Dr Paul Sullivan - Galactic Macro Series - July 19th, 2023

[00:00:07] Paul

There’s no such thing as clean energy. It doesn’t exist. I’m sure the top finance people get that. If you followed so-called clean energy solar panels from the start of finding the silicon and the aluminum and the copper and all this stuff, you’d see a lot of messy mining. You’d also see a lot of messy morality.

[00:00:34] Intro

Imagine spending an hour with the world’s greatest traders. Imagine learning from their experiences, their successes and their failures. Imagine no more. Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers in the world so you can take your manager due diligence or investment career to the next level.

Before we begin today’s conversation, remember to keep two things in mind. All the discussion we will have about investment performance is about the past, and past performance does not guarantee or even infer anything about future performance. Also understand that there’s a significant risk of financial loss with all investment strategies, and you need to request and understand the specific risks from the investment manager about their product before you make investment decisions.

Here’s your host, veteran hedge fund manager, Niels Kaastrup-Larsen.

[00:01:29] Niels

Welcome and welcome back to another conversation in our collection of podcast series that focuses on markets and investing from a number of different and fascinating perspectives. In the Galactic Macro series, we want to explore and be part of the discussions that relate to the unexplained and unknown objects as well as what’s going on in the world of AI because these two seemingly unrelated topics may indeed be related.

This is a series that I not only find incredibly interesting, as well as intellectually challenging, but also very important given the strong momentum we see at the moment in terms of releasing previously classified information as well as the exponential adoption of AI tools by the wider public.

We want to dig deep into the minds of some of the most prominent experts to help us better understand what this new galactic macro world may look like and how you should think about positioning yourself for it. We want to explore their perspectives on a host of game-changing issues and hopefully dig out nuances in their work through meaningful conversations. So please enjoy today’s episode hosted by David Dorr.

[00:02:43] David

Wonderful, Niels. Thank you for the introduction. Dr. Paul Sullivan, a pleasure to have you with us. I’m particularly thrilled to be able to have a conversation with you that’s actually out in the open. You and I have talked for I think more than a decade now. I’m a big fan of your work and your insights and I thought there would be tremendous value in sharing your knowledge with this audience.

We have a very sophisticated audience, but rarely do they have the opportunity to listen to people with such an extensive background and history such as yours. Why don’t we start, tell the audience a little bit about your career, just giving over a gentle 30,000-foot arc of your career?

[00:03:29] Paul

Okay, I think more like 45,000 feet, up in one of Elon Musk’s big rockets looking down. Well, let’s just say it kind of started 44 years ago but it really started well before that when I was noticing the world when I was a youngster, as a fisherman, a professional fisherman and I also worked on trucks. I know what it’s like to have calluses on my hands. That’s well before my academic or intellectual career started, but it helped develop it.

First of all, I realized how life is for working people and why it’s important to hit the books. Well, I spent… How many countries have I been in? I lost count a long time ago. One of my Yale students asked me that during the working term last year and I gave a number and then I looked at the map and I realized I was way off. So I’m not even going to give you a count. I started my research for my PhD in India. That was a very interesting moment if you don’t mind me going into little detail of it.

I had just learned a few days before that my family would no longer pay for my PhD because I’ve reached a certain age where I should handle things myself. This happens. It used to happen in this country anyway.

[00:04:51] David

Good parents.

[00:04:52] Paul

Yes, very responsible. By putting the responsibility on me, I was able to succeed in many ways. Well, I was going to the Yale gymnasium. On my way back from the Yale gymnasium to the economics department, I ran into my economic development professor and he walked past me and then turned around. He would always turn his head like this when he had an important question. You know people like that that had these quirks. Brilliant guy.

He said, “Paul, how would you like to go to India?” I looked at him and said, “How long do I have to think about this?” He said, “Two weeks?” Yes. So I’m that curious, and this is the story. Most of life is dumb luck. Absolutely dumb luck. If you have a plan for it, forget about it. Even when you’re my age, you have a plan and so forth, forget it, things happen. So my entire PhD was paid for. I got three jobs out of this, I worked a lot of hours for them, went to India three times, learned about South Asia, which led into my time in the Middle East.

I had an interregnum of what I call the root canal time as a consultant in Los Angeles, which ended with me not exactly liking what I’m doing and seeing an advertisement sometime after that for the American University in Cairo when the internet was just being developed. Do you remember that? Back then when you went onto your computer? What is this thing? I’m talking with someone in another part of the world? So anyway, I landed in Cairo at the American University in Cairo, and I’m speaking with the department head, of course, curious as what they want me to do.

His answer was, we want you to teach about the economics of the Middle East, the economic history of the Middle East, and the economic development of the Middle East. Here I am, someone who’s never taken a Middle East course in his life, this is my third visit to the Middle East, and they’re landing this on me. So over the next six years, I learned the Middle East in depth, I traveled all over the region, met with the leaders. It completely turned my life around. I couldn’t have got that job unless I was in India a few years earlier.

The fellow interviewing me said have you ever been to any developing countries, because Egypt is not an easy country to live in? I said, India. He’s said Egypt is going to be easy for you. The first few weeks in India, I’m eating toast and tea wondering what is this stuff on the plate. I had to look at a map to figure out where I was. I’m in my early 20s just shaking my head, why am I doing this? I learned the international way I guess the hard way. I was never given the books this is what international relations are, this is the history of India.

I read thousands of books about the history of the Middle East, and once I got there, I tossed most of them in the bin because I realized they were completely and utterly useless documents with axes to grind. You don’t get anything objective from any kind of book on the Middle East as far as I can judge. I’m not going to take the time to write a book about the Middle East because it would take me 30 years to try to get rid of all the edges. Then I came back here after six years with a wife and a baby. That changed my life.

I expected to be in Egypt for two years. That was my first contract and that was it, be back here, go work for a consulting firm or university six years later, married with baby going to the National Defense University, now a bonafide expert in the Middle East because of all the dumb luck stuff that happened near the gymnasium at Yale University getting to India and also just finding that by accident in the first days of the internet and sending in an application.

My interview for the first American University in Cairo job was the day of the First World Trade Center bombing. So I’m in a house of one of my friends in Queens and I’m looking over where I just interviewed and it’s full of smoke. I have to convince my parents two months later when they offer me the job that I’m going to Egypt. Of course, Egypt is not one of the problems that was paramount at that time, but most Americans, their idea of the Middle East is everyone’s dangerous, everyone’s a threat, everyone’s an enemy.

