Private Briefing with Byron King, Part Two

You’ll find Part Two of our latest Private Briefing with Byron King below (you can read Part one here). If you’d prefer to watch the video, both parts are presented at once in the link below. We’ve also attached a downloadable PDF version for you as well). Enjoy!

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Byron King: The reason I mention all this, because that world, the Alfred Mahan world, the Corbett world, the Nicholas Spykman world, in that world that you might say of the late-1940s, when we set up the United Nations and set up International Monetary Fund and the World Bank, and all these, that world is ending. Hello? It's 70, 80 years later. But you can see it falling apart. It gets back to what we're talking about earlier about BRICS, about the decline of the dollar, about the rise of the rest of the world.

Who are the top four countries in the world in terms of economies, in terms of purchasing power parity, PPP. Well, China, obviously a big, huge country. I mean, they might have a different standard of living, but big, huge country, lots of electricity, lots of steel. I mean, they produce over a billion with a B, a billion tons of steel a year in China. They have the ability to produce 50 million automobiles a year. I mean, everything about China's big. Their shipbuilding, the auto construction, everything's big, high-speed trains, you name it. Who's the next biggest economy in the world?

Well, yeah, the United States. Okay, that's us. We are who we are. What's the next big economy? I guess they'd say India, in terms of electricity, things that happen. What's the number four economy in the world? That would be Russia. In terms of how much electricity, how much steel, how much ag, how much everything, and Russia's economy in so many ways bigger than Germany, bigger than Britain, bigger than Japan, bigger than Brazil, you name it.

So anyhow, we started off saying what's going on with Alfred Mahan. Mahan had this view of sea power as the way to influence events in the world. And the US government, the US Navy for a century has followed that line, which brings us to the aircraft carrier view of the world.

And the famous line that you hear in Washington, DC, whenever there's a crisis, the president picks up the phone and says, "Where are the aircraft carriers?"

Well, yeah, that was true for a century. Where's my aircraft carriers? Where are my aircraft carriers?

"Varus, Varus, where are my legions?" To go back to the Teutoburg Forest.

But now, in an era of superfast, hypersonic missiles, in an era of targeting, if you're out there, somebody's satellite can find you. If they find you, they can locate you, they can fix you. If they can fix you, they can target you. If they can target you, they can hit you with a hypersonic missile in a matter of minutes and do a lot of damage, if not sink you. So are aircraft carriers still relevant? Well, yeah, they are. Aircraft carriers are still very relevant in a world just short of major war. In a world of major war, the aircraft carriers are just great big targets.

I mean, actually, that was probably 50 years ago in the 1970s. Hyman Rickover, the father of the nuclear navy, Admiral Rickover, was asked at a congressional hearing, "Admiral Rickover, how long would America's aircraft carriers last in a war with the Soviet Union?"

And his answer was, he said, "Probably about two or three days."

And today, maybe two or three days. Sure, we'll be generous. I mean, maybe two or three hours considering the ease with which people can locate the carriers. And I'm an old aircraft carrier guy. I mean, I flew off the USS Constellation, and I love my aircraft carrier days, and I'm very proud of my naval flight service and everything else. But I do have to wonder if we need to be building these great big ships that cost $15 billion each and take 12 years to construct and then you have to put the super expensive air wing on there that put 5,000 people all in one place.

When you look at what one or maybe two or three hypersonic missiles can do in terms of hitting you, just the kinetic energy alone, kinetic energy is one half mass times velocity squared. You do the calculations, you're putting a lot of energy into that hit, more than a bomb. Just an inert shape hitting you at Mach 6 or Mach 7 will do more damage than a 2000 pound bomb if you do the energy comparison in terms of how many megajoules.

So anyhow, it gets back to Tom's question about what's going on with the Red Sea and the Houthis. Well, the Red Sea is this very, very critical line of communication between Europe and the rest of the world. You sail through the bottom of the Red Sea, the Bab-el-Mandeb. Skinny little area, it's probably, I don't know, 20 miles wide between the bottom of the Arabian Peninsula and that Horn of Africa.

You don't have a lot of room to squeeze through there. There's lots of rocks and shoals and stuff like that, so the actual places that you can sail a vessel are very, very, very well known. There's no secrets there at all.

Then you sail off the Red Sea past, Saudi is on the East and Sudan and then Egypt, and then you get up to the Suez Canal. Well, I mean, it's been a trade artery since Ferdinand de Lesseps built the Suez Canal in the 1870s, '80s. So 140 years of trade.

