485

I think we should have learned

this lesson by now, right?

486

And we're seeing it happen in Ukraine.

487

By the way, very serious war crimes,

I believe, being, we believe,

488

being committed in the process,

like the The specific targeting

489

of the Ukrainian electricity

grid, in our view, is a war crime.

490

And, they've knocked out some two thirds

of that grid and stand ready to knock out

491

the rest of it just as winter unfolds.

492

The only logical reason that one

would do that is to create a migration

493

crisis to make the country unlivable.

494

and that's likely going to succeed

and, and it's dastardly and all of

495

those things, but it's the reality.

496

One of the reasons you don't get

into wars is you might lose them.

497

Mike Philbrick: Yeah, do do me, I'm

wondering on, on the idea of a Trump,

498

Trump presidency, some of what the,

you know, western leaders have done.

499

you know, cutting Russia off and then

sort of empowering its sale of its

500

hydrocarbons through back channels

at higher prices has empowered them.

501

I just wonder if, if a, a Trump

win and a drill baby drill.

502

isn't one way to undermine that power

dynamic that exists sort of in that

503

Russia Iran multi polarity production

partnership with the, you know,

504

sort of the China India side of it.

505

Doomberg: we, we have, we have

been making this case from the very

506

beginning, as you might recall.

507

I'm sure we've talked about it

in my, my prior appearances.

508

As we said, we have a sort of

counterintuitive view of the

509

consequences of the upcoming US election.

510

If Trump wins, that is very bullish

for supply, which means deeply

511

bearish for price and deeply

bearish for energy equities.

512

The reverse is also true.

513

A Harris win means more

EPA, which in a way, the U.

514

S.

515

regulatory regime acts as a police and

a disciplinarian to the energy sector in

516

ways it never seems able to do on its own.

517

So a Harris win is bearish for

supply, which is bullish for

518

price and bullish for equities.

519

And so you have this perverse situation

where I'm, I'm sure just based on

520

all of my contacts, 95 to a hundred

percent of industry executives in the

521

energy sector are going to be voting

for Trump and they're not voting their

522

pocketbooks because Trump is going to be

very bad for their their stock prices.

523

Now, you've hit on the exact point.

524

drill baby drill is and has always been

the only effective way to starve Putin's

525

war machine of the funds needed to win.

526

And all of the sanctions have done

nothing but increase the friction

527

costs associated with Trump.

528

And that means he gets to transact at

a higher price than he otherwise would.

529

The sanctions were designed to backfire.

530

We wrote about this two years

ago, two and a half years ago now,

531

in a piece called Crazy Pills.

532

Where we're like, we were screaming

from the roof that this is

533

going to fail and it has failed.

534

That Brent is still at 75 dollars

a barrel right now, is criminal.

535

if the US and European leaders had any

sense, Of how commodity markets actually

536

worked We would have done what James

Baker did ahead of the Gulf War which

537

is you go around the world and back then

people still took the US Secretary of

538

State seriously and you lean on all of

your allies to produce produce produce

539

produce It doesn't take much in the way

of excess supply for prices to crater If

540

we had got prices down to below Putin's

break even production costs what do you

541

think would have happened to their economy

542

Mike Philbrick: now we're talking.

543

Doomberg: and this is

what we needed to do now?

544

Look energy bulls don't like that.

545

Exxon Mobil doesn't like that.

546

but if you're truly playing a bit of a

longer game, this was the way forward.

547

in a way, in a way, Biden proved

it when he released 1 million

548

barrels a day from the Strategic

Petroleum Reserve for 6 months.

549

That was 1 percent of daily supply.

550

It cut the price of oil in half.

551

Okay, what does 2 percent

of daily supply do?

552

What does 3 percent of daily supply do?

553

You get oil back to 30 a barrel and

we are looking at a very different

554

geopolitical chessboard right now.

555

Adam Butler: What does it say about the,

the relationship between the US and,

556

and, the Saudis, that the Saudis haven't,

turned on their taps more aggressively in

557

support of, What would be an obvious U.

558

S.

559

objective?

560

Doomberg: we didn't give

them enough carats to do it.

561

I mean, clearly, they didn't.

562

In fact, you know, we're old enough

to remember that In the weeks after

563

COVID 19 became a thing, Russia and

Saudi Arabia engaged in a price war.

564

And one of the reasons why oil went

negative was in part because the

565

Saudis were flooding the world with

supply just as demand was shrinking.

566

Because of the lockdowns and the

economic shocks that followed

567

the spread of the pandemic.

568

And so it's not like Russia

and Saudi Arabia that Putin

569

and MBS are natural bedfellows.

570

Like this is not a natural relationship.

571

It is a sort of once the U.

572

S.

573

sanctioned those reserves, I think that

kind of spooked the Saudis and drove

574

them closer to the BRICS position.

575

And they've applied now.

576

to join the BRICS.

577

So have we lost Saudi Arabia?

578

Who knows?

579

God knows the domestic political situation

in Saudi Arabia is beyond our zone of

580

expertise and what's going on in the

back channels between, you know, the

581

US and Saudi Arabia again, who knows?

582

History will tell us what was

really going on 15 years from now

583

when we're allowed to read it.

584

But, but yeah, like we're not doing it.

585

Like again, the fact that Brent is at

75 is a condemnation of the sanctions

586

regime and one of the things we

haven't talked about, I mentioned

587

earlier, it calls into question the

broad competence of those that are

588

currently leading the Western world.

