This new Renaissance can fuel human prosperity for decades to come

The year 1776 is legendary for precisely one thing: the Declaration of Independence.

But 1776 was actually a REALLY big year. Because in addition to the formation of the United States (which undoubtedly had an extraordinary impact on the course of the world), 1776 also saw two other historic trends take shape.

The first was the birth of capitalism.

1776 was the year that Scottish economist Adam Smith published his famous work An Inquiry into the Nature and Causes of the Wealth of Nations, which was the first book ever to outline the case for free markets and laissez-faire governments.

Not to take anything away from impact that US independence had on the world, but you could easily make an argument that the idea of capitalism has been just as profound to human history.

Capitalism is responsible for more wealth creation and more prosperity in the past 246 years than every economic system combined over the previous 5,000. That’s a pretty significant impact.

But we’re not even finished yet with the big events from 1776. Because that year saw something else take place that was truly profound… again, potentially outweighing the impact of both US independence AND capitalism.

It was the invention of the steam engine… which at the time may have been the most disruptive technology in human history up to that point.

For thousands of years prior, nearly all work done on the planet was powered by muscle, i.e. human beings and animals toiling away in fields and factories. Just about everything required physical labor.

The steam engine changed all of that. For the first time on a mass scale, an inanimate fuel source (like coal or wood) could power machinery, which could do the work of dozens, even hundreds of people.

It was the steam engine that really kicked off the Industrial Revolution and brought about an extraordinary period of growth to the world, where wealth and standards of living increased like never before.

Over time, human being figured out better, faster, cheaper ways to produce energy to fuel their machines. And there is an inextricable link between prosperity… and cheap energy.

When energy is cheap and abundant, societies are able to invest heavily in growth; they have more resources (i.e. more energy) available to grow, to produce goods and services, to invest in the future.

When energy is expensive and scarce, the opposite happens. A society has to spend most of its energy just to sustain itself, and there is limited surplus left over for growth and investment.

After generations of enjoying cheap energy and declining costs that fueled unparalleled prosperity, we are now facing steeply rising energy costs.

And I don’t even mean in dollar terms. Sure, the cost of a barrel of oil has more than doubled in the last year. Gasoline prices and electricity prices are high too.

But what I’m really talking about is the cost, in energy, of producing energy.

Oil wells, for example, require electricity or diesel fuel to power their pumpjacks. So oil wells essentially consume oil in order to pump oil.

In the past, this ratio of oil produced vs. oil used was quite attractive. For every barrel of oil it burned in fuel, an oil well would produce 30-40 barrels of output. And that was a great cost/benefit ratio.

But this ratio is falling rapidly, making energy a lot more expensive. And that’s a terrible trend. Again, cheap and abundant energy is a critical factor in driving prosperity. More expensive energy has the opposite effect.

Europe is already in a full-blown energy crisis, and many developing countries aren’t able to get their hands on enough energy to sustain themselves agriculturally. So this is already becoming a major issue, and it could potentially become much worse.

Obviously the war doesn’t help. But there has also been a deliberate political agenda to drive investment and enthusiasm away from fossil fuels towards more expensive, inefficient forms of energy production… like installing solar panels across cloudy Germany.

Again, I cannot overstate how important cheap energy is to human prosperity. So these incompetent, spinless politicians and climate fanatics are dragging the world down a terrible path.

Fortunately there is a real solution to this problem that already exists: nuclear.

It’s controversial (even though it shouldn’t be). But momentum is really starting to build for a new energy renaissance driven by nuclear power.

And this is a major trend you ought to be aware of, because it could drive human prosperity for generations to come. (Plus there are a LOT of ways to invest in it now.)

I invite you to explore this topic with me today in today’s podcast, in which we discuss:

– the intriguing history of energy, and why there was very little growth for 5,000 years
– how everything changed in 1776
– basic energy terminology you should know, like EROEI, specific energy, and more
– why cheap energy is so important to prosperity
– why energy is becoming more expensive… in energy terms
– why nuclear is the obvious answer, and how it can drive future growth

