Speaker 1This is the Commodity Culture Podcast, where we interview prominent investors, fund managers, analysts, and company CEOs to give you an edge when it comes to investing in the commodity space. Doonberg, great to have you on Commodity Culture. Let's kick things off with the on-again, off-again war in the Middle East. We're seeing a fairly steady stream of media claiming that a deal is on the table one day, and then it's off the table the next. Trump is saying, maybe we're going to make a deal. Trump is going to say, I'm going to send them all to hell. This seems to have been a pattern that's been going on consistently throughout the conflict. Now, there's a few people I've spoken to who believe there is no way out for the U.S. right now, and Trump has alluded to potentially restarting kinetic activity after the midterms. What's your read on this situation? Are we anywhere close? To being able to wrap this thing up?
Speaker 2Well, Jesse, first of all, great to be back with you. I always appreciate the invite, and I know that I enjoy our conversations greatly. Hopefully, your listeners do as well. So, you know, giving a lot of thought to this, of course, because it is the question of the day for energy analysts, which is sort of the crowd amongst whom we count ourselves. We've sort of settled on that the real war is very little to do with Iran at the moment, and we have been doing a lot of work on it. We've been watching very closely what's going on between Yemen and the Saudis, and there the story is a pretty ominous one for Trump. And then sort of separately, you know, you have this bravado, and, you know, Trump is Trump. Trump says a lot of stuff. We see a lot of curious things going on right now that sort of maybe imply that the post-Xi Jinping world, you know, his visit to Washington might be a little different. It's a little different than the media is portraying. What do I mean by that? We have the bombers leaving RAF, the Royal Air Force Base in, what's it called, Langford? Pardon me if I don't know my British air bases all that well. But they all depart all of a sudden in a bit of a hurry this weekend, flying back to the U.S., which seems, you know, if they had to be there to bomb Iran, it seems to reduce the chances that they'll be bombing Iran anytime soon. The cover story that belatedly came out was that they were worried about a drone-style attack on those bombers, presumably by Iran, in the way that Ukraine did to Russia's strategic bombers back in the day. You may remember that. I certainly do. I'm sure the Russians do. And then you're starting to hear some rumors about maybe a deal cut on diesel between Putin and Trump. And you have the German Chancellor Friedrich Merz. And then you have the Russian Chancellor Friedrich Merz. kicked Russia out of the U.S. dollar system. And we're measuring GDP by U.S. dollars. You think we're missing some of what's going on in Russia? How do you think it is that Iran has an $8 billion U.S. dollar military budget and won the war? North Korea is out of the U.S. dollar system. It's U.S. dollar nominal GDP is nothing. And yet, why are we afraid of North Korea? They're making these advanced missiles and fire testing them into the war in Ukraine. What are we doing? We're blinded by our own utterly biased measurements of ourselves. Look, we're great. We're giving ourselves participation trophies and thinking that matters. It's insane. Just look at the school review of world energy. The total energy supply of Russia is multitudes bigger than Britain's. It makes actual steel. It makes armies. It makes shells. It makes tanks. It makes jets. It has a space program. Britain has none of these things. Britain has like 12 ships in its navy, 12. It's a joke. Like, who are you kidding yourself? You know, and I believe me, I'm aware of all the other controversies around that interview. And, you know, who cares? The fact is that Britain thinks he could go to war with Russia and actually believes it. Like, I take this man at his word. He thinks that Britain has a chance to go to war with Russia and emerge from it. That war would be over in a day. There'd be no Britain left. I mean, I'm sorry. I mean, I like many people in Britain. I would say what you want about that view. It's correct. So, you know, this whole concept that somehow, you know, all we have to do is attack