I’ve lived there long enough, traveled long enough, something like 30 years now to understand that is not the case. You just use your intuition. I was speaking with my barber yesterday getting a haircut for this. How do you know you’re in a threat environment? All the so-called experts say take a look at the eyebrows, the facial expressions, all this other stuff. No. It’s intuition. It’s absolutely gut instinct and I’ve had many instances of that.

I was in school in Ireland and I was wearing an orange sweater, this was back in the late 1970s, and this guy pulls out a loaded 45 and says, “Take the sweater out.” I didn’t have to think that this was a threatening environment. I broke the land speed record, but you get a sense of that, and I guess that’s kept me out of some trouble in the parts of the world that I’ve been to. I’ve been to every continent, except for Antarctica. I’ve published media in every continent I’m pretty sure except Antarctica. I don’t think they have a journal there.

[00:10:42] David

No news desk down in Antarctica.

[00:10:43] Paul

Yeah. Ask the penguins. They get out their typewriters with their black and white suits on. But no, it’s been a gas, I suppose. That’s a 1970s, 1980s comment. It’s been a challenge. It’s not been easy. In order to keep up with what’s going on, a lot of people think I’m a bit of a fanatic about energy, water, food, Middle East, Africa, Asia, all over the map. I’ve had people ask me, “Why don’t you just settle on one subject?” Well, with my mind, I would be bored silly after 24 hours and be an impossible person to deal with because I have to constantly dig for new ideas.

In order to understand the world, and certainly the investors who will be listening to this most likely understand that you have to keep on digging into the issues that you have to look into, and you dig into the issues on the edges that noone would really think about. Just pick up a book, pick up a magazine, pick up a journal, pick up a map that has nothing to do with what you’re looking at and twist your mind a little bit, stretch it a little bit. Otherwise, you’re not going to understand what’s going on.

For me, it’s 24/7 pretty much. I wake up at 3 o’clock in the morning with an idea in my head. Here I am into my 60s and I’m still doing this.

[00:12:08] David

You’re a machine.

[00:12:09] Paul

Yeah. It keeps me alive in many ways. It keeps life interesting. The questions that we have for today are the sort of questions, some of them I’ve been thinking about for many, many years, others are kind of new to mind. But you can’t understand any of this stuff through one discipline.

[00:12:29] David

Yeah, it’s definitely cross-disciplinary.

[00:12:31] Paul

No, it’s even more than that. It’s cross-cultural, it’s inter-religious, it’s inter-linguistic, it’s inter-philosophical. I think to be a really good investor or advisor, you have to understand so many different fields. It’s not just walking in, “Oh, I found the numbers.” Like this morning’s numbers out of the BLS, labor, the employment rate is going up, unemployment went down, GDP sharply upward. Conclusion: interest rates are going to increase. But there’s a lot more going on there.

[00:13:07] David

Yeah, if only it were so simple.

[00:13:10] Paul

Every once in a while, I listen to Bloomberg, The Close in the beginning of the morning, and I’m just thinking this is all short-term thinking. It’s all so short-term as to be ridiculous. If you’re going to be an investor, you have to think long-term, short-term, medium-term, and then upside-down term. What’s going to happen if something… Well, I hate the expression black swan because there are black swans in Australia and there are black and white swans in Chile.

Black swans is definitely an Anglo-centric view of looking at the world. Black swans happen every day and we should really call them something else. That Nicholas Taleb book, I think it was, about the Black Swans, was intellectually challenging for about five minutes.

[00:13:56] David

Paul, let’s dive into to some of these edges. First, I’d like to start with an area that everybody talks about, practically none understand. You have become first by dumb luck and then later through career experience, you are a Middle East expert. That was one of the things that struck me from our first conversation over a decade ago. You are one of the sharpest minds that I’ve ever heard on the Middle East. The Middle East just feels complicated for a lot of people, because it is.

What I see is it seems like people don’t pay attention to the details. One of the news items that had caught my attention and I shared with you, and I don’t see really anybody in the news talking about it, is with Syria and the Arab League. I was curious as to your comments on that. How do you see Syria in particular and things unfolding in the Middle East in general? Tell us what you see.

[00:15:04] Paul

Well, I’m going to have to describe my bias here first so people understand where I’m coming from. I will not go to Syria until the Assad mafia is out of there. These people are butchers. Their new name is Al Assad, meaning the lion. The original family name was Wahhish, which means the barbarians, the dangerous animals. Bringing him back into the fold this easily and then shortly after he slaughtered his people will backfire in the region. The reason why you’re not hearing a lot of the people in the street complaining about this is that they’re fearful.

When the Spring Arab winter Arab disaster was starting, I was in a luncheon with a Jordanian high-level official and he asked us at this small dinner, “Why is it that Syria is not falling like Egypt, Tunisia, and Libya?” Pretty much, our answer was fear. Because you have to go back to 1980 and Hafez al-Assad’s Hama rules. There was a city in Syria that tried to have a rebellion against the Hafez al-Assad regime. It was nominally Islamist. Hafez al-Assad sent tens of thousands of troops, killed thousands of people, cemented them over, and then went off to dinner.

People remember that. That’s Hama rules. You don’t mess with the Assads, and that’s one of the reasons why this has continued in Syria so long. It is not necessarily because of Bashar or his wife, who is famously an Amazon entrepreneur, buys chocolates and chandeliers as her people are starving and getting brutalized. It was the mother. Hafez al-Assad’s wife told Bashar on many occasions, “Don’t back down, it will ruin your father’s legacy.” Now, think of the legacy of the Father. A brutal animalistic way of treating his own people to continue with a dictatorship.

The son, when he first came back from his optometry schooling in London, I thought there was a little bit of hope. But I didn’t know him, so I called up a person who wrote a book about him, I’m not going to mention this person because he may want to go back to Syria one day. I said, “What is with this guy?” He’s got this weak chin. He looks like a normal person, looks like he’s not vicious. Probably because of his education, there’s a good chance that he could turn the place around. He said, “Paul, think of the Corleones. Michael Corleone is Bashar al-Assad. Just watch what happens.”

[00:18:09] David

Interesting. Wow.

[00:18:10] Paul

He was right, and he’s actually worse than Corleone. Corleone was pretty much just his enemies. Bashar is everyone. He’ll mow down anyone. The fact that the leaders of the Middle East are turning to befriend him and bring him back in again I think has more to do with oil pipelines and trade and controlling Captagon.

[00:18:34] David

Well, that’s what I wanted to ask about. What’s curious considering his reputation is, what is the geopolitical rationale or the resource rationale for this? Tell us a bit about the pipes because a lot of people don’t know that either. They think of some of these proxy wars but they don’t understand the strategic resources or the paths of these countries. Again, I know this is your wheelhouse.

