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Buy “The Colder War” on Amazon
Transcript:
Dan Ameduri: Greetings, and thank you for joining us at FutureMoneyTrends.com. I’m here with Marin Katusa, a chief strategist for Casey Research. He’s the author of “The Colder War: How the Global Energy Trade Slipped from America’s Grasp.” Marin, in his new book, outlines Putin’s rise to power in Russia, and how he has a multi‑decade plan to win the colder war. Just this week, Mikhail Gorbachev said that the world was in a new cold war.
Now, Marin, I believe you’re at the airport. Thank you so much for taking the time to join us today.
Marin Katusa: You bet, Dan. You caught me during the layover.
Dan: All right, cool. We’ll have some expected background noise. We want to talk to you about your book today. Before we get into that, the last time I spoke to you — which was just in September — I’d never seen you so aggressive and so confident in the uranium trade. Uranium has gone up 50 percent in just the last several weeks. Is this what you had anticipated, or is this just the warm-up?
Marin: It’s what we said would happen, but this is the first in a long, long bull market in uranium. The cure for low prices is low prices. When it was down at 28.50, the lowest‑cost producers in the world (Cameco, in Kazakhstan) could not make money. The West Texas uranium producers could barely make a profit.
At that point, we knew that eventually the world could not depend on or expect uranium prices to stay below $30. Look, in one week it’s jumped $5 per pound. This is going to continue.
Dan: Your top pick, Uranium Energy Corp, has doubled in just the past few weeks. Uranium’s gone up 50 percent and UEC’s gone up 100 percent. But when I saw you last time at Casey Summit, you had talked about a lottery ticket‑type uranium play. It was on no one’s radar because it’s actually a gold company. Can you update us on that? Then I want to get into your book and the new colder war.
Marin: Definitely, Dan. Look, it’s no secret. Rick Rule and I, in our fund, have put millions of dollars backing Amir Adnani on Brazil Resources. First of all, if you just focus on their four million ounces of gold that they have, 43‑101, they are cheaper than all their peers on just the ounces in the ground they have at current gold prices.
Secondly, we look at the exploration upside and, most importantly, the joint venture they have with Ariba, which is France’s largest uranium producer. That project alone justifies the market cap of the company today.
The guy who’s put uranium production, from exploration to production, now has a free lottery ticket in Brazil Resources with the Rea project. It’s very rare in 10 years that Rick and I have seen a situation like this, and that’s what contrarian investing is all about.
Dan: Let’s get into uranium now with your book. First of all, Putin and Russia. In your book, you outline that Putin is making a move to dominate the world energy markets – specifically the uranium market. But when it comes to energy overall, hasn’t the U.S. shale boom thrown a wrench into Putin’s plan?
Marin: No, not at all. First of all, under Putin’s leadership, Russia has reestablished itself as a global superpower. What people have to understand is Russia’s been the number one oil producer for almost a hundred years. They’re also the largest net gas exporter to Europe. More importantly, all of their growth plans are going to China.
For example, in the western Siberian oil deposits — which are the largest onshore oil and gas discoveries in Russia in the last 30 years — all of that oil and natural gas is going to China. In May, we heard about the $400 billion natural gas deal. Just last week, we heard that there are more oil deals going to be signed now between Russia and China.
Remember, this is all about the Judgment Day for the petrodollar. These deals are not being signed in U.S. dollars. More importantly, Putin has now controlled the resources, where almost half the world’s uranium is within the Soviet or the Russian control: whether it’s production, enrichment, sales, etc. Russia’s signed a major nuclear deal with Iran.
What is interesting enough here is when you talk about the U.S. shale. The U.S. shale is now at war with OPEC. Saudi Arabia, who has been a long ally of the U.S., has now seen their market share being decreased because of the expected exports of their liquids and condensates coming out of the U.S. shale sector.
All of this is very bullish for Putin. Not only does he still control the European market, he has now gotten into the Asian market. Remember, during the first cold war, China was a non‑event. This is the game changer. Now, rather than having America and Saudi Arabia as allies, they’re actually at war. They’re in an oil war right now with one another.
Dan: That’s interesting. Most people — at least my age, in their 30s — just simply read about the cold war… the cold war ending in the ’80s. Mikhail Gorbachev said we’re in a new cold war. I think he knows something about that. What is this new cold war? What is the biggest thing that people are going to notice over the next decade of our lives here in the U.S.?