589

They didn't get it right on energy.

590

They didn't get it right on Putin's

political stability on the domestic front.

591

They certainly catastrophically got

it wrong on Russia's ability to, keep

592

its commodities flowing, to increase

its war machine, to build weapons at

593

a rate that is lapping all of NATO.

594

Like how much really important stuff

do you need to get wrong before you

595

ponder the accountability question

596

Adam Butler: So do me, this, this is,

this actually leads to what I think

597

is maybe the most important question.

598

and it's a, it's a tricky one and I don't.

599

I suspect you've given it some thought,

but I don't necessarily expect you to

600

have all the answers, but what is it about

the frameworks that the current breed of

601

Western leaders who are, as you described,

sort of clinging to power and have been

602

in power largely over the last kind of,

call it 30 to 40 years, what What is it

603

about the frameworks they're using that

has led them to make so many what seem

604

obvious errors, and maybe they're more

obvious errors a little bit in retrospect,

605

but then there doesn't seem to be the

kind of recalibration that you'd expect

606

once observing a series of errors either.

607

What is it about their frame of reference

that makes it very difficult for them

608

to adapt and learn from these mistakes?

609

Yeah, that's a great question, I

have given it some thought and

610

I have a bit of an off-the-wall

hypothesis of what may be going on.

611

Much of the foreign policy establishment

612

Doomberg: And veterans that

make it up, especially in the U.

613

S., came of age during a time

where peak cheap oil or peak

614

oil, Hubbert's Peak, was dogma.

615

These people were convinced that the U.

616

S.

617

was Was dramatically short oil and natural

gas to a lesser extent and this framed the

618

geopolitical worldview, which is why we

cut the deal with the Saudis in the 70s.

619

you know, and everything

that happened after that.

620

And I think what's going on is the current

set of leaders have failed to internalize

621

the consequences of the shale revolution.

622

We no longer need to worry about going

around the world to secure access to oil.

623

to oil and commodities and other products.

624

We're the world's global energy giga

power, and we're not acting like it.

625

the Middle East actually doesn't matter

to us anymore in the way that it did

626

when we were deeply short oil and gas.

627

I think the shale breakthrough and

the meaning of it has not been fully

628

internalized by the current leaders.

629

And they have not changed their

worldview to accommodate a fundamental

630

change in assumption that the technical

revolution that is shale has brought.

631

Now, concurrent with that, there's

an entire complex that has grown

632

wealthy on foreign adventures.

633

people call it the military

industrial complex.

634

We spend 900 billion a year

in the U S alone and where it

635

all goes is a great mystery.

636

find me the last major conflict.

637

Okay.

638

Where things ended well, as a

consequence of those adventures,

639

Afghanistan, Iraq, Libya, Ukraine.

640

Now, you forget about Libya, but

you know, a lot of, wreckage left

641

in the wake of these adventures.

642

And we like to say, and have written

under our masthead that when you're

643

in the bomb making business, this

is a working capital problem.

644

And so you have these trends.

645

It was this.

646

Need to secure energy supplies.

647

Like there's some great

books to describe all this.

648

One of them is called The Pipeline Wars.

649

It's a fascinating book.

650

We quoted it in one of our earlier pieces.

651

That's changed.

652

Like we're swimming in hydrocarbons now.

653

I'm old enough to remember when

Freeport LNG was going to be an import

654

terminal as late as 2014, I believe.

655

The fact that we are drowning in

cheap hydrocarbons has not, you know,

656

percolated up to the highs of senior

decision making in Washington, D.

657

C.

658

or, or in Europe, and Europe's

not drowning in hydrocarbons, so

659

why would they have that view?

660

But the U.

661

S.

662

certainly is, and we need to worry less.

663

In fact, we've advocated.

664

If we just go back to the Monroe Doctrine,

planning in the western hemisphere

665

to keep us busy for a very long time.

666

Venezuela is sitting on the largest

hydrocarbon deposits in the world,

667

and it's a, it's a broken country.

668

Argentina, the, the, Yaca Verta,

I've got, I've reversed names, but

669

the, the large shale deposit in

Argentina, Yaca Verta, is capable of

670

producing an enormous amount of oil.

671

We, we, we read one expert analysis

that if all of the infrastructure was

672

there, that field could handle five to

six million barrels a day of production.

673

It won't get there, but it could.

674

It's huge.

675

It's on par with the Permian.

676

plenty of oil.

677

Look at British Columbia, Alberta.

678

I mean, we're drowning in

natural gas on the British

679

Columbia side of that formation.

680

So, the, the, one of the most fundamental

pieces on the board has changed, but our

681

geopolitical worldview really hasn't.

682

Mike Philbrick: So that, that framing is

just, it's the old adage of, you know,

683

they had to take, I don't know what it

was, 10 seconds between mortar rounds,

684

and that was to steady the horses.

685

We've abandoned horses a long

time ago in a military construct.

686

So it is, those old time

habits are hard to shake.

687

I wonder if we, so we've talked a little

bit about the developing multipolar world,

688

that the Russia's and Iran's supplying

the China's and India's, of usage.

689

sort of like we have in the West with,

with Europe being a user and, and, America

690

and American allies being producers.

691

Can we maybe switch to how that's

trickling down in other areas, maybe

692

heading to the world of technology,

chips, AI, or is there anything

693

else, Adam, you want to cover on this

particular, vein of conversation?