Russia more and they'll come to the table. So I try to draw this analogy for people. You know, I'm answering your question about the refineries and why isn't Russia taking the gloves off and all this other stuff. Imagine we're in a proxy war with China through Mexico. China's arming Mexico, building drones for Mexico, paying for them because Mexico is functionally bankrupt. And these drones are being launched into the Gulf Coast refinery network. How do you think the U.S. would respond to that? Do you think there'd be any Mexico left? Putin has been actually pretty measured in his response, much to the anger inside of Russia, which is real. You can go watch it. You could see it in the Russian papers. You could see it on social media. I mean, it's certainly policed, but it's there. You could see it. Okay, so what happens? Let's attack the refineries. All right. Russia starts webbing out their power grid. Let's attack civilian cargo ships in the Sea of Azov. All right. Russia seals off the Black Sea. The counterpunch is always harder. It's always more violent. It's always more effective. So what's going on now? The Ukrainians have launched 2,000 drones into Moscow, you know, the day of the parliamentary elections in Russia. All right. We're going to take out the bridges and cut Kiev. Russia has escalation dominance. They haven't even used any of their Reshniks yet. This is insanity. And so then you have Friedrich Merz getting on a train, going to Kiev on German unification day, by the way, talking about, you know, how Putin needs to stop this war. Well, I mean, one of the reasons you don't get into war is they're hard to stop. And, you know, if the gloves are truly coming off, and it looks like they are, then I do think it's a very, very bad time for the Ukrainians. And boy, what a tragedy to the Ukrainian people, for the Ukrainian people. What was done to them by the superpowers is a scandal of epic proportions. And, you know, we get all kinds of hate mail when we say this stuff. And a common reply is how nice of you to be so willing to sacrifice the lives of so many young Ukrainians for whatever purpose you think this matters. But here we are. So we have to watch this tragedy. Day after day, I was up this morning watching one of my open Intel sources daily video about the overnight attack into Moscow by Ukraine, 1200 drones, barely any got through. They've saved up several days worth of drones. There's a picture of one oil tank somewhere on fire in the southern part of Moscow. That's an awful big attack that is going to provoke a much more violent counterattack, as America would do in the same circumstances. And, you know, then there'll be all the lamenting about look at the power of the counterattack. I mean, there comes a point where you have to sue for peace. When the war is lost, it's always better to sue for peace than to continue fighting a lost war. It just is.
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Speaker 2Can I send you a long email so that you can study the issue ahead of time?
Speaker 1I would love to. Yeah. Any intel you can hook me up with. I'm not going to turn it into a battle confrontation. I don't really do this on the show, but I'm certainly going to ask you to do it. I'm going to ask you to do it. I'm going to ask you to ask some tough questions and see what he has to say. Now, that brings us to the EU leadership, because they seem absolutely obsessed with painting Russia as an existential threat, not only to Ukraine, but to the entire EU bloc as well. They're ramping up talks of going to war. We're seeing some media outlets in Britain basically releasing articles that say, hey, everybody might get conscripted. Are you psychologically ready? It's just this obscene stuff here. Germany tiptoeing towards full-blown conscription. I believe they're having people who are eligible for military service report now and put their names down. Denmark and Germany are starting to talk about, well, women should serve as well, because we're an egalitarian society. Now, what I wonder is, is this all just a distraction? Is this just a way to distract the populace from their own continued cascade of political and economic failures? Or do you think there comes a point where they're actually willing to try to send their people to war? And actually enter a full-blown kinetic conflict with Russia?
