His Casey Research. His book is, apparently, breaking records and cracking all kinds of bestseller lists in numerous categories; International Affairs, public policy, etc. So you heard it here, my friends. Hes an accomplished investment analyst. He has served as chief investment strategist at Casey Research since 2007. His funds are among the Top Performing in the resource sector over the last five years in canada. Hes a regular contributor to the Business News network and has been interviewed by global Media Outlets such as cnbc, bbc, bloomberg and forbes. Marin has traveled to numerous, numerous conflicted and challenging areas including russia, iraq, ukraine, kuwait, mongolia, kosovo and colombia among other resourcerich destinations. Hes a former. Mathematics professor former mathematics professor [audio difficulty] hello . Okay. How are we doing . Not good. Not good. There we are, were back. Okay. So i think that happened because of my own personal history with mathematics, but well just gloss right over that. Anyway, so marin is a former mathematics professor, and hes used his advanced mathematical skills to create a doig diagnostic tool that analyzes and compares hundreds of investment variables. Over the years hes been involved in raising over a billion Canadian Dollars in capital for earlystage and producing resource company. Marin speaks fluent serbian and coway san and is conversant in russian, and hes a graduate of the university of British Columbia and lives now in vancouver. So mairps going to speak for about 30 minutes, then well have our traditional q and a, and then therell be an opportunity to get signed books at the end. So with that, welcome, mairp. [applause] thank you [audio difficulty] through the investments, traveled to over a hundred countries. Canadas the Third Largest producing copper mine and at one point was the largest investor and shareholder. And then as i really got into the internationalization of investing in emerging energy markets, i was the largest investor and the lead financier in the first two rounds of what is today europes most successful shale gas company in the u. K. So my fends have outperformed my funds have outperformed the street. So how did this all happen . Ive been talking about this colder war for about a decade now, and ive been going to places to invest to find solutions for countries such as germany or the u. K. Who have been increasing their Energy Dependence on russia. For example, germany over the last decade increased its dependency on russian oil by 53 , something the media doesnt talk about. A little over two and a half years ago, i had a heart attack and ended up with a quadruple bypass, so all of the hectic traveling over ten years caught up with me, and i ended up writing book called colder war. We have some great videos on our web site which we really explain what the colder war is all about, so please visit thecolderwar. Com after this. So lets just jump in, ive got 30 minutes. The end of the lost decade. The west and our media not just in north america, but in western europe has really demonized Vladimir Putin such that they make him like the darth vadar of the world. They compare him to josef stalin, for example, David Cameron the Prime Minister of britain just came out this past week and compared putins russia to the nazis. You know, theres a lot of misinformation out there. But it is clear that Vladimir Putin has already made his strategic moves. But not with the sword, but with Worlds Energy supplies. How did this all happen . After the fall of the ussr, russia was in shambles. The soviet empire was truly in crumbles. Its fair to say that russia was an economic basketcase. Overnight russia went from over 70 years of communism to capitalism, and most in russia had no concept of what capitalism really was. They had no idea what to do. The the morale in russia was very low to now begging the west for money. So what happened here . Unfortunately, it got worse for the russians before it got better. For example, in 1994 they lost the first war in chechnya where the chechnyan rebels sent the russian army back home. So after the fall of the soviet union, putin who was in east germany at the time went back to st. Petersburg s and he became an adviser on International Affairs to the mayor of st. Petersburg. This is where putin really created his inner network who were to travel with him to moscow and spend the next 20 years of his life together. I nickname them the st. Petersburg boys, and these are very important members. One of them such as dmitry medvedev. He first started as just an assistant to putin in st. Petersburg, later on became the Prime Minister, then president , back to Prime Minister and also ran the Worlds Largest gas producer for some time. So in 1996 when putin moved to moscow, he eventually brought over those st. Petersburg boys who would eventually rule over the russian economic sector, the energy sector, the transportation sector and even the media and the political sector. These guys are very important such as igor [inaudible] whos been with putin for over 20 years. Hes the deputy Prime Minister. Theres very important studies of what putins done here to gain his power. So lets look into this. By 1998 putin was the head of the fsb, thats the old kgb that we know of in the west. And he was very unknown on the international stage. Within 12 months putin was given the nod to be the sixth Prime Minister in less than eight years, and his president at the time was boris yeltsin. No one expected anything of Vladimir Putin. He was a relatively unknown. But question sin took a liking to him, and the oligarch at the time approved of him. So where did that go from . Well, putin understood there were fife Prime Ministers before him that accomplished nothing, and putin knew he had to do something drastic, something very competitive and most importantly, something that will get him on the national stage. His first move had to be a big one, and he had to succeed. By late september of 1999, putin figure out what that move was, and it was to go to war with chechnya. But this time he needed to deliver a quick and decisive victory to the russian people, and thats exactly what he did. Putins plan was scorched earth policy. The russian Army Advanced slowly and in force using both artillery and airplane power against air power against the chechnyan defenses. The result . Over 300,000 of the 800,000 citizens of chechnya fled outside of chechnya. Putin back then knew the importance of controlling the media. And during that second war with chechnya, no journalists or media or were allowed in the war zone, something important to understand for later aspects. Putin delivered to russia what the people really wanted at the time; a quick victory. And people took notice. Then just before midnight on