What this covers
Doomberg returns for a 53-minute conversation that treats gold revaluation and energy market structure as two sides of the same debasement story. The central claim is that structural oversupply of cheap hydrocarbons—especially co-produced shale oil and gas—is pushing real commodity prices lower in gold terms, while gold and risk assets are being inflated upward as a deliberate mechanism to manage the US debt crisis. The discussion moves between macroeconomic argument (why gold must revalue higher, how stablecoins funnel Treasury demand), energy commodity forecasting (where oil and natural gas prices really go), and geopolitical observation (what instability in Venezuela, Mexico, and Europe means for energy security and capital flows).
The conversation spans several distinct territories. On energy, Doomberg explains how Permian co-production makes oil break-even prices nearly meaningless, why California's fuel islands are vulnerable (the Chevron refinery fire serves as a case study), and why molecular engine-switching will cap oil indefinitely around $55. On finance, it covers gold as an instrument of dollar debasement, the role of stablecoins in refinancing short-term debt, and the claim that revaluing Treasury's gold holdings could unlock a trillion dollars without selling. Geopolitically, it surveys Mexican cartel-driven production collapse, Venezuelan potential regime change, European rightward political shifts, and Russia's advantage in Ukraine. A recurring note is that uranium investment is oversold relative to oil because hydrocarbon consumption growth is certain while nuclear growth is not. Throughout, the thread is that investors should own volume-leveraged energy enablers—services, midstream—rather than producers trapped as price-takers in a structurally deflationary market.
Doomberg argues that the world is swimming in cheaply producible hydrocarbons, so the long-term real price of all commodities (oil, gas, uranium) is falling against gold, and investors should own gold and volume-leveraged enablers rather than commodity producers, while a deliberate US debt-management debasement is driving gold and risk assets higher.
- Co-production of oil and gas in shale plus engine/molecular switching structurally caps oil prices
- Gold revaluation and stablecoin-driven treasury demand are backdoor mechanisms to manage Yellen's wall of short-term debt and debase the dollar
- Commodities priced in gold are falling in real terms, so producers are price-takers in a deflationary market
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California is an energy crisis waiting to happen: it functions as two isolated fuel islands (north and south) with no major connecting or importing pipelines, requires a special gasoline blend, has only ~11 days of inventory, and has lost refineries down to about six — so a single major refinery outage (like the El Segundo Chevron fire that supplies ~40% of Southern California's jet fuel) can cause severe shortages.
“California can best be modeled as two fuel islands... No pipelines of consequence connect north and south. nor are there any major pipelines that import oil and gas into California... it has like 11 days worth of gasoline in inventory”
Because oil and natural gas are co-produced in shale (especially the Permian), you cannot determine oil's break-even price by oil alone; with a high enough natural gas price (e.g. a $5/MMBtu floor), the break-even price of oil in the Permian could effectively go to zero — a fundamental change in energy markets few have modeled.
“the break even price of oil could go to zero in the perian with the right natural gas price. This is a fundamental change in the energy markets that very few people articulate or have worked into their models”
OPEC, by keeping oil prices artificially high as a cartel, has been catalyzing its own undoing: high oil prices trigger Permian drilling that floods the market with cheap co-produced natural gas, which then displaces oil-burning engines through cheap substitution — and every switched engine is lost for a very long time.
“OPEC in its own sort of perverse way has been catalyzing its own undoing um by keeping the price of oil artificially high.”
Once a critical mass of oil majors and midstream/service providers sets up in a region (e.g. Guyana), they tend to spread out and develop neighboring resources, which is why stabilizing Argentina's Vaca Muerta or achieving regime change in Venezuela could unlock multiple millions of barrels per day and is deflationary for oil.
“once you have a critical mass of majors in an area, they tend to like spread out and develop other resources because they have the midstream and service providers there with them.”
Gold is behaving as though BRICS countries are reinstating it as a neutral reserve asset for settling international trade imbalances, and for gold to play that role it needs to be much higher; the US also has an interest in higher gold because it lets Treasury revalue its holdings to ease refinancing the wall of short-term debt.
“gold is is behaving as though the BRICS countries in particular um are reinstating gold as a neutral reserve asset for the settlement of imbalances and international trade. In order for gold to effectively play that role, it needs to be much higher.”