But now along come the Houthis and they're shooting missiles at people they don't like. Well, who don't they like? Well, they don't like people, anybody. They don't like anybody that supports Israel. If you're a ship that's going to Israel, or if you're carrying Israeli cargo, or if you're a shipping company that does business with Israel, they're going to shoot your ship. And they definitely have shot at US and British and French and German ships. I mean, I'm happy to say that our ships and our systems and our people were good enough that they shot down all the drones and all the missiles that the Houthis were shooting at them.

I don't believe we've taken a hit on a combat vessel. I mean, of course, the civilian vessels have taken hits. They've been damaged, they've been sunk. Had people killed, injured seriously.

And so like, well, who are these Houthis?

There's one view of them that they're a bunch of pirates and that they're just trying to extort money out of people. As any good intelligence officer would tell you, read what they write, listen to what they say, watch what they do.

They say they're very devoted to Islam and they are very devoted to the cause of what's going on with the Palestinians versus Israel. They're very put off by the Israeli incursion into Gaza, the damage, the injuries, the deaths, destruction, the fight with Iran. Now Iran, to be perfectly complete about it, Iran is supplying those missiles.

The Houthis don't have big factories where they weld and solder and put together these rather complex rocket systems. I mean, they have some industrial capabilities, but I not going to say they've got nothing. But most of what they have is courtesy of Iran. And Iran is a whole other story. They have a very, very wide, deep, broad, arms industry that can make missiles.

Tom Dyson's question, our dear friend Tom, was how do we stop this from going on? Well, I don't think we stop it kinetically. I mean, we can put all the aircraft carriers we want there, all the destroyers. We can shoot missiles at them. We can bomb the crap out of them and everything else. That's not going to stop them. I mean, we bombed the crap out of Vietnam. It didn't work. We bombed the crap out of all sorts of places in the Middle East. Hasn't really shaped events to our benefit.

This whole thing with the Houthis and Yemen is going to stop when enough people work out a deal. And so, if only we had somebody in this world who had some understanding of the art of the deal. So we'll see.

Dan Denning: Well, let me move on then, because that's the next question about what the strategy is, and how it's going to affect markets and some of the decisions our readers make with money. I want to preface it with a reference to something, and say that it isn't necessarily all negative, in the sense that, I remember you telling me that the construction of the Grand Coulee Dam on the Columbia River, and then the construction of the Hoover Dam and the Glen Canyon Dam later, both provided tons of electricity, which formed the industrial base of a lot of our production on the West Coast, specifically Boeing. But the shipyards and the aircraft construction that happened on the West Coast-it was all a result of energy.

And there's an alternative thesis that's emerging, and some people have developed it more fully than others, that when you combine a nuclear power with AI data centers, you get something. You get a parallel processing revolution, and you get the next century of American innovation, which is not industrial in the 19th century sense, or even in the 20th century sense, but might lead to quantum computing or whatever.

This is where it kind of gets difficult for the novice to explain what the use case is for AI plus nuclear. But I think it's an interesting parallel to what did happen in the 19th and 20th centuries, first with oil then with electricity, creating this industrial base you're talking about. But that base, as you mentioned, was the foundation for projecting both political and economic power. And then, now we seem to have been bogged down in Ukraine.

So I want to move to another question of strategy, but by shifting it towards the heartland, as MacKinder calls it, of the world island, which is Ukraine and Central Europe, maybe just east of Central Europe. So as you know, in July of 1947, George F. Kennan, famous historian and strategist, anonymously published an article in Foreign Affairs magazine, which was called The Sources of Soviet Conduct. And it was actually an expansion of a private communication within the government that subsequently became known as the Long Telegram, which he wrote when he was posted in Moscow in 1946, where he introduced the idea that we now know as containment.

And he said the way to respond to the Soviets is to understand their thinking about the world and their strategy, and the strategy of international communism is to contain it. And that became the touchstone for how the US foreign policy, and I'm assuming the military establishment understood the Soviet threat. It was later modified and informed by people like Henry Kissinger and Zbigniew Brzezinski and the Carter administration.

But I guess my point, and then my question for you is that, up until I'd say the eighties, there was a fairly well understood orthodoxy about what US strategy was, what their understanding of the world was. It was informed by MacKinder, by Mahan, by Kennan, and by others. It all seems to have come undone. And my personal opinion, and this is Bill's conclusion really as well, is that it all started, sort of in 1999 when Bill Clinton and NATO with Madeleine Albright decided to bomb Serbia and Belgrade because we could. Because there was no longer another superpower, and there was no one to stop us.