december 33, 1999, yeltsin unexpectedly resigned. He appointed putin the president , and everyone was, like, shocked. And the national stage, they were all asking questions, who was this man . In less than 18 months, putin went from the head of the old kgb, the fsb, to Prime Minister, to president. Never done before in the history of russia. So, however, most leaders who achieve such an advanced acceleration in their career would be pretty happy with that, maybe write a book, do speeches, get paid for it. Thats not putin. This was just the beginning of his plan. And now putin had his eyes on the oligarchs, which he needed to consolidate the power if he was to execute his plan we talked in great detail in the colder war of how putin humbled the oligarchs, i but i really want to focus on one, the most important one. After 70 years of communism, almost all the russians were struggling to adopt the principles of the free market society. Theres an old joke in the communist russia, we pretend to work, they pretend to pay us. However, not all were totally clueless about capitalism. Enter the individuals who would eventually become the oligarch. They were young, they were smart, they were aggressive, they took risks, they violated russian laws. Most were actually jewish, and ill point out why this is important in a later section. But they were very ruthless. Unfortunately, they were not as ruthless as putin, they would find out later. Putin correctly recognized that the power of the oligarchs had not just of the russian economic aspects, the oligarchs controlled the political aspects within russia. And thats what putin really set out to change. For the sake of time, ill focus on the most powerful and wealthiest one, mikhail corps dove sky. We all know of him in the west because he spent ten years in a russian prison. Whats interesting about his past is corps dove sky was actually the communist youth leader of russia. However, because he saw what was going on, he saw that the russian empire was crumbling, he wrote a treatise called the man with the ruble, and he was really studying the free market system. He had a large import business that was actually the largest bootleger of alcohol in russia and also the largest bootlegger of hardware and software in russia at the time, and they violated many, many of the russian laws at the time. So its interesting. Heres a guy that was the youth leader of the communist party switched over, did a 180, created a large import company and took advantage of the collapse of the ussr. But what really set him apart from the other smart young guys, he created a bank which was the vehicle that eventually took over the russian oil sector. Made hundreds of millions of dollars from diverted state funds of russia. When yeltsin took over as president , he was one of the key strategicked visors on the economic front for finances. He profited hundreds of millions of dollars from the voucher debacle. Now, what was this voucher debacle . The russian sector had major companies, and what they really wanted to do was make sure every individual within russia had an equal share of the company. So there was 140 million citizens in russia, each perp would get a each person would get a representative share, and the state would own the largest controlling bloc. Unfortunately, remember 70 years of communism, people didnt know what to do with these shares, and there was no true stock market. There wasnt the New York Stock Exchange or the toronto stock exchange. People didnt know what to do with these vouchers. Well, the bank created a market for these, and they literally bought these on pennies on the dollar from people that didnt understand what was going on. So they created a market for it, and he controlled a lot of these companies through his bank. But this was just the beginning of the billionaires club. And after 1993 through the loan for shares deal, that was the key deal. Thats how the bank took control of the russian oil sector. In 1993 ukos was created by the consolidation of dozens of russian oil and Gas Companies hoping to share wealth with the russian people. It was eventually the largest producer of oil in russia. He took control of this via two methods. By 1994 yeltsin needed a lot of money. His Approval Ratings were less than 5 , and he needed 159 million just to meet the weeks budget. So what did they do . They created a plan where the government would put up those shares of ukos for the money. Unfortunately, the collateral, the assets of the company, were worth 2550 times the what the Principal Amount the bank put up. They literally took control of 43 of ukos for about five cents on the dollar. Within a week yeltsin needed another 150 million. Who did he look forward to . This time the russians got a better deal. They paid they sold it for 15 cents on the dollar. So, essentially, the whole bill of what kordorovsky paid it back in three months from the cash flow from ukos. It was a will grant move for him, a disaster move for the russian state. So what happened here . This perspective really changed putins concept here and how these oligarchs were literally picking up state key assets for pennies on the dollar. No doubt he was a brilliant businessman. He brought north american technology, he brought north american knowhow and equipment, and most importantly he brought American People to improve the production from the ukos. For example, we all talk about fracking here in north america. Before George Mitchell made it famous in the perm january, it was actually happening in russia, believe it or not. So the canadians were fracking away at ukos assets, but yet within just a few short years of taking control of ukos, he became the 16th richest man in the world with a net worth of over 16 billion. This is a prime example of how the oligarchs in russia controlled all aspects of the russian economy and media. That is, however, until putin showed up on december 31, 1999. Initially, putin had the support of most of the very powerful oligarchs. That all changed after the first election in early 2000. Putin set his eyes on the oligarchs. He recognized that if he needed to move his agenda forward, he needed to get rid of the oligarchs. So he proposed the deal to the oligarchs. If you dont meddle in my politics, in russian politics, ill let you keep the money that you stole from the russian people. It was a fair deal in putins eyes. Now ill go back to the most powerful oligarch. He refused, and he didnt just refuse the deal, he actually challenged putin and funded the political opponents to putin, but also challenged him publicly. If you understand the slavic mentality and the way business is done in russia, you see the exxon deal with raz net, whos in the middle overseeing it . Putin. The one big thing in business is if the russian president is seen