[00:19:05] Paul

Well, it’s a wheelhouse that’s constantly shifting in the middle of the storm. Think of me being in an oil tanker or container ship. Some of the days, it’s nice and calm as I’m going through the Straits of Hormuz to get out of Hormuz into the Indian Ocean, and then you’re in the middle of a hurricane. You have to figure out what’s going on, what caused this. Not hurricane, rather a cyclone. If it were possible to build pipelines from Iraq through Saudi Arabia through Syria to the Mediterranean, that would cut down the time, space and expense.

There were actually pipelines there that went through Lebanon just north of Beirut, and that was actually one of the reasons for the Beirut nightmare, arguments over those revenues from the pipelines. But oil and gas will remain important. I don’t care what the IEA and others say about this. We cannot transition from this quickly. The Middle Eastern leaders are thinking about this, the Saudis, the UAE.

Yes, we can move to green hydrogen, we can do all this, but the real big money, the real geopolitical power right now is in oil and gas, not even coal. A lot of that oil and gas will be transiting from the Gulf, from Saudi, from UAE, from Kuwait, to Asia certainly, but also to Europe. Now that the Ukraine war is there, think of this as a connection. How important will it be to get a faster route to Europe for the Gulf Oil? A lot more important, and it’s a lot cheaper. You don’t have to go through the risks of dealing with the Iranians wanting to take potshots or even kidnapping a ship.

The Gulf of Hormuz or the Straits of Hormuz is a very dicey place, as I’m sure all of your listeners know. But it is connected globally, which a lot of people don’t really think about. The oil that comes out of Saudi Arabia, the UAE, Kuwait going to Asia doesn’t just go through Hormuz. It goes through the Malacca also. If you have to go through both, that means there are two choke points that have to be considered, and both of them are politically heated. Malacca, mostly because of the China connection in the US.

The Chinese feel that the United States might want to cut off the routes going through the Malacca. That makes zero sense because we’re talking about 30% to 40% of all world trade going through the South China Sea. We shut that off, what do we do? We shut down our own economy. So get real folks. A lot of these statements make no sense. A lot of statements land in the press and the media and social media, which is extremely dangerous in propaganda and misinformation. I know this may sound rambling, but it’s all interconnected.

If you can’t figure out the connections between these choke points, connections between transport zones, and then connect it with the financial market, you’re missing a very big point here. The warming up to Bashar al-Assad is not because Bashar al-Assad is a warm, fuzzy guy, or that his administration is so nice. They’re rats. They’re dangerous murderers. This is money and power and strategic location and leverage. That’s a big surprise, right, David? Nobody does that. Nobody does that. Everything’s really nice guys getting together, let’s sell oil so everyone has energy and can live a better life. Yeah, sure.

[00:22:48] David

What do you think is the- so just in the news headlines last night, several of the press members, Reuters, I think CNN, Bloomberg, at the last minute, they were booted out of the OPEC meeting and had their credentials yanked. What is OPEC’s strategy there?

[00:23:09] Paul

Well, I think they’re sending a message. This is our meeting, this is our house, and if you’re not going to agree with saying what we want to be said, you’re not invited in.

[00:23:17] David

Do you think that that will backfire on them or do you think that that’s strategically a good move for the outcomes that they’re pursuing?

[00:23:29] Paul

Well, I think it depends on what they’re trying to hide and what they’re trying to keep dummied up. If you have the people who are in your pocket in the room, you can say just about anything and then give them a press release this is what you’re going to write. We all know, but that’s how that works. The Wall Street Journal, there were some articles about OPEC and some of the OPEC players with some of their writers that really irritated OPEC people extremely.

The OPEC leadership actually publicly accused the Wall Street Journal of lying about certain things. Reuters, that’s a little bit more baffling. But Reuters is more all-encompassing than the Wall Street Journal. So there are probably things out there that were not pro-Saudi, that’s a big thing. But also, the complexity of the Ukraine war has made the emotions of these meetings a lot deeper, a lot more complex.

[00:24:34] David

There’s a constant narrative that pops up in the investment community and I certainly have some strong sentiments about it. It’s been around forever. It’s the conversation about the BRICS, Brazil, Russia, India, China, and I believe South Africa. There was a narrative, it was practically going viral, which to me was actually really suspicious even a couple of months ago. It went really viral. The dollar is going to collapse, everybody is going to jump on to these other currencies.

Of course, my first response is yeah, right. When international trade and people start agreeing to Russian-based rule of law contracts, call me up and let me know. But there definitely are things going in place as the United States is finding itself off-foot and kind of imbalanced right now.

Where are we most vulnerable? Is it Russia? Is it China? Is it something else? What would you want to bring to everybody’s attention? Where’s our real Achilles? I say we, there’s lots of people listening internationally. But thinking from the perspective of the United States, where is the United States most vulnerable right now?

[00:25:47] Paul

Well, the Achilles heel, for a good part of the world, is the Achilles heel for the United States, because if the United States heads into chaos and heads away from being a powerful source of at least some good in the world (I’m not going to be naive to think that all that we do is good, I have lived long enough to realize that’s not the case), but how many of the listeners would want the Russian Bratva to be running the financial markets? Maybe if there’s someone from that group there, they’d be shaking their head wildly, yes.

How many would want the completely lack of rule of law China to be in charge of financial markets? Financial markets in China are very weak and unstable right now. China is not the 12-foot giant people think it is. It has water problems, has youth unemployment problem, there are problems with minority and ethnic groups. It has problems with the one-child policy and trying to go to war with one child and the grandparents and the parents probably trying to keep that one child in the apartment.

Think of all the parents and grandparents who with their one child they devoted most of their lives to making sure that child was successful and healthy, and then the PLA drafts him or her.

[00:26:07] David

Do you see an implosion within China? Other experts have talked about that. China’s got significant problems within its own borders. What do you see are their headwinds and how do they react and interact with the rest of the world as those play up?

[00:27:38] Paul

Well, obviously, China’s comeback after the COVID is not what they had hoped it to be. It has been pretty slow. They’re playing a game with oil demand, showing that it’s going up whereas they’re storing a lot of this stuff rather than using it. Their story out today was another… The Chinese are very clever about this, much like some of our corporations are. You send out good news stories and you make sure it goes viral and everyone thinks maybe those guys talking about going downhill are wrong.

This thing about 1200 gigawatts of solar power to be built in China in the next few years is going to turn around climate change. Ha! Are you kidding? That’s a joke. In the next 20 to 30 years, they’re still going to be dependent on coal and LNG and all of those solar plants are going to be capacity, not necessarily generation. I don’t know how many of your audience has flown over inner Mongolia. I did this a few years ago to see thousands upon thousands of wind vanes not connected by wires. Maybe they’ve connected them since then.