But since then, it seems like at least publicly, no one has articulated what American strategy is in the next century. And so, with respect to Ukraine, what are we doing over there? And more specifically to get to a question Tom followed up with, have we miscalculated because we don't have a strategy? And does that raise the odds of Russia, or anyone, using a nuclear weapon in 2025?

Byron King: Again, we could spend all day, but we don't have all day. A couple of points. George Kennan was a brilliant guy, and he was very well, well-read, deeply read. I mean, his library was huge. He spoke several languages. He's famous in that sense for the Telegram X and the Soviet containment idea.

Before that though, I mean, he didn't come out of nowhere. He was a really smart guy in the thirties and the forties in the American diplomatic arena. He understood Germany very well. He worked very hard to understand Germany. He was instrumental in negotiating the surrender, you might say, of Italy in 1943 that got Italy out of the war. I mean, so this guy was a player by the time he was posted to Moscow. I mean, they posted really good people to Moscow back then, and he went there.

And on a personal level, he viewed his job as to be a learner, a thinker to understand things. Today, anybody who says, oh, we should think about the Russians, we should understand the Russians. They call you Putin, Putin, Putin apologist, apologist. Oh, Russia Russia.

For some reason, and there is a reason, but I'll just say for some reason, our culture, our political culture, has decided to demonize Russia in a way that has poisoned even the very ability to speak with them, understand them, to know what's going on. Part of it is political in the sense that,. When they wanted to take Trump out, one of the things that they threw against the wall, you know how you pick up that metaphor? You pick things up and you throw it against the wall, see what sticks.

They threw all they could against Trump in 2015, 16 to see what sticks to try to get rid of him. Because Trump was, he's a threat. I mean, he's an outsider. He is not an insider. He is not under their control. He didn't come up through the system. They didn't put all their little pins in the little doll and whatever. They couldn't control him. He has his own money. He has his own head. He has his own views of the world. And they said, we got to get rid of this guy.

So one of the things was, oh, Trump had this Miss Universe pageant in Russia. So when he would go to Russia to put on Miss Universe, he was bought and sold by the KGB and oh, when he had trouble in Atlantic City, the Russian Mafia, they bailed him out. Then all this stuff about Trump and, I mean, this is what they said. But that got turned into Russia Russia Russia. The FBI investigated it. The CIA was investigating it.

That's just the Trump angle to it. They've turned Russia into this horrible bête noire, French word, black beast of, you can't even talk with them. The Russians, not long ago, this is November of 2024. The Russians, just like a month ago, recalled their ambassador to the United States who's been there for seven years, because basically nobody in Washington would talk to their ambassador.

Why do you have an ambassador from a country if you're not going to talk with the guy? If you had an issue with Russia, you call the ambassador and say, Mr. Ambassador, would you, we'd like to have a talk, or we come over to your office, we'd like to have a talk. We will buy you lunch. Whatever. Talk to us.

Here's what we think. Here's what you think. That just wasn't happening. So now we go back to Kennan, George Kennan in Moscow. He talked to everybody. His job was to learn, to think, to understand and to present, where are the Russians coming from? What are they thinking? When I say the Russians, I mean the Soviets, or Stalin.

Where's Lavrentiy Beria? Where are these guys coming from? And so Kennan's idea was we are going to have to do what we can to isolate the Soviet Union until something else happens. Well, a lot of things happened, but eventually 45 years later, the Soviet Union imploded.

Now, US intelligence missed it.

I was on the staff of the Chief of Naval Operations. There was a time in my life when all the good stuff came across the desk every day. I mean stacks of stuff. And I, in the late eighties, for a couple of years straight, I was reading Intel on what's going on. And I assure you that at every level, naval intelligence, DIA, other agencies, embassy, cables, all the things that came across the desk that we could look at, they all missed it.

Nobody was predicting, "Oh, the Soviet Union is going to fall apart." Nobody was saying that because the Cold War had become an institution. It had become a business. Oh, we got to build so many submarines. We got to build so many missiles. We've got the nuclear weapons complex. We got all this stuff. There's more people living off the Cold War than were dying from it. You know what I mean?

And so when the Soviet Union collapsed, it came as a massive surprise to many, many people. If you're above a certain age, if you got, sort of my haircut, and my hair color, you might remember all this. If the Soviet Union fell apart... What do you mean? The Soviet Union fell apart?

Yeah, it fell apart. Well, I mean the contradictions of communism, the internal contradictions of communism became too much. And it imploded. Now, the Russians today look back and say, well, Gorbachev, he was a traitor. He was a horrible guy. Wouldn't have happened if it had been somebody else. Well, the thing is that it did happen. And so we live with it.