signing the deal, the bill will be passed. So kordorsky took on putin and, unfortunately, lost, but he did it with a doubleedged sword approach. The final straw that really ruined him was he tried to sell ukos in a bidding war between chevron and exxon. Both rockefeller Spinoff Companies from standard oil. Ironically, if he succeeded in selling ukos, he would become the largest shareholder of either exxon or chevron, whichever one succeeded in it. However, the president of exxon didnt quite like him too well. He phoned up putin and said, look, do you approve this . Putin said, no, we dont. He tried to do the deal without getting putins approval. You dont do that on Major National interests in putins russia. So what happened . Well, using russian law they put him in prison for tax. They also froze the bank accounts, then they went using russian law. Theres an old saying it can be interpreted whichever way the government wants it to be interpreted, and they demanded tens of billions of dollars in penalties and tax evasion. We get into great details who actually controlled the shell company. You can figure out who it was. Interestingly enough, it passed with no problems. So what about the individuals who agreed to putins plan . Roman eprom of age the owner of the football club, chelsea, his net worth actually increase, but he had to agree to putins plan. The wealthiest oligarchs in russia today was actually bored into his back. Hes actually not even born in russia and hes a muslim. So its very pragmatic. It doesnt matter what religion you are or where you were born. If you play with putins rolls, to let you keep what you have. So then you get into the great game of the 20th century. Lets first take a look at the 19th century. There were 320 global conflicts in the 19th century. 73 of those britain was involved and. Britain was the worlds major global conflicts were just in europe only. In the 20th century, 53 major global conflicts worldwide. Of those 53, the ussr and russia were involved in 38 of them. U. S. A. Was involved in a teen of the 63. We see there is a transition. The more worse you are involved in, the less well you do in the next generation. In the 21st century, there has been so far nine h. R. Global conflicts via china has been involved in zero. Russia in one. U. S. A. , anyone make a gas . All mine. Oil on the 20th century became the underpinning of the financial effect her. You control the oil. You control power. How did this all start . Historically was gathered for babylon in its walls what you think it is. Babylon is a great victim of the first desert storm. Oil distilled in china about 400 b. C. But our modern Petroleum Era actually began in the russian empire in 1846. What do i mean by modern Petroleum Era . The first modern well chilled and mechanical equipment occurred in the russian empire. The first oil wealth killed in the u. S. Was 13 years later in titusville, pennsylvania. Initially oil was used as a for heating and lighting. But 1876 with the invention of the internal combustion engine. So bob crewe at the time, which was at this time in the russian empire today, other by john was the largest producer of oil the world. Between 1875 in 1895, the experience 200 fold increase in Oil Production. Not a 200 increase. 200 times increase in Oil Production. The population at the time is going faster than london come in new york and paris combined. Unfortunately, later on for the russians, and the ukrainians, oil wasnt the only thing that came out. Chosesstalin created ideas and his early years. The family actually took notice of the baku early after the rothschilds. Both come along with many other foreigners invested significant amounts of capital to increase Oil Production by 200 fold. Interesting facts about the oil sector. We all know them for dynamite, the nobel peace prize. Yet they were the inventors of the modernday oil pipeline. I was first put in place in the oil fields. Also ,com,com ma the oil tanker was invested by the nobels. Also first put into place in the baku oilfields. By the 1900s, the russian empire produce 15 of the worlds oil. Things started to change in the u. S. By this time. In 1899, a croatian immigrant better known in north america in north america as andy lucas salmon trillion oil well in texas. That eventually became the worldfamous wild. It was a cashier. It produced over 100,000 barrels of oil a day. I 1910, the u. S. Became the Worlds Largest oil producer. Oil, war and peace are directly linked after world war i, it is clear to winston churchill. The general admiralty navy and became the Prime Minister. He realized Great Britain needed to modernize its navy to compete with modernization of the german military. To do so if he needed to secure a longterm supply of oil that britain would control. Great britain secured the supply from iran and this is critical at cnn chief that the allies had in world war ii. Oil is one of the main reasons hitler attacked russia in the winter and we know how that ended. Lets know russia worked with the u. S. And the u. K. To defeat the not pleased, sending today our media forgets. I am not here to glorify putin. I am here to lay the facts you can make decisions for yourself. History took a dramatic change during the conference in july 1944. Two critical outcomes occurred out of this conference. First, the 44 allied governments agree to maintain a fixed currency versus the u. S. Dollar. Interestingly enough, they never agree to this, but the 44 allied nations who agreed each country pledged to buy and sell the u. S. Dollars to keep keep the currency within 1 of the agreedupon exchange rate. If everyone agreed to that, the u. S. Government assured the allies at the delivery of gold at the range of 35 u. S. Per ounce of core if you were to tender your u. S. Dollars. So the u. S. Becomes the center of international finance. This arrangement essentially worked in the 1967 when he said time now. We want our goal. Heres your u. S. Dollar in gold bars were flying back to paris. The speculators took notice of this and there was not a lot on the u. S. Dollar. So what did nixon do . He closed the gold window on august 15, 1971. At the same time, u. S. Found itself in a major oil predicament. It is importing over 70 of the oil it consumes and happened to be from the middle east. We all know that the Arab Oil Crisis in the early 70s. As a nixon had a dilemma, but he came up with a solution. Henry kissinger, who i actually think has a great book out, the world order. He also just not instead we are on the verge of a new cold war. So what did they do . They needed to secure the demand for the u. S. Dollar, but also secure the supply of oil to the united states. Nixon sent kissinger to saudi arabia and kissinger set up what would eventually be known as the u. S. Petrodollar. So what do they do here . File, saudi Arabia Richard oil only in u. S. Dollars and invest the surplus profits in u. S. Securities, the u. S. U. S. Government in return promised military military support to keep the existing saudi family and power in the house aside accepted in kuwait agreed and the members of opec followed suit. So the u. S. And saudi arabia and other members of opec had a strong relationship. A 1992, because they were pumping oil into the International Markets, the russians who went from 10. 