694

Adam Butler: I think we'll cover

it as we discuss the other themes.

695

Doomberg: so concurrent with this

battle over polarity is the rise of

696

China and one of the things that the

US is deeply concerned about is that

697

the Western world loses its edge

in semiconductors, high computing,

698

and Quantum computing and so on.

699

And this is a sector where the U.

700

S.

701

is indeed a superpower.

702

But as we have been chronicling, China is

very, very good when it puts its entire

703

national interest to work at stealing,

bribing, blackmailing their way to

704

whatever technologies the CCP declares

are in the country's strategic interest.

705

And there is no technology more in

the strategic interest of China today

706

than Then semiconductor technology,

even more so than energy because

707

they've largely worked that out.

708

You know, they have access to

reasonable supplies from a basket

709

of suppliers across the entire

array of primary energy sources.

710

But just by an enormous inventory of

coal and the ability to bring more

711

coal power online, they're doing an

all the above energy strategy, which

712

is the right thing to do when you're

fundamentally short one of them.

713

In this case, they're short

oil, solving those problems.

714

And so now they're turning their attention

to semiconductors and we're seeing a truly

715

incredible arms race, in that sector.

716

It's long been our view that

the Chinese are going to win.

717

we've seen this movie before and directly

experienced it in multiple industries.

718

one of the great examples of this

is, how the Chinese are just gonna

719

take over the global auto industry.

720

BYD in particular is

just an amazing company.

721

amazing in a sort of agnostic sense.

722

Not in a praising sense, but I'm, I

remember seeing what we would call the,

723

the Frankenstein mobile at an auto show

in China, which was, BYD's complete and

724

total knockoff of the Toyota Corolla.

725

It was literally a, a total rip off

with different parts on their hood,

726

ripped off from other, manufacturers.

727

But, and this made it very easy for

people to not take BYD seriously, right?

728

But one of the things we've written about

is when you're allowed to take and cherry

729

pick the very best technology developed

by your competitors over the decades.

730

And skip the time and resources

needed to develop such a suite

731

of technologies on your own.

732

You have a huge advantage.

733

And today BYD produces a car that

is a plug in hybrid electric.

734

And if you start with a full tank of

gasoline and a fully charged battery, you

735

can go 2000 kilometers before you have

to charge up either of them for 14, 000.

736

GM and Ford and Volkswagen are cooked.

737

Like these companies are

capitalized to compete globally.

738

And the Global South, the

BRICS countries, are going to

739

happily buy this car from BYD.

740

and they're going to win and the

Chinese stole that from under, you know,

741

well in plain sight, they stole it.

742

They forced all of the major OEMs to

create joint ventures and then, you

743

know, called all the technologies

from those JVs and suddenly a wholly

744

owned, national champion comes out

of nowhere and dominates the market.

745

And we're going to see the same

thing in, in semiconductors.

746

We watch with great interest.

747

the recent, inadvertent early

release of earnings from ASML.

748

because this, this was a, we

had written about this company

749

about 10 days prior to that.

750

And so whenever something we've written

about hits the news, it's always a

751

high pucker factor moment for us.

752

Cause like, did we get it right?

753

Or did we get it wrong?

754

Right?

755

in this case, I think

we largely got it right.

756

One of the interpretations, again,

we like to challenge narratives and

757

think outside of the proverbial box,

so to speak, is that China stopped

758

ordering from ASML because they

figured out how to steal the technology

759

and they don't need them anymore.

760

And if that's the case, there's an awful

lot of companies with very rich valuations

761

that are about to fall off a cliff.

762

Adam Butler: so I think.

763

Can you go a little bit

more deeply into that?

764

Because.

765

I think this may be, a market

shattering revelation, given the

766

disproportionate size of market cap

that is, allocated to the sector that

767

you're describing that is ripe for

disintermediation by Chinese competition.

768

Doomberg: Yeah, so I want to tread

carefully because we're not calling

769

for that, but this certainly has,

it, it, it rhymes with things

770

we've seen in the past, right?

771

So ASML, what do they do?

772

They make lithography machines, and

essentially they have a monopoly on

773

that, and their biggest customers are

in Taiwan, and lithography machines

774

are critical to the production of most

semiconductor chips that we use today,

775

and in particular the high end ones

absolutely need ASML's technology.

776

The U.

777

S.

778

has been trying to inhibit China's

ability to get the best machines that

779

ASML has to offer, and as part of that

sanctions policy, which again reminds

780

us of the futile efforts that we saw

in the Russia energy situation, China

781

reacted to those sanctions in two ways.

782

One, they bought as much from

ASML as ASML would sell them.

783

Basically, anything that wasn't

specifically on the sanctions list

784

was pre ordered, which is why ASML's

shares have skyrocketed, and separately,

785

they embarked on a massive national

campaign to make ASML redundant to them.

786

ASML enjoyed huge growth in sales.

787

In fact, in the second quarter

of this year, China was 49

788

percent of their revenue.

789

Up from 10 to 20%, just

a couple of years before.

790

that's dangerous, right?

791

That's a concentration of risk.

792

And then suddenly in this, recent

accidental release of their Q3 numbers,

793

we learn that their order book, which

was expected to come in at between 5.

794

5 and 6 billion, was closer

to 2 billion and change.

795

Well, if that order book is half

China, what does that tell you?

796

Tells you the Chinese are

not really ordering anymore.

797

And if the Chinese aren't ordering

anymore, what does that tell you?