And so, brings us to today. What's going on? Well, first of all, this is me talking. I think that most Russian analysis that is out there in the news media, even a lot of published books, I mean, I buy these books. I read them, try to read them. They're very painful to read, some of them. They are just horribly written because they don't understand what's going on and they don't understand what's going on because there's this sense of disrespect towards the Russians.

You can like or not like the Russians you can admire or not admire Putin. A lot of Russians like him. A lot of other people in the world like Putin. He's been demonized. Oh, he's a thug. He's a murderer. Well, good luck with that. I mean, if you're Joe Biden coming into office four years ago, is Vladimir Putin a murderer?

Well, yes he is. Oh, great. Good luck. Good luck sitting down with a guy that you've just disrespected like that.

And so, it's gotten to the point where there's so much, just ignorance, so much misunderstanding, lack of understanding, lack of basic knowledge that we don't get who they are, what they are, what's important to them, that we, the West and us policymakers, which is not me. I'm an outsider looking in. I'm long on the Navy retired list. I'm off the security list. I don't see anything classified. I just know what I read in a newspaper.

It seems to me that people making policy don't have a freaking clue what they're doing. Now, it gets to Ukraine. What is the US interest in Ukraine? Well, that's a hell of a good question. What is our interest in Ukraine? Do we really care?

Is the United States national interest at all affected by where the line on the map is drawn between the Russian Federation and Ukraine? Does it really matter? Does it? Here's the Donbas, the Donetsk Basin Oblast, the provinces there. They speak Russian mostly. Does it matter if they have a Russian flag on a flagpole or a Ukrainian flag on a flagpole? Does it matter to us?

No, not really. Did it matter for 45 years during the Cold War? No. Did it matter for 200 years before that, going back to the founding of the country? No. This is not a national interest of the United States.

So when we get to the point where people are saying, "We might get into a nuclear war with Russia over," are you out of your mind? Are you crazy, that we care where the line is drawn, whether it's over here on the east side of the Donbas Basin, whether it's over here on the west side of the Donbas Basin, or whether the Russians move the line to the Dnieper River, or whether the Russians take the whole south of what is Ukraine, Odessa?

Well, that's a rules-based world order. Ah, thank you. Grasshopper rules-based world order. Where'd that term come from? When did we start talking about that? If you go back to George Kennan in his X telegram, he didn't talk about a rules-based world order. You go back to the founding of the United Nations, there was no rules-based world order.

I mean, you go back into the sixties and the seventies, there were no rules-based orders. This is some sort of a concoction that people started to talk about in the 1990s, vaguely. But now it's become this sort of term of art, that we have to get in there and we have to throw our national interest.

We have to throw our money, our weapons, even our people, our people, and put the whole nation at risk, in a nuclear sense, based on somehow or another upholding where the line on the map is. And it gets back into understanding Russia. Russia proper, and the Soviet Union as well, and now Russia proper, again, Russia for hundreds of years, 200 years, 300 years has had this concept of its border lands. It gets back to Halford Mackinder, the Eurasia heartland, Alfred Mahan, and the sea lines of communication. Russia has always had this concept of what they call the near abroad.

Like, here's Russia proper. This is us, the old Czarist Russia, Soviet Union. In a sense, there's a lot of discussion there about the Soviet Union as this expansion country with the Baltic States and big whacks of what used to be Poland, things like that. It gets into deep history.

The Russians have this concept of the near abroad basically saying, don't put your armies on our border. We don't like that. We remember the Swedes. We didn't like that. We remember Napoleon. We didn't like that. We remember what happened with Germany and Hitler. We didn't like that. And here we are with NATO, which in 1991, when we fell apart, and we said, what are we going to do?

And then James Baker, the Secretary of State of the United States, went over to Russia and was talking with Gorbachev, and he was talking with Boris Yeltsin. He says, okay, we're going to incorporate East Germany into Germany, and that'll be part of NATO, but we're not going to move NATO even one inch, not one inch, not one inch to the East.

Well, then what happened? In the 1990s, Poland came in. I mean, by the early 2000s, you had the Baltic States, you had Slovakia, you had Hungary, you had the Czech Republic, you had Romania. And if you're Russia, you're sitting there saying, wait a minute. You're coming into my near abroad. And then this whole thing with Ukraine, we're going to bring Ukraine into NATO. Well, what's so important about bringing Ukraine into NATO? Why?

Why couldn't Ukraine just be a neutral country like Finland was in the Cold War? Like Austria was in a Cold War? Was that so bad? Is Finland so terrible? Is Austria so terrible? Just be a neutral country, just trade with people, things like that.