6 Million Euros of oil down to 4. 5 Million Barrels of oil a day and saw Oil Prices Drop by 75 had the big engine we discussed that in the book. Essentially the ussr crumbled. All of this set the stage for the slavic lawyer to take power. Obviously i am calling Vladimir Putin a slavic warrior and sending important to understand to most russians in russia, he is the slavic warrior. Putin was born in 1952 in st. Petersburg. He started from very humble roots. But his grandfather really implanted Vladimir Putin at a young age with really grandiose ideas. Who was his grandfather . His grandfather was the personal chef for london. Joseph stalin trusted him and he became an outlet dose of stalin. Imagine the story the personal chef of stalin had. Yep hooton had a lot of inspiration and his Favorite Movie coming up is the field in assured. The roughshod equivalent. He wanted to be the spy. He became the world competitor in judo. A 1970 he enrolled in the Law Department at the state university. By 1975, he was recruited as an agent and his german accent was undistinguishable from anyone else. Essentially what putin calls come and i quote himself from a specialist in human relations. We north america call it a spy. So when putin got to st. Petersburg after the collapse of the ussr, he didnt hang a photo of president yeltsin like everyone else did in russia a few were in the government at the time. He put a picture of peter the great. That is very important because that is to putin most relates to. He does not relate to the modern failed politicians of russia. He wants to pick up where you left off and take russia to a new level. After putin consolidate the power from the oligarch and takes control of the Energy Infrastructure banking, media firm and the politics of the nation, putin now have to deal with external forces. First at the rose revolution in 2003 in georgia and the orange revolution in 2004 in the ukraine. What was interesting about these revolutions, they were funded by western forces from ngos. George stavros openly admits around russia. So what happens here . 2004, youre chancre wins the election and believe it or not over six years. The government of ukraine worked forward without problems from moscow. What changed . In 2010, you chancre is you chancres right hand and a very important ally julie mr. Ash go were at odds because he wanted to become president. But have been. Moscow family president jan milkovich split the vote of the prowestern side and became president. So now he pledged to play and was trying to get and that seemed to backfire on him. Early 2015, the pressure is russian and led to the maiden revolution because the city square there is called medan. The battle erupted and unfortunately resulted in 4000 people who had died to date because of this. Eventually, hundreds of thousands of people marched in protest and as i stated, unfortunately it turned deadly. The acting president , you milkovich fled to russia and an interim government appointed a nature and president initially petrenko was select it. Lets get to the details of putins plans. Why is ukraine imports and to putins russia . Theres four key pillars to this. Number one pipeline. Half of the natural gas russia exports to europe goes to ukraine. They want to bypass that by using the south stream. That is why crimea is so important. Number two, deepsea offshore oil and natural gas deposits natural gas deposits the one developed in the future. Number three, a deepsea warm port for the russian navy. Heres when the media is not talking about, the fourth is very important. If you join the e. U. , they have an advantage by bringing in importing goods without tariffs. Now that will eat into the russian market because the russian market has contracts with the existing cif state is ukraine does send out the russian manufacturer will have a competition not a lower price from the european goods. Its about the domestic economy. So lets get into the putin to station of oil a word i spent it because people like catchy phrases like that. Essentially, if you really want to know the fundamental basis, please visit the site cold war. Com. Weve created many about the putin as they should not just oil and natural gas and other resources. So when the book i break it down in great detail the types of categories of oil. Heavy oil, light oil, sweet, sour. For todays top, and went to clump it altogether is oil. So putin understands resources and his strategic importance to Russia Foundation to a promising future. 1997 he wrote his phd thesis on exactly the topic. But russia is a country into perspective. Im canadian hairbrush is over two times the size of canada in canada is the second largest landmass nation in the world. Russia is at the top of the world is not number two, per square kilometer of resource endowment. Its not just oil. Its natural gas, uranium, iron ore, zinc. They are very wealthy with resources. Unapproved spring from a russian Oil Production is increased from 6 Million Barrels of oil per day to over 10 million of crude oil per day. That is not easy to do in todays world. Most importantly, 2014 a lot of media approach means they russia is a dying society. Thats not true. 2014 is the first years in 1992 the russian birthrate is exceeding its death rate. Interestingly enough, the russian Poverty Level has declined under putin. If unemployment has declined under putin. Theyve doubled their Gold Holdings and they have much less bad than the western world. So lets look into this. Russia has anywhere between 5 to 10 of the worlds proven conventional oil resources. Theres a difference between conventional and unconventional. The success weve experienced in north america and unconventional. Its taking a drill that ongoing horizontal and striking it. All unconventional in very simple terms is the source of the conventional deposit. The russians havent even started their unconventional development. Every close friend of mine went Largest Service company in russia and he says its not even funny how much resources they have. They are Still Producing what we call cheap oil or easy oil. North america is now going for unconventional because of cheap oil is gone. So where does this all take us . Arctic oil is very important to putins grand plan. Hence, youll see the navy increase in the navy exposure in the arctic