Transcripts For CSPAN2 Book Discussion On The Colder War 201

CSPAN2 Book Discussion On The Colder War December 14, 2014

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 oilf

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