Marin: Definitely. It’s all about the Judgment Day for the petrodollar. And the effect on the derivative market… I could sum it down in one sentence, Dan. If the petrodollar dies, so does the American way of life. I think people have taken for granted that what the petrodollar means to the American way of life. This is significant, it is important, and it will be the most important event of our lives.
Dan: Russia, China and India. In your new book, you talk about the destruction of America’s retirement accounts if the Russians and their allies are able to loosen America’s grip on international finance. What have they done, and what’s left for them to do to achieve this?
Marin: We go in to cover this in great detail in the book, “The Colder War.” Most importantly, establishing how America became a global currency – the superpower. The emerging markets, if they want to increase their standard of living, need to get away from the U.S. dollar.
Number one, you see hundreds of billion dollars of currency swaps between countries, which is now decreasing the demand for the petrodollar. Number two, you see major oil, natural gas, and uranium deals being done outside of U.S. dollars. That’s also bad for the demand for the petrodollar. Number three, they’ve created what I call the BRICS Bank, which is directly in competition with the IMF, which is controlled by the U.S.
These are three significant factors. Putin is the leader, and now the emerging markets are working in concert together against the U.S. interest globally. We see just yesterday in the APEC conference in China, the leader of China and the leader of Russia, which is Putin, are signing major deals. They’re working together, and they’re sitting beside one another. In all the photos, they’re beside each other. Where’s Obama? To the far left. That really signifies, if you understand Chinese culture, the image that America is left out.
Dan: Now, Obama might not be the ideal leader for the U.S., but it doesn’t seem like the U.S. is completely out of the game. Here we stand, and U.S. oil production is rising. We’ve got a very strong dollar relative to the other currencies, and the Russian ruble is actually not doing well at all right now. Is it a closed chapter in this colder war, or does the U.S. still have a good chance of coming out on top?
Marin: America definitely has a chance, and we discuss that in the book. What we explain are the facts and what is going on in this colder war. What America needs to do is the next president of America needs to be a strong leader who understands international geopolitics. Obama has a real poor track record. He has a failed foreign policy.
There are definitely many opportunities for America to win this. Unfortunately, the last six years have been a disaster for America on foreign policy. You see, the emerging markets are working together. Is America out? Definitely not. This is going to be a long war. That’s why it’s called the colder war.
This is not a battle. It’s not going to be defined and won in the next six months. This is going to be a many‑year cold war just as it was in the first one, but it’s a lot bigger and a lot more important. There are many more nations involved; that’s why it’s the colder war.
Dan: When it comes to investing in this situation, what is the best way for someone to position themselves living here in the U.S.? They want to protect their money from the colder war and possibly profit from the global shifts that are happening.
Marin: First of all, you mentioned that the ruble’s decreased. That’s actually good if you’re an exporter, because now the Russians are going to make larger margins versus the American producers who produce in U.S. dollars and export in U.S. dollars. That’s something that our Western media is forgetting. Remember that.
Now, let’s get into how to profit from this. You started the interview asking me about uranium. The move in uranium has gone from $28.50 to $41.75 in just a few months, and it’s going higher. When you’ve got guys like George Soros positioning themselves to profit from the “Putinization” of resources, there’s going to be major opportunities here: not just for uranium, but oil and natural gas as well.
It’s your choice. You can either be a victim of the colder war, or you can become a benefactor of the colder war. Profit from it, or be a victim from it. It’s your choice.
Dan: Your book, for someone who is reading it… what is the best place for them to find it? Is it just at Casey Research or can they go to Amazon?
Marin: You can go to Barnes & Noble. You can go to Amazon. Most bookstores across North America are carrying it. It’s available nationwide. Just go to Amazon or Barnes & Noble. It’s available and you’ll get it to your door within 48 hours.
Dan: Now, this is your first book, Marin?
Marin: Yes, it is.
Dan: How is that? Because I’m a newsletter writer, as well as an article writer. I can do those all day long. But man, sitting down to write a book; I imagine that’s tough.
Marin: It was very difficult and it was more than I expected. I never planned on being an author. This was brought to me because of my research and my experience in investing in the sector. After all my talks and discussing this, Wiley offered a book deal. The number of edits and going back and forth, when you have the editors go through it; it was a lot of work.