as canadians we are so worried believe it or not, we spend so much time in the art to date. All of our resources. You want to understand politics, study the money. Finland and hungary, over 75 of what they consume comes from russia. In belgium over 50 . Germany 40 . Netherlands under 40 . In the last decade, germany and greece is dependent from former soviet oil by 52 . Putin is stationed is based on two strategies. Venture outside the content for oil and make deals with the International Market and most importantly, specially the arctic. We all know now putin was controlling the domestic supply, but who controls russias oil sector. Brass neck took over the shell company. That somehow got all. These very loyal inner circle for the past 20 years. So now, what about opec and russia . Russia will not join opec. Opec has invited russia. Russia politely declined. Russia, when convenient and beneficial to russia will cooperate with opec. What does this all mean . In the last 35 years, opec is cut Oil Production 11 times during my lifetime and on average reader says reduction by about 1. 25 Million Barrels per reduction. The last time opec cut production was in 2009. Opec invited russia to the meetings. Russia went to the meetings. Opec shared with russia what they wanted to do when opec decided they were going to cut production, making the assumption that russia agreed with opec to cut production. But russia do . The increase production, profited the situation and expanded the market share. All pet lost russia one. Today on november 27th, opec is meeting again and its not just russia opec is at war with. Its also the ratio sector. The sector is now become a swing producer of the international arena. Now will discuss without his imports in any day. What about the putin edition of gas . When he came to oil, it is a dream come true when it comes to natural gas. A lot of people in the west dont know russia has 25 above the conventional natural gas in the world here thats not including the and conventional. So when you look at it, as much as, you know, the u. S. Right now produced about 62 billion cubic feet per day. That is using conventional and unconventional. Russia is producing for the conventional fields in siberia about 65 billion cubic feet per day. The gas pump controls almost all of the russian natural gas. Who controls gas pumps quite you Better Believe it. Alexei miller. Before him, dmitry medvedev. These are all allies to putin. So what does this all mean . In europe, germany depends on 40 of the natural gas they consume comes from russia. Poland, 87 . Among 100 . Even the u. K. 25 . All that has happened is the largest successful shell gas formation was from a Company Called portrayal, which i was the largest shareholder initiated. The bull shells in the u. K. Proved to be a little over 100 pcs. That is 100 trillion cubic feet of gas. That is enough gas to supply britains for about 200 years. But they still depend on 25 of the gas from russia. Ward ran to use to run bp who understands the issues with russia because of the peace investment in dmk. Hes the chairman of quadrille it, so we understand with going on. But now everything is changed at the largest instruction in the project is not in north america, not in europe. From russia to china. Eventually, we will see what this all means, but russia by 2028 will be exporting more natural gas just to china than all of europe combined. More they, when you build the major pipeline, you can start shipping out arteries to other markets. That will happen. What about lng, liquefied natural gas. One is talking about the allergy revolution. The u. S. And canada are at least five years behind russia and qatar and australia for that matter. When you look at the giant fields the russians have, you look at the stockholm giant gas field, which has posted a billion barrels of oil, they are already building things. More importantly, theres something called as lng, floating lng. These are the biggest ships on the planet and you can move into the arctic where theres no infrastructure in the ship is essentially a floating lng are. Theres one in operation now in the northern coast of australia. Now lets talk about putin is a shin. Anywhere between 45 to 50 Million Pounds annually. With the last 20 years, on average, 20 of americas electricity is generated by Nuclear Energy. Half of that Nuclear Energy and uranium came from russia. That means that 10 of americas electricity generated over the last decade came from russia. That is one in every 10 homes in america. Globally, 71 plants under construction in the 163 planned, 225 Nuclear Reactors proposed. All of this is an emerging market. Almost half of the current primary uranium production on the planet is within russias control. Interestingly enough. If you take all of the uranium production in 2013, one Russian Company produce more uranium on american soil than all the American Companies combined. Scary thought. Half of the worlds Uranium Resources are within the russian sphere of an. Most importantly, half of the worlds enrichment capacity of uranium is within russias control. All of those growth of the Nuclear Sector is in the emerging markets. That is where putin is focusing his future on. What does this mean . Or bring us all together and see judgment day for the petrodollar. Opec and most of the world by the early 70s have been used in the petrodollar. However, if putin is successful in a lan, would involve the minds of the petrodollar. We have an amazing says on her website colder war. Com. They occurred nonus dollars around the world is the most recent with russia and her brand could russia will build eight Nuclear Reactors and a lifetime supply of uranium and operate the facilitys nine u. S. Dollars eared a 400 billion natural gas deal in u. S. Dollars. But will opec turn their back on the u. S. Dollar quickset icky critical question here. The u. S. Is saudi arabias largest customer for crude oil. That is all changed. Part of the oil war is not opec is at war with the show sector. Why . Because of the success of the north american shell sector amid the u. S. Now are exporting ngl. There is a band right now in america that you cant ask for crude oil, but there is no ban on refined product. What does that mean . The ui shell providers producers are now competing with saudi arabia and qatar and kuwait in the International Markets and the ngos. That is not good for saudi arabia. The number one customer is not china and usually a producer goes about its customer wants. So what does this all mean . The success of the u. S. Domestic energy has increased output in production. Therefore, the imported energy from the middle east has become less than 14 to americas foreign policy. What a lot of people in the media and most americans dont know is actually the u. S. Military