Today we're going to go back in time to the year 1776. Now, most people think of exactly one thing when they think of the year 1776, and of course, that's the signing of the Declaration of Independence and the birth of the United States as a nation. It but 1776 was actually a really big year for a couple of other things that we're going to talk about. The first, though, was a book. And it was a book that was written by a Scottish economist named was Adam Smith.  
And the book was called An Inquiry into the Nature and Causes of the wealth of nations. It's often just referred to as the wealth of nations. And this is generally known as sort of the Bible for capitalism. Adam Smith is known as the father of capitalism. So you kind of argue that 1776, just like it was the birth of the United States, was also the birth of capitalism.  
Capitalism, just like the United States, has had a profound impact on the world. And I think you could make an argument that it's possibly just as important, certainly at least in the same conversation in terms of the impact that capitalism has had on the world prior to capitalism. Hundreds and hundreds of years before capitalism, we had the feudal system, which is one of the dumbest ideas ever. Such a stupid idea. You had the king at the top, who was in his position solely by accident of birth, a bunch of noblemen, same position.  
And then all these medieval serfs who were tied to the land and couldn't go anywhere. It had no freedom. Terrible system. Terrible, terrible system. But between capitalism and the feudal system, there was a period of time where the general prevailing economic system was known as mercantilism mechanicals.  
And it was a very authoritative system. The government was in charge. And primarily it was based on an ethos in which everybody believed that the world and wealth was finite. It was a zero sum game. The only way I can be wealthy is by taking from you.  
I have to take your wealth. And that's the way I, as a nation, become wealthier. And that was the cause of imperialism and so many wars over territory and resources. It was all about, I have to expand my territory. I have to expand the availability of my resources, and that's the only way I can become wealthy.  
And Adam Smith said, no, that's crazy. That's stupid. Adam Smith believed, and he wrote about this in The Wealth of nations, is that wealth is not finite. Prosperity is not finite. And the way to actually create literally infinite wealth and prosperity is through value creation, by doing things that actually create value through competitive advantage.  
He gives us great example in the book where he talks about silk, and he's saying, in England, we do a lot of textiles really great, but we don't do silk. The French do silk really well. So you know what? The French should do what they do well, which is produce silk, and the English should do what they do well, which is wool and other things like that, and then we can trade with each other. That way, we're doing what we do most efficiently.  
You're doing what you do most efficiently. And we trade because we do things that we do most efficiently. We have this extra surplus, and we can trade our surplus with each other, and that way we're all be better off. We'll all be better off. And it was not a zero sum game.  
It was infinite prosperity. Everybody can win. It's a win win. That's what capitalism is all about. Win win, as opposed to winlose zero sum game.  
Mercantilism. And again, mercantilism is what gave way to all the imperialism and war and everything was all about taxes and tariffs and all these things. I would say, actually, we're kind of sliding quickly towards mercantilism again today. When you hear these progressives talk about I think it was AOC said, you don't make a billion dollars, you take a billion dollars. That's a zero sum mentality.  
That's based on this idea that wealth is finite, prosperity is finite, and the only way somebody becomes wealthy is by taking it from somebody else. That's a very 18th century, 17th century mentality. It's incredibly antiquated. It's naive, it's unsophisticated. Capitalism means value creation.  
Wealth is infinite. And Adam Smith was the first guy to really write this down and say, this is what the world can be. That was a really big deal. But there was something else even bigger that happened. And the other thing that happened that year was another Scotsman big year for Scotland, another Scotsman named James Watt, who had relocated to the city of Birmingham in England.  
James Watt was 40 years old in 1776, and he was an inventor, he was an engineer. And he put the finishing touches in 1776 on one of the most profound inventions, certainly up to the that point in history. It's called steam engine. Now, like all great scientists, james Watt stood on the shoulders of giants, like Isaac Newton before him and all great scientists before him. And one of the giants upon whose shoulders James Watt stood was a guy named Thomas Newcomen, who decades before had created something he called an atmospheric engine, which was something like a steam engine.  
But the basic idea behind the steam engine was you produce heat in some capacity, you burn something, that heat is produced, it heats up water, the water produces steam. And that steam, the rising of the steam creates a force, and that force does something. It turns a crank, it drives a piston, etc. It turns a wheel, something happens. It creates some mechanical motion.  
And that mechanical motion powers a machine that does something that weaves textiles or even powers a steam ship. It wasn't long that steam was soon powering everything. This idea of steam power, that you could take this inanimate fuel source like wood, burn it, and power something to create machinery. Soon everything transportation and trade and commerce and industry, cities, everything was being powered by steam. It's interesting that James Watts company was called Watt and Co.  
At the time. This actually companies still exist, believe it or not. It's a subsidiary of a large conglomerate, publicly traded company called Illinois Tool Workshops that has probably hundreds of subsidiaries. And one of those is actually the original Watt and Co. It's changed names since then, but that original company still exists, which is kind of interesting.  
Now, the reason this is such a big deal, the reason why steam power was such a big deal is you have to now we have to go even further back in time. You have to think about the way that human civilization was for, honestly, millions of years. Now, the first fossil fuel some years ago wasn't that long ago. Archeologists found fossils in a cave in central Bulgaria that they dated back to 46,000 years. And the fossils, through some DNA studies, that they did realize that these were certainly Homo sapiens.  
Our exact species of human beings have been lots of different species of human beings over time. But these were the first recorded Homo sapiens. And if you think about these people that would have existed in central Bulgaria 46,000 years ago. Or people that would have existed during the agricultural or called the Neolithic Revolution 10,000 years ago. Or even people in ancient Mesopotamia three.  
4000 years ago. Their lifestyles wouldn't have really been that different because most of the things that they did. Whether it was 460 years ago or 10,000 years ago. Planting the fields. Et cetera.  
Everything that human beings did was done primarily by human beings. Not by machines, not by robots, not by AI. Most of what they were doing was being done by human beings or animals, right? They were raising mules and horses and ox and so forth to do certain things. But it was really just muscle power.  
And so if you think about that, somebody, for example, 10,000 years ago who was working a wheat field, went out in the field, planted the seeds, took care of the crops, pulled some weeds, irrigated, maybe even dug some irrigation trenches, et cetera, harvested, separated the wheat from the chaff, processed. All that was basically done by hand, by human beings, literally human muscle power. And really up until the Industrial Revolution, until the invention of the steam engine, that's the way it always was. So if you think about a farmer in the 16 hundreds, even in the early one, seven hundred s, the way that farming was done wasn't really much different than the way it was done in ancient Mesopotamia, thousands of years before. It was still a human being.  
Maybe a couple of draw animals that were out in the fields using muscle power in order to plant their fields and tender their crops. Sure, by the 1500, they had better yields, they had better farming techniques, fertilizer, maybe better irrigation techniques, and possibly even the occasional, maybe water power to grind grain. They figured out water mills, and maybe even some early crude windmills, but it was still primarily muscle power. Steam changed all of that. And it was one of the most profound discoveries, one of the most profound inventions, literally in all of human history, because it gave way to this idea that suddenly we have this inanimate fuel source.  
So instead of muscle power, now we can go and take you, we can chop down a tree, and we can burn this wood, and this wood is going to create steam, and the steam is going to power stuff. And again, we had transportation industries, homes, entire cities were being powered by steam. Now, the interesting thing about this is that initially, the people were burning wood, because that's what people burned for a really long time. And then a couple of different things happen. One, as they chopped down a whole lot of trees, and they realized they had to go a lot farther afield to get new trees to chop down the wood.  
But they also realized, wow, there's a better source of fuel here. And it was called coal. And the reason that coal was a better source is because it actually contains more energy per weight per kilogram. And so if we think about energy, this is something that in science is referred to as specific energy or energy density. So if you think about, and we'll get to this in a minute, but the amount of energy which you could measure in a number of different units of measurements, so in this case, we'll say joules per kilogram for wood is about 18 joules per kilogram of energy that you get.  
So there's an amount of energy that's contained in wood. You can burn that wood, and that energy then is converted from what's stored in this chemical energy of the wood into heat energy. Same thing with coal. You've got this chemical energy that's contained in coal, you burn it, and that energy is converted into heat energy. Well, it turns out there's about twice as much energy, twice as much chemical energy stored in coal for every kilogram of coal than there is for every kilogram of wood.  
And I realized, oh, wow, this is great. So we get twice as much energy out of coal than we do for wood. So then coal became all the rage. Coal became super popular, and it was great. It was one of the things that actually ended up powering transatlantic steamships and so forth, because they could put more fuel on the boat, because you could get twice as much energy out of every kilo.  
And then they figured out how they could kind of doctor the coal a little bit and put certain additives. And so forth, it became much more powerful, much, much more reliable source of energy. Lighter, better, faster, sweeter. Everything was better about coal. But the other thing about coal is that it wasn't just the specific energy.  
It was also about how easily you could get it. How easily could that form of energy be obtained. So let's think about a basic energy calculus. Let's think about a lot of people probably like to garden, okay? So if you have a garden, you may be pleasantly surprised to know that gardening is actually pretty good exercise.  
And people burn 250 to 350 calories per hour when they're gardening. That's energy that we're using, right? Because that's human muscle. Just like thousands of years ago in ancient Mesopotamia or 10,000 years ago, we're using human muscle in our gardens with our tools and our shovels and all these things that we have to do. So you're burning about 300 calories an hour.  