Then of course, there are the ghost villages and the ghost houses in the ghost apartments and the real estate issues the Chinese are facing. They’re going to lash out maybe not militarily, but at Taiwan and others in the region. If they get into a war with Taiwan, the world economy is going to be damaged. They understand it. Their power right now is based on economic growth. That economic growth is feeding into their military power, their diplomatic power, their educational power, their inventive power. If they are willing to shoot the golden goose, I think the smart guys know what’s going to happen.

[00:29:34] David

What do you think? I found it curious, and not to stoke political views. I was surprised by Blinken’s statements and his press release after being in China and making it loud and clear that we support one China policy and making it clear that we’re not going to interfere with Taiwan. I was actually surprised to see that. That caught me a bit off guard. What’s the US rationale there?

[00:30:12] Paul

Well, we had a policy for many years that says just that, and he had to reiterate that policy. The timing was a gift to Mr. Xi and the Communist Party, because it pretty much said we think Taiwan is part of China. The Taiwanese sure are not happy about that. The Taiwanese are living in a state of constant paranoia. If you take a look at pictures of their beaches, particularly the islands close to the PRC, it looks like a warzone. They’re constantly being barraged by propaganda, constantly being harassed by ships and aircraft, and then the United States, their really ownly ally that could ever protect them says we believe in only one China.

You see, I’m sure you know David that there’s the public word and then there is the private word. The public word is him saying that there’s a one China policy and that’s what we follow, because that’s actually our policy as written.

[00:31:26] David

Private words is we’ll sell you some missiles and some jets.

[00:31:30] Paul

Well, that’s not even private, but privately, I’m sure he met with the lady head of Taiwan and her assistants and so forth and pretty much said we’ll back you but we’re not going to back you through the Third World War. That would just be devastating to everyone’s economy. If anything, the Chinese leadership and the American leadership have to do a lot of very quiet talking about this to slow down the hatred that’s being built, sorry, David.

[00:32:05] David

No, no, that’s okay. One of the things I wanted to ask about, because again, your depth of knowledge, it’s extensive, especially in themes surrounding resources and conflicts. One of the talking points again, with this audience, a lot of people listening here, a lot of people are familiar with global macro. That’s my background. We titled this series Galactic Macro with the concept of really pushing the edges and taking a flashlight and shining to the corners where people maybe you’re not seeing.

I love your example of pull out a map and look at a place that you never even think about and study that. I love that. That resonates. There’s lots of conversation, so what is known as rare earth metals. Everybody talks about that and everything else, and so we kind of know that story. But when you think in terms of resources in conflicts, what’s being missed? What are people not talking about that you think that they should, that they should be paying attention to?

[00:33:09] Paul

Well, actually, I’m noticing this in some of my students and colleagues, particularly those who are obsessed with the energy transition toward renewable energy and how this will give us greater energy, economic and national security. I just have to like my professor who passed me to go to India, move my head to the left. What are you guys thinking? What are you thinking? Who controls the supply chains for renewable energy? The Chinese. Who controls the cobalt out of the DRC, which is about 70% of the cobalt produced and processed by the Chinese?

This whole obsession with speeding up the energy transition, I understand why it’s happening, because of climate change and all this other stuff. That’s what’s really driving it. But people have to understand that it’s not just about climate, it’s also about energy security, environmental security, economic security, and national security. We can’t dive right into a new energy system without studying what’s going to be happening with the elements of security. We’re not doing that. We just have a whole bunch of people saying, “We’re solar, we’re wind. Good. Period. End of discussion.” No.

In order to understand energy systems, you have to understand the entire supply and value chain. Most people look at the end product, the end-use technologies as solar panels and wind vanes. Where do these things come from? How are they created? What kind of transport is needed to make them move from point A to point B and the products where they put them together? Who owns the technology? Who owns the resources from point one?

Which gets me into an issue that I always get into arguments about. There’s no such thing as clean energy. It doesn’t exist. I’m sure the top finance people get that. If you followed so-called clean energy solar panels from the start of finding the silicon and the aluminum and the copper and all this stuff, you’d see a lot of messy mining. You would also see a lot of messy morality.

[00:35:33] David

Yeah, mining is heavy duty. I was at a closed-door conference, a while back, that was very interesting. I was with several ministers of energy in Latin America on this very topic. They had some of the largest mining companies there, copper in particular. They had a book six inches thick, and behind closed doors, they were saying, listen, this is really messy. We don’t have enough. We’re not even remotely close to it. Even if we could, you wouldn’t want us to. It’s just that we don’t have replacements for these things right now.

You look at copper, forget the rare earths. Take something like copper, it’s a very, very, very messy situation. People forget other things too. I saw a blurb too, I haven’t fact-checked this so the audience is welcome to do so and let me know if I’m wrong. But I heard just a quick soundbite from Joe Rogan, of all people, commenting about brake dust particulates caused by cars. He was saying, listen, it doesn’t matter if you’ve got an electric vehicle or a regular vehicle, just the particulates that are put into the atmosphere from the brake dust which comes from all types of cars causes a ton of health problems and is damaging.

So I agree. It’s one of the things that concerns me and it’s one of the things I wanted to ask you as we think about the future. You teach and are inspiring young minds. There’s a lot of apathy and concern and fear of the next generation coming into the workforce. What happens with your students? A student comes to you and is like, “Professor, I want to make a meaningful difference. I want to also have a meaningful career. What do I do? Where do I go?”

[00:37:30] Paul

Well, could I get back to what you were talking about? I’ll get to that because it’s related to it. Get back to what if we all have an energy transition, all the major energy consumers have a very quick energy transition all at the same time? People on this podcast know what’s going to happen to prices, what’s going to happen to skilled labor, what’s going to happen to supply chains, they’re going to get all clogged up.

What about the use of ships, trains, and trucks? The demand for these products and technologies could overcome the demand for other things and those prices would go up. So increases in the price of minerals and metals and technology will affect other prices like food prices. It’s all interrelated. I suppose if we were absolutely certain that everyone was going to go toward the energy transition quickly, we’d buy up futures in copper and aluminum and cobalt and all this other stuff if we could.

Guess what? A lot of people are already doing that, and they’re putting them in storage in places. But what happens, this is the kicker, if a new technology comes out that doesn’t use all of this stored and hoarded metal? You’re toast. That’s going to be what I think will save the world from a complete and utter energy and economic shock if this moves too quickly, and that is to develop alternatives to copper, alternatives to cobalt (there are people working on that for batteries), alternatives to lithium. Lithium, you can’t recycle it that well.

