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Speaker 1: Welcome to the Nick, Dick and Poll Show. I am

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Speaker 1: one of your hosts, Nick Bilton, who is a star

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Speaker 1: of sound and stage.

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Speaker 2: Costello pediatrician. Are you licensed slightly for so slightly licensed?

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Speaker 3: I was sure that will work off.

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Speaker 4: I'm licensed, dish licensed, dish, Paul Keadrowski venture capitalists. No

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Speaker 4: rolling pediatrician, but what you are pediatrics?

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Speaker 1: Pediatrics? Yes you almost were a doctor though.

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Speaker 4: Right, I'm a doctor. But as my dad used to say,

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Speaker 4: not the useful color.

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Speaker 1: Did you actually get it? Did you get your doctor?

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Speaker 3: Really?

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Speaker 1: I didn't know that.

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Speaker 2: I'm going to always call you doctor k Dr Kurdrowski.

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Speaker 4: I'm told it works. There's this guy you may have

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Speaker 4: seen at n y U Gala something or other. He

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Speaker 4: calls himself doctor, doctor g I think.

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Speaker 1: Professor, professor g Okay. So this week's episode is going

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Speaker 1: to be a little different than usual. We are going

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Speaker 1: to be talking about a current event, uh, which is

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Speaker 1: Iran and oil and natural gas. We're going to get

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Speaker 1: into dog food, We're going to get into evs and

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Speaker 1: a bunch of other things like that. And given that

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Speaker 1: Di Costlo is a pediatrician and doctor Kutowski over here

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Speaker 1: is also an expert on all forms of oil except

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Speaker 1: coconut oil. We will be asking him questions. So here's

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Speaker 1: my first question, So can you explain a little bit

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Speaker 1: about what's going on with oil prices right now as

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Speaker 1: a result of the war in Iram and why it's

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Speaker 1: different from the nineteen seventies. So in the nineteen seventies,

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Speaker 1: you know, the cost of oil went from two ninety

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Speaker 1: per barrel before them two dollars ninety percent because it's

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Speaker 1: just insane before the the embargo, to eleven sixty five.

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Speaker 1: But now it's not as extreme of a jump we've gotten.

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Speaker 1: We have barrels that have gone from what ninety to

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Speaker 1: about one hundred and eighty or the projection is one

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Speaker 1: hundred and eighty. Sorry, So why is it not jumped

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Speaker 1: so much? And what's different now than in terms of

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Speaker 1: the nineteen seventies.

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Speaker 3: So there's at least three things.

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Speaker 4: One is that the US is less dependent on international

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Speaker 4: markets for oil, natural gas, for energy supplies than it

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Speaker 4: was in the nineteen seventies. So that's a really big

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Speaker 4: deal obviously, because you fe're less dependent on those markets

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Speaker 4: than the prices in those market. Changing prices in those

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Speaker 4: markets doesn't affect you as much. And the reason for

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Speaker 4: that is that US has become a huge supplier of

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Speaker 4: natural gas domestically, so we're we actually are our own supplier.

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Speaker 4: Like something like only three percent of US natural gas

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Speaker 4: product ends up being exported. It's a tiny fraction. And

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Speaker 4: as there's a similar story the respect to oil, but

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Speaker 4: slightly different. The US is now the largest supplier of

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Speaker 4: oil worldwide, largely because of the expansion of shale oil

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Speaker 4: in the premium basin. And the difference is though we

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Speaker 4: are more exposed to oil than too natural gas despite

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Speaker 4: being a large supplier. And this always confuses people because

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Speaker 4: they're like, well, you know, we make our own what

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Speaker 4: are we doing? We should just we're a huge exporter.

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Speaker 4: So once you're an exporter, you can think of it

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Speaker 4: as like a web. Now we're tied into international markets.

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Speaker 4: So it's like if the US were to say, oh,

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Speaker 4: we've got to sell it for lower prices domestically to

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Speaker 4: make people happy, it's like no, no, no, no, I

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Speaker 4: can get way more by selling this stuff elsewhere. So

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Speaker 4: once you're tied into export markets, then you become what

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Speaker 4: a price taker. You're taking the price from the international market.

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Speaker 4: So in natural gas, that's not the case. We're not

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Speaker 4: a huge supplier to international markets. We were largely supplying ourselves,

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Speaker 4: so we're somewhat insulated from what we're.

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Speaker 3: More like a firm to table countries we can try

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Speaker 3: natural gas.

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Speaker 4: Yeah, no, it's totally true. We're much more like a

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Speaker 4: farms to table and so that's why these two markets.

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Speaker 4: So if you look at the price of natural gas

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Speaker 4: into the current episode broke up, you wouldn't know anything

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Speaker 4: has happening. Largely nothing has happened in the US. But

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Speaker 4: if you look in Europe, Western Europe, you look in

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Speaker 4: Southeast Asia, dramatic impact because they're all importers of natural

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Speaker 4: gas and so they're much more dependent on the pre

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Speaker 4: that are changing as a result of what's happening in

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Speaker 4: the Middle East. So that's those two are two of

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Speaker 4: the biggest factors. The other one is, and this is

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Speaker 4: one that people misuse the statistic, but it's really important,

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Speaker 4: is the energy intensity of US GDP has declined dramatically

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Speaker 4: over time, meaning that for every unit of energy that

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Speaker 4: we use in the economy, we're producing more dollars of GDP.

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Speaker 4: So if you imagine in the limit, every dollar of

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Speaker 4: GDP required a barrel of oil and that never changes

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Speaker 4: with like a linear relationship. Well, then you'd have a

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Speaker 4: huge problem, right, because to grow GDP, I have to

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Speaker 4: use proportionally more of the energy of that particular source

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Speaker 4: of energy. The energy intensity of US GDP has collapsed

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Speaker 4: over the last thirty years for a host of different reasons,

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Speaker 4: some of which is like changing energy sources, some of

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Speaker 4: which is just what we're producing. And there's an assidious

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Speaker 4: thing that a lot of the most energy intensive things

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Speaker 4: that used to be produced here are produced somewhere else.

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Speaker 4: We get to say, oh, it's way less energy intensive

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Speaker 4: because energy intensive manufactur string is happening in China and

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Speaker 4: Southeast Asia. I don't have to account for that. So

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Speaker 4: there's all kinds of things going on. But the bottom

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Speaker 4: line is that the energy intensity of what we do

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Speaker 4: here in this country has changed dramatically since the nineteen seventies.

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Speaker 4: So at least those three things are.

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Speaker 2: Happening oncerege with AI.

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Speaker 4: Yeah, it changes dramatically with AI because if you think

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Speaker 4: about data centers as men, as plants manufacturing plants, it

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Speaker 4: just so happens they produce tokens they don't produce, you know,

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Speaker 4: the widgets widgets of some form that the energy intensity

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Speaker 4: of that production is demand. So they're rapidly becoming, at

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Speaker 4: least at the margin, the single largest source of new

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Speaker 4: energy demand in the United States. So AI is reintroducing

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Speaker 4: energy intensity back into the US economy. But until now,

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Speaker 4: those three things were the drivers that We're very exposed

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Speaker 4: to oil prices because despite being one of the largest

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Speaker 4: suppliers and the largest supplier in the world, we're a

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Speaker 4: huge exporder, so that ties us into global markets. So

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Speaker 4: what happens with you know, WTI, West Texas intermediate prices

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Speaker 4: are are tied and turn to what's happening in Oman prices,

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Speaker 4: and what's happening uh and Brent crude and all the

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Speaker 4: other non in US prices, and then natural gas. We're

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Speaker 4: largely supplying ourselves, so we don't get tied into world prices,

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Speaker 4: But then you have this sort of overlay of the

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Speaker 4: changing how much how much energy is required to produce

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Speaker 4: a unit of GDP? Right, So these three things.

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Speaker 2: Are an important follow up question. Who is the Brent

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Speaker 2: in Brent cru I know who the West Texas is?

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Speaker 3: Who is g.

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Speaker 4: I literally thought you had to ask, like literally like

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Speaker 4: is it David Brent or something. Yeah, is David Brand,

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Speaker 4: It is David bad. It was a deposit in the

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Speaker 4: North Sea.

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Speaker 1: So when so when?

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Speaker 4: So that price is like a Northern European price. So

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Speaker 4: one of the strange things is if you look at

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Speaker 4: we talk here about West Texas intermediate prices, right.

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Speaker 3: I talk about West Texas intermediate.

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Speaker 4: People literally all the time people talk about the price

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Speaker 4: barrel we got on there.

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Speaker 3: I was out there like blah blah blah.

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Speaker 4: Don't get me started. People in the US talk about

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Speaker 4: the price. That's what they're talking about, mostly is the

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Speaker 4: price of West Texas crewed. But that is no if

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Speaker 4: you actually look at what's happening in the Middle East,

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Speaker 4: the price of other barrels, whether it's Brand crude or

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Speaker 4: Oman crude, that's actually spiked to one sixty five a barrel.

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Speaker 4: So we're even though we are part of global markets,

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Speaker 4: we are still somewhat insulated because if we were directly exposed,

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Speaker 4: prices here would already be considerably higher than they are.