But no, US policy supported a group in Ukraine that took over, staged a Maidan coup in 2014 and installed a very anti-Russian government there. And then now we get to those ethnic Russians again in the Donbas. They spent eight years literally firing artillery shells, just gratuitously in there just to kill people.

There was an entire monitoring group over there, OSCE, organization of Safety and Cooperation in Europe or something like that. Organization of Security and Cooperation in Europe, OSCE there's an entire cadre of people over there whose job was to keep these two guys apart, but they were not successful because the Ukrainians were shooting into the Donbas, and then the Donbas was shooting back.

They could barely stick their head up above the foxhole, out of fear of getting it blown off by an artillery blast. And then, the invasion in February of 2022, and they say, well, the Russians invaded. It was unprovoked. And you notice how, in the news media, often you'll read Russia's unprovoked invasion of Ukraine in 2022. It was not unprovoked.

The Russians spent like eight years saying, cut it out, quit doing that, whatever. And eventually they moved in because they're going to save their brotherly Russian-speaking Slavic cousins. That's the history.

Again. What's the US national interest in this? Why do we want to risk Philadelphia and Chicago and Los Angeles and Boston, and why do we want to risk our fruited planes getting into this fight? I mean, part of it is that we have people in Washington who are abysmally ignorant, whatever they know about Russia, most of it's wrong, much of it's opinion.

The factual basis for what they know is probably absent, and they don't respect Russia in so many ways. Oh, it's a gas station with nuclear weapons. Well, actually, you have to be pretty smart to be a gas station, and you have to be pretty smart to have nuclear weapons. But that's a stupid statement to say, anyhow. Russia is a very sophisticated country full with a fabulous education system. A little digression here.

One joke that I like to tell is that really smart Chinese young people come to America to go to American universities so that they can learn math and physics from Russian professors. I mean, Russia is a deeply rich cultural country. They are the Noah's Ark of Western culture in many ways, whether it's the art and culture of the Hermitage, whether it's Orthodox Christianity.

And this idea that these Russians are these backwards barbarians. They don't have toilets, and their technology is so primitive that they have to buy washing machines and take the chips out. Who comes up with this stuff? This is ridiculous. This is crazy. This is absolutely stupid.

Russia is a very sophisticated country with a very sophisticated economy. They produce lots of electricity. They're leading the world in nuclear power. They are a leading aerospace power. If you want culture, Russian ballet, Russian music, Russian... All that cultural stuff.

Dan Denning: Dostoevsky, Tolstoy, Pushkin, Chekhov, Gogol. Let's not forget... Those literature guys. Got to throw those guys in.

Byron King: Aside from those guys, what have you done for us? So anyhow, we get back to the point about what's going to happen ahead. I mean, we started out talking about we're moving into the Trump era. The really, really nice thing about moving into the Trump era, if the powers that be are smart enough to let it happen so we can make a clean break with the past.

Trump can walk in there on day one, after he takes the oath of office and after the inaugural parade and thank you, he waves to the bands and all that stuff. He can go into the office, grab a pen, I'll loan you a pen, grab a pen and just start signing orders. We're going to let Russia back into SWIFT. We're going to start de-sanctioning all these Russian people.

I think there's like 25,000 separate sanction actions against Russians, Russian companies, whatever. We're going to start de-sanctioning you. The war in Ukraine, despite whatever people think from reading the really, really bad Western media accounts. The war in Ukraine is over except for the dying.

Ukraine has lost. Ukraine is maybe a country of 16, 18 million people anymore because so many people have moved away. They've lost. We could get technical. They've lost four armies in the last three years. The original army, the replacement army, the NATO army, and now they're down to just sort of shanghaiing people off the streets and throwing them at the front lines as cannon fodder. They're being slaughtered in droves.

The Russians are losing people too. I assure you. It's a very, very bloody, very horrible conflict on both sides. But the war is over. A country with 16 million, 18 million people is not going to defeat the country with 140 million people, which is the fourth-largest economy in the world by purchasing power parity.

The Russians have turned their economy into a military economy. They produce all the artillery shells they need. They produce all the missiles they need. They produce all the tanks they need, and they're still building a big Navy, and they are a very, very significant military power. You're not going to beat that.

Meanwhile, what about NATO? Well, NATO, we've been pouring stuff in. NATO, they're out of beans and bullets as well. I mean, we are down to... How many more tanks can you give them? I mean, Germany doesn't have any more tanks. Britain doesn't have any more tanks.

The argument you hear is this, if we just give them this one more weapon, we've been hearing that for three years. If we give them Javelin anti-tank missiles, we'll defeat the tank. Well, guess what? The Russians are not stupid. They're very smart.