798

and it should be noted that, as we

quoted in our piece, I believe the

799

piece, the title of the piece where

we wrote about this was called Going

800

Dutch, because ASML is a Dutch company.

801

I think the social preview

for that piece was in the chip

802

war between the US and China.

803

The Netherlands struggles

to split the bill.

804

and so, we, we pointed out

805

It was revealed that a senior

technical employee walked out of ASML,

806

presumably with a thumb drive full of

their secrets and escaped into China.

807

We've seen this before.

808

This is what the Chinese do, right?

809

So if they're in possession of all

the machines they need, and then

810

some to keep things going now, And

plenty of spare machines for them to

811

do a complete and total breakdown on.

812

Then it's only a matter of time

before they get around the problem.

813

The Chinese have a history of doing this.

814

and next thing you know, we're going to

wake up to a headline where the Chinese

815

no longer need, you know, the Taiwanese

or the Dutch or the American designs or

816

the chips that come from the combination

of those three things, because they're

817

going to have done it on their own.

818

And, ASML was happy to take that revenue.

819

Stock was skyrocketing.

820

And, and now we see what happens.

821

Now, if this does happen, as you

say, there's trillions in market

822

cap predicated on the current market

darlings, not only having a moat,

823

but keeping it for a very long time.

824

And to the extent that that assumption

isn't true, it doesn't mean those

825

stocks are going to go down now.

826

It doesn't mean they're not going

to keep going up for a while.

827

But the long term situation, the

equilibrium state is pretty clear.

828

Adam Butler: Well, yeah, and they're

priced as though they're going to

829

maintain this unassailable moat and

these, just outrageous profit margins

830

as far as the eye can see, right?

831

For decades in the future?

832

Doomberg: I don't know how else you

can justify how every 1 move in NVIDIA

833

stock is 25 billion of market cap.

834

Adam Butler: yeah.

835

Doomberg: it's pretty amazing.

836

Seems to be, look, we've said this

before, we don't trade stocks.

837

So like, don't, don't listen to Doomberg

for stock trading advice, but two

838

things can be true simultaneously.

839

AI is incredibly transformative,

a much bigger deal than even the

840

internet was in the dot com era.

841

And we could be in a giant AI bubble.

842

Adam Butler: Yep.

843

I've been saying the same thing.

844

Doomberg: I think both

of those things are true.

845

we are sort of doing a lot with AI in

our sort of professional lives and,

846

know some people who are knee deep in

the, in the thing, and it's pretty scary

847

what's going on out there, actually.

848

The open source AI is wild, wild

west, zero guardrails, way ahead

849

of open AI and really scary.

850

That's coming, right?

851

You can see what's coming.

852

but at the same time, 40

times revenue is rich.

853

I don't care what your profit margins are.

854

and those margins are a giant prize for

other people to go and, and chip away at.

855

And especially when you mix in

geopolitical risks, like the Chinese

856

intent on putting everybody out

of business because they will.

857

and so we shall see, maybe

this time is different.

858

but then you mix on top of that, the

piece we released over the weekend about

859

Taiwan's energy situation and things

860

Mike Philbrick: Right.

861

Doomberg: scary.

862

Mike Philbrick: Well, how

does that relate to Taiwan?

863

Is it, does it make it less key

of a position given that China is

864

going to recreate it on the mainland

865

or?

866

Doomberg: of course.

867

Yeah, certainly.

868

Look, Taiwan today produces two thirds of

all of the semiconductors and more than

869

90 percent of the most important ones.

870

That's a monopoly.

871

Where I come from, I mean, that's

the definition of a monopoly, right?

872

You have pretty good pricing power.

873

You're also really, really

important to the market.

874

And as we said in the piece, you know,

like Taiwan imports 98 percent of its

875

energy and it all comes in on a boat.

876

And what are the Chinese doing?

877

Maritime exercises to simulate a blockade.

878

Why would they be doing that?

879

Certainly not if they needed the chips.

880

Mike Philbrick: So that's a slightly

different take than, than I, so yes, I

881

Doomberg: we, we like to

generate slightly different takes

882

Mike Philbrick: Yes.

883

Now that even, even reading it, I

didn't quite come to that take so that

884

the, expertise is being developed in

mainland so that it is not impacted

885

as much by, the potential conflict

with Taiwan and the conflict that

886

would arise with the West there, their

supply chain would be recreated on

887

Doomberg: exactly.

888

And so, so like the main victim

of that blockade is the U.

889

S.

890

and Europe,

891

Mike Philbrick: Yeah.

892

Doomberg: not China and Russia.

893

Because if China has its

own homegrown industry,

894

Mike Philbrick: Mm hmm.

895

Doomberg: all across the supply chains,

they are proactively building inventory,

896

both in raw commodities, products,

but also in domestic expertise, right?

897

and so this is what really scares us.

898

So if, when we saw, so again, you know,

even paranoids have enemies, right?

899

So I'm willing to admit that, maybe

we're, we're seeing ghosts here, but

900

when you see China running a very

comprehensive blockade practice, you

901

see technology escape from ASML in 2023.

902

You see this massive pre buying

from an ASML by the Chinese.

903

You see telephones being produced

that are shocking people in the West

904

because of their sophistication.

905

And then we see a sudden drop

in orders, presumably from

906

China, in ASML's future books.

907

What do you see?

908

I mean, I, I see, I see a pattern.

909

Mike Philbrick: Yeah.