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Speaker 4: So this is what we've got is like a damping

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Speaker 4: effect because of domestic supply.

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Speaker 1: So if this is the case, why is why the

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Speaker 1: markets everything is responding? The interest rates, the markets. Everything

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Speaker 1: is a result of what's happening. Is there an assumption

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Speaker 1: that this is worse or is it actually a bad

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Speaker 1: thing for the economy or a terrific thing, Because just

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Speaker 1: because the energy intensity of GDP is declining doesn't mean

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Speaker 1: that energy itself is less important.

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Speaker 4: We're using vastly more energy globally than we were fifty

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Speaker 4: years ago, even if the US is somewhat peaking in

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Speaker 4: terms of its total energy use, which will change with

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Speaker 4: AI data centers. But oil, if you go skiing and

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Speaker 4: you wear gortex clothes, you're wearing oil. If you if

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Speaker 4: you're eating food, it was probably fertilized with something that

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Speaker 4: was passed through the straight of horm moves at some point.

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Speaker 4: So a pretty decent chance you're eating an oil byproduct.

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Speaker 2: Right.

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Speaker 4: It's one of the reasons why the doomsters back in

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Speaker 4: the sixties were all wrong with respect to the US

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Speaker 4: there being a population crash, you know, poly air like

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Speaker 4: famously predicted one. It's because they didn't understand that famous

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Speaker 4: predicted one day.

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Speaker 3: Yeah, I do remember that he was born in the

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Speaker 3: house next to David Brent.

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Speaker 4: I have a good polar Lick story, but I want

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Speaker 4: to so the What happened then is we.

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Speaker 1: Also have a good Parlar lik story, but they keep going.

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Speaker 4: Okay, so we're essentially eating oil, we wear oil, we

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Speaker 4: drive oil. So that's the difference, right, So it's it's

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Speaker 4: ubiquity with respect everything that's happening in the economy is

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Speaker 4: why it's so material, and then secondarily other economies around

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Speaker 4: the world to be affected, So our export markets are affected,

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Speaker 4: So that changes the likelihood of companies being able to

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Speaker 4: sell products and the at the rate at which they

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Speaker 4: previously were.

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Speaker 3: So it's just ripples to your.

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Speaker 2: Point about every incremental dollar of GDP being less reliant

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Speaker 2: on energy. Yeah, in the US, Why isn't the inverse

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Speaker 2: true for China? And then why aren't they more agitated

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Speaker 2: about all this?

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Speaker 4: So the inverse is true for China, Like there are

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Speaker 4: the energy intensity knew that, which was my leading questions.

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Speaker 1: I was like, I got a way for it is

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Speaker 1: true for China energy.

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Speaker 4: Intensity of the ones doing all the manu one's doing,

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Speaker 4: because it was essentially we're playing the shell game of

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Speaker 4: pushing the most energy intensive things other than data centers,

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Speaker 4: pushing it off shore and then saying, you know, kudos,

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Speaker 4: tas I've managed to push all of we've managed to

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Speaker 4: become less reliant on the most energy intensive activities like

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Speaker 4: smelting and what have you.

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Speaker 3: So why aren't they more agitated and up in arms

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Speaker 3: about all this?

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Speaker 4: Well, because they're currently still getting lots to supply.

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Speaker 3: Right.

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Speaker 4: So one of the if you look at the ships

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Speaker 4: that are traveling through the straightham Our moves and still

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Speaker 4: supplying that there's a vastly smaller number, but they tend

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Speaker 4: to be ones headed for China, India and other countries

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Speaker 4: that still have very energy intensive economy. So they're seeing

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Speaker 4: higher prices, but it's not like they're being starved entirely

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Speaker 4: of supply.

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Speaker 2: And is that because Iran is sort of like the

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Speaker 2: last thing we want to do, is it's at because

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Speaker 2: around historically has been a patron See he's just going

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Speaker 2: to say, right, so they're they're working with their patron

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Speaker 2: and you know.

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Speaker 1: What percentage of oil comes from Iran now.

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Speaker 2: For which depends on which country, which country global or

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Speaker 2: like where it's in the teens.

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Speaker 1: It's in the teens.

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Speaker 3: Wow.

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Speaker 1: And is Russia? So is Russia happy about what's going on?

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Speaker 3: Or another patron state? So no?

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Speaker 1: So well, but they also they're also creating their own

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Speaker 1: It helps them because Russia.

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Speaker 2: Is happy in the sense that we've removed this limited,

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Speaker 2: removed the eliminated or limited the sanctions.

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Speaker 4: On Russian oil, right, and that's been one of the

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Speaker 4: byproducts are a benefactor, is that some of the sanctions,

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Speaker 4: like one of the perverse things that's happened is that

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Speaker 4: Iranian oil continues to flow out of Iran under the

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Speaker 4: watching eye of the US and everyone else, because that

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Speaker 4: would be a great secondary, much bigger problems. And so

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Speaker 4: it's flowing to places like Russia and elsewhere. But it's

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Speaker 4: also flowing out of Russia because we want to We

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Speaker 4: don't want to create the impression that there's been this

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Speaker 4: real pinch and supply because that would cause a huge spike.

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Speaker 3: And that's the grink sort.

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Speaker 4: Of the second thing, which is that gas oil price

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Speaker 4: increases don't go directly to gas prices, so it's not

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Speaker 4: like every doll every time you see the price of

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Speaker 4: a barrel of oil go up, it doesn't necessarily translate

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Speaker 4: directly into it. Because there's inventories in the system. It

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Speaker 4: takes time for this for oil to be refined and

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Speaker 4: find its way into the gasoline chain and everything else.

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Speaker 4: So just because prices haven't gone up that much yet,

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Speaker 4: if prices stay high in global markets for a barrel

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Speaker 4: of oil, you should expect the price of the average

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Speaker 4: national price of a barrel of gas to continue to

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Speaker 4: go higher without any change in the price of a

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Speaker 4: barrel itself.

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Speaker 3: It's just it takes time to work its way through

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Speaker 3: the system.

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Speaker 2: Okay, I have a provocative question if all if everything

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Speaker 2: you're telling us is true, it may not be.

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Speaker 3: Let's just all up.

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Speaker 2: Let's just say, for example, that Brent crude really does

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Speaker 2: stand for David Brent, a deposit that was found in

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Speaker 2: the North Sea. Let's just say everything you're saying, why

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Speaker 2: do we still have a strategic petroleum reserve?

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Speaker 3: Like why do we need it?

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Speaker 4: So we don't because we there's a bunch of issues

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Speaker 4: with the strategy.

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Speaker 1: It's more.

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Speaker 2: Question so nicely because it's it's almost like it's almost

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Speaker 2: almost like you're a professionals.

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Speaker 3: It's almost like I know what the answer is or

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Speaker 3: answer the question that can you explain what the created this?

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Speaker 3: Have been a journalist and said of a pediatrician, I've

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Speaker 3: heard many of your patients say that, so the US

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Speaker 3: created this thing?

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Speaker 4: Called the SPR the Strategy Petroleum Reserve, which was this

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Speaker 4: idea that when required, like how you use.

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Speaker 1: Acronyms all the time, how he does it, But I

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Speaker 1: like how he does it as if he was writing

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Speaker 1: the paper.

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Speaker 3: I learned a lot about him from him about how

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Speaker 3: to do these things, like.

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Speaker 4: Oh, for you, I spell it out you pediatricians out

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Speaker 4: there anyway, who are up on the latest acreatives in

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Speaker 4: the energy space. It was intended as a buffer in

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Speaker 4: the event of disruption and global supply, that the US

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Speaker 4: would have its own domestic supply, and it's spread across

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Speaker 4: a number of different storage locations across the United States,

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Speaker 4: mostly mostly in the South across Texas. But nevertheless, there

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Speaker 4: isn't enough storage there to make a big difference in

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Speaker 4: terms of saying the US could.

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Speaker 3: It's like a older panel on your roof. It's all

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Speaker 3: like I can.

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Speaker 4: It's an offsetting factor, not a factor that's going to

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Speaker 4: dramatically change anything. And then there's a secondary issue, which

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Speaker 4: is that you have to get it into the flow.

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Speaker 4: You have to get into flow. People confuse the idea

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Speaker 4: of stocks and flows. I could have millions of barrels

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Speaker 4: of oil sitting inside of the use it tomorrow. You

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Speaker 4: can't use it tomorrow. It's not like I can just

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Speaker 4: open a spigot and then all of a sudden you

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Speaker 4: look down the streeted shell prices just went down.

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Speaker 2: It doesn't work that way. It's not that farm to table.

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Speaker 4: It's not that farm to table.

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Speaker 3: It's farm to something, farm to like Larcenous moved.

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Speaker 1: So is it just is it just a pr move?

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Speaker 4: Is it like a hey, it's a perfect and it's

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Speaker 4: the same thing I think back to like the financial crisis,

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Speaker 4: when you started bailing people out. It wasn't because you

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Speaker 4: thought this would solve anything, because you wanted to give

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Speaker 4: the impression you were willing to take extreme moves to

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Speaker 4: support the market.