Speaker 2Look, it doesn't really matter. It's ultra-dangerous talk. These things have a way of becoming self-fulfilling. There's a reason why you don't talk in that way. Everybody knows. So I've said this on a different podcast. I forget which. The fundamental question is, do you believe Russia is a great power worthy of deference? Full stop. That's the question. And I think that is the great core disagreement. Sir Jacob, when it comes on your show, do you think Russia is a great power worthy of deference? They have 6,000 nuclear weapons. What are we talking about here? And so if you don't believe Russia is a great power worthy of deference, then you could talk about seizing Kaliningrad as though you won't get nuked. So the most fascinating thing happened last week. I was traveling. And I have lots of, as you do, I'm sure, open source social media type accounts that you follow that have pretty good traffic. And I have lots of, as you do, I'm sure, open source social media type accounts that you follow that have pretty good track records. And some are spotty, but you know when they're spotty. And so, okay, so-and-so is saying this. I have my doubts, but that's interesting. I'll keep that in the back of my mind. Well, I'm on Twitter. And I see that the Russian embassy in Britain, the Russian embassy in Belgium, where NATO and the European Union are headquartered, and weirdly, the Russian embassy in Ireland all released this statement at the same time, literally using the words nuclear weapons in the context of a warning for NATO not to move on Kaliningrad. That is unprecedented. It's been 50 years since a Russian leader has used the words nuclear weapons in the context of a warning, because everybody knows that is a very dangerous thing to say. Now, the Russians said it. I'm shocked. I'm looking at this. I'm shocked. I'm like, wow, they actually use those words. So I do what you do. I click on the account and make sure it's real. Wow, it has a great badge. Okay. I punch it into Google, and I see that nobody's covering it except for some obscure papers tied to Ukraine and maybe one in Italy. But it's not on the Financial Times yet. It's not in any of the major British papers. And I'm thinking to myself, like, hey, the markets are going to open here soon. Doesn't the fact that Russia is officially warned and is prepared to use nuclear weapons warrant a headline somewhere? And it took a few hours before the Financial Times finally ran it. And I was kind of blown away. I was like, hello, where's your red glaring headline on my Bloomberg terminal? There was a delay. Everyone waiting for their instructions as to whether and how they should report it it was amazing and i'm thinking to myself like is it possible that we've reached the point where people actually don't think that russia has nuclear weapons and is prepared to use them i mean it must be i suppose that's a mental model we ought to brainstorm around boy it doesn't lead to too many good answers um like i don't know that like europeans understand the image of frederick mertz german chancellor showing up in ukraine talking about sending missiles and drones into russia like i don't know if you know that like 20 some million people died in world war ii against germany within russia that might have a little ptsd effect on their culture they are also the same leadership that has 6 000 nuclear weapons like there's there's sensitivities here you could like pretend like they don't matter um that's quite the gamble i i happen to share the planet with you i would prefer it if you didn't take such gambles um but this whole russia is irrelevant russia is not a power russia's a gas station masquerading as a country um russia's gdp is the size of spain britain's gdp is much bigger okay take out the financialization of london and let's measure britain's gdp i mean give me a break nominal us dollar gdp including financial services is what you're going to go to war with you're going to go you're going to charge the front line with your spreadsheets i mean good luck it's absurd i mean i know i sound like i sound like a broken record but like i feel like i'm taking crazy pills what are we talking about here i grew up hiding under my desk in in grade school during nuclear bomb uh drills it was it was taught to us that mutually assured destruction was a real thing kissinger was a diplomat like you thought about these things james baker was a diplomat where's the james bakers of the world i don't know it's it's it's absurd and instead we have macron at 14 approval and mertz at 11 approval and who cares what ursula's approval is she doesn't even stand for election um you have 45 british prime ministers in three weeks none of whom have really like have any popular mandate um and like this is the democracy we're all supposed to be defending what are we talking about mertz is like the least popular german chancellor of all time and he's hurdling his country back to another hot war with russia don't you think there's a reason why the afd is is the is the most popular party in germany by a long shot but maybe germans remember world war ii as well and would not like to repeat it i i don't understand in what universe and but like it's just here we are like we're just supposed to be like shut up and go to war no i'm not going to shut up and i'm not going to go to war um certainly not over the the flimsiness of what you're proposing we should go to war over give me
Speaker 1a break that leads into my follow-up about the af day um because obviously we saw them do very well in a recent election their party's popularity is surging um we're seeing people call for marie le pen to be the next president to france as well uh you know we've got all those issues currently with the riots happening in france i want to get to that a little bit later but mike the question i want to pose to you is do you think that if we do see these so-called as portrayed by the media right party's so-called anti-immigration anti-war wanting to after after a leadership has talked about normalizing relations with russia once again do you think the eu will simply interfere in elections as they've already proven themselves capable of doing i believe the af days was removed from some local election uh ballot box options already um in the past i think this was for mayoral elections or some smaller elections isn't there a possibility that the eu just says this is not the outcome we want um and let's let's just interfere here and get the result that