They figured out how to jam the guidance system of the Javelins and pre-detonate them before they hit the tank. So the Javelins are probably 80% ineffective, or if we give them Abrams tanks, well, we've given them Abrams tanks and guess what? They've been blown up. They're in museums in Russia now because they captured them and they hauled the wreckage off the battlefield. If we give them the M-777 artillery system, well guess what?

They blew that up too. That stuff's in the museums in Russia. If we give them 155 millimeter artillery shells, well that's great, except now we don't have any, and we're having trouble making them. If we give them the Patriot missile system, well, those are getting blown up as well. And when we say who operates-

Dan Denning: What about nuclear weapons?

Byron King: Yeah. Now we have this idea, oh, if we give them nuclear weapons. Are you out of your mind? I mean, who came up with that hair-brained stupid, crazy idea? I mean, the Russians have piecemeal defeated and destroyed everything that was sent against them. I mean, the F-16s, we sent them F-16s. Guess what?

We shot a couple of them down. They blew up the rest of them in the hangars and on their runways. I mean, I've seen photos of this stuff. I've seen photos of F-16s just destroyed in the bunkers, in the storage hangars. I mean, they're just sitting there. And now it's kind of like if we give them nuclear weapons, oh great. We're one weapon away.

I went to the Naval War College, we did this stuff. Everybody who does war gaming about, if we nuke them, they nuke us, we get... The escalation ladder is very, very rapid. It's very significant, and it escalates up into this situation where we don't want to go. I mean, in my operational days in the Navy, I was a nuclear weapons officer among other things.

There's still things like 40 years later I can't talk about or I shouldn't talk about, but I'll say this. When you handle these things, when you deal with these devices, kind of like at the time, you're just being technical about it. Okay, here's the manual, here's the checklist. What do we do for loading them? How do we pre-arm them? How do we do this?

Obviously, we never dropped any on my watch or you'd know about it, but we were ready to do that. I mean, I was ready to drop... I was ready to do whatever I had to do. I mean, I knew how to do it and I'm glad I didn't. And looking back at it 40 years later, I'm really glad I didn't. We wouldn't be here. And so what my free advice is to anybody out there who thinks, oh, we can fight and win in a nuclear war is like, no, we can't. You really don't know what you're talking about.

There was this US Navy admiral who a week or so ago, two weeks ago, gave a talk and he's in charge of strategic systems or whatever. He says, "Oh, we're ready to fight a nuclear conflict." Well yeah, for like three hours, then we won't be ready and we won't be here and we won't have a country to deal with anymore. So don't talk like that. I mean, really the only thing to say about nuclear weapons is we have them and we know what they are, and they're under very, very tight control and you don't want to go there. I had this on my desk and I hold in my hand a piece of material here. I don't know if anybody would know what that is. It's called trinitite, T-R-I-N-I-T-I-T-E.

It's a substance. It's from the Trinity site in New Mexico. Now, I did not pick this up off the ground out there. I bought this at an auction because it would be illegal for me to pick up this material at the Trinity site. I have the receipt if anybody is out there and wants to turn me in, but I have a receipt for a significant amount of money for this stuff.

This is what they talk about when a nuclear blast occurs and it melts the ground. This is what the melted ground looks like. This is from Trinity, New Mexico, the site of the first atom bomb test. I was just out there at the end of October. Once a year, the White Sands Missile Range allows people onto the Trinity site. It's a national historic site, except it's on the White Sands Range, so it's guarded by guys with machine guns and stuff.

So you're not allowed there 364 days of the year, but for about four or five hours on one day of the year. I think it's the third Saturday in October. I spent two years on the waiting list so I could go out there. And I bought an airline ticket to El Paso, I rented a car, I drove up, I stayed overnight. I had a very dear friend who works in the nuclear industry, invited along, and we had a great day just walking around. It's in the middle of desert. Why do you think they set the bomb off? Because there's nothing out there except this fused glass and whatever. But this is what we're talking about and this is where it's going. Don't go there.

Dan Denning: I hope you're right. I mean, I want to move on to one last question, but I don't want to minimize what you said because I jotted a note down while you were talking that the phrase rules-based order sounds to me a lot like people who use the phrase our democracy. And what they really mean is they say, the institutions which we have used to amass and control power and wealth are losing legitimacy or power and wealth, and we need to protect them because that's how we derive our status and power and wealth. So it doesn't mean... It's not a set of principles or ideas anymore. It might've been in 1945 or 1950. Eisenhower was actually one of the big advocates of a European Union because he thought it would make the world safer. And I think everyone thought in 1945 that certain international institutions would be better for mediating conflict and preventing another Holocaust than nothing.

