(Conversation Recorded on August 17, 2022.)
On this episode, we meet with legendary financial icon Kiril Sokoloff to take a bird’s eye view of the global energy/financial situation.
Why is the financial community so complacent about peak oil and the relationship between increasing energy scale and growth? Can we make predictions about the future by looking back at history?
Kiril shares his professional experiences with scenario planning, disruption, and investing as well as his passion for history and the practice of Buddhism to influence and inform decision making and life.
About Kiril Sokoloff
Kiril is an investor, a researcher, and long-time writer of the highly respected weekly publication “13D – What I Learned this Week”. For 50 years he has predicted major inflection points in energy and commodity prices correctly including 1980, 2002, and 2008 and recently stated sanctions on Russia will result in economic suicide for Europe.
Kiril is active in philanthropy in areas of healthcare, education, and the scaling of human consciousness.
Show Notes & Links to Learn More
00:45 – Kiril’s info + works , XIIID
03:17 – Kiril’s book “Is Inflation Ending? Are You Ready?”
03:36 – “Hubbert’s Peak”
03:44 – Peak Oil
04:45 – Oil prices in 2007-2008
05:00 – The Oil Drum
05:40 – The shale revolution
06:17 – George Soros and writing on Reflexivity
06:34 – Our culture is energy blind
06:44 – Commodities and the importance of gas and oil
07:17 – Deflation in the 2000s
08:06 – OPEC+ power
08:15 – The Green Energy revolution (Renewable energy)
09:20 – Global oil production decline rate if no there were no new drilling
09:26 – Tech productivity is deflationary and energy depletion is inflationary
09:37 – Kiril and 13D research on disruption
09:43 – Durations for building landlines and mobile phone systems by country
10:10 – As the world digitized, industry would be disrupted, which is deflationary
10:46 – All inflations since 1973 were oil-induced
11:05 – The cycle of wealth distribution is inflationary
12:04 – Number of vehicles in the world and 95% of them use petroleum
12:11 – Petroleum demand for transportation
12:15 – Number of electric vehicles worldwide
12:25 – Percent of automobiles sold which will be electric by 2030
12:34 – What goes into electric car batteries
12:46 – The copper needed in electric car batteries is a bottleneck
13:18 – The crisis in Europe is economic suicide
13:37 – Sanctions on Russia
13:40 – Russia oil exports
13:48 – Germany and natural gas from Russia
13:56 – German labor costs
14:04 – Germany’s low cost natural gas replaced with market-cost LNG
14:11 – German breweries to close
14:26 – Italy’s massive drought
14:34 – France nuclear reactors and drought impacts
14:40 – Rhine River low water levels affecting transport
15:20 – Russian stance – WWII, Invasion by Napoleon
15:46 – Forward price for electricity in Germany is 10x higher than 10 years ago
16:23 – Europe has no other option than to obtain Russian energy
16:35 – Europe’s relationship with Russia
16:44 – The fight between China and the U.S. for global supremacy
16:45 – China largest exporter of green energy
17:09 – Emmanuel Macron cohabitation with the Left and the Right
17:22 – The fall of Boris Johnson
17:54 – The Russian invasion into Ukraine and energy awareness
18:24 – Limits to materials growth
18:46 – Causes of WWI and resulting destruction
19:09 – German and Russian mobilization readiness in WWI
19:28 – Nancy Pelosi visit to Taiwan
19:32 – Republican representatives visit to Taiwan
19:42 – Japan’s access to oil cutoff in 1941
19:58 – John Mearsheimer “The Tragedy of Great Power Politics”
20:12 – The G7
20:30 – Growth in global energy use
20:54 – Vaclav Smil “How the World Really Works”
21:00 – Ammonia is responsible for 4-5 Billion people on Earth [“Population Growth and Nitrogen”]
21:12 – Impacts due to curtailment of fertilizer and natural gas
21:35 – Joe Tainter Works + Info
21:44 – Complexity
21:53 – Availability of natural gas and oil in the world
22:05 – Scottish farmers not using fertilizer due to high cost
22:35 – Natural gas market from bearish to bullish
22:44 – Natural gas should sell on btu basis like oil
23:26 – Financial claims on biophysical reality