Speaker 2that's best for us can i introduce you to romania yeah exactly i mean look we are about to experience a blow-off top in authoritarianism across western europe um it's a very dangerous time it's a dangerous time to be uh a populist uh i've been reading what glenn decent has been posting on twitter i don't know if you've seen it but the smear campaign against him in norway has been a very dangerous time i've been reading what glenn decent has been posting on twitter and i've been reading what glenn decent has been posting on twitter and he's been doing a great job um and i've been reading what glenn decent has been posting on twitter and he's been doing a great job what you read on social media and they get to spy on your encrypted chats as well all for the protection of her democracy let's not kid ourselves the european union is an authoritarian construct um and it is not going to go out quietly which is why we're in an extremely dangerous time you how in what universe does frederick martz have the authority to take germany to war against russia he's never won but barely a plurality of the vote um he's got the lowest approval rating ever if he had any honor if he had any decency he would resign and call a new election he has neither of those things apparently so here we are a man with 11 approval rating is going to take germany and by extension the rest of the world into a catastrophic nuclear war because believe me if russia and germany go to war there will be nuclear weapons used and it it won't end well for germany um germany is a much smaller place and russia has a far more powerful repertoire of attack missiles and defense um and it would be a very quick war um and you know i say this as somebody who loves germany very good friends with many germans it's been to germany countless times wonderful country um what is going on what are we doing like it's just so bizarre just i don't know you tell me what am i missing
Speaker 1yeah that it's an interesting conundrum to be sure because you think that we are seeing the ifda surgeon polls there obviously so we are seeing a large part of the country push back against this agenda however we recently saw a very far left um new mayor of berlin who's got all sorts of crazy ideas about socialist grocery stores is being called the mom dami of europe or whatever um so we're seeing a lot of i mean i spoke to i had a guest on my show simon michaud he's located in finland and he said you cannot believe how brainwashed all the fins around me are to just hate and despise russia above all reason and above all else it's constantly pushed to them in the media and everybody's buying into it i find that to be crazy but i guess mass psychosis is a thing and a lot of people are not very informed and nor do they take the time to inform themselves about what's going on in the world and what's going on in the world um which is why i love having conversations like this hopefully some of those those people are tuning in right now they probably already clicked off the video as soon as you said russia is has the upper hand against ukraine but but who knows but here we are it's a truly bizarre situation i agree with you so
Speaker 2first of all full full credit to simon um and i've always been a fan of his work um never met him but i do read his stuff um it's funny because i did a podcast with a great canadian show raise your average love those guys i go on about once a quarter we spend a couple hours and we always get lots of uh email and somebody from finland wrote us an email about you know basically as brainwashed as simon was just describing and i was like well if you believe all those things i mean get your affairs in order because you're not going to survive this war like i'm sorry like this is this is not child's play anymore like all of these comparisons to world war ii and you know the tropes um you know there weren't nuclear weapons in 1939. and i can assure you if there were nuclear weapons in 1939 things would have evolved differently um and like people like to gloss over this fact it's like it's not convenient for their thesis like why aren't we talking about invading north korea well because north korea has nuclear weapons why are we at war in the middle east allegedly to stop iran from getting nuclear weapons russia has 6 000 of them follow the logic if it is utterly and totally terrible that iran would get the bomb and we don't go to war with north korea because they have the bomb what are we doing with russia yeah
Speaker 1that's a very good point and by the way most of these people who's probably i would say 100 of these people who are clamoring for war with russia would never put their boots on themselves i mean you can volunteer for the ukrainian army um so i find that very hypocritical now the next thing i want to discuss is energy markets in terms of a potential diesel crisis i've heard you talk about this on some shows uh i was looking at to to formulate the questions here do you think we're going to see diesel prices go even higher because this has probably been the main massive price increase we haven't seen that you know we we've seen wti crude hit triple digits but people are predicting it's going to go to 150 it's going to go to 200. we haven't seen that but we have seen a massive surge in the price of diesel do you think we could go higher here what will the second order of prices be what will the second order effects of that be and do you think we eventually see that higher price on the screen for wti crude and brent as you mentioned right now now in the real physical world, a lot of those barrels actually exchanging hands for prices that are far greater than we see in the futures markets.