That's energy, right? So if you think about it takes 100 hours of work to maintain, to seed your garden, to maintain it, go out and pull the weeds, harvest it, process everything that you get out of that. If you think 100 hours times 300 calories an hour, that's 30,000 calories, 30,000 calories that you're burning that's energy, right? So literally, just in order to break even on that energy consumption, if you're spending 30,000 calories to take your garden from nothing to where you've got food in your hand, you're spending 30,000 calories of energy, then in theory, your garden should generate at least 30,000 calories in order for you to break even on it. Otherwise you're going to be spending more energy than you're producing in the food, right?  
So that's roughly, if you think about it, if you have a tomato garden, that's like somewhere between 80 to 100 tomato plants that you would need. So your garden needs to have at least 80 to 100 tomato plants just for you to break even on that 100 hours of work. So if you think about this, and I'm sure that's a pretty easy concept to understand, if you think about this in the context of energy in general, it's the same, really, with any form of energy. We could think about that with oil. We could think about that with coal.  
If you think about it with something like, for example, early steam engine, when people were burning wood, somebody had to go and chop down the wood. Then they had to transport the wood. They had to have carriages with horses, the horses need to be fed and all these sorts of things.  
This is true of any form of energy. There's no such thing as truly free energy. Every form of energy has to be harnessed in some capacity. We have to drill for oil, we have to mine coal, we have to chop down trees to burn for heat energy, all these sorts of things. This is known in energy analysis as energy return on energy invested.  
And there's a lot of different ways people look at it. Sometimes they look at it as net energy. There's a lot of different terminology for this. But you can think of energy return on energy invested as I have to put energy in, in order to produce this energy, and I get a certain amount of energy out. So you can think about it again as wood, I have to put a certain amount of energy into chopping down the tree, transporting the wood, maybe even processing the logs, et cetera.  
And then I burn it. It goes into my steam engine. And that steam engine produces a certain amount of energy. So we certainly better hope that that steam engine produces more energy than it required to chop down the tree and transport it to the steam engine, all that. So we better hope that generates more energy than that.  
So this energy return on energy invested is generally considered a ratio, right? So we say for every one unit of energy I put into it and chopping down the tree and transporting the wood and all these sorts of things, for every one unit of energy I put in, I get three units out. Five units out, 100 units out, right? So the general level that most people, it's certainly an advanced developed economies. The threshold that they look at is they say, okay, this is what makes a reasonable energy source and economically viable.  
Energy source would be a ratio of about seven. So if you have seven to one, for every one unit of energy you put in, you get seven units of energy out. That's considered economically viable. Now, there is no standard calculation, right, because it really depends on how far do you take this. What do you actually sort of circle in the energy input?  
We know the energy out. That's usually pretty easy to figure out, right? How much energy does this steam engine produce? For us, that's pretty easy to figure out. Same thing with a power plant.  
We know exactly how much energy this power plant can produce. But what's a lot more difficult is to figure out, okay, how do we calculate exactly the amount of energy required that goes into it? If you think about the wood and the steam engine example, do you also include the energy used, for example, to manufacture the axe that was used to chop down the tree? Do you amortize the cost of that axe over thousands of trees? Do you include the cost to make the wheel that goes on the carriage to transport the wood, et cetera?  
So there's no standardized calculation for this. And this is why you'll see a lot of estimates. If you look up energy return on energy invest, you'll see a lot of different calculations for a lot of different fuel sources. But it's a very interesting way to think about energy. I want to go into a little bit more about energy terminology.  
If we think about really anything height, weight, area, length, et cetera, let's think about length. We have different units of measurement for length, right? We could say miles, we could say kilometers, we could say millimeters. We could use nautical miles, light years, right? So these are all different ways to talk about length, and they all have different uses.  
So if you're in aviation or shipping, if you have a boat, whatever, you're probably accustomed to using nautical miles. When you talk about distances, if you're just driving around the road in the United States, you're using regular, what they call statute miles. Or if you're in pretty much everywhere else in the world, you're using kilometers. If you talk about really short distances, using millimeters or centimeters or inches, if you're in astrophysics, you use light years to talk about really far distances between stars and galaxies, or maybe parsecs or kiloparsecs, right? These are all different units of measurement, but ultimately, they all measure the same thing.  
They all measure length, right? And we convert from one of these to the other. We can say, okay, I'm whatever, 6ft zero inches, which is the same as 182 CM. You can also, if you wanted to, you could calculate your height in miles. You could calculate your height in light years.  
If you wanted to, you could calculate your height in nautical miles, or you could calculate the height of Mount Everest in meters, or you could calculate it in feet. And so there's a conversion between these 1 mile is equal to 1609 meters. We convert back and forth. Energy is the same way. There's different units of measurement, just in the same way that we can convert from miles to kilometers and kilometers to nautical miles and light years, et cetera.  
We can do the same thing with energy. So different units of measurement for energy, if you're talking about, for example, your electricity bill, which is a form of energy, you're accustomed to seeing something like kilowatt hours. If you're in science and technology, a lot of times people use joules. If you're in particle physics, they use a unit of measurement called electron volts, which is a really tiny unit of measurement. If you're in the automotive business, you use footpounds.  
If heating people use British thermal units. BTUs, food is a form of energy. Food is literally just stored potential energy. And with food, obviously, the unit of measurement we use with food is calories. Again.  
We have BTUs, British thermal units quads. Quad is literally 1 quadrillion. That's ten to the 15th British Thermal units, or barrel of oil equivalent BoE. So there's all these different units of measurement when we think about energy. So let's go back to food for a minute and think about something really standard that probably everybody's at least seen if not eating at some point in their life, like a Snickers bar.  
A Snickers bar is 250 calories. That calorie. Again, that's a unit of measurement for energy. It's literally the sort of amount of stored energy inside of all that mess that chocolate and nutty, not going anywhere for a while, 250 calories of energy. And so, if you consume a Snickers bar, that energy now is going from the Snickers bar and through your body's metabolic process, is converting that into some form of energy, which you can then use to go for a run, power your muscles, type on a keyboard or do absolutely nothing, in which case your body goes AHA.  
And it stores that in your gut, or your butt, or wherever you happen to store your fat, because fat is really just stored energy. So we take this stored energy from the Sniggers bar, put it through our body's metabolic process, and then it ends up being stored somewhere else in our body in a rather unsightly manner. But you can again convert because calories is just a unit of energy. So the 250 calories in a Snickers bar is the same as saying, well, 250 calories is the same as 1,046,000 joules, which is the same as 991 British thermal units, which is the same as zero point 29 kilowatt hours. These are all different units of measurement for energy.  
It's like saying that 100 km is the same as 54 nautical miles, which is the same as 328,000ft. This is all the same thing. We're just using different units of measurements. So 250 calories is roughly 1000 British thermal units and so forth. Now, with all that kind of in mind, we talked about energy return on energy investment, we talked about specific energy, we talked about basic energy calculus.  
Here, if we go back to this idea, we had the steam engine and we had people burning wood and they were burning coal. Well, eventually they figured out, oh my God, we could do this with oil. And now oil had been around for a really long time. In fact, I've read about shipwrecks in the ancient world going back thousands of years, where they found at the bottom of the ocean, they found oil lamps on these old shipwrecks, right? So even in the ancient world, people realized that they could burn oil as a fuel, mostly for lamps.  
And even in the early days in the United States, when they discovered oil, they were originally saying, oh, this is great for lamps. And everything was basically about lighting that they could put basically becomes kerosene, and they could burn it and have these oil lamps. But eventually they realized we could burn this because oil has a much higher specific energy than coal. It's got a very high energy return on energy investment, by the way, natural gas even higher. And they realize that we could burn this.  
This becomes a source of electricity, becomes a fuel not just for lighting lamps, but literally for powering entire cities, for eventually internal combustion engine, et cetera. So oil, especially in those early days had an incredibly high energy return on energy investment, had a very high specific energy. So it was a much more efficient fuel source than coal, certainly than wood. And this was, again, a huge discovery, not even just for any single country, but literally for our entire species. The important thing to really understand about energy is that you got to think about energy as the ability to do things, the ability to create value.  
If we go back to the idea of Adam Smith and Adam Smith's concept of capitalism was value creation, you do what you do best, we'll do what we do best. We specialize in certain things, and we create value. And the amount of value that we can create is infinite. But in order to create value, we need energy. And initially it was human beings with muscle power and animal power doing things to create value.  
And then all of a sudden, we had machines doing that. And so the machines made us much more productive, much more efficient. Instead of having 100 people doing this one activity, you could have one person and a machine doing this activity and meant that everybody else is freed up to do other things, and we could produce more. So energy, the ability to have abundant energy and the machines that were powered by that abundant energy was an incredible boost in human wealth creation. And that's the important thing about energy.  
It gives us the ability to do things. Now, if we think about energy in that context, right? So let's look at the United States, for example. So total energy production, now we're going to go back to those units of measurement, right? So we have barrel of oil equivalents or kilowatt hours, whatever.  