What you need is something of a circular economy. Without that, you’re going to take this stuff out of the ground, you’re going to put it into materials and technologies, and you’re going to throw them in a landfill.

[00:39:28] David

Yeah. Are you referring to materials such as graphene? That’s a material development that we’ve watched for a long time. It’s fascinating and a lot of interesting applications there.

[00:39:42] Paul

Well, that’s part of it. But another thing we have to think about, including my students with regards to their future, the stuff we’re reading now and the stuff we know now will not be the same that we’ll be reading about and knowing 20, 30, 40 years from now. We’re talking about an energy transition through net zero, which I think is the wrong way of looking at 2050 to 2070. Okay, let’s backtrack 30 to 40 years. What were energy systems like in the world 30 to 40 years ago? What was the economy like 30 to 40 years ago? If we’re going back 50, 60 years, we didn’t even have a man on the moon yet.

Think of how technology has changed so much. Who are we to arrogantly guess what will be available for any kind of energy, transport, or food technology in the future? We’re falling into this Malthus situation all over again. Malthus was wrong, by the way. Technology change in thinking and policy dug the world out of the Malthusian trap, and now a whole bunch of people are saying we’re in an energy Malthusian trap, we’re in a food Malthusian trap. They never read history.

There are a lot of smart people out here that can invent around it. Those are the people we need to focus on, not the people who are thinking this is a straight line, let’s go with this metal, let’s go with this technology, let’s go with these ideas. What we need is an orderly transition in energy and food and water and all kinds of other things. We’re not getting it orderly because we are thinking that things are going to be in stasis and there’s this big competition that’s going to interfere with our ability to think properly about this.

Actually, John Kerry said something very interesting early on in the debate just before COP27, I think it was. Most of the investment in energy transition is going to have to come from the private sector (this is a public sector maven saying that). Of course, I would agree with him. But also, the most important thing he said was the technology we know of now are not going to be the technologies we will have in 30, 40 and 50 years. Everything’s going to be different. I don’t believe much in 40, 50-year forecasts. I don’t believe even in year forecasts sometimes.

Think about the people who forecasted the price of oil in December ’21. Was anyone right? No. LNG prices, no. All the people in Europe and elsewhere are going up in arms and sweating and biting their teeth as the price of natural gas quintuples, goes up 10 times in Europe, and they’re thinking it’s going to stay that way. Economies and people adjust. New laws can be developed.

[00:42:44] David

Yeah. You’re preaching to the choir. Everybody listening I’m sure can relate to that because forecasting is the job… You can boil that down to saying that’s pretty much the job of most investors, and it’s very difficult. Billions of dollars are spent on trying to do exactly that and get it right and it is not easy in any sense.

[00:43:09] Paul

Well, I kind of think of that as statistical analysis. How confident are you in your analysis? 60%, 70%, 90%? If you’re confident 100%, I’m not going to talk with you.

[00:43:26] David

There’s a good book. Have you read Superforecasting?

[00:43:29] Paul

No, I haven’t.

[00:43:30] David

Yeah, it’s a great read. Check that one out. The book is fantastic. There’s another one called Thinking in Bets by Annie Duke. My background when I got into trading came from gambling. I actually used to play dice on street corners as a kid. So I think in terms of probabilities, and I think most successful traders certainly have that quality as well. Superforecasting is very interesting because it gets into exactly that when talking about forecasting and thinking in terms of probability of an outcome. Yeah. Is it 60%? Does that bump to 65% as new information comes in? You’re constantly calibrating that and refining that.

So yeah, I agree. What do you think about, there is actually very interesting news that came out today. We’re recording here, it’s June 29th, a big physics breakthrough. We have discovered or confirmed what was believed for many, many years, gravitational waves and the implications of that. You know obviously I’m a big geek on the on the UFO subject. Do you think that we’re about to have some breakthroughs in physics?

[00:44:47] Paul

Well, I think we have breakthroughs in physics all the time, just a lot of it never really hits the public. As an undergraduate back in the late 1970s when dinosaurs were roaming around in Massachusetts, I just, on a whim, took an astrophysics course as a freshman. I was the only freshman in the room. I figured it’s high-level math, I can handle the high level math. Then I started to get into the reality of what we were studying. To go from the high-level math to what exactly it was saying was such a huge intellectual leap. I found it fascinating. I couldn’t sleep thinking about the stuff.

But so much has changed in physics. People are still thinking in Newtonian physics, in Einsteinian physics, or even Max Planck quantum physics. It’s different. Every generation, it seems, we have a new physics, a new way of looking at it, but it doesn’t filter into the public for many years after that, because mostly, scientists are really bad communicators of what they do. Einstein was a terrible communicator. The people we have now in the MIT labs and not so much in the Bell Labs because they’re more practical.

One of my first jobs out of my PhD was the Oak Ridge National Laboratory. These folks were working on cutting edge things and pie in the sky things that companies would invest in. I had such a tough time understanding the super brainiac physicists. They knew what was going on but yet they couldn’t get the stuff out of their minds and onto a paper other than to an academic audience and maybe 20 people read the paper, and then it collects dust and it does nothing else.

I think in the future, if we’re going to do anything positive to help solve some of the ideas that we face, we have to get the edge ideas out into the public and explain that these are the opportunities, these are the trade-offs we have now. I’m sure there are a whole bunch of articles out there that have brilliant solutions. Nobody can understand them. You open up a physics article and you’ll see Lagrangian multipliers and all these. Most people think of it as squiggly lines and then they go to watch the football game.

When invention happens and new ideas happen, it’s kind of like an orange. The ideas are the outside, the peel. But the public is on the inside, in the orange, in the juice, and the stuff never gets to them, except after many years. The government’s not doing a very good job of moving these ideas in the public either except for military applications. War is not going to be the answer to our energy problems in the future. Although, if it gets to the point where we’re going to have to get to war to get those energy resources, well, we may have to do that. But that’s the stupid man’s answer to energy resource stress.

Is physics changing? Yes, it is. Where can we find out about those changing physics? We need to get some of the guys and ladies who are on the edge of this and train them how to speak common everyday languages. It doesn’t have to be English. It could be French, German, Chinese, whatever. I remember trying to understand my linguistics professor in college. Genius, MIT, two PhDs. This guy couldn’t explain how to open up a pizza box without getting overly complicated. We have a lot of good people. We have a lot of creative people.

I don’t think of myself as one of these great thinkers. Maybe I’m one of these translators that we need to go from the super smart guys (which I don’t consider myself to be), to the regular people and explain things. I am more of the woodchopper and the fisherman of the intellectual world. I’m not the guy who figures out how to make a new Stradivarius. But you see, once a new Stradivarius is figured out, it will take years for people to figure out how to use it.