presence in the middle east has been subsidizing the European Energy supply that comes from middle east or north africa. This is now significantly at risk. In the last four years, weve seen the arab spring come a change in many governments in the middle east in a power vacuum that continues with the u. S. Military leaving. Unfortunately for everyone, al qaeda is expanding. The war in iraq is nowhere near complete. Its getting worse. Expect the conflicts in ukraine to get worse before it gets better. As the u. S. Pulls more into stability and volatility, in the middle east will increase. What about the shaky houses. Lets talk about saudi arabia. The worlds number two oil producer after russia ended that great risk. You look at the key right now over 90 years old. His successor, his brother in his late 70s and is not doing well healthwise. There are 7000 princes who were vying to become the next canyon mine. That is not good. More importantly, lets look at the demographics. Its a majority sunni country, but all of the Oil Production comes from the east coast. Sort of the core horror oilfield, the Largest Oil Field producer in the world. Unfortunately for the existing saudi arabia regime, the majority of the people within the oilproducing regions, were of the Oil Production comes from her shiites. Theres over 50 unemployment of adult males in this region. It is just a ticking time bomb ready to go. When guaranteed result of any war in a producing region, we dont know who will buy in. We dont know whats going to happen, but one guarantee is Oil Production decreases. Another thing that is very, very important that people not talk about that could change overnight if the seven global chokepoints of oil. For example, the strait of hormuz, right whereby brain is an further south, about one third of all the worlds oil travels through that street. Another straight no one talks about is the strait of malacca committee oil that goes to asia. What is the South China Sea bubble about to pop all about . Is their major issues going on globally. So what is russia down under putins leadership . It actually expanded relationships and production in middle east and north africa. For example, israel. Believe it or not, i spent a lot of time. Most people are shocked when i say they have worldclass natural gas potential. Israel has the potential to become a world lng exporter. Kisses all over it . Not the u. S. Companies gasper. Youre dependent on russia for energy and food is executed on finalizing new market for russian energy, which is in china and the rest of asia. All of this leads us towards the twilight of perpetual dollar. What happens if the u. S. Petrodollar falls . First of all, the cost to finance u. S. That will be higher. The u. S. Country dissipates and Interest Rates will result. Thats the average american that cost will be more expensive to service. Remember today is that is greater than 100 of gdp. Thats the standard of living for the middle class. The poor will decline much further. But that is the best Case Scenario. It can get a lot worse. As derivative markets could become significantly unset the demise of the petrodollar. Theres over 500 trillion the derivatives market. Thats a conservative estimate. A lot of people publish books well over a quadrillion dollars. Iomega know how big that number is amazed to teach calculus. By gillian is a big, big number. What happens to the derivatives market, which by the way Warren Buffett called weapons of mass destruction at the petrodollar collapses . It will increase major volatility and stability in the market. Is this possible . Yes. We already see many nations setting of currency swaps were trying to dollars and nine u. S. Dollars denominations, all teaching demand from the u. S. Dollar. In fact, a lot of people again to 70 of the handtohand currency are actually held by foreigners. 70 of the 100dollar bills and all the current seattle by foreigners outside the u. S. Its actually more 100dollar u. S. Both in russia and america. Interestingly enough of a one third of all the u. S. Bank checking deposits in the u. S. , which works out to be a little over a trillion dollars u. S. Dollars are owned by foreigners. If theres a currency collapse based upon the fall of the petrodollar, and you will expect that these foreigners will dump the dollars and cause further pressure on the u. S. Dollar. So what is the u. S. Government done to prevent this . In 2013, the u. S. Government made up about one 30th the total military expenditures globally. A little over 640 billion. Remember the facts i gave you earlier in the 19th century and 20th century 21st century. The u. S. Are involved in every major conflict. That usually doesnt work too well for a country if you believe entrance of the past piece about is the best Case Scenario with the u. S. Policy doesnt change . Stagflation. High unemployment amid negative Economic Growth and rapid Price Inflation. The biggest loser in the scenario will be the middle class. You basically. Com to go from working middleclass comfortable to the working poor, especially the baby boomers who plan on living on fixed incomes. The worst case u. S. Or e. U. Or japan defaults on the debt held at the foreigners. This single event would be the most interesting day ever in the history of the Financial Market and we will all be that unset it. So how can you protect yourself from this . Its not something the richer Hedge Fund Managers can do. We can all do it. Her stuff, limit your debt and attempt to become debtfree. Simple, basic rules. To protect yourself from the demise, by a little bit of physical gold as an insurance in case the u. S. Dollar does crash and you hope that you would never actually use it because if gold does go to 5000 or 10,000 per ounce, the world would be in a very bad place. Diversify your holdings internationally. Hopefully for the younger people in audience. Dr. Moss passport, one bank account. Have two passports. Try to have internationalized their assets. Most importantly, we can all profit from the cold war by investing in Companies Run by the right Management Team to understand how to bring the right modern technology to pass producing oilfields or gas fields of uranium deals. You can profit from this. Look at whats going to happen in mexico. Mexico is a game changer. Unfortunate for mexico, and use the profits of the oil sector to Fund Social Programs. Mexico is gone from 3 Million Barrels a day of production to just about 600,000 a major declines. Look at exxon, americas largest oil company, that is how much you make per production of a barrel of oil isnt in the gulf of mexico. Its not in the middle east. Its actually in germany. So these fields have never seen modern technology. So invest in what the countries need to do to diversify from the russian supply of energy. We