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Speaker 1: This is that what is the price per barrel? That

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Speaker 1: really screws everything? Like it is there if we hit

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Speaker 1: the two producers or know that, if that breaks the economy, If.

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Speaker 4: W G I or Brent Crew go no X there,

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Speaker 4: we're in trouble. It's entirely a question of how long

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Speaker 4: goes there. So if you go you can go to

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Speaker 4: two hundred and fifty dollars for like thirty minutes tomorrow,

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Speaker 4: no impact, right, two.

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Speaker 1: Hundred and fifty dollars for a month.

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Speaker 4: Two hundred and fifty dollars for a month, you probably

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Speaker 4: get yourself into at least a recession. So if you

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Speaker 4: go out to like say, people are modeling like one

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Speaker 4: seventy five as a possible price depending on what happens

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Speaker 4: in the straight offore moved for.

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Speaker 3: Six months, that's happen. That's price. That's what a recession

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Speaker 3: and possibly something worse.

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Speaker 2: What has to happen to the price? Before I stop

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Speaker 2: saying wentworth fetched the Bentley.

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Speaker 1: I think that's hold on before before you answer, that's.

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Speaker 4: More of an idiosyncratic question. But you're tolerance for gas plight.

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Speaker 1: I want to keep going with this, so so it

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Speaker 1: has to get to But so just it's a question

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Speaker 1: of price and time. But what's affected is it's not

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Speaker 1: just airline prices that go up, and it's not just gas.

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Speaker 3: Every clothing. I mean said dog food earlier. Dog food that.

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Speaker 5: Food is not because of the oil price. If that's

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Speaker 5: because of the energy intensity of producing yes, exactly right.

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Speaker 5: It's a highly energy intensive process and so it essentially

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Speaker 5: goes through everything. Like I said, whenever you're skiing, you're

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Speaker 5: wearing oil, right, I mean all of these products, these

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Speaker 5: plastics products all are fundamentally petroleum byproducts. It's almost impossible

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Speaker 5: to find something that isn't a byproduct if it's not direct.

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Speaker 3: And that's the issue.

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Speaker 4: Right, So as soon as all of those prices start

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Speaker 4: going up and then we're back into we're fighting stagflation

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Speaker 4: in the United States, then right where you have inflation.

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Speaker 4: But because about this byproduct, this product, that price is

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Speaker 4: going up, but the economy is shrinking. And when that's

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Speaker 4: a terrible trap because monetary policy stops working.

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Speaker 1: And what is also what makes this exacerbates this is

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Speaker 1: the fact that usually when these instances happen, they happen

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Speaker 1: over a long periods of time, But with this, it

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Speaker 1: could happen in a very short period and this economy

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Speaker 1: can break as a result of it. Right, because do

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Speaker 1: you think that we're going to get there or do

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Speaker 1: we stop the war before that? Like what happens?

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Speaker 4: All why questions to do with the current administration can

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Speaker 4: be answered with who knows?

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Speaker 3: I mean, I don't know.

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Speaker 4: It's impossible to know. You would think that it's obvious

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Speaker 4: the agility in the system. Yeah, and it's obvious that

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Speaker 4: there is no straightforward path just to say, for example,

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Speaker 4: securing safe transit through the Strait of Hormus for oil

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Speaker 4: tankers without having an incredible military presence on the ground there.

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Speaker 4: And I don't think Americans are ready for that.

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Speaker 2: I don't believe the answer to that question is that

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Speaker 2: we should just rename it the Strait of America. I'm

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Speaker 2: sure that's time, and then get Sundar to go fix

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Speaker 2: Google Maps.

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Speaker 4: Right, just relabeling things. Yeah, yeah, and it worked. It

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Speaker 4: worked on the Gulf the Gulf of Mexico slash America.

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Speaker 5: No.

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Speaker 4: So the answer is everything in the systems telling you

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Speaker 4: this thing just.

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Speaker 3: Didn't land as well as I thought it was.

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Speaker 4: I like the idea, though, Now everything in the systems

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Speaker 4: telling you this has to stop, right because anytime there's

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Speaker 4: even a hint that this is going to get resolved,

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Speaker 4: there's a collapse, which is the flip side of collapsing prices,

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Speaker 4: which is the flip side of oh my god. If

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Speaker 4: this continues, the system is going to break. And there's

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Speaker 4: so many ways it can break, right, not just in

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Speaker 4: terms of consumer demand, but byproducts. We're seeing across Southeast

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Speaker 4: Asia where people are being told they can only use

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Speaker 4: air conditioning three days a week, and again because energy

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Speaker 4: plays a huge role.

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Speaker 2: In one of the one of the areas in Southeast Asia.

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Speaker 2: They're basically taking Wednesday off now and like don't go

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Speaker 2: to work on Wednesdays when you can serve energy, right,

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Speaker 2: And so that these consequences ripple through the whole system.

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Speaker 2: And then the reverse is also true, that it's now

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Speaker 2: not just a snap thing that were everything to get

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Speaker 2: reversed and you sign something and say this ends tomorrow.

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Speaker 4: It depends on who you look at. But the IA

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Speaker 4: the other day said something like like six months to

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Speaker 4: three years to do the rebuilding required to get all

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Speaker 4: of the natural gas supply back online, the rail lines

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Speaker 4: back on. There's a long, really consequentially expensive process here.

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Speaker 2: So it's not simply you also can't you know, like

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Speaker 2: you can only say things like where Iran has come

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Speaker 2: to the table, were negotiating with Iran and Iran says no,

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Speaker 2: not not.

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Speaker 3: You can only do that a couple of.

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Speaker 2: Times before any no, And that's intreamental announcement true or

404
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Speaker 2: not doesn't have as much of an impact on and it's.

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Speaker 4: Also creates this this this game theoretic problem where if

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Speaker 4: I'm the counterparty and I see how much that causes

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Speaker 4: the price to come down. I now I can now

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Speaker 4: price my leverage. I now know how much leverage I have,

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Speaker 4: because if people think I'm agreeing to something, it causes

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Speaker 4: the price to go down this much. I have a

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Speaker 4: manse leverage now, right, And this becomes a negotiating ploy

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Speaker 4: And that's what you're seeing makes it more difficult to

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Speaker 4: get a resolution.

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Speaker 1: I have a question that may seem like a silly

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Speaker 1: question to you, but to most people will not.

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Speaker 3: And that is.

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Speaker 1: But to the lay pediatrician, serious to the lay pediatrician.

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Speaker 2: So that is that.

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Speaker 1: Recently the Trump administration signed a deal to give what

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Speaker 1: is the name of Total Energies a billion dollars to

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Speaker 1: cancel a wind project a wind project and instead invest

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Speaker 1: their money into fossil fuels. Why if we are so

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Speaker 1: re lion, if the world economy, specifically the US economy,

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Speaker 1: is so reliant on oil coming in the Strait and

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Speaker 1: so on and so forth, why not invest in these

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Speaker 1: alternate energies.

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Speaker 4: But that's a part. That's a partisan position, right. So

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Speaker 4: it's entirely driven by the idea of climate change denial

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Speaker 4: and the idea that whatever the other side wants, I

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Speaker 4: don't want the other side wanted wind generated energy, wanted

431
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Speaker 4: more solar. So I don't want it because they wanted it,

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Speaker 4: and I think there's a tiny overlay of real estate.

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Speaker 4: Developer doesn't like the look of windmills offshore.

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Speaker 3: That's it. Yeah, so it's not so.

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Speaker 1: But but if it were not a partisan issue. But okay,

436
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Speaker 1: But even if it's a partisan issue.

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Speaker 2: Can I ask a question, do we call them windmills

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Speaker 2: or do we call them something else? I have an

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Speaker 2: image of a windmill in my mind. They're called wind

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Speaker 2: wind wind farms when you have a collection of them,

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Speaker 2: all right, yeah, more than one.

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Speaker 4: But wind farms always sounds to me like I'm literally

443
00:20:52,760 --> 00:20:54,280
Speaker 4: growing wind and I'm not sure how that happens.

444
00:20:54,800 --> 00:20:57,200
Speaker 3: So I just stick to the old termidol it time.

445
00:20:57,400 --> 00:20:59,040
Speaker 4: All right, so you can take the boy from the farm,

446
00:20:59,119 --> 00:21:03,240
Speaker 4: but understood, etcetera. So so that's this is a classic

447
00:21:03,359 --> 00:21:06,800
Speaker 4: example of doing a pursuing a self destructive policy for

448
00:21:07,400 --> 00:21:10,880
Speaker 4: irrational reasons, but reasons that makes sense if you're taking

449
00:21:10,920 --> 00:21:11,720
Speaker 4: partisan lens to it.

450
00:21:12,000 --> 00:21:14,920
Speaker 1: But if you're if you're just doing the math, would

451
00:21:14,960 --> 00:21:19,359
Speaker 1: it logically make sense to invest in these alternative energies

452
00:21:19,760 --> 00:21:26,200
Speaker 1: or is it from an actual energy standpoint, would it

453
00:21:26,359 --> 00:21:28,920
Speaker 1: work or is or is there some argument to be

454
00:21:29,040 --> 00:21:32,520
Speaker 1: made by the Trump administration or the Republicans that it

455
00:21:32,600 --> 00:21:33,679
Speaker 1: won't work, that.