So the ones that they use a lot of times in national accounting like this is quads one quad is 1 quadrillion British thermal units. So 1 quadrillion, by the way, is ten to the 15th power. That's one followed by 15 zeros. That's a big number. Total energy production in the United States is about 100 quadrillion British thermal units.  
Okay? So British thermal unit is specifically what is a BTU? I'm trying to remember it's like to increase I think it's increased a certain amount of water by one degree Fahrenheit, something like that. I can't remember exactly what it is, but each one of these has a very specific measurement to it. So total us.  
Energy production, 100 quadrillion British thermal units. And we could convert, again, that British thermal unit. We can convert that to kilowatt hours, we can convert that to whatever we want in the same way that we could convert a nautical mile into inches and feet if we wanted to. So 100 quadrillion BTUs, we say, okay, it's 365 days in a year. There are 350,000,000 people in the United States consuming this 100 quadrillion BTUs of energy production.  
So what that works out to be, if you divide that 100 quadrillion BTUs by 350,000,000 people divided by 365 days out of the year. And convert that into another unit of measurement, one that we all understand. Food calories, right? Let's convert it into Snickers bars. 100 quadrillion BTUs is the equivalent of about 200,000 food calories per person per day, literally for every man, woman, and child in the United States every single day.  
That's the amount of energy. That's about 800 Snickers bars worth of energy per person per day in the United States. That's how much energy is being produced. So if you can imagine, every single day, 800 sneakers bars just fall out of the sky, right? That's how much energy is essentially being produced in the United States.  
So that's based on daily caloric consumption, anywhere between, let's say, 1802,600 calories, that gives you roughly the daily food needs of about 80 people, okay? So that's essentially what it works out to be. If we're talking about 200,000 food calories per person per day. So 200 Snickers bars, that's about 80 people in terms of daily food needs. Let's have a little thought experiment for a minute.  
So let's imagine that we have 80 people all working in some beautiful garden in some commune where no money exists, and it's just people just working, right? Sounds like a communist paradise, but just go with me for a minute here. So we have 80 people kind of working in some gardens. And initially, they don't know anything about gardening, they don't know anything about food production. And so it takes all 80 people working in the garden just to produce enough food in order for them to survive, right?  
So the 80 people, they consume x number of calories working the garden, and the garden produces exactly that many calories. And so they eat, they have that food, and so they're able to survive to another season to work in the garden and keep consuming and producing, and they never have basically any surplus. But then one day there's a technology breakthrough and they realize, oh, wow, we could fertilize or we could increase our crop yields and all these different things. And the crop yields skyrocket. The crop yields just go through the roof and all of a sudden now they could free up a whole bunch of other people.  
Now, instead of all 80 people working in the gardens to produce enough food to support exactly 80 people. Now it only takes ten people working in the garden, and those ten people can produce enough food to support 200 people, right? So that's a huge breakthrough, because what it means is those other 70 people and their little communist hippie commune now can go out and do stuff. Those 70 people can engage in trade and develop technology and security and build buildings and so forth, and essentially create civilization. And everybody benefits because of that, of those 70 people.  
And now, all of a sudden, instead of producing enough food barely for 80. People. Now we're producing food for a couple of hundred people. And some of those 70, they say, oh, you know what, I'm going to go to the next commune over and I'm going to trade the surplus of food we have for other things that they might have. And so I'm going to bring those other things back and everybody's going to be better off because of these advances.  
So the basic idea here is that when you have the ability to produce energy more efficiently, more inexpensively, it's better for everybody. It drives prosperity. And that's a very key point that you have to understand, is that prosperity really abounds when energy is cheap. Poor countries have expensive energy, and it's actually quite a vicious cycle because they have to spend more energy to get energy. And instead of spending that energy, instead of having an abundance of surplus excess energy that they can spend on other things, they have to keep reinvesting all the energy they get out of their system right back into it to try and produce more energy.  
So they don't ever have any excess energy left over for value creation. Just like what Adam Smith said. Actually, to combine these two capitalism where we have this concept of value creation, and it's not a zero sum game, wealth is abundant, prosperity is abundant. Plus cheap energy, you get crazy amounts of prosperity. And what a surprise.  
The United States had both of these for a long time and became the wealthiest country in all of human history. Prosperity abounds when energy is cheap, if you think about it in financial terms, right? Because we're talking about energy return on energy invested. It sounds like a financial term. Let's think about a basic financial investment, something as simple as a certificate of deposit.  
If you go back to the early 1980s when interest rates are actually really high, in early 1982, you could go to your bank and put money into a three month CD certificate deposit and they would pay you an annualized rate of 15 and a half percent. 15 and a half percent. Now, inflation was pretty high back then, but it's basically about the level that it is now. Inflation was about 9% and your three month CD was 15 and a half percent. This is kind of in a way of looking at energy return on energy invested, right?  
So it's like your inflation is kind of your cost and your three month CD yield is your return. And so if you subtract the two and you say, okay, my return is 15 and a half percent, but my cost of getting that 15 and a half percent is I have to pay this 9% inflation. But hey, I'm still six and a half percent ahead. 15 and a half percent return minus the 9% inflation means I'm still six and a half percent ahead. Even after adjusting for inflation, that's extra surplus and that extra surplus of six and a half percent.  
You know what? I could reinvest that again and get another six and a half percent on that. Or I could invest in other things. I could pay down my mortgage. I could invest in the business.  
I could do so many other things because that six and a half percent, that's surplus, and I can get ahead with that. Now, think about what we've been dealing with over the last several years, right? Inflation was I'm not talking about now. I'm talking about let's go back to 2017, 2018, when inflation, the official inflation rate was like 1% 0.7%. Now you could go out and actually get a certificate of deposit.  
If you are really lucky, you might be able to get a 0.7% 1% certificate of deposit. There are a couple of banks that are actually offering that was considered a really high certificate deposit rate. So now we got 1% inflation. That's sort of our cost in order to produce a 1% rate on certificate deposit. Now we're just breaking even.  
We're barely breaking even here. We got 1% in one person out. We're not actually we don't have any surplus. There is no wealth. There's no prosperity being generated here, right?  
And Metro respects is actually even worse because if you put your money in a savings account, you're getting 0%, and yet you're still paying 1% inflation. So now you're actually worse off year after year after year. Now it's negative prosperity instead of positive prosperity. So this is a really important concept to understand, is that cheap energy? And when I'm talking about cheap energy, we're talking about energy return on energy investment.  
We're talking about the amount of energy required to produce energy. Because the cheaper energy is in energy terms, the more energy we have left over is surplus. And that surplus energy powers things. It powers value creation. And value creation was what creates prosperity, especially when you combine it with capitalism.  
Now, the issue that we're facing, of course, is that energy is becoming more expensive. We think about the price of oil. Right now, the price of oil is like $90, $100 a barrel. Depends on if you're looking at WTI or Brent or whatever it is that you're looking at. But as of the day I'm recording this, september 2, 2022, that's the price of oil.  
If you listen to this, at some point in the future, you might think, oh, my God, $100 oil sounds so cheap. I hope we don't get there. But it's certainly a possibility. But try to divorce yourself for a moment from the idea of the price of oil denominated in dollars or euros or any other currency. Try to divorce yourself from looking at gasoline prices in your local currency and instead think about the price of oil, the price of energy in general, and the price of oil in oil, right?  
What is the price of oil in oil? How many barrels of oil do we have to burn in order to get one barrel of oil or really better, how much oil do we get out of the ground for every barrel of oil that we burn in producing it? Right? So this is the basic energy in, energy out, energy return on energy invested. Well, guess what?  
We don't have to guess because a lot of oil companies actually produces and there are extensive studies and you can even look at government sources. The Energy Information Agency for example, the United States, they have lots and lots of data on this and even the oil companies themselves often report this. And in the 90s, for example, in the early ninety s, it was pretty common that oil companies would report a 30 to one ratio. So for every barrel of oil or barrel of oil equivalent amount of energy that they were burning, that they were consuming in trying to drill for oil, they were getting 30 barrels out. That's quite a good ratio.  
Remember, the sort of economic threshold is about seven to one. So they're getting 30 to one. Well by the early 2000s, by 20 05, 20 06 that had fallen to about 18 to one. And now in a lot of places it's less than ten to one. So it's been falling, it's been falling pretty rapidly.  
Now, bear in mind, in the early days in the United States in particular, we're talking about 1000 to one energy return on energy investment. This is in the early 1009 hundreds when the oil was just bubbling up out of the ground and they just had to go and just scoop it up in jars. It was so abundant. You're getting 1000 to one really energy return on energy invested. Now again, this is something that it varies widely.  
This is not something I'm not trying to say, oh, we're running out of oil tomorrow, or any of these sorts of things. It's not what it is. And it's very specific. Literally every oil well is going to have its own calculation in terms of energy return on energy investment. Every field, every region, it's all different.  
But it's pretty clear that the abundance that they had so long ago and it was so much easier to get it out of the ground because it was in many respects not even underground. It was bubbling up above ground. Those days are gone when it was so easy to get. So now they have to spend more energy to get it. Fortunately, a lot of the technology has gotten a lot better and that makes things more productive and means you consume a little bit less energy in getting it.  
But it can be deeper, it can be harder to get to and you've got to go through a lot of things, especially with shale oil etc. Or to really unlock all of that. And so that's why in many respects that energy return on energy invested is declining. We're getting less and less oil for every barrel of oil that we spend or in many respects we're having to spend more energy to produce the energy. That's the opposite trend that we want.  