are in the cold war. It will take many years to play out, but protect yourself is your responsibility. Thank you very much. [applause] so inured to take any questions. I am here. Ask away. Yes, sir. Thank you. How do you see the impact of international out for on bringing dash of controlling Global Warming on the effects on the hydrocarbon fuel mart at both gas and oil and will it change this overall picture of gloom youre giving us quite unfortunately, it wont. Germany for example is the world leader in energy. For the last five years and a euro per year the cuts have increased 25 to the point that its not economic without government subsidies and as a result, the manufacturing and germany is leaving germany and yet theyve increased their dependence on former soviet oil by 52 over the last decade. You know, you look at the numbers. We are about 100 years away from that. Great political lipservice to have these grand ideas in talk about all these fabulous ideas. But you know, we are years away in the anomie of solar being just night. I finance the largest geothermal plant else in the u. S. In the last 25 years. Its very difficult to make economic. Hydrocarbons are here to stay. But i will say, just got back from china and the apocalypse occurring there. China definitely has to get away from the consumers of 70 of the whole conception and they are going to definitely make a big push or Nuclear Energy, which is the cleanest form of energy, baseload energy. The problem with green energy as its not baseload. Solar, wind or not they flip our. Yes, sir. In the back. Thank you very much for your insight or your commentary. I have to ask about your opinion of the simultaneous decline of the russian stock market and obviously price of oil. We went back down to the main 70s. How long can russia continued to exert influence with prices at those levels coming down from the midone teens spears we discussed this in the book as part of the cycle is before the great inflation you will have deflation and a key year for people to understand saudi arabia, russia, to balance their budget, to keep other social programs happy, and a balance between 90 to 105 oil. It can be economic at 40. They just have to adjust the budget. Their social budget. More importantly, the ruble has devalued much more than the price of oil. Therefore, that is an advantage to the Russian Oil Producers because they make more money because they are selling a depreciating currency. That is an advantage. The side effects of distinction against russia, which we hope to crumble the economy has pushed them closer to china and the chinese one make huge deals moving forward with the russians. This is the beginning of what weve seen. Chinese dont care what obama or america or germany think on sanctions. The Chinese Government is about securing their 50 year Business Plan moving forward to secure the stable supply of energy. Yes, sir. I believe we are the biggest oil producer, are we . Well, the questionnaire will be will the u. S. Shall sector be able to still grow and fight the decline . The problem with the unconventional factories after your first year production you have between 50 to 75 decline for a while. What the media is saying we will be almost energy independent. That report came out from iaea, 380 page report in the report never said by 2028 america will be energy independent. If all of these assumptions have been, will almost energy independent. Will america continue its growth and production . No. Can a lot of production in the u. S. A. Itself is 65, 75 oil . Yes. Combining the barrels of Oil Equivalent with the natural gas in the oil. One quick question. If things are going so bad on the petrodollars are coming to an end, why is the dollar rising . But will replace these . They have destabilized the future first. Theres an old joke about the u. S. Dollar. The tallest unless the u. S. Foreign policy changes and accepts as equals rather than telling them what to do in implementing sanctions, which is the first thing. Youll see the rest of the world move away. Now where would you rather go . The euro, yen. Until the new bank establishes itself, were talking a few years now. There will be alternatives where the debt, for example, for every dollar of debt a government would take in the 50s, the u. S. Government receives fourpoint x times growth in the gdp. Today for every dollar of debt ec 8 cents on the dollar gross. The most recent in japan. Even though theyve injected a trillion yen, they announced yesterday they are in a recession. In the near term, yes. The u. S. Dollar is the strongest currency. Lets look at the last decade or the last century up as britain. Exchange. Unless america changes their approach, it will change sooner than later. Thank you again for your comments and for the book. Please send america has to change its approach. You provide some kind of recommendation . Can you talk about that a little bit . The next president of the u. S. Lets take what happened in syria with the u. S. Funded to fight a sods regime. People forget that putin took out a fullpage in the New York Times saying this is foolish. Are you finding the exact equal you were at war with . That today has become true. The u. S. And canada and allied firebombing isis. Unfortunately, isis is getting stronger theyve joined forces with al qaeda. There is a secret saudi arabia has also been funding them. So what happens here . Into europe and america and the allies to the last respect and recognize that russia has their interests, china has been interested you have to work as equals to create a modern solution, it is not russia expanding into military. If you look back over 20 years, nato has actually grown in membership. Nato has been expanding its own agendas. Look at what happened in kosovo and i spent a lot of time in kosovo with the largest resources than you get a real about what is going on. Even the u. S. Sanctions are not legal according to the laws of the u. N. Security council. There needs to be more dialogue and there is a major on globally. That is where it has to start. The bank you feel it is any theater that is present for that is the leader now are someone emerging in you feel it is taking the right approach . Was interestiinteresti ng and i am apolitical. From an investment perspective where i can make money from the Current Situation in the current realities. I remember the election in 2012 when they brought me set our biggest enemy americas biggest enemy is fresh at obama laughed at him and said the cold war is over. Well, within a year,. Com and, it was russia that stood up to america with a red line comment of the rest of the world is taking notice. When the u. S. Started crumbling, no one expected putin to rights in the ashes and do what he has done. Do i see anyone right now . Bill. Lets all hope