456
00:21:34,280 --> 00:21:36,960
Speaker 2: Wind farms don't work, No, no, all these So there's

457
00:21:37,400 --> 00:21:39,800
Speaker 2: basically saying like if you were just if you took

458
00:21:39,920 --> 00:21:43,439
Speaker 2: remove politics from this and are purely basing it on no.

459
00:21:43,600 --> 00:21:47,119
Speaker 4: Then you you're you're The most rational approach is what

460
00:21:47,200 --> 00:21:49,480
Speaker 4: people call the all of the above, so that you

461
00:21:49,800 --> 00:21:51,440
Speaker 4: don't just should do all it, do all of it.

462
00:21:52,040 --> 00:21:55,240
Speaker 4: Stop making these arbitrary decisions about solar's best, wind turbines

463
00:21:55,280 --> 00:21:58,320
Speaker 4: are best nuclear. So the correct answer is all of

464
00:21:58,320 --> 00:22:00,680
Speaker 4: the above, because you want to take this the sort

465
00:22:00,680 --> 00:22:02,840
Speaker 4: of fuel substrate in terms of what we produce baseline

466
00:22:02,880 --> 00:22:04,800
Speaker 4: baceline power in the United States and make it as

467
00:22:04,840 --> 00:22:07,560
Speaker 4: diversified as possible. So we're not relying on exclusively on

468
00:22:07,640 --> 00:22:10,760
Speaker 4: fossil fuels. It's not relying exclusively on wind turbines either.

469
00:22:10,760 --> 00:22:12,320
Speaker 4: Because you know, there's been a bunch of papers about

470
00:22:12,359 --> 00:22:14,960
Speaker 4: this idea of global quieting, the notion that wind speeds

471
00:22:14,960 --> 00:22:17,200
Speaker 4: have declined dramatically over the last thirty years, So you

472
00:22:17,280 --> 00:22:17,639
Speaker 4: know the.

473
00:22:17,680 --> 00:22:18,320
Speaker 3: Right time is that right?

474
00:22:18,359 --> 00:22:19,880
Speaker 1: We were talking about turbulence this week, and how.

475
00:22:20,680 --> 00:22:22,440
Speaker 3: I love the phrase global quieting.

476
00:22:22,560 --> 00:22:24,040
Speaker 1: Yeah, wait, what's happened with the wind?

477
00:22:24,680 --> 00:22:25,479
Speaker 3: Global quieting?

478
00:22:25,680 --> 00:22:27,680
Speaker 1: I didn't know you were a wind expert too, my

479
00:22:27,760 --> 00:22:29,600
Speaker 1: spare time, tell us about the wind.

480
00:22:29,960 --> 00:22:33,200
Speaker 2: Let's talk about global quieting. Yeah, so this sounds so

481
00:22:33,320 --> 00:22:34,720
Speaker 2: much nicer than global warming.

482
00:22:35,560 --> 00:22:37,800
Speaker 3: It sounds like it might be more peaceful anyway, you know.

483
00:22:38,240 --> 00:22:39,800
Speaker 3: So I'm going to get a lot more sleep.

484
00:22:40,359 --> 00:22:42,879
Speaker 4: So this is I don't think it's that kind of

485
00:22:43,000 --> 00:22:45,840
Speaker 4: quieting as much as I like it. No, it's just

486
00:22:45,920 --> 00:22:47,399
Speaker 4: there's been a series of paper thinks. There's one in

487
00:22:47,520 --> 00:22:49,760
Speaker 4: Nature a couple of years ago showing that average wind

488
00:22:49,800 --> 00:22:52,040
Speaker 4: speeds And again, this is a very noisy signal, because

489
00:22:52,320 --> 00:22:53,600
Speaker 4: how do you actually sort of come up with a

490
00:22:53,640 --> 00:22:55,679
Speaker 4: mean wind speed that for the whole world? So they

491
00:22:55,720 --> 00:22:58,480
Speaker 4: did on a continent by continent basis are I've been declining?

492
00:22:59,600 --> 00:23:02,080
Speaker 4: And there's question a series of connections.

493
00:23:01,720 --> 00:23:04,160
Speaker 3: To people have made back to climate change. I thought

494
00:23:04,200 --> 00:23:07,000
Speaker 3: this was the question he has related.

495
00:23:09,760 --> 00:23:14,680
Speaker 2: But it's important when when what hour in the day

496
00:23:15,880 --> 00:23:18,119
Speaker 2: did you think yourself, I'm going to come up to

497
00:23:18,200 --> 00:23:19,520
Speaker 2: speed on the global quieting?

498
00:23:20,320 --> 00:23:23,960
Speaker 3: Because literally, I want to talk. I want to tell

499
00:23:24,000 --> 00:23:26,200
Speaker 3: you why I asked that question. Please tell me why

500
00:23:26,560 --> 00:23:30,320
Speaker 3: I don't have that hour. I get like, I get

501
00:23:30,359 --> 00:23:33,200
Speaker 3: a workout in, then I got to grab lunch.

502
00:23:33,600 --> 00:23:37,600
Speaker 4: And it's like three work pediatric clients.

503
00:23:37,960 --> 00:23:38,600
Speaker 3: I really have.

504
00:23:40,080 --> 00:23:44,040
Speaker 1: In the cabin and your dog, your golden retriever, is

505
00:23:44,119 --> 00:23:46,679
Speaker 1: by your feet, and you've got like chocolate of cookies

506
00:23:46,680 --> 00:23:49,200
Speaker 1: and the coffee and the fires. Reading papers on the

507
00:23:49,280 --> 00:23:51,800
Speaker 1: whole host of papers on on the wing.

508
00:23:52,160 --> 00:23:55,920
Speaker 3: That's exactly what happens, Wentworth. That's the Global Quiet paper

509
00:23:57,000 --> 00:23:57,879
Speaker 3: I feel like reading.

510
00:23:59,040 --> 00:24:03,960
Speaker 4: Okay, anyway, Yeah, but this is really it's really important

511
00:24:04,080 --> 00:24:08,359
Speaker 4: because it's changing the dynamics of the of wind energy production.

512
00:24:08,720 --> 00:24:10,240
Speaker 4: But I don't want to you just don't want to

513
00:24:10,280 --> 00:24:11,680
Speaker 4: get stuck in that. What you want to say is

514
00:24:11,720 --> 00:24:14,280
Speaker 4: that because of it, all of these we're gonna do

515
00:24:14,320 --> 00:24:16,560
Speaker 4: all of the above. Right, there's an argument that, you

516
00:24:16,640 --> 00:24:19,920
Speaker 4: know the importance of solar is changing, the wind is changing.

517
00:24:20,040 --> 00:24:22,800
Speaker 4: Nuclear may be problematic. We're seeing what happens with fossil fuels,

518
00:24:23,000 --> 00:24:24,760
Speaker 4: so you should just be pursuing all of the above.

519
00:24:24,960 --> 00:24:27,000
Speaker 4: That's that's the real answer. Like whether or not goldal

520
00:24:27,040 --> 00:24:28,520
Speaker 4: plieting is not separate.

521
00:24:50,000 --> 00:24:53,600
Speaker 1: I know this is a very debatable thing. But what

522
00:24:53,840 --> 00:24:57,239
Speaker 1: is the prediction of how much, how many, how much

523
00:24:57,280 --> 00:24:58,400
Speaker 1: fossil fuels we have left?

524
00:24:58,520 --> 00:24:58,879
Speaker 3: We don't know.

525
00:24:59,160 --> 00:25:01,760
Speaker 1: We just don't know, simply don't. Is there a guesstimate

526
00:25:02,440 --> 00:25:03,560
Speaker 1: twenty years thirty.

527
00:25:04,080 --> 00:25:05,600
Speaker 4: You can't do it in those terms at all, because

528
00:25:05,640 --> 00:25:10,360
Speaker 4: what happens is, as price prices rise, previously economically inaccessible

529
00:25:10,400 --> 00:25:13,360
Speaker 4: deposits become accessible because at a high enough price, yeah,

530
00:25:13,359 --> 00:25:15,440
Speaker 4: I guess it makes sense to get that stuff. Right,

531
00:25:15,560 --> 00:25:17,600
Speaker 4: So this is part of the reason why you know,

532
00:25:17,680 --> 00:25:20,119
Speaker 4: for example, the premium basin emerged as a as a

533
00:25:20,760 --> 00:25:23,520
Speaker 4: wasn't just technology. Is that price has made it economically

534
00:25:23,600 --> 00:25:26,679
Speaker 4: feasible to pursue deposits that weren't possible to pursue. Because

535
00:25:27,080 --> 00:25:29,240
Speaker 4: you probably watched the Beverly Hillbillies, there was a time

536
00:25:29,280 --> 00:25:30,880
Speaker 4: whenever you could just knock a home in the ground

537
00:25:30,920 --> 00:25:32,680
Speaker 4: and stuff shoots up and Jeed gets.