910

Adam Butler: Well, there's two, I guess

there's two potential explanations,

911

and both can be true as well.

912

But, I mean, one is that they've reverse

engineered 2 to 3 nanometer lithography

913

and have figured out how to mass produce

these, these machines that will allow

914

them to build the latest chips at scale.

915

and they need neither ASML nor TSMC.

916

or they've made the decision that

they're going to go after Taiwan

917

and, I guess, just capture the

supply that they need militarily.

918

Doomberg: Yeah but then you risk

things like kill switches and so

919

on right, so who knows umm I would

argue in, in the piece we wrote, we

920

talked about the, the Formosa potential

campaign, and ultimately why the U.

921

S.

922

decided not to invade what was then known

as Formosa, which we now know as Taiwan.

923

It's a difficult place to invade.

924

very high cliffs, you know,

that's a pretty long distance

925

to cross, with an armada without

being sighted by the defenses.

926

You know, like, I don't think anybody

is saying that China can effortlessly

927

invade Taiwan, without consequences,

but it's, it's not clear to us

928

that those plants would survive.

929

And most importantly, the sort of

hidden magic, which we know from our

930

time in industry and having supplied

this sector, the real magic is in the

931

technologists and the technicians.

932

It's not actually in.

933

It's the people that are doing the

work, which is why it's been so hard,

934

for example, to get these facilities

up and running outside of Taiwan,

935

because they have a nationwide

dedicated strategy to grow and develop

936

brilliant technicians dedicated to

this space who do the actual work.

937

Much of it is indistinguishable from

magic, trade secrets, fine tuning, like

938

these are highly sensitive machines.

939

And it's the technologists and

the technicians and whether

940

they would be motivated to

work or still be alive, right?

941

I mean in the case of a total war

that could cause significant problems.

942

So I don't think the Chinese

are necessarily interested

943

in grabbing the foundries.

944

But they certainly would be limited

in what they could do until they

945

have become self sufficient in that,

at a minimum, but we shall see.

946

but this is how we view it, right?

947

When, when we see those combination of

things, it, it sort of triggers our Spidey

948

sense, so to speak, as, as to a movie

we've seen play out in, admittedly far

949

less important industries than this one.

950

But the, the, the tools and

the tactics are very similar.

951

Adam Butler: Lets talk about, you did,

you mentioned, AI I've been neck deep

952

in, in AI, mostly LLMs and, and to a

much lesser extent, generative visual

953

models, like Sora and Flux and stuff.

954

You mentioned that open source progress.

955

is now making leaps ahead of, for

example, OpenAI's latest models.

956

What are you seeing there?

957

And then maybe expand on some of

the, I think you sort of alluded

958

to some scary potentialities there.

959

So, so what are you seeing in the

open source space and what should

960

make people concerned about that?

961

Doomberg: Yeah.

962

So when I say zero guardrails,

I mean, zero guardrails.

963

And you know, both the LLMs have

become very powerful, but also the

964

visual stuff has become less and less

distinguishable from authentically human.

965

And when you combine all of those

things, it's very easy to make

966

deepfakes, the full range of them, from

disgusting to, financially devastating.

967

And We have a friend who works in

the space, and we've been dabbling

968

with the technology, mostly because

we're in, we have a media business

969

now, and, this person is capable of

leveraging nothing but off the shelf,

970

open source technologies of creating

you, Adam, your voice, your likeness.

971

And speaking with almost perfect,

you know, your mannerisms to,

972

to, to like fool people that it's

actually you, that exists now.

973

And, and we're seeing all kinds

of fraud, like, people calling

974

children of people calling their

parents, but it's actually AI.

975

And they're getting like

money sent to the wrong bank.

976

You know, there's all manner of

dastardly things that could be done.

977

it campaigns.

978

When you watch a video on

Twitter, now you have to be.

979

wary of no matter how real

it looks, is it truly real?

980

Like how, what is the test?

981

as we're blurring the definition

between human and machine, is

982

there a test for authenticity?,

983

I would argue we're, the

window on that is closing.

984

And so like any technology, nuclear

power for example, in the wrong hands,

985

it can be used for terrible things.

986

And in well controlled hands, it

could be a source of limitless

987

clean energy for decades.

988

And there is legitimate, real risk to

our current way of life that is happening

989

online in the dark corners of the web that

would freak people out if they saw it.

990

Cause from what I've seen, it's freaked

me out and I don't go looking for

991

the worst of it, I can assure you.

992

Adam Butler: can you give a

couple of examples or even one,

993

Doomberg: Well, if I can make your

likeness, I could catch you on film doing

994

all manner of things that could be used

against you for blackmail, for example.

995

and if enough people see it.

996

Not many people stick around

for the footnotes, right?

997

And once that image is embedded

in people's minds, you're

998

stealing this person's identity

in the most visceral way.

999

And you could make them do anything, Adam.

00:58:26,226 --> 00:58:27,376

I mean, anything.

00:58:28,096 --> 00:58:30,116

Think Hunter's laptop, right?

00:58:30,486 --> 00:58:31,966

Like, that could be created.

00:58:32,436 --> 00:58:35,536

Indistinguishable from reality today.

00:58:35,666 --> 00:58:41,006

A bad actor looking to destroy Mike's

reputation has a lot more tools at

00:58:41,006 --> 00:58:42,516

their disposal than they did a year ago.

00:58:43,429 --> 00:58:46,099

Adam Butler: well, they'd have trouble

destroying Mike's reputation because.