Speaker 2Yeah, look, first of all, there's a couple of things on the board that could really affect things short term, and they have to do with the weather. So we have this possible, you know, cyclone formation in the Gulf Coast. And I would say that, you know, thank, thank the man upstairs for global warming, because we've not had a single storm in the Atlantic this year of consequence, but we have this thing forming in the Gulf of America. You know, and if that takes a wrong turn, or shuts in some refining, you're going to see a short term spike in diesel prices. I mean, that's the one reprieve, well, two reprieves really. From the weather, you know, this this no major Gulf Coast hurricanes in 2026, knock on wood, would have taken this diesel situation and turned the dial up to 11. Right. And but I if you push me, I would be thinking about getting short diesel pretty soon. Crack spread still around 100. Not that I short not that I advise it. I'm just saying I think the highs might be close to being in absence some catastrophic development in in the Gulf of America. Or, you know, a rapid fall of the house of sod in in at least all bets are off to temporarily, but in the long run, all, you know, the long term trend of all commodity prices is lower, and there's going to be a glut of diesel as a consequence of this. We explained all this in a couple of our articles, I could give you the highlights. You know, if you just take the pre war numbers, let's say global diesel production, depending on how you define diesel, heating oil, you know, middle distillates, pick your favorite. 28 million barrels a day, let's say. The global market for diesel, the seaborne market for diesel, the jump ball market for diesel is 7 million barrels a day. All this is all pre-war stuff and round numbers. That means like 21 million barrels are produced in countries in which they're consumed. So the real market for diesel is 7 million barrels a day. That sets the global price for much of the other 21, but really it's those 7 million barrels. And that's why when Russia yanks 800,000 barrels of exports off the markets, that's 11%. That's a big deal in an inelastic commodity, right? And then you have the Middle East issue as well, and then partially offset by U.S. pumping as much diesel as it can. Okay. But you can see now the following math. Assume we get steady state. Well, what's going on right now is every refinery in the world is learning how to pump out more diesel. Because diesel crack spread is $100 a barrel. It's insane. It's insane, right? Okay. Well, if the global refinery network was putting out 28 million barrels a day, and let's just say they learn how to grow that to 30 sustainably. Well, that means the jump ball, which is still 7, now has 9 million barrels of supply to meet it. And now you have glut. And so this is the part where I think people fail to understand sort of prices. They just sit at the margin and then truly understand the marginal flows. Why could Ukraine's attacks on the refinery network impact diesel so badly? And so I've seen the counter to this, and I've seen some pretty high-profile people say this, that people, they look at Trump and they see who they want to see, right? And if they hate him, everything he says is wrong, and so they concoct reasons for why it's wrong, and they stick to those arguments. So here's the counter to that. It's Russia. It's Russia's fault. Trump is trying to blame attacks on the Russian refinery to deflect blame from Iran. That's true. But it's also true that the Russian refinery attack and the subsequent closure of their exports has materially impacted the price of diesel. So what people will say is, oh, 800,000 barrels a day, that's less than a percent of total global oil consumption. Yes, that's true. But it's 11% of diesel. It's 11% of the jump ball diesel that sets the price for diesel. It's not less than 1% of global oil that matters. It's the 28%. It's the 28 million barrels of diesel, the seven of which are available, and 800,000 just went off the market. And so that same counter that, you know, less than 1% of global oil, well, less than 1% of global oil redirection towards the production of diesel gives you 14% more supply in that jump ball circle. And so you ask me, what's the price of diesel in two years? Way lower than this. Because the return on flexibility is being paid. Paid for generationally right now. And so every refinery worth their salt is going to spend a few bucks and get ready to produce more diesel the next time it comes, which by definition means it won't come. And it won't reach the same highs that it did in the past. And so, you know, with the caveat of let's assume the Gulf of America doesn't erupt into a global warming volcano in the next eight days, I'd be looking to think that the top might be in soon. You know, House of. House of Sod falling being the other caveat. Does that make sense?