538
00:25:32,560 --> 00:25:34,760
Speaker 2: Rich from the ground came of bubbling crude, all.

539
00:25:34,720 --> 00:25:37,639
Speaker 4: Right, right, But that's the thing. So that era is

540
00:25:37,680 --> 00:25:41,160
Speaker 4: long gone, and so now we're normalizing much higher prices,

541
00:25:41,160 --> 00:25:42,400
Speaker 4: which makes previously get.

542
00:25:42,520 --> 00:25:45,680
Speaker 2: Up from fourteen miles below the earth comes a bubbling crude.

543
00:25:45,520 --> 00:25:47,440
Speaker 4: Rough, right, And I have to and I have to

544
00:25:47,480 --> 00:25:50,080
Speaker 4: send a high pressure water sideways and fracture.

545
00:25:51,440 --> 00:25:53,879
Speaker 3: So this is the the we don't know.

546
00:25:54,480 --> 00:25:56,960
Speaker 4: We do know that it's becoming much less accessible and

547
00:25:57,040 --> 00:25:59,439
Speaker 4: the deposits become more expensive, which is you know, if

548
00:25:59,480 --> 00:26:01,639
Speaker 4: you're in a of an economics band, is the market

549
00:26:01,680 --> 00:26:03,359
Speaker 4: telling you find some other way to do this?

550
00:26:03,760 --> 00:26:05,720
Speaker 3: Yeah? Right, And that's really the answer.

551
00:26:05,840 --> 00:26:07,879
Speaker 4: Is the market's jumping up and down shouting, not just

552
00:26:08,000 --> 00:26:10,040
Speaker 4: because of the prices, but also because of what's happening

553
00:26:10,040 --> 00:26:10,560
Speaker 4: in the Middle East.

554
00:26:12,200 --> 00:26:14,320
Speaker 3: Can I sorry, I just want to go to a

555
00:26:14,480 --> 00:26:15,119
Speaker 3: slight tangent.

556
00:26:15,720 --> 00:26:18,159
Speaker 2: This is kind of there's been a lot about wt

557
00:26:18,320 --> 00:26:23,000
Speaker 2: I and Brent and all things I knew earlier, but

558
00:26:23,720 --> 00:26:25,480
Speaker 2: I do not want to go on to a slight tangent. Yeah,

559
00:26:26,320 --> 00:26:28,240
Speaker 2: there's been all this talk for the last few years

560
00:26:28,280 --> 00:26:31,720
Speaker 2: of like China and Taiwan, in the military build up

561
00:26:31,760 --> 00:26:34,440
Speaker 2: in China, China and Taiwan, if they were going to

562
00:26:34,520 --> 00:26:37,959
Speaker 2: go attack, try to take Taiwan.

563
00:26:39,720 --> 00:26:41,800
Speaker 3: Is it now like I'm not trying to.

564
00:26:41,800 --> 00:26:44,719
Speaker 2: Give anyone any ideas here. I'm sure you have your

565
00:26:44,720 --> 00:26:46,400
Speaker 2: own military plans and strategy.

566
00:26:46,800 --> 00:26:50,480
Speaker 3: I'm just saying listening to.

567
00:26:52,240 --> 00:26:56,280
Speaker 2: Is it now like the perfect time, like we're he

568
00:26:56,400 --> 00:27:00,680
Speaker 2: is listening now, But yeah, we're preoccupied. Yeah, we're preoccupied,

569
00:27:00,800 --> 00:27:04,960
Speaker 2: not not just preoccupied, but you know, of course, and

570
00:27:05,240 --> 00:27:09,679
Speaker 2: I think we've got you know, more than one carrier

571
00:27:09,720 --> 00:27:10,320
Speaker 2: group there.

572
00:27:11,440 --> 00:27:14,879
Speaker 4: And it's also they've got their own strait of hormis right,

573
00:27:14,880 --> 00:27:16,040
Speaker 4: I mean literally and they do.

574
00:27:16,160 --> 00:27:18,639
Speaker 2: And the amazing thing is it's also called the strait

575
00:27:18,720 --> 00:27:19,199
Speaker 2: of hormone.

576
00:27:20,080 --> 00:27:22,000
Speaker 3: It's crazy.

577
00:27:22,240 --> 00:27:25,720
Speaker 4: So, but the idea that all of these economic linkages

578
00:27:26,160 --> 00:27:30,280
Speaker 4: can be used for purposes that they you wouldn't have

579
00:27:30,320 --> 00:27:32,560
Speaker 4: expected earlier on because we've come so dependent on them.

580
00:27:32,600 --> 00:27:35,240
Speaker 4: So this idea that world trade do you mean the

581
00:27:36,440 --> 00:27:39,080
Speaker 4: so so world trade, which was obviously the idea in

582
00:27:39,920 --> 00:27:42,960
Speaker 4: macroeconomics for years, was that trade is a free lunch.

583
00:27:43,320 --> 00:27:45,159
Speaker 4: That the more I trade with other people, let them

584
00:27:45,160 --> 00:27:47,320
Speaker 4: pursue comparative advantage, it's good for me and good for them.

585
00:27:47,359 --> 00:27:48,879
Speaker 4: It was a free lunch. I wasn't just feeling the

586
00:27:50,359 --> 00:27:55,680
Speaker 4: whole nineties, the liberalization of trade. But what people didn't

587
00:27:55,680 --> 00:27:58,879
Speaker 4: anticipate was all of these trade linkages themselves would be

588
00:27:58,920 --> 00:28:02,200
Speaker 4: weaponized against modernity so that I could actually say, I

589
00:28:02,359 --> 00:28:04,520
Speaker 4: understand that you're dependent on me, and I'm going to

590
00:28:04,600 --> 00:28:07,000
Speaker 4: use that against you because I've become the globally dominant

591
00:28:07,000 --> 00:28:08,920
Speaker 4: supplier of you know, fill in the blanket in the

592
00:28:09,000 --> 00:28:12,520
Speaker 4: case of Taiwan, of semiconductors, and so that trade linkage

593
00:28:12,560 --> 00:28:14,840
Speaker 4: is then weaponized. So what seemed like a good idea

594
00:28:14,880 --> 00:28:16,480
Speaker 4: and was a free line and was part of with

595
00:28:16,600 --> 00:28:18,840
Speaker 4: this idea that by creating all these trade linkages and

596
00:28:18,960 --> 00:28:21,520
Speaker 4: be more peaceful world works until it doesn't. And what

597
00:28:21,560 --> 00:28:24,719
Speaker 4: we're discovering now is that these things are increasingly weaponized

598
00:28:25,280 --> 00:28:27,119
Speaker 4: and becomes your own straight of horrm moves that you

599
00:28:27,160 --> 00:28:28,840
Speaker 4: can then use to blackmail the rest of the world,

600
00:28:29,200 --> 00:28:31,560
Speaker 4: which is now causing of course, the US to demand

601
00:28:31,640 --> 00:28:36,440
Speaker 4: that TSMC, for example, build a semiconductor fabrication facility in Arizona.

602
00:28:36,560 --> 00:28:38,400
Speaker 4: Is an Arizona in Texas one of the other and

603
00:28:39,680 --> 00:28:42,120
Speaker 4: which is creating all this redundancy. So now it's like,

604
00:28:42,120 --> 00:28:43,920
Speaker 4: wait a minute, why are we building these things here

605
00:28:43,920 --> 00:28:45,960
Speaker 4: when it can be done more efficiently over there. Orthodox

606
00:28:46,000 --> 00:28:48,200
Speaker 4: economics tells us it should be done over there. It's

607
00:28:48,320 --> 00:28:51,680
Speaker 4: because the systems being weaponized, the entire trade systems being

608
00:28:51,760 --> 00:28:55,320
Speaker 4: weaponized against us, against everyone, all participants. And so now

609
00:28:55,440 --> 00:28:57,520
Speaker 4: with the next big shift, is going to be towards

610
00:28:57,720 --> 00:29:00,760
Speaker 4: incredible amounts of redundancy in the system because of this

611
00:29:00,960 --> 00:29:03,640
Speaker 4: problem of the system itself being weaponized. And that's the

612
00:29:03,760 --> 00:29:06,080
Speaker 4: So the answer is absolutely they should do it, because

613
00:29:07,560 --> 00:29:11,480
Speaker 4: not them suggesting anything, because if they don't do it,

614
00:29:11,600 --> 00:29:13,920
Speaker 4: now that leverage goes away. Correct, the leverage goes away

615
00:29:13,960 --> 00:29:16,800
Speaker 4: because the redundancy is being back into the system, and

616
00:29:16,920 --> 00:29:18,920
Speaker 4: you will know your chance now chance you will never

617
00:29:18,960 --> 00:29:22,080
Speaker 4: have a moment when the semiconductor industry was your own

618
00:29:22,120 --> 00:29:24,040
Speaker 4: state of horror moves that you could blackmail the world

619
00:29:24,120 --> 00:29:25,320
Speaker 4: with and get what you want.

620
00:29:25,360 --> 00:29:27,600
Speaker 1: But they won't do it because no.