We have all kinds of technologies out there, quantum computing and all this business. Do I understand it? No, I don’t understand it. Can I see applications of it? Yes. Can I see dangers from it? Yes. This whole thing with AI, we talked about that for a bit. Who actually understands what that stuff is, in the public?

[00:49:42] David

I’m scared nobody understands it privately either. We’ve dug really, really deep into that and it is alarming. I feel that the top, top, top people also don’t understand what they’ve gotten themselves into.

[00:49:56] Paul

Well, AI also affects the stuff I’ve been talking about: energy, water, food politics and all this. How can you know that a President is being spoofed? That’s the thing that people worry about now. Or is a robot going to take your job?

[00:50:11] David

Or kidnappings. There’s kidnappings taking place already. People spoof the voice of a loved one and they’re calling people and faking that somebody’s daughter or son has been kidnapped. The person shows up and is all in panic and they commit a crime and they kidnap the person that actually shows up instead. That’s just the beginning.

[00:50:32] Paul

Well, I think what’s going on here, David, and I think we both understand this and I’m pretty sure we’ve talked about this a few times over the years, is the problem isn’t the technology and the thinking and development in the new ideas. It’s that morality and ethics are not keeping up with these changes. Are we a moral society within AI? Are we even ready for this? I don’t think we are.

[00:50:58] David

Well, this is what the people that really understand the risk or at least as best as can be understood with AI risk is they talk about the alignment problem. I think this is useful. If you permit me just a second, I’m going to expand on this because it ties directly into what you’re saying. What’s important to understand with designing AI is you cannot design it to be controlled. We’ve known that. That’s not new, all the experts know that. That hasn’t even been the intention for the last 20 years. So the best that you can do is you can align it.

In order to do that, it takes a lot of time, a lot of time, a lot of money. What they suggest is that you’re supposed to be building those things in parallel, large language models and all these neural networks, but also the alignment models. They estimate that we’re 7 to 10 years behind on the alignment models because it turned into effectively an arms race on the learning models, and now we don’t have any way to align it. We’re so far behind on doing it.

So the alignment is where you incorporate those things, the morals, and that would be different from one place to the next. But we don’t really have that in, built in ,and we’re far behind.

[00:52:19] Paul

Well, I’m thinking of that through another lens, Wittgensteinian private language.

[00:52:26] David

Oh, that’s a big word. Why don’t you explain to me and the audience what that is.

[00:52:34] Paul

Wittgenstein was a philosopher long ago, not to get too complicated on this, who believes we never really communicate with each other because each and every one of us has their own private understanding of the words they use. Now, if you’re talking about me talking with you, do you really understand what I’m talking about? Does every word that you’re taking in from me had the same meaning? Does your life experience and history with some of these words change the meaning a bit?

[00:53:04] David

It’d be impossible not to.

[00:53:06] Paul

So now, think about AI. There are few people who even know what the terms are. No one’s really explaining them, no one’s explaining the potential of this. I think a lot of people will think of that Boston company with the dog robots and then they freak out and they just say forget about this, I’m going to go watch the hockey game.

People don’t focus enough on these things to understand them. The regular folks are pretty much lost on things as simplistic as the price of eggs. This is not to disparage or insult. The functional literacy of the average American, well, what do we have? Sixty-five percent of the public could not read a complicated paragraph. Now we’re introducing these complicated new technologies in this world-changing set of ideas of quantum physics and AI and Internet of Things, which is an old idea, but it’s also changing at the same time.

How are they handling it? How are they understanding it? How many scientists go to the local pub while the guys are watching the Patriots game and ask them, hey, what do you think of AI? Could you imagine the response? Throw this fool out. Why do you think people can’t understand economic policy? They’ve never had economics training. They just guess that they know it because they buy stuff.

Energy education in this country and throughout the world is in miserable shape. That’s why our policies are not going in the direction where they should be. You cannot make proper public policies without having a public that’s ready to understand them.

[00:54:51] David

This goes into the failure of leadership.

[00:54:53] Paul

Leaders? Name one. That’s the first thing I do, even when I was teaching colonels and generals and I go, name a great leader of today. Listen to our people running for president now. It’s abysmal. There is no debate. I know of a congressman from North Carolina, very well-educated, very smart guy, experienced guy who simply left the Congress because he told me they’re debating nothing. Most of my time is doing cold calls to get money for the next election. It’s not only sad, it is ending toward the results that we see. We have to educate our people.

The education systems in almost all countries are not up to the task of the problems we’re facing in the future. That’s going to mess up our forecasts and our investments in the future if you have the average folks not understanding these new technologies that are going to hit pretty soon. I think most of the younger kids though, the teenagers and the college kids are looking at this, wow, that’s cool entertainment.

[00:56:07] David

There are studies now, what’s really fascinating is there was this perception that younger generations understand technology because they’ve grown up with it. That, in fact, has been proven to be completely untrue. Just because they’re used to using social media does not mean that they know how to use even basic technologies, basic stuff, an Excel sheet, a Word document, and this is problematic, which leads into a really, really important question, because I think people listening to this would have this question for you as they think about their own children.

There are hardworking, motivated people that are part of the audience here that have worked their asses off to be where they’re at; the things that you say resonate as they do with me; and they’re thinking about their own children, as any of us would. If they asked you and said, how do I instill a sense of leadership or a way to prepare for the future, what advice would you give to parents that are in the audience listening to you?

[00:57:16] Paul

Wow, that’s a tough one, because there are so many outside influences. Most of it is unobservable to parents. I had no idea how messed up the education system was until I saw the results of some of the kids that I met over the last few years. I have no idea where they’re coming from. Their idea of success has no meaning in this world in a practical sense and maybe some of the people listening in on this have seen this as well. Getting things done, this is mostly physical stuff, not internet stuff. Driving to the supermarket, things like to be a leader requires that you understand your people. How can these kids understand their people if they barely communicate with them?

The pandemic got in the way of that. How many kids stayed in front of their computers before the pandemic, during the pandemic, and after the pandemic? They have lost the ability to read facial expressions, body language, many of them. A lot of life is intuition. A lot of leadership is intuition too. The really good leaders I’ve known in my life were born leaders. It isn’t that you can charge a leader walking into an elementary school that he’s the next president. That’s nonsense, because in this country, the real leaders never become president. But I have been able to pick some of the best leaders out of my military students from the beginning of the first day when I met them.