Speaker 1Yeah. No, that was a great analysis. And your thoughts on WTI crude and Brent, do you expect much the same that we'll see lower prices up ahead?
Speaker 2Sure. I mean, peace. If there was no war in Iran, oil would be at 40 bucks right now. I mean, some would argue that's why there's a war in Iran. We're not quite that cynical. Yeah, there's plenty of it. And by the way, it's coming back in now because ultimately, again, hey, look, we blew up some refineries. Why is oil down? Because the only natural buyer of crude is a refinery. You just run the experiment into the extreme. Think laterally. Take off every refinery in the world. What's the price of oil? It's zero. It's probably actually negative because it's a toxic goo that's hard to store. This gets back to a bit of a debate I had with Nate over at Canadian Prepper, who I actually genuinely enjoy his content. And he's quite a good lateral thinker. And to his credit, he had me on when he sort of took it. He took a dig at us, and I wrote him a long email explaining why his dig was wrong, and he had me back on to explain it to his audience, which I always appreciated. The purpose of the oil market is different than the purpose of the stock market. It's different than the purpose of the market for interest rates. The purpose of the oil market is to ensure a steady flow of crude to refineries at a price where they can earn a profit refining fuels. That's it. That's the purpose of the oil market. It's not for speculation. It's not to give you geopolitical signals. You could derive those. You can speculate. But the purpose of the oil market, the reason it exists, is to ensure a steady supply of crude to refiners at a price where they can make money. And the structure of the crude market fits that purpose. Expiring contracts, settled by delivery, with location, grade, and timing of delivery specified in the contract. Well, who would care about those things? Refiners would. So you have these forcing functions in the oil market of expiration and delivery. Physical delivery. Not all contracts are settled by physical, but enough of them are that you could hedge all the others, and they're effectively all settled by delivery. So you can speculate in the price of oil, but if there's not a refiner at the end of it willing to pay that price, because they can't make a profit refining it to diesel and jet fuel, the price has to come down. So you blow up a Russian refinery, Brent drops three or four bucks. That makes totally perfect sense. There's less demand for Brent. Is there geopolitical? Is there geopolitical risk in crude not reaching market? Sure, but nobody cares if crude reaches the market if there's no refineries to ultimately buy it. And so it's different than the stock market. The purpose of the stock market is to assemble risk capital for enterprises. Once issued, stocks can trade immortal. There's no forcing functions. Yes, companies do buybacks, and yes, they get bought out, and yes, they file for bankruptcy. But even when they file for bankruptcy, they trade on the pick sheets forever. There's no forcing function. So you could speculate. You could have access. By the way, not only is there a purpose and a structure to the oil market, but there's a participant roster, too. And the participant roster in the oil market is just wildly different than in the stock market. It's refiners. It's hedge funds that have storage capacity. It's highly sophisticated traders who understand the nuances of grade and location and timing and storage costs and shipping costs and all of these nuances. And by the way, every single one of those nuances trades billions of dollars on subtleties between the hands of experts who know a lot more than the retail punters who play in the stock market. I include ourselves amongst them, by the way, which is why we don't trade oil, because we like our money. So they're just wildly different things. And once you understand that, once you understand and have graded the information the oil markets are telling you, you're far less likely to fall into this silly trap that Trump is manipulating the price of oil. I mean, give me a break. What an amateur analysis that is.