621
00:29:27,640 --> 00:29:30,560
Speaker 2: I'm not saying they will. I don't think anyone's saying

622
00:29:30,560 --> 00:29:31,080
Speaker 2: they won't do it.

623
00:29:31,200 --> 00:29:31,240
Speaker 4: No.

624
00:29:31,440 --> 00:29:33,240
Speaker 2: I think a lot of people think they will do it.

625
00:29:33,360 --> 00:29:37,040
Speaker 2: And it's getting more, it's getting increasingly timely.

626
00:29:37,280 --> 00:29:39,480
Speaker 4: Yeah, I think that's exactly right, and that's what should

627
00:29:39,480 --> 00:29:42,080
Speaker 4: be because especially if you sort of go up a

628
00:29:42,160 --> 00:29:45,800
Speaker 4: level and say, what's really going on this world trade

629
00:29:45,840 --> 00:29:48,880
Speaker 4: being weaponized? What do I have that's a weapon now?

630
00:29:49,400 --> 00:29:52,280
Speaker 4: That won't be a weapon into five years. I have this,

631
00:29:53,360 --> 00:29:54,040
Speaker 4: use it or lose it.

632
00:29:56,240 --> 00:29:58,640
Speaker 1: Going back to oil for one minute, we.

633
00:29:58,720 --> 00:30:00,640
Speaker 3: Can go back to oil as long as you want. Yeah.

634
00:30:00,920 --> 00:30:02,160
Speaker 4: We uh.

635
00:30:03,080 --> 00:30:07,239
Speaker 1: We are also in a situation where there has been

636
00:30:07,280 --> 00:30:10,960
Speaker 1: a consumer pushback against evs.

637
00:30:11,440 --> 00:30:12,840
Speaker 3: Yeah. Uh.

638
00:30:13,760 --> 00:30:16,560
Speaker 1: A lot of car companies are canceling they're evs.

639
00:30:18,000 --> 00:30:18,120
Speaker 3: Uh.

640
00:30:18,680 --> 00:30:20,840
Speaker 1: Consumers are no longer buying them in the way they were.

641
00:30:22,560 --> 00:30:25,320
Speaker 3: I don't understand that. I don't get why that's the case.

642
00:30:25,720 --> 00:30:26,360
Speaker 3: I love mine.

643
00:30:27,200 --> 00:30:30,680
Speaker 1: Do you have, don't worry about it? You have the

644
00:30:30,960 --> 00:30:32,400
Speaker 1: Bentley the electric?

645
00:30:36,080 --> 00:30:38,880
Speaker 3: Do you have a Tesla Wentworth? Bring a plug? I

646
00:30:38,960 --> 00:30:42,600
Speaker 3: feel like charging the car. Do you have a Tesla?

647
00:30:43,320 --> 00:30:44,760
Speaker 1: It's not you still have a Testa?

648
00:30:44,960 --> 00:30:47,000
Speaker 2: You have a Tesla model as an old Tesla models.

649
00:30:47,080 --> 00:30:48,680
Speaker 3: I love it. Yeah, they're great.

650
00:30:48,920 --> 00:30:52,160
Speaker 1: Yeah, but I love all the Tesla stickers. There's like

651
00:30:52,280 --> 00:30:53,360
Speaker 1: I love my hat.

652
00:30:54,040 --> 00:30:56,000
Speaker 4: I thought it before the crazy guy went crazy.

653
00:30:56,560 --> 00:30:58,800
Speaker 1: But there's been a pushback. So so then that is

654
00:30:59,000 --> 00:31:02,400
Speaker 1: again in turn, driving up the prices and demand and

655
00:31:02,440 --> 00:31:05,440
Speaker 1: so on and so forth. But why why not?

656
00:31:06,520 --> 00:31:06,560
Speaker 3: What?

657
00:31:07,120 --> 00:31:09,600
Speaker 1: I'm surprised them with the evs that pushed the people

658
00:31:10,760 --> 00:31:11,479
Speaker 1: pushed against them.

659
00:31:11,520 --> 00:31:13,520
Speaker 4: That's a US phenomenon though, right, I mean it's still

660
00:31:13,640 --> 00:31:15,800
Speaker 4: in Norway, for example, it's now the large they're the

661
00:31:15,920 --> 00:31:17,400
Speaker 4: largest shite.

662
00:31:17,400 --> 00:31:20,400
Speaker 3: We also don't have any of the Chinese EV's like byds.

663
00:31:20,040 --> 00:31:22,680
Speaker 4: Right, the BYD stuff which is like really aggressively priced.

664
00:31:22,680 --> 00:31:24,280
Speaker 4: You can argue about whether we should or shouldn't have it.

665
00:31:24,640 --> 00:31:28,680
Speaker 4: But this is not entirely but largely a US phenomenon.

666
00:31:28,760 --> 00:31:30,640
Speaker 4: So there's a bunch of US specific things, one of

667
00:31:30,680 --> 00:31:34,040
Speaker 4: which is that the appearance and disappearance of subsidies creates

668
00:31:34,080 --> 00:31:35,560
Speaker 4: this it's it creates.

669
00:31:35,320 --> 00:31:36,120
Speaker 3: This weird phenomenon.

670
00:31:36,200 --> 00:31:38,280
Speaker 4: Like if someone offers you something for fifty dollars and

671
00:31:38,360 --> 00:31:40,600
Speaker 4: you know full on it was only worth thirty, you

672
00:31:41,080 --> 00:31:43,200
Speaker 4: get pegged to that price where you say, okay, you

673
00:31:43,240 --> 00:31:45,000
Speaker 4: know what, it's still worth fifty to me, even though

674
00:31:45,000 --> 00:31:46,640
Speaker 4: I know the market price is thirty. Well, the same

675
00:31:46,720 --> 00:31:49,280
Speaker 4: thing happens in evs, where you say, okay, these things

676
00:31:49,320 --> 00:31:51,000
Speaker 4: are good, but you were previously willing to give me

677
00:31:51,080 --> 00:31:53,680
Speaker 4: fifteen thousand dollars subsidies. So take away the subsidies, and

678
00:31:53,720 --> 00:31:56,960
Speaker 4: suddenly people reprice it in their head and say, even

679
00:31:57,000 --> 00:31:58,440
Speaker 4: though I would it might have been willing to buy

680
00:31:58,480 --> 00:32:01,440
Speaker 4: this without the subsidy, the fact that subsidy previously existed

681
00:32:01,480 --> 00:32:03,320
Speaker 4: and is now gone, I'm out.

682
00:32:03,400 --> 00:32:04,280
Speaker 3: I want my f on fifty.

683
00:32:04,640 --> 00:32:08,160
Speaker 2: Psychological anchoring on every right, So.

684
00:32:08,200 --> 00:32:11,080
Speaker 4: People anchored on a price that included a subsidy, even

685
00:32:11,080 --> 00:32:13,400
Speaker 4: if they might have rationally purchased it without the subsidy,

686
00:32:13,760 --> 00:32:15,680
Speaker 4: and now because the subsidy is gone, they say, well,

687
00:32:15,760 --> 00:32:18,320
Speaker 4: I guess evs are some kind of twenty twenty two thing.

688
00:32:18,440 --> 00:32:20,720
Speaker 4: And I'm out right, and I think that's a huge factor,

689
00:32:20,840 --> 00:32:23,280
Speaker 4: this psychological fact leaving us, like you know, the partisanship

690
00:32:23,320 --> 00:32:26,400
Speaker 4: and everything else, anchoring on the subsidized price is part

691
00:32:26,440 --> 00:32:26,959
Speaker 4: of the problem.

692
00:32:27,680 --> 00:32:30,320
Speaker 1: So to conclude, do you have any questions, because I

693
00:32:30,520 --> 00:32:33,040
Speaker 1: have a conclusion question, it's all yours.

694
00:32:33,520 --> 00:32:34,920
Speaker 3: I've asked all my leading questions.

695
00:32:34,960 --> 00:32:36,480
Speaker 4: I think that you know what that the angle that

696
00:32:36,920 --> 00:32:38,720
Speaker 4: that we haven't talked about that's worth talking about is

697
00:32:38,760 --> 00:32:39,440
Speaker 4: the effect on AI.

698
00:32:40,520 --> 00:32:42,680
Speaker 1: Yeah, because of data centers.

699
00:32:42,360 --> 00:32:44,680
Speaker 4: And yeah, not just data centers, but I mean there's

700
00:32:44,680 --> 00:32:47,240
Speaker 4: all kinds of ways that energy plays back into this.

701
00:32:47,400 --> 00:32:51,160
Speaker 4: Like in the data center's context, an increasing fraction of

702
00:32:51,240 --> 00:32:53,080
Speaker 4: data centers they are not connected to the grid. They're

703
00:32:53,080 --> 00:32:55,320
Speaker 4: not connected to the grid because consumers are complaining about

704
00:32:55,320 --> 00:32:57,880
Speaker 4: it because it's jacking up their prices. People still want

705
00:32:57,880 --> 00:32:59,760
Speaker 4: to build data centers, so instead they're doing what's called

706
00:32:59,760 --> 00:33:01,720
Speaker 4: behind the meter power, which is to say, you show

707
00:33:01,800 --> 00:33:03,600
Speaker 4: up with the natural gas turbine and say it's fine,

708
00:33:03,600 --> 00:33:05,920
Speaker 4: it's fine, it's fine, I'll power this myself, but it's

709
00:33:05,960 --> 00:33:08,360
Speaker 4: powered by natural gas. Well, this is and finite supply

710
00:33:08,440 --> 00:33:11,120
Speaker 4: of natural gas. Even though we're operating within the US marketplace.