I had this game I would play with myself. Which of these students in this 17-person seminar are going to go to high leadership position? I’d walk around and I’d start asking questions. They wouldn’t know what I was doing. What do you think of this issue? The way the answered the question is more important, how they answered the question. If they didn’t know anything about it, and they struggled with it, and they were trying to figure out how to better the seminar, then I knew these people were going forward. Right now, I know 10 or 12 lieutenant generals, many ambassadors, the head of the NSA. No kidding. These are former students that I kind of picked in the class like this guy is going somewhere, this lady is going similar.

The Commandant of the Coast Guard was a student of mine. I could tell from day one this was leader. But how do you instill leadership in a young person? Well, I guess one way, depending on your wealth is put them on a sailboat, put them in front of the wheel, and head toward a storm. Not a bad one, a mild one. Caveat emptor, you take the risks, you’re listening to this. But I learned a lot from being out in the water, particularly with other people. We ran a fishing boat and we saw the weather turning bad. Immediately, if you have any leadership skills, they’re going to kick in.

There are land versions of that. I suppose the Boy Scouts used to have that, the Girl Scouts used to have that. But now, most of the kids go to the internet and watch a TikTok or a YouTube video on how to be a leader. That’s not the way to do it. You have to be in the practical world, you have to be facing practical challenges. I think one thing that the government could do and others could do, even private sector people could do if they had the right kind of people with the right moral and ethical and leadership principles, is you start the systems where these kids are challenged.

Civilian Conservation Corps. Get them out of the basement and away from the computers, bring them out into the mountains, 10 or 12 kids with adult supervision of course, which we don’t have in the White House, but that’s something else. But adult supervision out in the mountains, and then watch them figure their way back to safety. Go through difficult things.

[01:01:33] David

Richard Branson’s story with his mom, when he was five years old, his mom dropped him off I don’t know how far it was from their home, but several kilometers away as a five-year-old, I think where he grew up, and he had to make his way home. One of the best experiences of his life. As my own mother used to say, referring back to your advice on oceans which I think is great, calm seas don’t make great sailors. You have to be challenged.

[01:02:04] Paul

We can go back to another statement. I forget were exactly it’s from. There are all kinds of claims who said it first. But like all these things, probably a thousand people said it all over the world. “Easy times make weak leaders, weak leaders make difficult times, difficult times make great leaders.” If you’re going to have a soft life, we know that most kids in the US, or from the families of the people who are listening to this, have pretty good lives; private schools, which I think are a disaster.

I think if you want to toughen a kid up and teach him about leadership, bring them to a public school and deal with it. Now, that’s one way of doing it. Private school, you have the same kids from the same background with the same topsiders and the same uniform. They all go back to their mansion houses and they have no understanding of the rest of the people in their country.

[01:03:03] David

There’s something I want to go back to as we come up here on the top of the hour that really, really resonates with me that you said. You said it at the beginning of our conversation and you mentioned it here towards the end as well. You talked about intuition. This fascinates me because this is something that I’ve openly talked about within our firm, our clients and with other traders. Most traders don’t talk about intuition, but the best traders I’ve ever met in my life are extraordinarily strong in intuition.

Because that’s harder to kind of quantify, it doesn’t get talked about or it’s almost even stigmatized, yet it’s such a powerful skill. What I share with people is that it is something you can develop, and it is something that parents (so kind of looping this all together here), my dad, he didn’t beat it into us, but he was constantly pushing us to hone in intuitive skills. He literally made it a point of raising us. He said pay attention, listen to your instincts, and it will save your ass over and over and over again more times than you’ll be able to count, and he was right.

So it’s so fascinating that as a professor, you would talk about something that’s feels a little bit less tangible. I’d love to conclude with your thoughts on intuition and how any of us, whether parents, kids, new young leaders, anybody, could tune in or hone in on that skill.

[01:04:50] Paul

That’s a tough one because intuition is almost like the seventh sense. I can talk about my example and the example I’ve seen in some younger people who have almost immediately clear intuition, which is sometimes shocking to see. Even as young children, they say things that, as adults, we could never figure out. Some people have strong intuitive skills. Maybe it’s genetic, maybe it’s experiential, I don’t know. But how do you get students and your children and others you know to be more in tune with the intuitive light?

Intuition is a buildup of experiences often. If a child or a student or even an adult doesn’t have experiences in a certain field, that intuition can atrophy. We can see that in some of our leaders. They have atrophied intuition. Also, if you’re, let’s say, a hockey player (I played hockey as a young person, I wasn’t very good at it, hence, I’m a professor), you could almost feel the puck and not see it. You knew it was there, you knew where it was going.

Now, it’s also experience but it’s also intuition. I don’t know how you separate the two out. I had a neighbor who taught me about that, just listen to the ice, listen to the other players. How are they breathing? What’s going on? Where’s the puck now?

[01:06:26] David

Yeah. Well, Gretzky’s famous quote, his whole thing was skate to where the puck is going to be not where it’s at.

[01:06:33] Paul

I was talking with an energy CEO three weeks ago and I said trying to figure out what to invest in now is a lot like bird hunting. If you shoot where the bird is now, you’re not going to hit him where he is in the future. You need to have some sense of where this is heading. Birds don’t fly in straight lines, nor do politics and energy systems. But I think it’s very important that our kids develop some sense of thinking about the world because my fear is many of them are losing it.

Being in front of a computer is not a way to improve your intuition about the world. If anything, social media is a complete distortion. Every morning, just as again, another game I play, I flip through Twitter and I look at some of the stuff and I figure 80% of it is total garbage. Absolutely useless garbage. How would many people even be able to distinguish that? Then I see the responses to it and then I get to the actual work. Some days, it’s more depressing than others. But this is the way people are communicating now.

The problems begin when these young people build companies and they get their first jobs and they have no idea how to react to the people around them.

[01:08:01] David

Especially in macro. I don’t know anybody that works in macro that generally would label themselves an optimist. Because when you sit and you study these things all day long, as many of us do, the world feels pretty heavy duty and you wonder how in the world humanity is going to make it. Nonetheless, the human spirit pushes forward. Two questions for you. What are you most hopeful about? What is the best potential you see for the future of humanity?

I always love asking people for book recommendations, especially from people that are avid readers. You are an avid reader. You’ve read thousands of books during your life. So what are you most hopeful for and what’s a book you’d recommend for the audience?

[01:09:00] Paul

What am I most hopeful for? You get me on a day where it’s a tough one, reading the news today. I think the greatest well of hope that I can see is that there are still good people amongst us. I’ve seen a lot of evil in the world. I’m sure you have and the others listening have to and it just gets you down and you figure these guys are often on the top and they’re making decisions, and we know how they get there, so what’s the point? The point is there are still good people out there. That’s my well of optimism. They do help each other, they do come out of the woodwork.