Oil is flatlining in nominal terms but actually going down in real terms because inflation is still above the Fed's target; when priced in ounces of gold, the long-term real price of all commodities is lower, which is why one should avoid investing in commodities or their producers directly.
“if you price commodities and ounces of gold... the long-term real price of all commodities is lower. So when you say oil is flatlining, it's flatlining in an inflationary environment that is still above the Fed's target rate... it's going down in real terms.”
The constraint on US nuclear power is not uranium supply (effectively infinite) but enrichment capacity, where Russia holds a virtual monopoly; this is a roughly $10 billion problem and primarily a financial issue since the US military already knows how to enrich uranium.
“what's constraining um nuclear right now especially in the US is not uranium itself. It's enrichment. So, it's kind of like getting long in a refinery... uranium is worthless until it's enriched.”
Mexico's national oil company (Pemex) is being hollowed out by cartel oil theft and illicit diesel smuggling (disguised as lubricants) totaling billions of dollars a year, at a scale that makes high-level government complicity inevitable; production is down exactly 50% from its 2004 peak due to governance, theft, and corruption rather than geology — making Pemex uninvestable, while the US 'war on cartels' is really a war for energy.
“its production is down uh exactly 50% from its peak reached in 2004. That's not geology, that's not technology, that's governance, theft um and and corruption on a massive massive scale.”
Europe is undergoing a rightward, anti-Brussels, anti-war shift (Hungary, Slovakia, Czech Republic, France) that Brussels is trying to stifle; if Ukraine's war is lost this year and Putin devastates its grid, causing a migration crisis and capitulation peace terms, it could be the beginning of the end of the European Union — a shift Europe's self-inflicted energy de-industrialization predicts.
“if the war in Ukraine is lost this year if Putin devastates the entire electricity grid of Ukraine and causing a migration crisis into Europe... that could be the beginning of the end of the European Union”
The US government is encouraging stablecoin and crypto speculation (via the Genius Act requiring stablecoin operators to hold US treasuries) to manufacture steady demand for short-term treasuries; ultimately Treasury could issue special stablecoin treasuries paying below-market rates (e.g. 2% vs 4%), a form of financial repression masquerading as a risk asset class.
“the US government is um encouraging um the growth of stable coins and speculation in cryptocurrencies and things like Bitcoin um in order to create a steady demand for short-term treasuries because with the passage of the Genius Act, stable coin operators must hold, you know, US treasuries.”
Gold has tripled in price since Doomberg first started using it as a savings vehicle at scale, which is another way of saying it now takes three times as many dollars to buy an ounce — the primary purpose of gold being to measure dollar debasement.
“it's, you know, tripled from when I first started um using Fizz as a savings vehicle... it takes three times as many US dollars to buy an ounce of gold now than it did um back then, which is the primary purpose of gold.”
Oil and gas companies are the real technology sector and deflationary machines; for modeling purposes there is an effectively infinite supply of hydrocarbons underground, and producers keep getting better at finding and extracting them, which structurally puts a lid on prices.
“because the oil and gas companies are the real technology sector uh in the economy, they're technological powerhouses. They are deflationary machines. Um there's in our view an infinite supply of hydrocarbons underground for modeling purposes”
There is so much natural gas in the US (including huge non-shale Permian resources) that production could grow 0 to 20 BCF/day over 15 years without dying; it isn't produced because prices are too low (sometimes negative), but a global floor price of $5/MMBtu would cause production to explode and make oil a near-worthless byproduct in the Permian.
“If there was a national global floor price of $5 a million BTU, the production of natural gas in this country would explode um to huge levels”
Revaluing the US government's gold holdings (currently marked at $42/oz) to market would create roughly a trillion dollars of fiscal flexibility for Treasury without selling the gold — effectively creating money out of thin air, a backdoor form of QE that is bullish for gold, stocks, and Bitcoin.
“the US government on the government's balance sheet marks its substantial gold holdings... at $42 an ounce. And if they were just to market to market, the US would have a trillion dollars worth of gold, which apparently frees up Bessant... to effectively print that money outside of the purview of the Fed.”
Russia is winning the war in Ukraine, which was effectively lost in December 2023 when Ukraine's counteroffensive failed; Russia produces ~1,000 drones a day (soon several thousand) plus heavy missile barrages that overwhelm air defenses including Patriots, and has not yet fully mobilized (e.g. has not destroyed Ukraine's ~17 major bridges) because it still treats this as a 'special military operation.'