711
00:33:11,200 --> 00:33:13,280
Speaker 4: Now we have an aggressive new series of new buyers

712
00:33:13,280 --> 00:33:16,080
Speaker 4: showing up who are bidding for the commodity. That's still

713
00:33:16,120 --> 00:33:17,880
Speaker 4: going to have an impact on the price of the commodity,

714
00:33:17,880 --> 00:33:20,520
Speaker 4: at least at the margin, even though we're not connected

715
00:33:20,520 --> 00:33:24,120
Speaker 4: to what's happening in the Middle East. So the impact

716
00:33:24,160 --> 00:33:25,720
Speaker 4: of all of this, the way it plays out, is

717
00:33:25,760 --> 00:33:28,840
Speaker 4: that your natural gas prices still end up going up

718
00:33:28,880 --> 00:33:30,760
Speaker 4: here in part because of the existence of these data

719
00:33:30,800 --> 00:33:32,920
Speaker 4: centers that are bidding up the prices of natural gas.

720
00:33:33,640 --> 00:33:36,200
Speaker 4: And it's we still have a slight interaction with the US.

721
00:33:36,320 --> 00:33:38,560
Speaker 4: Something like three percent of the US product is exported,

722
00:33:38,600 --> 00:33:40,520
Speaker 4: so you're still pulling in some of the global price.

723
00:33:41,040 --> 00:33:43,800
Speaker 4: So I'd expect natural gas prices to slowly start working

724
00:33:43,840 --> 00:33:47,000
Speaker 4: their way higher as this plays out, and so data

725
00:33:47,040 --> 00:33:49,400
Speaker 4: center pricing begins to change. So you think about it

726
00:33:49,520 --> 00:33:52,800
Speaker 4: like they're just factories producing tokens. Well, if my costs

727
00:33:52,880 --> 00:33:55,160
Speaker 4: go up, but my token prices are going down and

728
00:33:55,240 --> 00:33:58,960
Speaker 4: I'm debt financed, that's not good, right, And so you

729
00:33:59,080 --> 00:34:01,200
Speaker 4: can see how it becomes it's more problematic in terms

730
00:34:01,240 --> 00:34:03,760
Speaker 4: of financing these things because of this, you know, increasing

731
00:34:03,840 --> 00:34:04,440
Speaker 4: costs lower.

732
00:34:04,640 --> 00:34:07,520
Speaker 2: Fortunately, companies aren't issuing debt to finance these things.

733
00:34:07,640 --> 00:34:10,280
Speaker 4: It's a good thing. And let alone exotic financing vehicles

734
00:34:10,360 --> 00:34:12,000
Speaker 4: like stvs, it's it's all good.

735
00:34:12,080 --> 00:34:13,040
Speaker 3: So that's a problem.

736
00:34:13,080 --> 00:34:15,080
Speaker 4: But then even in in semiconductor manufacturing, it's one of

737
00:34:15,080 --> 00:34:18,520
Speaker 4: the most energy intensive processes on Earth. Natural gas plays

738
00:34:18,520 --> 00:34:20,920
Speaker 4: a huge role in terms of silicon fabrication and you

739
00:34:20,960 --> 00:34:23,400
Speaker 4: can see that in Taiwan statistics, and so it plays

740
00:34:23,440 --> 00:34:27,440
Speaker 4: into directly into the cost I'd expect you to be

741
00:34:27,680 --> 00:34:30,120
Speaker 4: some scarcity starts showing up in chip manufacturing as a

742
00:34:30,160 --> 00:34:32,279
Speaker 4: result of what's changing and energy prices, which in turn

743
00:34:32,320 --> 00:34:34,839
Speaker 4: plays back into you know, in video's ability to get

744
00:34:35,360 --> 00:34:37,920
Speaker 4: quantities of GPUs that it wants. So it's it plays

745
00:34:37,960 --> 00:34:40,160
Speaker 4: out through all of these backdoor channels. And so you're

746
00:34:40,160 --> 00:34:42,640
Speaker 4: saying we should shorten a video, absolutely go crazy.

747
00:34:43,760 --> 00:34:47,000
Speaker 3: I'll watch wait you have.

748
00:34:47,000 --> 00:34:49,920
Speaker 1: A summary, sumbing up summing up question, which is, if

749
00:34:49,960 --> 00:34:52,239
Speaker 1: you were to put on your economist.

750
00:34:51,760 --> 00:34:56,080
Speaker 4: Hat and like the magazine No, not the magazine, no,

751
00:34:56,160 --> 00:34:56,680
Speaker 4: your hat.

752
00:34:56,680 --> 00:34:59,759
Speaker 1: As an economist, not really an economists you play one

753
00:34:59,840 --> 00:35:04,919
Speaker 1: t Oh yeah, sure, okay, fine, what how does this all?

754
00:35:05,880 --> 00:35:08,600
Speaker 1: Let's just say we pull out of around tomorrow, we

755
00:35:08,719 --> 00:35:12,080
Speaker 1: don't go in, which we probably will hypothetically, but let's

756
00:35:12,080 --> 00:35:15,920
Speaker 1: just say that we that we don't. How long does

757
00:35:16,000 --> 00:35:18,640
Speaker 1: it take for let's you know, let's do two scenarios here.

758
00:35:18,760 --> 00:35:23,160
Speaker 1: Let's do scenario one, which is we do Trump says,

759
00:35:23,600 --> 00:35:27,480
Speaker 1: you know, a mission accomplished, we all go home. How

760
00:35:27,560 --> 00:35:30,239
Speaker 1: long does it take for the economy to get back

761
00:35:30,320 --> 00:35:33,040
Speaker 1: on track, the oil prices, gas and so on and

762
00:35:33,120 --> 00:35:35,200
Speaker 1: so forth, all of your your ski goggles and so on.

763
00:35:35,760 --> 00:35:38,239
Speaker 1: And then what is the scenario if we stay and

764
00:35:38,560 --> 00:35:41,960
Speaker 1: there are boots on the ground? How long? How what

765
00:35:42,120 --> 00:35:43,200
Speaker 1: is the repercussions of that?

766
00:35:43,840 --> 00:35:46,560
Speaker 4: Well, the second one is almost impossible because there's no

767
00:35:46,680 --> 00:35:48,640
Speaker 4: way to know. I mean, we didn't go into Vietnam

768
00:35:48,760 --> 00:35:51,640
Speaker 4: planning to stick around for a decade, no reason to

769
00:35:51,680 --> 00:35:52,880
Speaker 4: expect you're going to be in and out of this

770
00:35:53,000 --> 00:35:55,280
Speaker 4: one in short order, right, So I have to believe

771
00:35:55,320 --> 00:35:57,120
Speaker 4: that it's going to take longer than we expect because

772
00:35:57,120 --> 00:36:00,640
Speaker 4: and they will at every turn. Test American resolved to

773
00:36:00,800 --> 00:36:04,919
Speaker 4: have people imagine, imagine we've got some special forces people

774
00:36:04,920 --> 00:36:08,200
Speaker 4: who are taking hostage, they're on television. How long an

775
00:36:08,200 --> 00:36:09,640
Speaker 4: American is going to put up with it before they say,

776
00:36:09,680 --> 00:36:11,840
Speaker 4: you know what, we don't need this because we've already

777
00:36:12,040 --> 00:36:14,920
Speaker 4: largely self sufficient with respect to many of these products.

778
00:36:15,200 --> 00:36:17,520
Speaker 4: Get us out of there. And so there's so many

779
00:36:17,640 --> 00:36:20,560
Speaker 4: contingent ways that can break that den't to do with yeah,

780
00:36:20,719 --> 00:36:23,040
Speaker 4: winning or losing in war, right, So you know that

781
00:36:23,120 --> 00:36:25,880
Speaker 4: one's almost impossible. The other one is more Weirdly, it's

782
00:36:25,880 --> 00:36:29,960
Speaker 4: easier to answer because we know roughly from the statistics

783
00:36:30,000 --> 00:36:31,839
Speaker 4: we have, how long it would take to rebuild what's

784
00:36:31,880 --> 00:36:34,440
Speaker 4: already been destroyed. And the answer is probably less than

785
00:36:34,440 --> 00:36:37,400
Speaker 4: three years, but certainly more than six months. And so

786
00:36:37,520 --> 00:36:40,120
Speaker 4: that is the answer in terms of how quickly sort

787
00:36:40,120 --> 00:36:42,640
Speaker 4: of the global system comes back online in terms of

788
00:36:42,760 --> 00:36:44,600
Speaker 4: actually being able to function at the levels that it

789
00:36:44,640 --> 00:36:46,239
Speaker 4: does now, and that's a really long time. That's an

790
00:36:46,239 --> 00:36:48,960
Speaker 4: incredibly long time. It's something you can't We've already had

791
00:36:49,000 --> 00:36:50,880
Speaker 4: a point where it's like the pottery barn rule. You know,

792
00:36:51,440 --> 00:36:53,279
Speaker 4: you broke it, you bought it. We broke it and

793
00:36:53,360 --> 00:36:56,120
Speaker 4: we bought it. Right, So it's you know, the pottery

794
00:36:56,200 --> 00:37:01,080
Speaker 4: barn rule. Actually that was a potter, No, you were

795
00:37:01,480 --> 00:37:02,880
Speaker 4: and barrel, same thing, same thing.