00:58:47,254 --> 00:58:48,524

Doomberg: It's hard to

get lower than zero,

00:58:48,664 --> 00:58:51,574

Adam Butler: There's, there's,

there's, there are very few things

00:58:51,574 --> 00:58:53,444

that we don't have Mike doing live

00:58:53,599 --> 00:58:53,849

Mike Philbrick: Yeah.

00:58:53,989 --> 00:58:54,519

Seen it.

00:58:54,619 --> 00:58:55,099

Seen it.

00:58:55,189 --> 00:58:55,719

Seen it.

00:58:55,904 --> 00:58:56,194

Adam Butler: Yeah.

00:58:57,824 --> 00:59:00,664

Doomberg: but in all seriousness, like,

I don't know if you think about like if

00:59:01,181 --> 00:59:06,338

a bad actor wanted to destroy a political

candidate, far easier to do that now.

00:59:07,348 --> 00:59:13,818

Adam Butler: I think too, what also is,

has gone under the radar is the real time

00:59:13,818 --> 00:59:22,218

speech APIs, where it's not just that

you can create a video that goes viral.

00:59:23,173 --> 00:59:31,653

But you can have a Zoom video call with

a live avatar that is completely that

00:59:31,683 --> 00:59:39,263

the speech behind it is a language model,

and you've got a real time generative AI

00:59:39,263 --> 00:59:43,173

video model that is moving the avatar.

00:59:43,488 --> 00:59:47,578

Doomberg: is exactly what I was referring

to, like, when, when, if you get a

00:59:47,578 --> 00:59:50,208

call from your adult child at college.

00:59:50,933 --> 00:59:54,383

And it's a FaceTime call, and

it's actually not that person,

00:59:54,383 --> 00:59:57,243

and they're asking you to do

something, send money or whatever.

00:59:57,763 --> 00:59:59,983

it, you can see how this would be abused.

01:00:00,263 --> 01:00:01,283

and it's really challenging.

01:00:01,283 --> 01:00:03,673

You know, I read an interesting

article, I think it was in the

01:00:03,673 --> 01:00:08,043

Financial Times, about how teachers are

struggling to catch students because

01:00:08,043 --> 01:00:11,293

the AI detection algorithms often get

things wrong, and people are falsely

01:00:11,303 --> 01:00:12,813

accused, and how do you handle that?

01:00:12,833 --> 01:00:17,223

And it's, it's really gonna

mess things up in a big way.

01:00:17,563 --> 01:00:20,233

But the part that's freaky is

there's just no stopping it.

01:00:20,303 --> 01:00:22,263

Like, there is no guardrails.

01:00:22,933 --> 01:00:23,533

It's out there.

01:00:23,633 --> 01:00:30,973

You can build these things at no cost, in

record time, and people are building them.

01:00:32,053 --> 01:00:32,493

Like,

01:00:33,223 --> 01:00:34,293

Mike Philbrick: The doors wide open.

01:00:34,293 --> 01:00:34,393

The

01:00:34,393 --> 01:00:34,893

barns empty.

01:00:34,913 --> 01:00:35,293

Doomberg: open.

01:00:35,413 --> 01:00:40,413

And God knows that the current

batch of regulatory leaders are

01:00:40,673 --> 01:00:42,543

wholly ill equipped to handle this.

01:00:43,298 --> 01:00:50,578

The talk about we're just now

beginning to ponder the barn door and

01:00:50,578 --> 01:00:53,701

that horse is like long gone, right?

01:00:54,031 --> 01:00:55,521

It's scary.

01:00:55,726 --> 01:00:57,296

Mike Philbrick: Was there,

was there even a barn?

01:00:57,756 --> 01:00:59,196

They didn't even have a

chance to build a barn.

01:00:59,346 --> 01:00:59,566

It's

01:00:59,711 --> 01:01:02,731

Doomberg: right I mean, it's just and the

horses are already procreating and there's

01:01:02,731 --> 01:01:08,671

like a whole herd of them now like it it's

it's it's scary and I one of the things

01:01:09,139 --> 01:01:11,359

That sort of allows me to stay sane.

01:01:11,369 --> 01:01:13,389

There's just nothing I can do about it.

01:01:14,459 --> 01:01:16,909

So you just brace for impact

with everybody else, right?

01:01:16,939 --> 01:01:17,359

If it's a,

01:01:17,849 --> 01:01:19,759

Mike Philbrick: Hopelessness

is such a comforting thing.

01:01:20,189 --> 01:01:22,869

Doomberg: well, if it's a problem

for everybody, it's not, it's

01:01:22,869 --> 01:01:25,799

not a unique problem to me, And

01:01:25,814 --> 01:01:28,364

Adam Butler: Well, it's really a

continuation of what we've been

01:01:28,364 --> 01:01:34,754

seeing over the last 5 to 10 years,

which is just a pollution of the,

01:01:34,864 --> 01:01:37,114

of the information commons, right?

01:01:37,144 --> 01:01:39,714

Like it's, it was mostly text.

01:01:40,504 --> 01:01:45,724

pollution, and more recently

it's been audio pollution.

01:01:45,754 --> 01:01:51,454

And now we're moving into the

audio video real time interactive

01:01:51,698 --> 01:01:53,818

pollution domain, right?

01:01:53,928 --> 01:01:57,658

so, I mean, we weren't able

to get our heads around how

01:01:57,658 --> 01:01:59,528

to regulate it or manage it.