Again, if we think about this in a financial context, now we're saying that if we go back to that certificate of deposit example, now we're saying, okay, well imagine now we have that certificate deposit. Now we've got really negative rates. So now it's like in the European Union or Japan or Switzerland. Now we go to certificate deposit. Now we have to pay minus.  
And on top of that we've got four, five, 6% inflation, right? So that's not a great situation to be in. There are of course a lot of reasons for this. We have climate fanaticism that has truly just demonize the oil and gas sector for sure. They say oil bad, solar good.  
That's the only thing that anybody is allowed to say. And that's led to quite a bit of wokeness in business, banking, lending, investment markets, capital has really dried up. They call this the official kind of nice sounding, high sounding terminology for it is ESG, which stands for Environmental Social Governance. And so you have all these banks and private equity funds and hedge funds that have adopted these ESG principles. And so if you got an ESG fund you're literally just not allowed to invest in oil and gas companies because they are evil.  
And so you can't invest in these companies. And so what that means is there's less capital going into these sectors. If you want to see this for yourself, the Federal Reserve Bank of Dallas publishes every quarter. The next one is coming out in a couple of weeks. The last one was from June, the one before that was from March.  
And they publish a quarterly oil survey and they go and survey a bunch of oil companies. And so granted this is all anecdotal some of this is more objective data but some of this just listening to some of these oil companies just complained. A lot of it is hilarious. There's one I think from June, I'm going to read this and this is an oil company executive and they post these comments and they say when our government leaders are regularly demonizing the business, the oil and gas sector, we shouldn't be surprised that investors are not interested in supporting exploration for new supplies. Basically.  
Meaning you've got all these politicians that are saying oil is bad, oil is bad, oil is evil. And so of course the banks and the private equity funds and all these guys are just they are divesting. They're not investing in oil in many respects. They're actually getting out of the oil business. They're selling their oil positions that they have and making it.  
Another one says the current administration in Washington has declared war on fossil fuels. They did this before going into office and they have continued that war to this day. Another one says the real energy crisis isn't even here yet. Shale will likely tip in a terminal decline. That's shale is the type of oil that's contained in rocks and it was sort of all the rage some years ago.  
But they're saying shale will likely tip into terminal decline in about five years as the main shale plays run out of locations. Unfortunately, by then most of the individuals with incumbent knowledge will have retired. The brain draining industry will create a real and much larger crisis in the mid to late 2020s. So this is another sort of point to the idea about energy return on energy invested, having the resources and tools to do this. So this is if you really want to hear the comments of people that are in the business, they're right here in the Dallas Fed actually puts this stuff out.  
There's actually one guy who's saying it's really frustrating, but this push for the elimination of fossil fuels. Now would I like to see the use of fossil fuels reduced? Of course I would. If not for my sake, then for the sake of my kids and my grandkids and generations to come. But they're saying, look, it's got to be gradual and not let's get this done yesterday because obviously let's get this done yesterday attitude.  
We've got to get ourselves off of these fossil fuels. Now that's having a significant impact and it also means that there's not as much investment, there's not as much exploration. And when there's not as much exploration out there, that's a big problem, right? Because it means that now we've got to spend more energy to produce the energy that we have instead of having this abundance of energy. That's a really big deal.  
Now the issue is actually a bit worse than that. It's actually quite a bit worse than that. And we've got to talk a little bit about physics here. There's a principle in physics called conservation of energy. And thermodynamics this is the first law of thermodynamics and it basically says that you might have heard of this, you probably have that energy is neither created nor destroyed.  
It is conserved and conserved basically meaning that energy essentially just changes form. We never really just eliminate energy never just disappears from the earth. It's just converted from one form to another. So an example of this is photosynthesis, right? So we have sunlight.  
Sunlight shines all over the world and plants absorb this sunlight and they've got special chemicals and so forth inside of their plants and chloroform and all these things. And plant biology is really interesting. What is that really interesting and the things that plants are able to do to power themselves is a really high talk about really high energy return on energy invested is what's inside of the plants and the stomas and everything. It's really powerful biology. Now that solar energy through the photosynthesis process is converted into stored energy inside of the plants.  
So basically, photosynthesis converts solar energy into stored energy inside of plants. And then what happens? Human beings, the head of lettuce, whatever we go and we eat the lettuce and the stored energy inside of the plants goes through another process, our human metabolic process, and we convert that stored energy inside the plants into muscle energy that we can use to do things again. Go, run, go work out at the gym. Whatever it is that we do, play with our kids, right, that requires muscle energy that we get from the stored energy in plants.  
And so we're just converting one form of energy to another. In the same way that early steam engines were converting, there was a certain amount of potential heat energy inside of wood, and they would burn the wood, then produce steam, and that steam would essentially power again, some kind of turban or crank or shaft or something that would produce mechanical energy. So we're just converting this potential thermal energy or this chemical energy inside of the coal into heat energy, which is converted into mechanical energy. So this is essentially what conservation of energy is all about. Unfortunately, that process can be messy and not very efficient.  
And the reason for that is that there's a lot of loss along the process. So if you think about a coal power plant that burns coal to produce electricity, today in our modern world, not in 1776, today in our modern world, roughly 68% of the potential chemical energy stored inside the coal that is burned to produce electricity, 68% of that is lost just due to heat, because the coal gets really hot. And that heat, instead of being contained inside of the system, is just sort of if you think about sort of like a fireplace or if you ever have like a Franklin oven or something like that, these things, they can get really, really hot. But a lot of that heat is really lost. And it's the same thing in, for example, an automobile engine.  
We put gasoline in our cars, and the gasoline in our cars, there's an internal combustion inside of the engine block. But a lot of that chemical energy inside the gasoline is actually lost to the heat, which is why your engine block is really hot. Once your engine is going for a while, your engine block gets really hot. And the reason your engine block gets so hot is because of so much heat in that chemical reaction where you're converting the potential energy, the chemical energy inside the gasoline, into the mechanical energy of your car. Well, again, that process is very inefficient.  
And so there's a lot of heat loss in that, right? So we're losing literally two thirds of the energy in the conversion process, transferring from one form of energy to another. So that's a pretty big deal. Then they also have another thing called the capacity factor. This is with power plants.  
Power plants have capacity factors. And these are losses that are often due to certain operational inefficiencies and things like that. And these can be quite significant as well. You could lose easily 2030, 40% of your energy just due to this capacity factor, the operational inefficiencies. And then you also have other issues.  
For example, like what's plugged into the other end of that. If you think about an old incandescent light bulb, those old glass bulbs or the tiny little filament in the middle, those were popular when I was a kid in the where I was told you're not allowed to shake the bulbs because the filament might fall out and then the bulb is pretty much dead. But those bulbs, you'd have like 100 watt light bulb. 95% of that electricity that went into that bulb was wasted to heat. Only 5% of it actually went into light.  
So now the light bulb converts electrical energy into light and heat energy. But only 5% of the electricity went into light and 95% was wasted as heat. So if you think about it again, coal fired power plant, we're losing 68% of the coal energy into heat loss. We're losing a lot more due to capacity factor than losing 95% wasted to heat with an incandescent light bulb. So at the end of the day, if you think about going from the coal, the lump of coal to the light at the other end of that, it's a really, really low ratio, right?  
So if you consider that through the lens of energy return on energy investment, right, you think about something like oil. Oil has a declining energy return on energy investment. Again, we had 1000 to 101 and 35 to one and 20 to 115 to one. Now in some respects, even less than ten to one. So we have this declining energy return on energy investment.  
Then we think about, okay, we drill for oil using vehicles and generators and all these things and all that requires, guess what, gasoline, which is made from oil, right? So we have oil that is powering the way that we drill for oil. So right off the bat now, all those things, the generators and the vehicles and so forth that we're using, the big trucks and tractors and generators, all require oil. But the engines and motors and those things are wasting two thirds of it in heat loss, right? So we're using oil in order to drill for oil, but two thirds of the oil that we use is being wasted.  
And then the oil that we get out of the other end, the oil that we're actually drilling, that we're producing as a declining energy return on energy investment. So that's a really bad scenario, that declining energy return on energy investment. We're wasting most of what we get out. We have to put it right back in to try and produce more oil, wasting most of that because of the heat losses, etc. For so if we go back to that financial example again.  
This is like a certificate of deposit. It's paying zero 1% interest like they do today at a time when inflation is 9%. And then on top of that, you've got to pay 30% tax, 40% tax. If you live in the state of California, God help you, you got to pay 45% combined state, local, federal tax on that 0.1% interest that you get from your CD. So you get 0.1% interest, you pay 40 50% tax, then you got 9% inflation.  
So you're getting killed, especially after adjusting for taxes and adjusting for inflation. And then you go, you got this tiny little bit of money that's really, when adjusted for inflation, less than what you started with and you got to reinvest that back into your CD. That's not a way to become prosperous. That's the way to become poor and poor and poorer every single year. Now, a lot of people obviously jump to renewables and say, oh, renewable is the answer.  