But as you pointed out, it was a long time ago, and most of those things seem to be no longer fit for purpose or they're run by people who don't understand them and maybe don't even try anymore. But I want to end with one final question, which is, I know in your wheelhouse, and it's probably a little bit more focused on investors, but it involves energy and energy strategy.

So I'll finish with this one and I'll give you the floor so you can take as much time as you'd like. But you've written before about Colonel Edwin Drake who drilled for oil in Titusville, Pennsylvania on August 27th, 1859. He hit oil at a depth of 70 feet. One thing I didn't know until yesterday is that part of this was just a technology breakthrough that Drake drove an iron pipe through the bedrock, and then inside the pipe, he inserted another pipe that could go deeper and bring the oil up, which, of course, launched an energy revolution, which launched an industrial revolution and led to many of the things we've talked about earlier.

Now, more recently, especially in the time since I've known you, we've talked about the shale gas boom and the shale oil boom in the United States, which was also partly driven by technology, so hydraulic fracturing and horizontal drilling. So without getting too in the weeds on the technical part of it as an oil guy and then an energy guy, and going into the Trump administration where we expect energy security and energy production to be a big part of his policy, what do you think Trump's energy policies are going to be, and what do you think that will mean for investors?

Byron King: Oh, wow. Okay. What are they going to be? They're going to be pretty much all of the above in the sense of oil, gas, uranium, nuclear. He won't be anti-renewable, but they might pull the tax incentives back. I think I would not want to be in the windmill business. I think the solar panel business will be... It'll muddle along. Trump has said, "Drill baby drill." That was one of the keystones of his whole platform. Yeah, we're going to drill baby drill. The thing is that we've been drill baby drilling since 1859. The conventional oil in America mostly is all drilled up. The unconventional oil, the tight oil, the shale gas, things like that, that's been drilled up for, call it 20 years, 15 to 20 years.

There's still a lot out there, but a lot of these things are starting to plateau. Even the Permian Basin is sort of plateaued in terms of production. We're going to drill baby drill a lot. There's going to be a lot of wells getting drilled under Trump. A lot of projects that were deferred or just blocked outright by the Biden administration are going to come back onto the capital expenditure list. Offshore, I think offshore is going to do really well.

The Biden administration just closed things down. They just tightened it down offshore to the point where lease sales became... It just stopped happening. And the Bureau of Ocean Energy Management made it really difficult to do any projects. But there's a lot of big oil left offshore, and so companies that are in the offshore business... And you have to be big to do it. I mean, the usual suspects, Chevron, Shell, Exxon, those guys, and then the support companies, the trans oceans of the world and noble drawings of the world, Schlumberger, Halliburton, Baker Hughes, BHI, they have some good days ahead just in terms of doing the work.

We still live in the petroleum age. No matter what the Biden administration was trying to tell us that we are in a petroleum age and we are going to be in a petroleum age for a long, long time to come, whether it's gasoline for cars or diesel for trucks or jet fuel for airplanes, certainly feedstock for the chemicals industry.

And so yes, but don't expect, don't be unrealistic about what to expect when Trump says, "I'm going to drop the price of oil in half because we're going to produce so much oil." As a geologist who's been doing this for a long time, I don't think so. I don't think so. In terms of fracking and everything, there are some spots that are better than others. And in the industry, we call them sweet spots, and we kind of know where they are. We know where the shale beds are, we know where the tight sands are, things like that.

We've known that for decades. I mean, my first industrial job out of school was, we mentioned this earlier, was with the old Gulf Oil Company which is now part of Chevron. And I worked in West Texas and I worked in conventional wells in West Texas, although we also worked on secondary and tertiary recovery. And in fact, I put in a well proposal one time, and it struck. I discovered a new oil field, and my reward was that my boss gave me a drill bit. Theoretically, this is the drill bit that discovered it, but I've had this on my shelf for a long time, 50 years, not 50, 40 something years. But this is an old rotary bit, and you can see how it works, and I'm really proud of this.

I felt like I really discovered something when I put in that well proposal. And my boss, when he called me in to talk about it, he said, "Byron." He says, "You just found all the oil you're ever going to use for the rest of your life." Oh, wow. "What are you going to do now?" And I started thinking, what am I going to do now? Not a year later, I joined the Navy.

I've been there, done that. Do something else now. So we've lived in a petroleum age for a long time. We're going to live in a petroleum age for a long time to come. The price of oil is not going to be so much controlled by Trump's policies on drill baby drill. It's going to be controlled by, is there a global recession? It's going to be controlled by, is there a war in the Middle East?