01:02:00,393 --> 01:02:08,763

When it was just text and you know now

we've gone from text to speech to AV We're

01:02:08,763 --> 01:02:15,263

in three dimensions now four arguably

in time and You know, we're we're just

01:02:15,273 --> 01:02:16,703

getting further and further behind.

01:02:16,703 --> 01:02:23,503

I agree It's almost certain we won't

be able to regulate or manage it How

01:02:23,503 --> 01:02:29,583

do you envision the next three to five

years playing out from a political?

01:02:30,353 --> 01:02:32,263

and social perspective

01:02:32,263 --> 01:02:33,561

Doomberg: It's going to be incredibly

challenging and the one thing that

01:02:33,561 --> 01:02:36,753

is very difficult to do is predict

the decisions of nonlinear systems

01:02:36,753 --> 01:02:40,343

and we are effectively predict

with precision nonlinear systems.

01:02:41,103 --> 01:02:47,543

And we are y running a giant experiment

in a complex non-linear system with

01:02:47,543 --> 01:02:51,469

a major perturbation coming and

how this manifests politically,

01:02:51,529 --> 01:02:58,733

energetically, socially, culturally

is profound in the same way that, you

01:02:58,733 --> 01:03:00,083

know, the iPhone changed the world.

01:03:00,153 --> 01:03:03,613

I mean, it's cliche to say it now, but

I, I, I didn't grow up with an iPhone.

01:03:04,393 --> 01:03:07,623

I didn't grow up with a universal

information machine in my

01:03:07,623 --> 01:03:11,053

pocket, effortlessly telling

me everything I need to know.

01:03:11,053 --> 01:03:17,223

Now equipped with, you know, AI powered

search apps that with amazing precision

01:03:17,223 --> 01:03:20,383

and almost no hallucination tell me

everything I need to know in seconds.

01:03:21,118 --> 01:03:22,818

that this is, this is staggering.

01:03:23,398 --> 01:03:27,118

one way to model the world, which

we have written about, is to assume

01:03:27,788 --> 01:03:32,918

that society will do whatever it

takes to organize itself in a way

01:03:32,968 --> 01:03:37,058

which ensures that it stays on this

exponentially growing Kurzweilian

01:03:37,058 --> 01:03:38,758

curve of supercomputing power growth.

01:03:39,388 --> 01:03:41,718

And that model has worked very well.

01:03:41,818 --> 01:03:43,508

Betting against it has

been a fool's trade.

01:03:43,873 --> 01:03:47,303

And if you do that and we circle it

all the way back to energy, you get

01:03:47,303 --> 01:03:51,513

back to, how AI might predictably

impact energy, assuming everything

01:03:51,513 --> 01:03:53,883

else remains reasonably solid.

01:03:53,933 --> 01:03:56,753

and by the way, I should note

as we're talking, gold just

01:03:56,753 --> 01:03:57,923

dropped 20 bucks an ounce.

01:03:58,033 --> 01:04:00,223

who knows on what headline,

but man, I hate being right.

01:04:01,173 --> 01:04:01,513

Anyway,

01:04:01,913 --> 01:04:02,083

I

01:04:02,143 --> 01:04:02,423

don't want

01:04:02,433 --> 01:04:02,703

Mike Philbrick: Right.

01:04:02,703 --> 01:04:03,203

And long.

01:04:03,313 --> 01:04:07,403

Doomberg: off, but I'm watching

gold dump 20 in five minutes, and,

01:04:07,453 --> 01:04:08,623

wondering what's going on in the world.

01:04:11,863 --> 01:04:14,823

Mike Philbrick: I mean, we have

been on for over an hour and it

01:04:14,856 --> 01:04:16,266

is, is this an appropriate time?

01:04:16,276 --> 01:04:18,726

We haven't had a chance to

talk about nuclear much, but,

01:04:19,156 --> 01:04:20,166

Doomberg: keep going if you guys have the

01:04:20,226 --> 01:04:21,786

Adam Butler: Yeah, I've got tons of more

01:04:22,346 --> 01:04:23,601

Mike Philbrick: I just

want just to check in.

01:04:24,156 --> 01:04:24,996

Adam Butler: yeah, yeah, all good.

01:04:25,126 --> 01:04:34,426

so if, if what you posit plays out, which

I agree, I think is a likely trajectory, I

01:04:34,426 --> 01:04:41,416

mean, do we need to get to Kardashev level

2 energy production in order, you know, in

01:04:41,416 --> 01:04:43,796

short order, in order to facilitate that?

01:04:44,596 --> 01:04:49,156

Doomberg: I think the biggest victim

of AI is this net zero nonsense.

01:04:49,779 --> 01:04:50,689

That's going to go out the window.

01:04:51,199 --> 01:04:55,739

I mean, and I think, as we have been

saying all along, the human endeavor

01:04:55,739 --> 01:04:58,549

is a constant, unrelenting struggle

against the forces of entropy.

01:04:59,219 --> 01:05:01,979

your standard of living is defined by

how much energy you get to harvest and

01:05:01,979 --> 01:05:07,189

all humans everywhere want a higher

standard of living and AI for all of its

01:05:07,509 --> 01:05:13,306

threats and flaws and the fears we may

have surrounding those threats and flaws

01:05:13,676 --> 01:05:20,964

is a smashingly impactful, powerful tool

for progress towards the human endeavor.