Wind and solar and blah, blah. And it's just not. It's just not. The first thing you've got to understand about renewables is that renewables is like it's like the term rainforest. They used to call it a jungle and then a couple of decades ago they start saying, no, it's not jungle, it's rainforest.  
And somehow it's some kind of catchy marketing idea that just makes it the kinder, gentler jungle is now called the rainforest. Renewable energy is not renewable because it takes stuff in order to create the renewals. Photovoltaic cells don't fall out of the sky, they have to be created. And all the things that go into producing photovoltaic cells and wind turbines, et cetera, are all based on finite resources. It takes metals and minerals and all these sorts of things to produce those things.  
And some of those, by the way, like lithium and cobalt are really nasty. You're talking about child labor in the Congo overseen by guys with AK 47s holding their guns to the heads of little kids out in cobalt mines, which are dangerous and nasty. And yet it goes into these batteries and it goes into photovoltaic systems and all the progressives and all the environments. People go, yeah, this is so great. It really is.  
This just child labor. There's a horrible environmental consequences to a lot of this, but everybody just sort of ignores that. And so this is why I would say it's not renewable because it does depend on many of these finite resources and many of these are really nasty resources that we have to pull out of the ground. And then on top of that, you're dealing with heat losses, transit losses, capacity factor, especially with something like solar. Guess what?  
We have this concept called nighttime when the sun doesn't shine, right? So you are all automatically starting off with this capacity factor of 50% at best. And that's assuming that for the other 12 hours of the day, every single day the sun is shining, which of course it doesn't. So if you're being relatively realistic, even in your calculations, the energy return on energy invested is quite low. Same with wind.  
Guess what? The wind doesn't blow all the time. And so you have to have all sorts of redundancy built in if you expect to get electricity. And that really vastly increased. I mean, double, triple, quadruple.  
If you have to have four different turbines, six different turbines, it's six x's your input costs, right? So your energy return on energy investment ends up being quite a bit lower than that. Now, I've been hearing a lot of people started to talk about this. If you think about the summary of all of this, we're talking about, look, energy is critical. Energy is prosperity.  
The cheaper energy is, the more prosperous we can be. And yet energy is becoming more expensive, not only in dollar terms or local currency terms, but it's becoming more expensive in energy terms. And that's really bad. That's a bad trend because if energy becomes more expensive, that puts a limit on the amount of prosperity that we can have. And a lot of this is self inflicted, right?  
They go off and they engineer a war and they engineer all this wokeness and drive exploration and discovery out of the business. By the way, every year the US Energy Information Agency puts out a report and they say, here's what US proven energy reserves are, proven energy reserves in the United States. And last year, for example, the last report they put out, that number declined by almost 20%. And the reason why is because there was almost no exploration, no new discoveries. That's a really big deal.  
And it's not because there's not more discoveries to be made. It's because they just can't get the money, they can't get the political will, they can't get the support, the entire industry can't get the support they need. So a lot of this is really just a self inflicted wound. But there are a lot of people now that are starting to look at this and study this and these energy trends. I mean, Michael Moore made a documentary about this in many respects, is all you need to know.  
You can probably guess where that goes. And the moral of the Michael Moore story there is we just all need to consume less. We all need to figure out how to get by with less. We all need to just own up to the fact that we're going to be less prosperous and our entire civilization is going to be less prosperous and so forth. And then a lot of people are even talking economic growth is dead and a lot of people are making the link between fossil fuels and food and saying, oh, because energy is going to be more expensive than food's, not going to be done, fertilizers aren't going to be made.  
And that's going to lead to starvation and famine and all these things. I got to tell you, I have a completely different view I have a completely different view of this. And for this, we'll have to go even further back in time. You've probably heard of ancient historians use what they call the Three Age system. We have, for example, the Stone Age.  
The Stone Age lasted millions of years, right? Fred Flintstone and Barney Rubble and the whole cartoon and the dinosaurs and all that. But the whole point of the Stone Age was human beings using learning how to use fire and develop very crude tools that were made of stone, because that's what they had available. They took stone, they shaped the stones, and they made little shovels and very crude weapons and things like that. They had access to metals.  
In fact, there's a lot of archeological evidence of many Stone Age tribes I'm not going to say civilizations, but Stone Age tribes that had gold and silver and copper. Most of it was just used as decoration and adornments. I'm sure the big chief, whatever, was wearing gold and silver, maybe they made little just had it stacked around as ingots and things like that. But everything that they did, they didn't have any metallurgical capabilities, so everything they did was based on stone tools. Well, eventually they developed the ability to work with metal, and the new technology that came of age to them was bronze.  
And this goes back now several thousand years. Bronze was absolutely game changing for our species. Bronze is basically the combination of copper with tin. Copper in and of itself wasn't useful enough for them. They couldn't turn it into a tool.  
They had to combine it with something. And the thing that they combined it with was ten. And the reason why is because tin had a very low melting temperature. Ten's melting temperatures about 250 degrees centigrade. You could get that on your kitchen stove at 250 degrees Centigrade.  
It's like 450 Fahrenheit. That's about where you would bake a loaf of bread in your oven. So today you could just melt ten in your oven if you wanted to. But you combine ten, the ratio is about ten to 110 parts copper, one part ten. You combine the two, you've got bronze, which is a metal that you could forge, that you could shape into tools and weapons and all sorts of things, wheels, even if you wanted to, all sorts of things.  
And this was a major game changer because now they had a really great metal that they could use to actually go out and help grow and build civilization. And so tin was as critical to the world thousands of years ago as oil is today. Tin was the aside from food and water, was the most important commodity in the world. This is why it was so important that the historians literally call it the Bronze Age, because the tin was. The key element going into the bronze medal that they were making.  
And the bronze was an absolute game changer for human civilization. There was a substantial bronze trade in the Mediterranean, substantial tin trade in the Mediterranean. The tin itself, copper mines, lots of copper mines all over. Some of the biggest copper mines in the ancient world were actually in the island of Cyprus. Tin, on the other hand, was quite scarce.  
They had to come from a long way. You had to go all the way to Afghanistan in the mountains of Afghanistan, go and find ten and haul it all the way across, basically Iran and all over the Middle East and up into Turkey and so forth. And there are all these trade routes, and the trade routes for ten were very expensive, extensive. The ten trade was very expensive most of the time. There were fleets of ships going all sailing all around the Mediterranean, because that's where most of the civilization was at the time.  
And they were trading in tin among a lot of other things, including, like I mentioned, oil lamps and copper and gold and silver and all sorts of things. And then eventually the tin supplies started to run out. And I'm sure there are people in the ancient world who were running around saying, peak ten, the ten is drying up, but we can't get any more tiny people saying, oh, you're crazy. There's no such thing as peak ten. Don't believe anybody says peak ten, that's nuts.  
And yet, sure enough, the ten dried up and the trade ended. And you could imagine the same thing. What if all the oil just runs out all of a sudden? You could imagine the chaos, the war, the violence that would ensue in the world. Or if all of a sudden all the oil dried up in the United States, I have to imagine they would probably be looking pretty hard at invading Venezuela literally tomorrow morning.  
Right. So the tin trade in the ten supplies and the ten reserves drying up was a major factor. Extremely disruptive. There is some evidence, it's possible that the Trojan War, in fact, may have been fought over ten and over the years, obviously, as they told the story and retold the story, at some point along the way, somebody decided, you know what, let's forget about the tin trade and just insert something else. It's a lot sexier story.  
If we say, oh, is this hot babe Helen of Troy? Everybody went to war over this woman as opposed to the tin trade, that's not really as sexy. It's not going to stand the test of time. So they knew their audience pretty well and they changed the story. But it's possible that the tin trade may have actually been the cause of the Trojan War, at least one of the causes of the Trojan War, because Troy actually would have been a very wealthy city set smack dab right on these trade routes of where the tin would have crossed paths from Afghanistan going into the ancient Mycenaean civilization and ancient Greece and the Hittites, et cetera.  
These are sort of the dominant kingdoms at the time, the Hittites, the Mycelian civilization.  
Then there was a tin shortage, and the tin just sort of went away. And this was certainly a tumultuous time in human history. And there are a whole lot of other things, by the way, going on. There were wars, there were invasions, they had a volcanic eruption, they had climate change. They had all sorts of things that happened.  
But one of the key lessons that we learned from history is that you never bet against human ingenuity, that human beings have been down before plenty of times, have faced an incredible amount of adversity, and yet, time after time after time, human beings adapt and overcome. And we always figure out a way. And it's because we have brains, we have our ingenuity, we have courage, we have all these things that enable us to go out and say, all right, we're going to figure something out. Regardless of the stupidity of our leaders that want to drive wars and cause all sorts of inefficiencies, we're just going to get it done. And the beauty of this is that essentially heralded the end of the Bronze Age.  
Not even the end of the Bronze Age. It was a fullblown collapse of the Bronze Age. The Bronze Age went out in terrible fashion because the entire thing that made the Bronze Age possible just went away. Now, they had this other technology at the time that they were aware of. They already knew for a long time.  
They always knew about iron. Iron was so much more abundant. I mean, tin was rare and had to go all the way to Afghanistan to get it. Iron was man, look at those rocks over there. It's all iron.  
Everything is all iron. There was iron everywhere. It was like oil in the early days of the US. It was just bubbling up out of the ground. There were iron rocks and rocks and rocks everywhere.  