But the product has been getting rave reviews from Congressman Ron Paul. The chairman of the world’s largest gold producer has significantly endorsed this. It’s been a pretty big success so far, so it’s been definitely worth all the hard work.
Dan: In your research, I know probably you’ll have the same idea of what I’m talking about. Sometimes when you’re researching something, you’ll have an “aha” moment. When researching this book, you probably put countless hours into it.
Was there anything in the book where you just couldn’t wait to get it to get it to the public? Something maybe you possibly discovered or connected some dots? Something where it was just like, “Wow, this is really big and nobody’s talking about it.”
Marin: Definitely. Look, when you really talk about the pipeline capacity, the amount of natural gas, the amount of oil the Russians have ‑‑ more importantly, they haven’t even started their unconventional development ‑‑ the impact from a financial perspective is important.
Dan, this book took 10 years to put together. We’ve been the largest investor in the European shales. We were the first ones to write about it. You look at some of the major deals that we’ve been investing in, from the third‑largest producer in Canada of copper, to Cuadrilla, which is the U.K.’s largest shale gas company.
It took many years to develop this and it’s unbelievable how things that are happening in Europe and Asia can specifically change the daily lives of Americans if America’s not prepared for the colder war. That was the biggest significant “aha” moment.
Dan: Marin, before we close out, I want to do a special; possibly an extra two minutes with you just for our premium members. Just to really get an update on the investment in Brazil Resources and Uranium Energy. At the beginning, we discussed them.
What is a good update for people who have possibly invested in these companies within the last few months, or maybe even years ago? Where do we stand with Brazil Resources and Uranium Energy Corp?
Marin: Sure, let’s start with Brazil Resources. It’s no secret that gold is going to perform the opposite of the U.S. dollar, and that’s going to continue. But more importantly is that this is exactly the type of market to help show why Rick Rule and I are backing Amir Adnani.
We expected a bear market in gold, and if you have a longer‑term perspective, look what Amir has done in the last four years. He’s gone from zero ounces to four million ounces. I expect that within the next 24 months he’ll get to over six million ounces. More importantly, he may have exposure to near‑term production.
You get strong when other people are weak. You need to be a contrarian investor in the resource sector. You want to buy when everyone’s selling. More importantly, if you would actually look at Amir’s past, he’s one of the few guys that have put a uranium production project into production.
Ironically, BRI, just its gold assets, just on its ounces, if you ignore all of the exploration potential from the company and just focus on their proven 43‑101 resources in the ground… the company is significantly undervalued to its peers at current gold prices.
You get all this extra exploration for free. But most importantly, the one guy who understands uranium better than anyone else in the U.S. and North America happens to have a major exploration joint venture with France’s largest uranium producer. That’s Ariba, on the Rea project.
It’s a significant upside. We’re cashed up. When you’ve got guys like George Soros taking notice of Amir Adnani; Li Ka‑Shing, Asia’s largest investor; Rick Rule, the most successful contrarian speculator in the North American markets. This is key, and people get a chance to invest early in a future titan. I couldn’t be more bullish on BRI.
Dan: How about Uranium Energy Corp? We’ve seen a huge pop. Of course, all of the uranium stocks are up big, but I think UEC’s probably up the most.
Marin: First of all, it is up the most. Secondly, I haven’t changed my opinion on UEC at all. When uranium moves, UEC, Uranium Energy Corp. is the only unhedged uranium producer in the world. Why has George Soros picked UEC, rather than the other U.S. producers? Because those U.S. producers, first of all, are depleting the best reserves at capped prices because they’ve hedged themselves.
Secondly, you look at the management team of what Amir’s put together with the WISR, warm ISR production. He will continue to outperform all of his peers because he’s positioned himself. He is up to two million pounds capacity permitted and built. When the price of uranium changes, UEC will benefit the most from it.
Dan: Marin, thank you so much for your time. If anyone wants to get this book, “The Colder War,” you can go to Amazon and Barnes & Noble. This is something that’s going to affect every one of our lives. To talk about timing, Marin wrote this book and literally in the past week I’ve seen more articles and more news stories — including from Mikhail Gorbachev — talking about the new cold war. Marin, thank you so much for your time.
Marin: My pleasure, Dan. Take care.