Every once in a while in my life, and maybe some people listening are atheist or agnostics or whatever, but there have been certain situations in my life where things have happened and it really did seem to be proof of God. There’s no way this could have happened without some supreme something, whatever you believe in (I don’t want to impose my opinions on you), intervening in some small way. It’s arrogance to think that this being would intervene for me, but getting shot at Jerusalem on Thanksgiving evening in 1995, buildings getting blown up, missing a traffic accident, things like that.

These things happen and sometimes, a saying through the Irish is you’ve had a lot of bad luck, it’s about time you had some good luck. I think to study the world as we do, David, means that we see a lot of the downsides in order to understand the upsides. If we didn’t understand the downsides, once we realize the upsides, we would not be so gleeful. When you see something actually working out, it’s elation because so many things don’t work out. It’s like baseball. If you hit 500, you’re amazing. Hit 300, you’re almost amazing. You hit 150, you’re pretty darn good. Life is similar.

But most kids, most younger people, even in my generation thought, well, I’m from this successful family, therefore, I’m going to be successful. No, that’s not the way it works out. You’re going to have to get a few bloody noses and scraped knees before you figure out how to navigate your way through the world. If you don’t get some of those bloody noses and scraped knees, you will never learn.

There was a story out of Australia, and I’m sure you’ve been there a few times, David, about parents who were concerned about their kids face planting. They didn’t know how to get up after falling down.

[01:12:02] David

Wow, that’s wild. I can’t even imagine. That’s wild.

[01:12:07] Paul

Okay. The biggest lessons I ever had, I’m pretty sure this has been in your life too, is when you fall down, when you fail. How you get up is when the learning happens. I had read some quote the other day, “When I’m winning, I’m winning, and when I’m losing, I’m learning.”

[01:12:26] David

That’s right. I’ve heard that too.

[01:12:28] Paul

I would like to think that, but sometimes when things are not going well, I’m thinking oh, this is dreadful, I’m definitely losing here. But some of the worst moments in my life have ended up to be the most educational. I didn’t even know it until years later. Something good, something bad. This is one of the lessons I give to some of my students and other younger people and other people if they’re willing to listen.

[01:12:52] David

So you’re optimistic that we will learn to fall and get back up and that there are good people out there, which of course I completely agree, and we will continue to seek each other out and help one another.

[01:13:10] Paul

Well, that’s part of it, but it takes a lot of work to make that happen. Things don’t just fall into your lap, your bank account, whatever. That’s not the way life is. Another thing I’ve learned through my life is a quote I heard from someone from South Korea. “I work 18 hours a day, then I get lucky.”

You can’t succeed in this world by not working. I’m not probably the best person to ask about this because I am certainly far from a perfect leader or even a great leader, even a good leader. I’m not the best at anything I do. Let’s be reasonable. There are always good people, there are always better people, and that’s what keeps on driving me.

[01:14:06] David

We appreciate that about you, Paul. That’s what’s always connected me to you is that you’re constantly sharpening the saw. You’re always looking for ways to learn, to improve, and there’s tremendous value in that. So on the final point with a book, and I’m sure you probably have a zillion that come to mind, but what would be a book recommendation that you would leave our audience with? Any book you like, what would you recommend as a good read for the audience?

[01:14:37] Paul

Well, I would start with The World in 2050 by Hamish McRae, How the World Really Works by Vaclav Smil, who is a really challenging author. Any book by Malcolm Gladwell, he’s an irritating person but he gets you thinking. The Wisdom of the Bullfrog.

[01:15:02] David

The Wisdom of the Bullfrog. Okay.

[01:15:04] Paul

By Admiral McRaven. It’s lessons in leadership that he learned over his career as a seal and later on as the head of the seals. So that’s to start off with. For you, there’s a special one, David: Coffeeland.

[01:15:21] David

Oh, wonderful. I appreciate that.

[01:15:23] Paul

The history and geopolitics of coffee by Augustine Sedgwick.

[01:15:28] David

I will order that one today.

[01:15:31] Paul

There’s another one. I just read, I don’t know how many I’ve read even just to some extreme economics or Extreme Economies by a Richard Davies. It doesn’t look into the normal economies, it looks into slums and places where the aging of society like, the area of Akita in Japan where the average age is now 56 and how the people survive, how does the economy survive. It looks into Santiago, Chile, kind of the barrio economics of that. Glasgow, Scotland, how do people survive?

Then oddly enough, he talks about a prison in Louisiana and how people survive in those difficult circumstances. This is what he defines as extreme economies. I’ve read this thing twice and each time, I learned something. But there are just so many good books out there and there are so many lousy books to. Anything by Bill Bryson is worth it if you need a laugh. All right, David, thank you.

[01:16:35] David

Well, Dr. Paul Sullivan, folks, I know everybody is going to enjoy listening to this, we got not just one book recommendation, but several. We’ll make sure that we put those in the show notes.

Paul, you’re a good friend. I appreciate you taking the time to come on the show and have this conversation with me and I hope that we’ll get to do more of this soon, because there’s just so, so many more places to cover with this. So thank you for your time. With that, Niels, I will turn that back over to you.

[01:17:02] Niels

Thank you so much, Paul and David for a wide-ranging conversation, from the challenges in parts of the Middle East to the risks of the energy supply chain to ending up with some parental advice to our youngsters setting out in their own careers. Of course, the point that Paul makes regarding how geopolitical power is closely tied to oil and energy security is something that I think many of our listeners will be familiar with from our various conversations in the past couple of years.

We really need to continue to better understand the connection between some of these choke points in the energy supply chain and the financial markets. Closely related to this of course is the narrative that we may not be talking about, namely, things like who really controls the supply chain of the green energy transition, which for the most part, are the Chinese. We need to be honest about the fact that there is no such thing as truly green energy, and that it all comes at a cost which incidentally, Madame Lagarde from the ECB has come out saying very clearly now that this cost is inflation.

Finally, I did enjoy the last part about what we as parents need to be mindful of when it comes to the younger generation and the role that intuition plays in our lives and in their lives and how it may be lost due to the technological advancements that we have seen and the impact it has had on our kids.

That’s it for today. Make sure you go and follow Paul’s and David’s work because as you can tell from today’s conversation, there are many exciting facets to learn from those who have been in the trenches for many years, and we really look forward to exploring many more of them as this series continues. From David and me, thanks ever so much for listening. We look forward to being back with you on the next episode. In the meantime, take care of yourself and take care of each other.

[01:19:07] Ending

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