796
00:37:03,000 --> 00:37:05,040
Speaker 3: So so the answer is it's already baked in.

797
00:37:05,080 --> 00:37:06,560
Speaker 4: That it's already baked in, right, it's going to be

798
00:37:06,640 --> 00:37:08,919
Speaker 4: it's going to be six months to two three years

799
00:37:08,920 --> 00:37:10,400
Speaker 4: before it all comes back out. And then you know,

800
00:37:10,480 --> 00:37:13,279
Speaker 4: your export markets are weakend because they're paying higher energy prices,

801
00:37:13,280 --> 00:37:14,600
Speaker 4: they're not willing to pay as much to you for

802
00:37:14,719 --> 00:37:15,680
Speaker 4: buying us products.

803
00:37:15,880 --> 00:37:16,560
Speaker 3: Blah blah blah.

804
00:37:16,680 --> 00:37:18,600
Speaker 1: It plays out, how does that affect interest rates?

805
00:37:19,520 --> 00:37:22,359
Speaker 4: And the well, inflation is going to be much higher,

806
00:37:22,400 --> 00:37:23,520
Speaker 4: and so the pressure is going to be for at

807
00:37:23,560 --> 00:37:25,000
Speaker 4: least marginally higher interest rates.

808
00:37:24,880 --> 00:37:27,120
Speaker 1: Because you have this, right, and then that's less housing

809
00:37:27,200 --> 00:37:27,520
Speaker 1: sales and.

810
00:37:27,920 --> 00:37:29,480
Speaker 4: Right, and at the exact same time as the economy

811
00:37:29,560 --> 00:37:31,520
Speaker 4: is weakening and job seekers are already saying this is

812
00:37:31,600 --> 00:37:32,920
Speaker 4: the worst job market in memory, and.

813
00:37:34,120 --> 00:37:36,960
Speaker 1: Then AI takes all of our jobs. So it's pets

814
00:37:37,200 --> 00:37:40,640
Speaker 1: and world pets. Last question, this is for both of you.

815
00:37:41,960 --> 00:37:45,360
Speaker 1: Let's look at the worst case scenario. China decides to

816
00:37:45,400 --> 00:37:50,120
Speaker 1: go into Taiwan, we go into Iran, Russia does something.

817
00:37:51,280 --> 00:37:52,160
Speaker 1: How does that play out?

818
00:37:52,880 --> 00:37:54,680
Speaker 4: Well, that's is that a disaster?

819
00:37:55,040 --> 00:37:58,719
Speaker 2: I think Wentworth doesn't get me that iver handled backscratcher.

820
00:37:58,760 --> 00:37:59,200
Speaker 3: I've had my.

821
00:38:01,480 --> 00:38:03,400
Speaker 4: Yeah, I mean that's the worst possible case, right, I

822
00:38:03,440 --> 00:38:06,320
Speaker 4: mean it's hard to imagine how something like that doesn't

823
00:38:06,360 --> 00:38:09,400
Speaker 4: have massive global or cascading consequence.

824
00:38:09,440 --> 00:38:11,560
Speaker 3: It doesn't stop there, yeah, right, the cask.

825
00:38:11,680 --> 00:38:14,920
Speaker 2: It's always the second and third derivative consequences that like,

826
00:38:15,400 --> 00:38:17,439
Speaker 2: it's not like you said, well we seemingly don't.

827
00:38:17,719 --> 00:38:19,880
Speaker 4: This isn't like about right, It's not like risk right,

828
00:38:20,040 --> 00:38:22,440
Speaker 4: it's well I got chat.

829
00:38:22,760 --> 00:38:25,160
Speaker 2: It's not like you get cum chotgun and then it's done.

830
00:38:25,360 --> 00:38:27,520
Speaker 3: Right, I rolled triple three. I'm gonna take. I'm gonna take.

831
00:38:27,520 --> 00:38:29,319
Speaker 3: You know, Iran. It doesn't work that way.

832
00:38:29,360 --> 00:38:31,400
Speaker 4: So there's going to be this huge realignment if that

833
00:38:31,480 --> 00:38:34,279
Speaker 4: happens in terms of spheres of influence and who controls what,

834
00:38:34,480 --> 00:38:36,600
Speaker 4: And it's very hard to imagine it doesn't ripple much further.

835
00:38:36,800 --> 00:38:39,640
Speaker 1: Is there anything that's anything to learn from from our

836
00:38:39,760 --> 00:38:42,640
Speaker 1: time in Iraq on the global economy and and the

837
00:38:43,040 --> 00:38:46,440
Speaker 1: and to learn what would happen potentially with Iran.

838
00:38:47,040 --> 00:38:49,680
Speaker 4: Well that if you don't finish, quote, finish the job,

839
00:38:49,880 --> 00:38:51,399
Speaker 4: you end up in the same place just a couple

840
00:38:51,440 --> 00:38:53,760
Speaker 4: of years later. And so let's say we declare victims.

841
00:38:53,800 --> 00:38:57,320
Speaker 2: It's worse because if you don't finish the job, the

842
00:38:57,600 --> 00:39:00,440
Speaker 2: ensuing regime that's now not on is like further rect

843
00:39:00,840 --> 00:39:02,920
Speaker 2: I'm not coming back to Switzerland and talking to you.

844
00:39:04,160 --> 00:39:06,120
Speaker 4: And they've learned a really good lesson though. They've learned

845
00:39:06,120 --> 00:39:07,799
Speaker 4: that they have a toll booth, and the tol booth

846
00:39:07,840 --> 00:39:10,040
Speaker 4: is the Straight of hor Moos and so you can

847
00:39:10,120 --> 00:39:12,400
Speaker 4: expect that to be and they've literally they've floated the

848
00:39:12,440 --> 00:39:14,759
Speaker 4: idea already. They've said that we'd like to charge we

849
00:39:14,840 --> 00:39:17,759
Speaker 4: will charge tolls in future for all passages through the straight.

850
00:39:17,840 --> 00:39:21,919
Speaker 4: Wait a minute, we weren't monetizing that, Yeah, right, Yeah,

851
00:39:21,960 --> 00:39:25,160
Speaker 4: we've now taught people that this is much more valuable

852
00:39:25,200 --> 00:39:27,440
Speaker 4: than they thought, and that they have full control over it.

853
00:39:27,520 --> 00:39:30,080
Speaker 4: And what's the line from Dean Done, like who controls

854
00:39:30,160 --> 00:39:32,800
Speaker 4: the thing or who can destroy the thing controls it

855
00:39:33,080 --> 00:39:34,440
Speaker 4: and so it's the same thing. It doesn't matter whether

856
00:39:34,480 --> 00:39:36,480
Speaker 4: it's spice or the Straight of horor moves. Now they

857
00:39:36,520 --> 00:39:38,959
Speaker 4: control it and so that's the answer, that's what will happen.

858
00:39:39,560 --> 00:39:42,120
Speaker 1: Ww this has been another fun episode of the Nick,

859
00:39:42,160 --> 00:39:44,399
Speaker 1: Dick and Poll Show. I had fun, I had fun,

860
00:39:44,960 --> 00:39:48,400
Speaker 1: I had fun too. This is really interesting, it's incredibly important,

861
00:39:49,200 --> 00:39:52,399
Speaker 1: it's but it's also a little just it's it's it's

862
00:39:52,480 --> 00:39:54,480
Speaker 1: daunting to think about the fact that even if we

863
00:39:54,560 --> 00:39:58,719
Speaker 1: were to pull out today, which we will not, that

864
00:39:59,000 --> 00:40:01,120
Speaker 1: it's going to take six six months to three years

865
00:40:01,200 --> 00:40:03,520
Speaker 1: to get back on track, and the implications of that

866
00:40:03,680 --> 00:40:05,120
Speaker 1: are just are staggering.

867
00:40:05,520 --> 00:40:06,200
Speaker 3: Thanks everybody.

868
00:40:06,400 --> 00:40:08,200
Speaker 2: This has been the Nick, Dick and Paul Show. Next

869
00:40:08,239 --> 00:40:10,520
Speaker 2: week the Global Quieting, Will it be quiet?

870
00:40:13,880 --> 00:40:14,319
Speaker 3: Can't wait?

871
00:40:15,840 --> 00:40:17,279
Speaker 1: Well, thanks for coming on as a guest today.

872
00:40:17,320 --> 00:40:20,160
Speaker 4: Paul, Absolutely, I'm here. You can expect a Bill