Speaker 1Let's talk about the debt and deficit situation in the United States. United States right now, because we've seen national debt surpass 40 trillion dollars. Treasury yields continue to creep higher. Many are calling this a potential crisis in the Treasury market. Scott Besant is at least doubling Treasury buybacks in an attempt to keep yields under control. And meanwhile, we've got Trump out there promising five thousand dollar checks to every American. The GOP sweeps the midterms. I mean, what are we doing here? I wonder what your thoughts are here. It has end of empire vibes. But of course. We know that's kind of a hyperbolic headline and empires can take decades and decades to ultimately collapse. I wonder what your read on that is. this whole situation is is it as alarming as many media pundits are making it out to be
Speaker 2i mean i think it's alarming um the math sort of indicates it's alarming we're doing some numbers okay um 40 trillion in debt right that's a lot of debt i mean i remember when a billion was a lot of money still a lot of money to me fyi if somebody wants to give me a billion i'll happily take it um okay what does it cost to service 40 trillion well there's back in the envelope number you can do which we've been playing around with which is the duration of that 40 40 trillion so like let's increase the net interest the government pays by one percent how much is that that's 400 billion well 400 billion is nine percent of receipts okay just the incremental cost of an extra point in financing is nine percent of receipts before military pre-existing interest costs health care fraud theft graft all of the things that make up the budget um boy you're kind of getting to the point where you know elon doge failed that was some would say was preordained to fail um when the incremental cost of servicing your debt is nine percent of receipts for every point in other words your your receipts duration on your debt is nine percent um it kind of feels like you're you're you're entering weimar type calculations now trump of course uh and i i when i heard it i thought the same thing and luke published it on friday luke roman um in his forest for the trees which i read every week love luke um don't always agree with luke but love luke and um trump has a way of a sort of confessing in the middle of the night and i think that's what he's been saying in the open what he's just been briefed on you know he's as we like to say occasionally loses control of his inner monologue um and he's talking about how one way we could get rid of the debt is just have a lot of inflation there's something to that effect right i mean what a thing to say talk about scott besant slapping his forehead looking at yields on the screen um let's not create a run on the bank while creating a run on the bank um trump is basically saying what luke has been saying the fed and the treasury will have to do to get rid of the debt which is what you do for many many years which is you you run it you you you repress rates you run inflation hot and you get debt to gdp back down to 60 or 70 percent by keeping the debt fixed and just inflating the gdp um back to our you know britain is bigger economy than russia nonsense that we were talking about earlier um so here we are and then for trump to say that in a press gaggle he did mean somebody told him that that's an option that he kind of liked and so i think you know the the shrewd investor would be owning real assets or taking out fixed dollar debt to buy factories that produce real stuff because you pay them back nominally and you'll still own the
Speaker 1factories let's end on talking about the riots in france and what you think is the you know crux of all of this because the official reports are it's due to understaffed schools uh student issues at the school level and i think it's a good thing to do that and i think it's a good thing to do that schools i mean and then all of a sudden they're burning everything down i mean that's a pretty serious student protest it's not them standing outside picketing it's them literally bringing on incredible amounts of destruction throughout the city i mean it's completely out of control at least from what we see we all know that social media sensationalizes things and of course if you look at x it's going to be painted in the most dark light that could possibly um be presented as and you know so others are saying well it's a migrant issue it's all of these muslims islamists that have been led into the country that have raised these kids and some are saying well it's not even the kids at all these people are like in their 20s tearing stuff down uh and of course the the more conspiratorial minded will say this is all part of the plan this is what the globalists wanted when they imported all these people into eu nations is to completely destroy and break down society make it a case of us versus them so you're never looking to the government as the source of the problems you're too distracted trying to survive day to day i wonder if you could perhaps help us cut through the noise here and uh and and what what you think is really going on jesse you're going to crush both of our social credit