01:05:21,754 --> 01:05:26,124

And, we are going to extract

the energy needed to keep us

01:05:26,144 --> 01:05:27,634

on that Kerswellian curve.

01:05:28,374 --> 01:05:34,374

and the two biggest winners from the

trade are nuclear in the long term and

01:05:34,374 --> 01:05:38,244

natural gas in the medium term, and

we could talk about why and the timing

01:05:38,244 --> 01:05:40,254

of those two, why we hold those views.

01:05:40,494 --> 01:05:43,913

And the biggest loser is, is the

climate change hysteria, because,

01:05:43,994 --> 01:05:45,154

big tech isn't going to care.

01:05:45,704 --> 01:05:50,064

and, and we predicted

that COP 28 was peak ESG.

01:05:50,754 --> 01:05:56,444

And I think the lack of turnout headed

towards COP 29, ostensibly under the

01:05:56,444 --> 01:06:00,484

reason that it's difficult to get

there, is further proof of that, but

01:06:00,484 --> 01:06:03,854

the biggest winners will be nuclear

and natural gas, and the biggest

01:06:03,854 --> 01:06:05,684

losers will be the carbon counters.

01:06:05,754 --> 01:06:06,163

Sharon

01:06:07,529 --> 01:06:09,339

Adam Butler: I think you guys

have covered the whole thing.

01:06:10,663 --> 01:06:15,634

Nuclear natural gas in in other

in a previous conversation, right?

01:06:15,634 --> 01:06:21,474

So I want to point, current listeners

to previous episodes with Doomberg,

01:06:21,634 --> 01:06:23,994

for great in depth coverage of that.

01:06:26,334 --> 01:06:30,984

I want to pull on a, maybe a higher

level abstraction thread here, which is.

01:06:32,359 --> 01:06:37,329

One of the, one of the challenges

that we are facing at the moment to

01:06:37,799 --> 01:06:43,479

perhaps the greatest extent in, in

a century is consensus building and,

01:06:44,123 --> 01:06:46,073

you know, global cooperative gameplay,

01:06:48,366 --> 01:06:55,633

how, and one of the symptoms of

that is a loss of faith in the

01:06:55,633 --> 01:06:57,083

institutions of decision making.

01:06:58,076 --> 01:07:01,266

maybe talk a little bit about some

of the things you've written on that

01:07:01,266 --> 01:07:05,006

theme, what you're, what you're maybe

currently writing about that theme

01:07:05,036 --> 01:07:13,693

and what the impact of this inability

to build consensus and build global

01:07:13,733 --> 01:07:19,306

cooperative frameworks might be on our

ability to solve these big challenges.

01:07:19,386 --> 01:07:22,617

So,

01:07:22,681 --> 01:07:24,301

Doomberg: we publish it, because

sometimes we write pieces

01:07:24,301 --> 01:07:25,501

that we decide not to publish.

01:07:25,771 --> 01:07:27,861

Someday we might publish a

collection of the pieces we

01:07:27,861 --> 01:07:29,401

never published, just for fun.

01:07:30,413 --> 01:07:34,354

We're writing a piece on ivermectin, and

that whole nexus of science and media,

01:07:34,614 --> 01:07:40,771

and how the sort of media medical nexus

has lost half the country, basically.

01:07:41,121 --> 01:07:42,031

Conservatives in the U.

01:07:42,031 --> 01:07:42,461

S.

01:07:42,866 --> 01:07:43,866

don't believe the media.

01:07:44,336 --> 01:07:47,226

They don't believe the

scientific establishment.

01:07:47,226 --> 01:07:50,026

This is why, by the way, when we

write pieces like Scientists Say,

01:07:50,356 --> 01:07:55,506

we bemoan the knee jerk response of

Hurricane Helene is proof of climate

01:07:55,506 --> 01:07:58,946

change, because that just drives that

half of the country to not believe

01:07:58,946 --> 01:08:01,653

anything the media says about science.

01:08:02,258 --> 01:08:04,988

As it pertains to the

particularities of AI, though,

01:08:04,988 --> 01:08:06,528

we do see one major difference.

01:08:07,478 --> 01:08:10,888

The technology companies control

social media, and therefore have

01:08:10,888 --> 01:08:12,598

enormous power to shape beliefs.

01:08:12,818 --> 01:08:15,448

And conservatives are generally

pro energy development.

01:08:16,077 --> 01:08:20,411

So that one will be an easier sort

of piece to move on the board, to

01:08:20,411 --> 01:08:22,731

normalize the use of natural gas.

01:08:23,111 --> 01:08:28,180

To power data centers in the Permian, for

example, or we see Microsoft reopening

01:08:28,661 --> 01:08:33,661

Three Mile Island, shocking the sort

of old school Malthusians who thought

01:08:33,661 --> 01:08:35,470

they had won the war on nuclear power.

01:08:36,201 --> 01:08:40,941

So I do think that the

move to use abundant U.

01:08:40,941 --> 01:08:41,081

S.

01:08:41,111 --> 01:08:43,131

energy to power data

centers to keep the U.

01:08:43,131 --> 01:08:43,401

S.

01:08:43,451 --> 01:08:48,736

on the cutting edge of technological

development in a quote unquote war

01:08:48,736 --> 01:08:54,145

with China will be widely well received

and that'll be an easier thing for the

01:08:54,145 --> 01:08:57,946

technology companies to sell and they

will pay off all the environmental