23:36 – We create more money rather than tighten our belts
24:03 – Democracy, subsidies, and demand
24:54 – The energy equivalent to one barrel of oil
25:35 – Scenario Planning
26:24 – Covid vaccination rates and Covid variants
26:35 – Long Covid
26:42 – Decline in productivity due to Covid and airline shortages
27:11 – Economic stagnation
27:24 – Democracy vs Authoritarianism
27:37 – Darwinian thesis of economic growth
28:37 – Americans use 4x more energy than world average
28:49 – Loss aversion
29:17 – 1978 Shah of Iran overthrown
29:33 – Gasoline station lines in the 1970s
30:27 – Cochlear implant
31:00 – 2002 500-year flood in Eastern Europe
31:21 – Global climate extremes
31:44 – Financial overshoot
32:08 – Climate impact to water cooled nuclear power plants in China
32:37 – Florida building and hurricanes
33:03 – Potential for San Francisco Bay to flood
33:12 – Half of U.S. vegetables produced in CA
33:21 – Energy descent and Finland
34:30 – Barry Lynn and supply chain management
34:42 – Localization
34:51 – Outsourcing and downsizing
37:13 – “The Lessons of History” by Will Durant and Ariel Durant
38:11 – 1970s “Supply-siders”
38:34 – Signs of wealth distribution – PBOC (People’s Bank of China) and 25% wage increases, Xi JinPing, Occupy Wall Street, Brexit, President Donald J Trump
39:42 – Arnold Toynbee book “A Study of History”
40:53 – History of invasions into Russia and WWII Russian death toll
41:10 – Negative interest rates and negative yield
41:51 – The Federal Reserve
42:43 – Financial repression after WWII
43:13 – 2021 US debt to GDP
43:26 – The supply-side solution
44:20 – 1989 Japanese bubble burst
44:36 – Chinese “property bubble”
45:00 – Yield curve control – nationalizing the bond market
45:17 – Late 1990s and short JGBs
45:43 – Shinzo Abe and deflationary monetary policy
45:57 – Japan and population peak
46:55 – Japan’s yield differential between JGB and 10 year treasury is large
47:33 – US is 85% energy independent but Japan, Europe and UK import a large % of their energy
48:02 – Fiat currencies
48:17 – US Treasury dependency on capital gains taxes
48:27 – US trade deficit last 50 years
48:33 – Charles de Gaulle and “exorbitant privilege”
48:43 – Current US debt to foreign countries
48:50 – Freezing of Russian foreign exchange reserves
49:52 – EU crisis
50:10 – Stocks are a measure of the flow of money in and out of them
50:49 – Ray Kurzweil’s book “The Singularity is Near: When Humans Transcend Biology”
51:17 – Identity politics
51:34 – Blaise Pascal
51:48 – Canals in Venice clear after Covid
52:12 – The dangers of AI
52:27 – The complexity of technology’s rapid advance
53:09 – Arnold Toynbee, Joseph Tainter, Vaclav Smil
54:14 – Zbigniew Brzezinski
54:35 – Agreement made between Vladimir Putin and Xi Jinping before the Olympics
54:52 – World land mass once controlled by Europe
55:07 – Opium addiction in China
55:15 – The Congo
55:40 – BRICS and the countries wanting to join
55:56 – Shanghai Cooperation Organisation
56:17 – Henry Kissinger and a new world order
56:19 – Treaty of Westphalia and the European world order
56:36 – Dollar based hegemony
56:54 – Afghanistan’s frozen foreign reserves and China
57:55 – Xi Jinping visit to Saudi Arabia
58:42 – Tar sands
59:02 – US benefits from WWI and WWII
1:01:51 – Crack-Up Boom and Ludwig von Mises
1:02:48 – Bear Market, Bull Market, Meme stocks
1:03:15 – Inflation is really 15%, shrinkflation
1:05:08 – Empathic understanding
1:05:32 – Japanese invasion of Nanking
1:05:55 – Pope’s visit to Canada to apologize to indigineous people
1:06:15 – Siddhārtha quote
1:06:58 – His Holiness the 14th Dalai Lama
1:07:14 – The basic tenets of Buddhism
1:07:36 – Pandemic in the U.S.
1:07:51 – Coca Cola and WWII
1:09:08 – Debt from climate-induced hurricanes
1:09:53 – Mahatma Gandhi
1:10:08 – Capitalism and fairness
1:10:51 – The Age of Aquarius and becoming a more enlightened species
1:14:22 – “A Clockwork Orange” book by Anthony Burgess
1:15:04 – Education about Auschwitz
1:16:43 – Who we are, how we got here, how things fit together
1:17:07 – George Orwell
Teaser photo credit: By EDF Energy, Attribution, https://commons.wikimedia.org/w/index.php?curid=94779379