Speaker 2scores here if you're not careful i mean what are you doing why don't you try to get yourself demonetized i mean what what are you doing to me here now look um two really important caveats um one there's always riots in france like this is france so you have to put france in the denominator this is not you know manhattan that we're talking about here this happens in france all the time uh and two social media as you said i don't think it could be emphasized enough so i'll just tell you an anecdote um a doomberg co-founder and its editor-in-chief was in paris um earlier this year you know taking a nice vacation and i'm seeing a similar set of scenes uh spread on twitter and so i just sent a note hey you seen any of this of there like absolutely not you know i i hit every tourist attraction in paris i didn't see a single incident if it's happening it's at some obscure corner of the city it's on nobody's radar it's nowhere near the way it's being portrayed on twitter that was pretty eye-opening you know admittedly anecdotal but you know boots on the ground as we say it's not like analyst number three from centrini heading over to you know the the straight of hormuz in the early days of the war but you know um it was still interesting nonetheless to have a team member sitting in paris when we're watching what twitter is telling us is going on on the ground all those things being said on the path from prosperity to starvation is riot first political and eventually physical is this the early stages of a wildly unpopular president in france selling out his country's prosperity for whatever reason and motivation who knows who cares doesn't matter similar story in britain similar story in germany we would argue the european union we've been writing for some time that the end of the european union is near and it's going to get ugly the specific manner in which things get ugly the specific catalyst the sparks that light the flames the flames that light the the you know uh like the bombs off the bombs where they explode who throws them how people react who knows it's a non-linear system is chaotic it's sensitively dependent on initial conditions butterfly flapped its wings and a hurricane showed up over here and not there all those things are true are we surprised that the fabric of once great european nations is tearing itself apart in the face of a descent into uh energy poverty first and foremost and geopolitical tensions no we're not surprised and in fact are such societies particularly susceptible to outside forces color revolutions uh they always seem to start with students ask indonesia ask ukraine ask belarus ask pick your favorite south american country right now ask the the vote counters in brazil peru colombia we're seeing this all over the place and look at this is where i keep coming back to like i see the occurrence on twitter about who's to blame for the war in iran look trump's to blame for the war in iran i don't care who's trying to influence them you could decide that maybe netanyahu's to blame and he tricked trump into going to war nonsense every government in the world is trying to influence washington the president decides how he's going to be influenced the buck stops with the president trump with the war in iran period it's trump's fault if you support the war trump gets credit it's nobody else's fault or credit it's trump's he's the president of the united states um and so you know are there outside actors interfering in france well if you if you have something to accomplish in france wouldn't now be a ripe opportunity to throw a few molotov cocktails into the crowd maybe are there chinese agents russian agents ukrainian agents american agents british agents in france there have been since time immortem when you put yourself in the position where a match lights a bomb it's kind of hard to control the distribution of matches around the world you know so no i don't know how it's going to work out but i do know that on the path from prosperity to starvation is riot for
Speaker 1those who want to dive deeper into your
Speaker 2work tell us about the doomberg substat doomberg.com is a better thing to remember easier to remember and since we paid to eject a squatter i'd like you to go there um that'll route you directly to our substack and all of our product but yeah doomberg.com jesse always enjoy our conversations um please direct all hate mail directly to jess save yourself the electrons of copying us and um you know i really enjoy our conversation jesse in in all seriousness and um let's hope that um the world avoids a nuclear holocaust and we could keep doing this you know uh for for weeks and months and years ahead thank
Speaker 1you for joining us today on commodity culture earn up to a four percent annual yield on your physical gold paid in gold ounces through monetary metals go to monetary dash metals.com slash commodity to find out how to put your gold to work for you link is in the show notes below
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