that there is someone there. I just dont have the answer for that. Piggybacked for this presentation. I was reading in the Financial Times that for russia as a budget should be a go, it has to be honored at 10 per barrel. It was a graphic image that showed the breakeven point for kuwait and other countries. I think era to American Companies that are already given approval by congress to be able to ask for into acog. Excuse me. The big names as china and russia, if they are so confident that there would be a demise in the u. S. Dollar in the future, that is why 50 or 60 years, give us confidence and extrapolate how much of the featuring mick so many grandiose plans of hearing the resources elsewhere for different commodities, why are they not holding their own current e. U. . Where the chinese so confident . Ways theyre already a majority of the foreign reserves in the u. S. Will start with the first one. The first one. The first one is for new projects in russia. Kuwait and the other members of opec. In that article for the countries to balance budgets, that is different than making an economic or turn on oil. So rush is a big different than kuwait. There is no middle class and kuwait. You got your imported, lets call it nonslave workers, but essentially they are glorified slaves and you have the royal family. That is different than rush over some of the other countries like mexico where this date oil company you can actually come across not as a publicly traded company. Taxes are used to Fund Social Programs of the government. [inaudible] exactly. Is russia because if you cannot balance your budget because the primary budget you use is going down the general market because the commodity. Different. What you are referring to is the dutch disease. The dutch disease when you have a strong currency producing the price of the commodity crash is coming you are stuck because your Price Inflation domestically. Its very different in russia. Their currency was overvalued because of oil. Like i stated earlier, the current use company is better off. So the opposite. The way i read it was that your government depends on one commodity. The same thing. Look at venezuela. Nigeria. Russia is very different. Im just learning so much. No need to race. There was a book. If you cannot alister project. Lets talk about the budget. They have tripled their gold reserves under putin administration. The chinese have doubled. She knew it the largest producer in america is . Actually china. China is the largest improver of oil. Gold is money. Dont fool yourself. Gold is money. General questions . At the decline of u. S. Influence on the Global Energy market, do you see Something Like the Manhattan Project developing to replace certain forms of energy . Its interesting we talk about that in the book because to do with the Manhattan Project was today in todays dollars to be a trillion dollars investment from the government and a revolutionize what became Nuclear Energy. Obama tried out with the green revolution. It was a disaster. So now, i dont see that being a solution unfortunately. Yes, sir. This is fascinating. Just a couple of points i want a clarification of enzi said earlier. I was under the impression that it was rusnak that was chasing. Noble energy is one of them in the leviathan bass in. If you look at the cost to actually build the infrastructure, they cant afford it. For example, during obamas first term, you never visited israel. Routine in the edit were there five or six times. So you see when the collapse of russia and the ussr happened, over 300,000 russian jewish engineers went to israel and the influence there and they with their governments. There were very smart, educated, successful. So it has its eye definitely on israel. When i went to iraq, we all know the military and u. S. Reburied 2000, to down saddam. Interestingly enough, saddam wanted to train. He went down after the new regime came in. There was no mention in nothing other than u. S. Dollars read more importantly, whos doing the Service Contracts . Is the chinese. The russians. Not the north american. The Largest Onshore Oil Discovery in the last decade his account and he called africa oil. They proved up now over a billion barrels of oil. Whos doing all the work . Chinese road rigs. Fortunately, the north American Companies did not win the contracts because exxon, for example in iraq are already working on the kurdish oil fields. The mcinerney said if you go to curtis and, which you wont recognize, uses contract in iraq. So the foreigners came in. I just want to follow. The other part of the middle east is how to not be saran and russia supplying them possibly be the solution on the nuclear front. It would be nice to have a solution to the chaos. After the natural gas deal with russia and china before putin went back, you have to rent and started negotiations and this past week it was signed at the rant has agreed to have the russians find, build, supplied uranium and operate with eight Nuclear Reactors in iran. Yes, sir. Just a point of clarification. A return in march from 10 years in baghdad hit a to clarify one thing. As with many other countries, subsoil resources belong to the country. Not to the region for the person who happens to be parked on the surface. Those oil sales in the kurdish and the law is quite clear. So, those Companies Like exxon oil who had advisers. Encourage them tunica deal with the kurds because its quick money and no getting out through turkey were very ill at nice because how could the Iraqi Government rely over 95 on oil revenues for everything. More importantly, look at the cure coca fields, producing 25, 40,000 Barrels Per Day oil fields. Theres three main pipelines and how they would get the oil out. Theyre trucking oil out. Four years ago i wrote a report when i got back from iraq saying im not putting the dollars they appeared too much chaos. Well, the point of all this isnt that. Some countries do not have diversified economies and rely too much on the best out of the masses mexico. Venezuela has not come in saudi arabia has not. Theyre changing the rules because it has anyone been successful. Just a counterpoint to your analysis. Looking up at the oil is doing, one has to look at the diversity of the economy to see whether theres resiliency they are to move from one set or to another. Thats where we talked in the book. Like i mentioned, Putin Foundation to the future plan is the resource sector. You cant depend on it depend on and on this very kind of explained in the book. [applause] well, thank you very much. Okay, so we have time for a book since i need, et cetera. We are wrapping up questions obviously now. Thank you all very much for coming and look forward to seeing you next time. [applause] heres a look at some upcoming fairs and festivals around the country