It's going to be controlled by just events, just the same events that control everything really. Will Venezuela invade Guyana to grab that 16 billion barrels of oil that Exxon discovered down there off the coast of South America? There's plenty of oil out there yet to discover. But again, when you look at the production curves over 150 years or whatever, 170 years, we're in this plateau area, and eventually you get to the back end of the production curves.

Sure. Technology will find new ways to get more oil out. Yeah, okay. The original fracking from 20 years ago, call that generation one. Right now we're on about generation six of fracking technology. I was just maybe two months ago out in Colorado at a fracking operation that was unbelievably sophisticated.

Talk about math, physics, and engineering. It's like holy smokes. I mean, it's north of... It's actually not too far from... It's just south of Laramie, where you are. It's north of Denver. I think it's called Ward County.

Dan Denning: Weld County.

Byron King: Yeah, Weld County. And so there's going to be oil. Don't worry about it. The price will be whatever it's going to be, and it's not going to be controlled so much by Trump, drill baby drill, although that is going to happen, it's going to be controlled by the price of oil as set at the Strait of Hormuz in the Middle East or set on global markets. And if there's a recession, price of oil goes down. If there's a global boom, the price of oil goes up.

If Trump and the tariff regime sets us into this global tariff battle where you tariff me, I tariff you, we can see who out tariffs each other. Well, I mean, that might be bad for business. We might tariff ourselves into another recession or worse. So I'm not saying it will happen, but I'm saying it's one of the risk factors out there.

And so I mentioned nuclear as well, or we've mentioned nuclear, and I don't mean atom bomb nuclear, I just mean generate electricity nuclear. For decades, nuclear was all bad, Three Mile Island and Chernobyl, Fukushima, bad, bad, bad.

And all of a sudden big tech comes along and says, "Oh, we have these data centers and we need lots and lots and lots of 24/7, 365 reliable electricity, but we don't want to pollute the air with CO2." Not that CO2 is pollution, even though the Supreme Court has said it is, but I don't believe that. That's my geochemist talking, not my lawyer talking.

And so all of a sudden nuclear power is okay. It's like, oh, we're going to restart Three Mile Island. The companies that have nuclear utilities exposure, Constellation Energy or Southern Energy, boom, their share price is way up because people are seeing that, oh, well, if you've got Microsoft and Google and Amazon, if you have these people buying your electricity just 24 hours a day, that's just money forever.

And so the nuclear side's doing well in the US on an investment side, the uranium plays have done well. Companies like Cameco have done really well. Uranium Energy Corp, UEC has done really well. And even if you missed the initial kick, there's still an upside to these guys. The initial run-up. If you weren't there, you missed that train. But I don't think it's too late to get on the second or the third train on the tracks that comes down.

Dan Denning: Well, maybe we circle back to that in early 2025 and focus on mining and minerals and some of the companies. I got an invitation yesterday to preregister for Rick Rule's Natural Resource Symposium in Boca Raton in 2025. Former attendees get a discount if they register again. And I thought, gosh, it's been a while since I talked to Rick about mining companies, and it's been a while since I talked to you about it.

So I think today we've covered the very big picture, and I want to thank you for the breadth and depth of your knowledge about all of this stuff and for making the time to go into detail. There's a rush these days with X, and having watched so much cable news up until the election, I forgot how shallow and superficial a lot of the media coverage of really important ideas is.

So I appreciate that you're able to take the time to go into them in depth. But will you come back and join us early next year to talk about some of the companies and the mining?

Byron King: Oh, I'd be happy to. Yes. Yeah, we can come back early in the year and we'll do a deeper dive in terms of sectors and companies and metals and just energy plays and things like that. I mean, today was really big picture kind of stuff, geopolitical history, all that. It's a lot of fun. For people who've watched us this far or followed us, thank you. Thanks for your time. I really appreciate it.

Dan Denning: Despite the seriousness of the times and the issues, I think you're right. I think there's a chance that things could change. So we'll come back and talk about it early next year. But until then, Byron to Barb and your children and yourself, happy Thanksgiving and safe travels to upstate New York, and thanks again for being on our private briefing. And we'll talk to you soon.

Byron King: Great to be here. Thank you, Dan. Thank you everybody out there who subscribes to Bonner Private Research. Bill Bonner is a dear friend of many years, Dan is a dear friend of many years, and Tom Dyson, known him for a long time. So you're in good hands.

Dan Denning: Thanks Byron. We'll talk to you soon.

Byron King: Thanks.