It was so easy to get. The problem is that iron has a very much higher melting point, talking 1500 degrees centigrade as opposed to 200. You can do tin in your oven iron. You need very special equipment. And when the tin went away, instead of cowering in fear and saying, oh shit, we're all done for.  
Everybody's going to die. We're all going to starve, all these terrible things are going to happen. They said, all right, we're going to figure this out. And they doubled down and had a tremendous growth curve, not necessarily in their economic growth or any of these other things, but in the growth of human knowledge, the body of knowledge of human beings. And they learned very quickly, how can we work with iron?  
And they developed much more advanced technology. They say, okay, if we build it like this, and we take these bricks and we take this grass, and we use these special equipment that we developed in order to create more combustion and retain the heat, et cetera, you know what? We could actually get a fire much hotter that's going to be able to we can actually work with iron. And they figured that out. They figured it out pretty quick.  
And then they figured something else out because once they were working with iron, then they really started experimenting. I said, okay, what happens if we add a little bit of this? And what happens if we add a little bit of that? And suddenly one day they went, oh my God, look at what happens when we add a little bit of carbon to this, because now we go from iron to steel. And steel was an absolute game changer.  
Steel was better, faster, cheaper, stronger, much more abundant. Steel was absolutely revolutionary. It was so much stronger than bronze, so much stronger than iron. It was the best thing that had ever been invented in the entire world up to that point in human civilization. And with steel now, they had really powerful tools and really powerful weapons, and they had really powerful weight.  
They could build things with steel. They could build really great structures that could last a really long time. There were so many things that they could do with steel, and it made all the difference in the world. And the world propelled itself forward. They were at the depths of this crisis.  
They had resource shortages and everything. And they said, you know, we're going to find a better way. And that better way was steel. So I believe that the world is in a similar point right now where we have these issues where our energy return on energy, investors getting lower, our energy is becoming more expensive, not only in dollar or euro terms, but in energy terms. That's really bad for prosperity, because prosperity requires cheap energy.  
But we already have this, right? In the same way that during the Bronze Age, they knew about iron. In fact, there are some civilizations that already started to kind of crudely work with iron. And they figured out, okay, we can kind of get to 1500 degrees Celsius. We can kind of start working with us a little bit.  
So there are some basic, some tribes and some kingdoms had very, very basic crew knowledge of working with iron. But it didn't really go anywhere because iron in and of itself, it was okay. But they were so accustomed to working with bronze, they were really doubling down on tin. I think we're in a similar position today. And the iron essentially that we have available to us, because this is a technology that already exists, just like for a lot of ancient Bronze Era civilizations already knew about iron, we already know about nuclear.  
Now I remember that concept of specific energy we were talking about that energy density, the amount of energy you have, and Joules, or really megajoules per kilogram, I want to go back to that with nuclear. So remember, with wood, the specific energy, that energy density in wood is about 18 megajoules. Remember, Joule is a unit of measurement for energy. So 18 megajoules for every kilogram of wood. With coal, it's twice as much.  
It's about 36 megajoules per kilogram. With uranium, it's 80 million. 80 million megajoules per kilogram. Okay, 18 megajoules per kilogram with wood, 36. With coal, 80 million with uranium.  
So what you're talking about with a little hunk of rock with uranium, 80 million megajoules per kilogram. It's off the charts in terms of its specific energy, the amount of energy that's contained in a kilogram of uranium. If you compare that to, for example, photovoltaics, if you compare that to solar power, the panels, if you generously, I think assume 2000, 2500 hours a year for 30 years of a lifespan for solar panels, you're going to get about 40 to 50,000 megajoules. With solar panels, it's not really about weight so much as energy, right? You think about solar panels is like per square meter or per square foot of solar panel.  
So we convert this into volume or area instead. So you're talking about 40 to 50,000 megajoules for every, let's say, square meter or liter of solar panels versus 1.5 billion for uranium. The difference is just extraordinary. And if you look at the numbers, for example, energy return on, energy invested. Look, this is something that's subject to a lot of debate.  
And it's a bizarre thing with nuclear. There are so many people that hate, really hate nuclear. They think nuclear is the worst thing in the world. All they can think about is, whatever, three Mile Island and Chernobyl and all these sorts of things. They say nuclear is the worst thing ever.  
Okay, fine. I'm not here to say nuclear is perfect form of nothing's perfect. Everything has upside, everything has downside. The problem that we've had for so long. And by the way, excuse me, I would take this back to Covet.  
I would take this back to a lot of things related to C. There was never any rational debate that was even allowed, let alone took place about upside versus downside, looking at actual, real data. Instead, it became very emotional. It became very contrived, heavily censored, and this is the only thing that you're allowed to think, et cetera, honestly, with the subject. I think nuclear is the next Covet with respect to the debate and the emotional frenzy and everything going along with because they're environmentalists right now in Germany, you have environmentalists.  
That because they're losing so much Russian gas. And the Russians have just recently announced, hey, by the way, we're going to dial back the amount of gas that we're sending to you for the wintertime. Good luck with that. Dealing with the harsh winter in Germany without our Russian gas. Good luck with that.  
So, of course, the Germans know they got to keep the power on, and yet what do they decide to do? They're firing up all these coal fired power plants. And the Green Party, right, the hardcore environmentalists are saying, yeah, let's do it. Coal fired power plants, that's great, let's do it. Because they're so antonuclear.  
And you have these people, the Greta Thunbergs of the world. How is this person even relevant in a conversation? You've got a bunch of kids that are out in the streets protesting no to nuclear, don't know the first thing about nuclear energy, nuclear power, the risk associated with it. Come to find out, oh, well, actually, they say, oh, it's radioactive, and so forth. A lot of things there's just crazy misconceptions about it.  
Again, I'm not here to say there's no issues and there's no risk and so forth, but I think that as somebody that I pride myself on being as objective as possible, I have looked at this so much, and I've come to the conclusion, looking at so much data, including there's people that are extremely pro nuclear, by the way, that completely dismissed. Oh, there's no risk of that. And there's no risk of that. Of course there is. There might be a meltdown.  
There might be there's certain risks that might happen. There's also, by the way, a lot of risks of coal. In fact, often there's more radioactivity coming out of a coal fired power plant than there is in any nuclear plant. You'd be surprised, actually, at a lot of this. And for anybody that really does, I think, rational, objective research, the conclusion to me, I think it's an inescapable conclusion that this is absolutely the way forward.  
Nuclear is absolutely the way forward. There are a lot of really great, I think, objective, comprehensive studies that really, when you talk about energy return on energy investment, they go all the way through and say, okay, let's talk about even what does it take to build a nuclear plant? What does it take to mine uranium? What does it take to produce the energy? Once we have the uranium, we have the plant built.  
For example, you can see things like it takes 75 concrete and 36 tons of steel for every megawatt and power that a nuclear energy plant produces, right? So it's a very comprehensive study, and you can see a lot of these studies. For example, wind, by the way, produces requires 460 tons of steel per megawatt versus 36 tons of steel for a nuclear power plant. So you end up, again, if you look at all this and say, what does it take to mine what does it take to build what does it take to produce all this? You end up with an energy return on energy investment of between 60 and 70 X.  
That's really high. That's really high. And that's really your all in cost with everything, even including the steel and the concrete and the mining and all these things. And by the way, for people that are so inclined for this, the CO2 emissions on nuclear are basically nothing all the way through the chain. Even with the mining of the uranium, even with the concrete and the steel and all that, you're talking about a CO2 emissions that is almost nothing.  
You can't say that about solar. If you're honest about it and you're honest about the cobalt and the lithium and the battery production, all these things, you just can't say that about solar, but you can about nuclear. That is completely undisputable. And there's a lot of really good data. I'm not here to convince you about nuclear or whatever, but I want to point out that this idea of nuclear, especially right now, nuclear fission is technology that already exists.  
It's better, it's cheaper, it's everything. And I would really say for the people that are detractors the stuff that's out there, there's so much media, so much hysteria. Nuclear is terrible. They say, oh, it's too expensive. No, it's not.  
It's really not. And there's actually a lot of data for this. In fact, in the state of California, which still has at least one nuclear power plant that's run by PG and E, Pacific Gas and Electric, the average power production cost for PG and E is ten cents per kilowatt hour. For their nuclear plant that they have, it's 6.5 cents, right? It's not even a study.  
It's not even some hypothetical, let's try and figure this out. It's the data that they have. They know this. This is what it costs us per kilowatt hour. And again, lower CO2 emissions, all these things that all these people supposedly care about.  
And instead they go, no, we don't want nuclear because they're still living in the think a lot of people haven't really bothered to try and objectively educate themselves. Yeah, of course there's risk. There's risks of tailings. And you've got a story that a lot of people talk about nuclear waste. It's funny.  
In the United States, under Jimmy Carter, jimmy Carter actually outlawed the recycling of nuclear waste to go back into nuclear power plant, said, no, we're going to go and store this. And in the there were some issues with that in the technology has obviously gotten so much better. And by the way, why wouldn't you want to recycle a nuclear waste if you can get more energy out of it? That just increases the energy return on energy invested even more. So there's been a lot of political ill will against nuclear for a long time.  
And I view this as this is actually the good thing about global competition. And it's like anything else when you've got some countries that say we're going to raise taxes and we're going to make things more difficult for business, et cetera, well, guess what? You can have other countries say, well, guess what? We're going to lower taxes and we're going to roll out the red carpet for productive individuals and profitable businesses because we want you to come to our country. And so this is how places like Singapore are actually really able to thrive and become incredibly successful, because they were very competitive in building the right kind of environment that was attractive to businesses and productive people in the UAE, they said, hey, we're going to cut our taxes.  
