(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

03:17Kiril’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

06:44Commodities and the importance of gas and oil

07:17 Deflation in the 2000s

08:06OPEC+ power

08:15 – The Green Energy revolution (Renewable energy)

09:20Global 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

12:04Number of vehicles in the world and 95% of them use petroleum

12:11Petroleum demand for transportation

12:15Number of electric vehicles worldwide

12:25Percent of automobiles sold which will be electric by 2030

12:34What goes into electric car batteries 

12:46 The copper needed in electric car batteries is a bottleneck

13:18The crisis in Europe is economic suicide

13:37Sanctions on Russia

13:40Russia oil exports

13:48Germany and natural gas from Russia

13:56German labor costs 

14:04Germany’s low cost natural gas replaced with market-cost LNG 

14:11 German breweries to close

14:26 Italy’s massive drought

14:34France nuclear reactors and drought impacts

14:40Rhine 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

16:23Europe has no other option than to obtain Russian energy

16:35 Europe’s relationship with Russia

16:44The fight between China and the U.S. for global supremacy

16:45 China largest exporter of green energy

17:09Emmanuel Macron cohabitation with the Left and the Right

17:22 – The fall of Boris Johnson 

17:54The Russian invasion into Ukraine and energy awareness

18:24 – Limits to materials growth

18:46 Causes of WWI and resulting destruction

19:09German and Russian mobilization readiness in WWI

19:28Nancy Pelosi visit to Taiwan

19:32Republican representatives visit to Taiwan

19:42Japan’s access to oil cutoff in 1941

19:58 John Mearsheimer “The Tragedy of Great Power Politics”

20:12 The G7

20:30Growth in global energy use

20:54Vaclav Smil “How the World Really Works”

21:00Ammonia 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

21:53Availability of natural gas and oil in the world 

22:05Scottish farmers not using fertilizer due to high cost

22:35Natural gas market from bearish to bullish

22:44 – Natural gas should sell on btu basis like oil

23:26Financial claims on biophysical reality 

23:36We create more money rather than tighten our belts 

24:03 – Democracy, subsidies, and demand

24:54 The energy equivalent to one barrel of oil 

25:35Scenario Planning

26:24Covid vaccination rates and Covid variants

26:35Long Covid

26:42 Decline in productivity due to Covid and airline shortages

27:11Economic stagnation

27:24Democracy vs Authoritarianism

27:37 Darwinian thesis of economic growth

28:37Americans use 4x more energy than world average

28:49Loss aversion  

29:171978 Shah of Iran overthrown

29:33Gasoline station lines in the 1970s

30:27Cochlear implant

31:002002 500-year flood in Eastern Europe

31:21 Global climate extremes 

31:44Financial overshoot

32:08 – Climate impact to water cooled nuclear power plants in China

32:37Florida building and hurricanes

33:03 Potential for San Francisco Bay to flood

33:12 Half of U.S. vegetables produced in CA 

33:21Energy descent and Finland

34:30Barry Lynn and supply chain management

34:42Localization

34:51 Outsourcing and downsizing

37:13“The Lessons of History” by Will Durant and Ariel Durant

38:11 – 1970s “Supply-siders

38:34Signs 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

43:132021 US debt to GDP 

43:26 – The supply-side solution

44:201989 Japanese bubble burst  

44:36 Chinese “property bubble”

45:00 Yield curve controlnationalizing the bond market

45:17 – Late 1990s and short JGBs

45:43 Shinzo Abe and deflationary monetary policy

45:57Japan and population peak

46:55Japan’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

48:02Fiat currencies

48:17 US Treasury dependency on capital gains taxes

48:27US trade deficit last 50 years

48:33 Charles de Gaulle and “exorbitant privilege

48:43Current US debt to foreign countries

48:50Freezing of Russian foreign exchange reserves

49:52EU crisis 

50:10Stocks are a measure of the flow of money in and out of them

50:49Ray Kurzweil’s book “The Singularity is Near: When Humans Transcend Biology”

51:17Identity politics

51:34Blaise Pascal

51:48Canals in Venice clear after Covid

52:12 – The dangers of AI 

52:27 The complexity of technology’s rapid advance

53:09Arnold Toynbee, Joseph Tainter, Vaclav Smil

54:14Zbigniew Brzezinski

54:35 Agreement made between Vladimir Putin and Xi Jinping before the Olympics

54:52World land mass once controlled by Europe

55:07Opium addiction in China

55:15The Congo 

55:40BRICS and the countries wanting to join

55:56 Shanghai Cooperation Organisation

56:17 Henry Kissinger and a new world order

56:19Treaty of Westphalia and the European world order

56:36 – Dollar based hegemony

56:54 Afghanistan’s frozen foreign reserves and China

57:55Xi Jinping visit to Saudi Arabia

58:42Tar sands

59:02US benefits from WWI and WWII

1:01:51 Crack-Up Boom and Ludwig von Mises

1:02:48Bear Market, Bull Market, Meme stocks

1:03:15 – Inflation is really 15%, shrinkflation

1:05:08Empathic understanding

1:05:32Japanese invasion of Nanking

1:05:55Pope’s visit to Canada to apologize to indigineous people

1:06:15Siddhārtha quote

1:06:58His Holiness the 14th Dalai Lama 

1:07:14The basic tenets of Buddhism 

1:07:36Pandemic in the U.S. 

1:07:51Coca Cola and WWII

1:09:08Debt from climate-induced hurricanes

1:09:53Mahatma Gandhi

1:10:08Capitalism and fairness

1:10:51The Age of Aquarius and becoming a more enlightened species

1:14:22“A Clockwork Orange” book by Anthony Burgess

1:15:04Education about Auschwitz 

1:16:43Who we are, how we got here, how things fit together

1:17:07George Orwell

 

 

Teaser photo credit: By EDF Energy, Attribution, https://commons.wikimedia.org/w/index.php?curid=94779379