Come to the UAE. You're not going to pay any taxes. We're going to build this whole this whole thing here for you. A lot of these countries, they became competitive because they knew all these other countries, these Western developed countries, were going in the wrong direction. They said, we're going to compete.  
And they were able to attract a lot of business. It's going to be the same thing with energy. There's going to be a lot of countries, they're going to say, we don't want nuclear energy. We're running away from nuclear energy. And there's going to be other countries that say, we like nuclear.  
Sure, if you want to do nuclear, come to us. We're going to support it. We might even subsidize it. We're going to embrace it with open arms. It's like every other technology.  
There are places that say, sure, you want to do driverless vehicles, come to us. We're going to pave the way for you. We're going to pass special legislation making driverless vehicle autonomous driving technology possible in our state or in our country. There are countries that outlawed online gambling, and there are other countries that said, we like online gambling. And if you want to be in the online gambling industry, come to our country, right?  
So this happens in everything, and it's going to happen with energy as well. There are going to be a lot of countries that say, you know what, you want to do nuclear? Come here. We like nuclear. We want to go nuclear.  
If you want to do nuclear, come here. We want the most advanced technology ever. And this is going to happen. It's already happening. And it's even happening in surprise places.  
It wasn't that long ago, I think it was back in July, that the European Union, they published this thing called the Green Finance Taxonomy for Sustainable Activities. This is basically their thing that says, all right, this is what we now consider as our big EU government. This is what we consider now environmentally sustainable activities. They've now included nuclear on that list. There are a number of caveats, but they've included nuclear on that list.  
What that means is that a lot of funds and a lot of investment can go and be allocated now into nuclear energy, nuclear power, RND, research, development for nuclear energy, etc. And in a way that never was before. And they get all sorts of different incentives and tax benefits, et cetera, for this. Now it's pretty pathetic that they had to be dragged into this kicking and screaming. You had certain places, the Green Party in Germany, this one guy, one freaking guy who's like, I've been fighting against nuclear energy for 50 years, and I'm not going to allow that success to be snatched away from me after all that time.  
It's like, dude, what kind of ego? What kind of ego do you have to have to say, I am going to personally retard the progress of all of human civilization because of my own ego, because I'm not going to because otherwise, what was my life for anyway? I'm sorry. Your life in the last 50 years was completely meaningless. And I would say that's probably the same for a lot of other politicians that have spent 50 years in government.  
I can't think of anybody right now. We'll see. But for these people, their entire life was completely meaningless. Everything they did was wrong. Well, guess what?  
Tough shit, get on board the train right now. Because this is what the world needs, and this is where the world is going. And so this one guy is trying to block this, unsuccessfully, by the way. Then you had the entire government of Austria that threatened to sue the European Union over this. I mean, so ridiculous.  
Then of course, quite predictably, greta Thunberg is barfing all over this and making her contrived scowling faces and giving these silly videos and speeches and stuff that for some reason some people actually listen to. But it's still happening.  
This is happening. There's a lot of momentum. There's a lot of progress. More importantly, there's been literally tens of billions of dollars in investment capital, even primarily earmarked for R and D going into nuclear. And not just the technology that exists.  
We have nuclear fission, which is where we split apart an atom's nucleus. This is really powerful. Inside of an atom's nucleus, you've got a lot of similarly charged particles, a lot of protons, and you've got different subatomic particles even within really tiny particles, within protons themselves, you've got a lot of similarly charged particles that in theory, based on what we know about electromagnetism, they should be flying apart from each other, right? When you take two magnets that are similarly a North Pole and a North Pole, or you take two similarly charged electrical particles and you put them together, then the electromagnetic force is going to cause them to go flying apart from one another. They're going to repel each other.  
And yet you have all these similarly charged particles that are sitting inside of an atom's nucleus, which means there's something really powerful as a very powerful force inside of a nucleus. In fact, scientists refer to there's a weak force and a strong force inside of a nucleus. And so what happens in fission is we're breaking apart that atom's nucleus and we're unleashing that energy that's holding together all these suddenly charged particles. That's where a lot of this comes from. So the force and the energy inside of that through splitting apart an atom's nucleus, that's the fission process.  
That's what powers nuclear energy. It's why there's so much energy inside of uranium, because that's what they're using for this, is uranium. There are other elements that can be used in nuclear power and a lot of research and development for that. But on top of that, and I would actually say that fission is like our iron. So we're the end of the Bronze Age right now, and we're looking around saying, hey, we have this iron, right?  
Look, it's everywhere. It's all these rocks everywhere. We have all this iron already. And we can say the same thing. We already have fission, we already have nuclear.  
And you know what? It's pretty good. And it's a lot better than the alternative, which is running out of the tin that we have using fission. It's not perfect, but it's pretty good. And that's basically the same situation that Bronze Age civilizations were faced, the ancient Egyptians under Ramsey III were faced with at the end of the Bronze Age.  
But we also have our steel. And our steel, which is not here yet, but it's coming, is nuclear fusion. Fusion is where we instead of splitting apart at atoms nucleus, where we're combining two or more nuclei together, it releases an incredible amount of energy. The specific energy in fusion is so high. Remember I was talking 80 million, it's like half a billion with nuclear fusion.  
It's even higher with nuclear fusion. Nuclear fusion, if you go back a couple of decades, you might be thinking nuclear fusion. It's not even possible. Well, in many respects, they've already done it. There's been so much R and D into this.  
The advances are happening very rapidly and there's a ton of capital going into this. This is our steel. This is like steel in the Bronze Age. This is something, we know it's there, we know it's coming. We already have a really good alternative in fusion, but fusion has the potential to be even better.  
And this is why I would say ultimately why this is not this bad news story. This is not famine and widespread economic devastation and all these sorts of things because we already have it. We have it. We have something that is inexpensive in dollar terms. Again, you think back to Pacific Gas and Electric, six and a half cents per kilowatt hour versus $0.10 for the rest of their energy.  
Lower CO2 emissions. It's very high energy. Return on energy investment, absurdly high specific energy, all this stuff combined, and we already have it. We don't have to figure out, oh gee, how do we do nuclear fission? We already have it.  
It's already there right in front of us. And all we have to do is just somehow muster the political will and the will and the media don't hold your breath for that. But it's going to happen because there's so much competition in the world among nations. There are countries that are in a quite serious energy situation right now, and they're going to be the first ones to go, you know what? We're going nuclear.  
I don't give a shit what the media says. We're going nuclear because we need it, because we have no alternative and we're going to do it. And all of a sudden, everybody's going to look around and say, oh my God, look at how they solved their problem. They have so much energy right now and it's so cheap and their economy is booming. We want that too.  
And all the people that were against it, they're going to look really stupid. All the politicians that were against it, they're going to look really stupid. People have been making little baby steps in this. Again, we can see what's happened with the European Union. We can even see, believe it or not, even now, the State of California, they had this one nuclear power plant and now they're looking at saying, hey, let's continue the lease on this.  
Let's keep going with it. I'll be the first guy to say that Gavin Newsom is a moron, but he's actually been one of the guys leading the charge, notwithstanding other side issues, including the fact that he's getting billions of dollars from the federal government to do this. So it's free money and very little risk on his part. But again, you've got people that are just they're coming up with the most, the craziest things. You got people that are saying, oh, but the nuclear power plant is on lands that once belonged to Native Americans and all these sort of things.  
You go, how is it even relevant right now? It's really insane, the sort of obstacles and the roadblocks and the excuses that people come up with. But in time, and I think relatively short order, there's going to be a period because there are countries that are going full steam ahead, no pun intended, with nuclear power, and everybody else is going to say, wow, look at that. They're better, they're faster, they're growing like crazy. They don't have any of these obstacles.  
They've completely divorced themselves for any dependence on Russian oil and gas. They're totally energy independent and their economy is booming as a result. We want that too. And that's really what's going to lead to this kind of adoption. On top of that, all the investment capital that's going into it, that makes it even better, even safer, and developing nuclear fusion technology, this is what's absolutely going to drive prosperity for the future.  
Because, again, that rule from history, you never bet against human ingenuity. We're going to have political competition that's going to cause a lot of countries to increase adoption. And our human ingenuity, the investment capital, is going into this. This is going to power prosperity for decades and decades to come. It's not.  
Going to solve a lot of the other major political challenges. It's not to say that Social Security is still going broke. The US government still has $30 trillion in debt. They still love their Marxism. They still love all their Woke bullshit, all that kind of stuff.  
But we don't have to worry about living in some kind of Mad Max world where we've got this handful of scarce resources and everybody's out killing each other over it. It's going to be bumpy and it's going to take time. It's still going to be all sorts of issues. You're going to have to put up with everybody's nonsense and campaigning against this. But eventually, nuclear is going to be powering decades, even generations of prosperity to come.  
And I believe that's going to make it the biggest thing that's happened since Bye.  

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