“the war was lost in December of 2023 when Ukraine's counter offensive failed... we define a war as loss as one that can't be won. And the war cannot be won conventionally against Russia.”
Molecular switching (replacing oil with natural gas, NGLs, and coal) and engine switching to run on whichever hydrocarbon is cheapest, combined with huge supply growth in Guyana, Argentina, potential Venezuela regime change, Mexico, and OPEC increases, all put a lid on oil; the equilibrium price of oil is around $55 and going lower.
“you're seeing molecular switching to replace oil with natural gas liquids, natural gas and coal. And we're seeing engine switching to run the engines on different hydrocarbons as they become cheap and available. And all of this is um putting a lid on the price of oil.”
For the US to achieve a manufacturing renaissance, the dollar needs to be much weaker not just against other G7 currencies but against gold as well, and Bitcoin's strength is itself an inverse judgment on the dollar.
“I think longterm for the US to have a manufacturing renaissance of the form that Trump is angling for the US dollar needs to be much weaker not just against its the currencies of the other G7 countries but against gold them as well.”
The VIX behaves like the European natural gas (Dutch TTF) chart — spikes can be faded fairly reliably — but timing such tantrums is next to impossible because everyone trades the VIX and market makers ensure premium blows out or fills are poor.
“The VIX is like buying natural gas in Eur... when you see those spikes, you could fade them, right, pretty reliably”
Janet Yellen deliberately issued short-duration rather than 30-year debt and emptied every short-term tool to prop up the economy, stocks, and Biden's reelection chances, leaving the resulting refinancing crisis for Scott Bessant — reflecting a bipartisan loss of 'country first' patriotism in DC.
“Janet Yellen emptied every short-term juice the market um tool at her disposal in order to prop up the economy, prop up stocks, and prop up Joe Biden's chances um for reelection.”
Cheap energy is a great foundation for economic growth, and the pair trades Doomberg watches as early crisis indicators (Landed LNG vs Brent, WTI vs Brent) are currently trading in harmony, signaling no significant stress in physical energy markets.
“the pair trades that we look at to be early indicators of potential crisis aren't signaling anything significant... When we look at WTI and Brent, nothing crazy there.”
The greatest crisis facing the Trump administration is the wall of short-term debt left behind by Janet Yellen, and reframing administration behavior through that lens makes patterns emerge and decisions make sense.
“one of our mental models was um the greatest crisis facing the Trump administration is the wall of debt that was left behind by Janet Yallen and then when to reframe the behavior of the administration through that lens. U patterns tend to emerge and things tend to make sense.”
If forced to invest in energy, one should favor companies leveraged to the volume of oil produced (services, midstreamers, enabling technologies) rather than to commodity prices, because hydrocarbon consumption volume is always growing while producers are price-takers in a deflationary market.
“if we were forced to invest in the sector, we would be interested in things that unlock volume services, midstreamers... enabling technologies that enable volume. Um that's interesting to us much more so than just the commodity itself or the producers of that commodity.”
When oil super-spikes due to a crisis, you should wait for it to drop 20% and then buy out-of-the-money puts, because a collapse from there is all but guaranteed — this is far better than trying to time the spike on the way up, which just burns premium waiting for a spike that may not come.
“if you see a super spike in oil wait for it to drop 20% and then it's all but guaranteed to really collapse from there. Uh and so buy out of the money puts at that point.”
Given a five-year lock-up choosing between the oil and uranium sectors, oil is the better bet because it is 'stone cold guaranteed' the world will burn more oil in five years than today, whereas uranium consumption growth is less certain — so allocate to volume-tied oil companies.
“it's stone cold guaranteed we're going to be burning more oil in five years than we are necessarily going to be consuming uranium... I would I would put it in uh a subset of companies in the oil sector that are tied to volume.”
Doge and the Trump administration's inability to significantly cut government spending is a disappointment.
“the utter failure of Doge and Trump's uh inability to significantly cut government spending is I think um disappointing to say the least.”
Offshore drillers should be avoided because they produce oil and are therefore price-takers in a deflationary market, no different from natural gas drillers.
“offshore drillers themselves produce oil, and so we wouldn't be interested to own them because they're price takers in a deflationary market.”
Energy markets are still very well supplied, with oil in the low $60s, landed LNG in Europe around $11/MMBtu, and US natural gas costing about a medium Diet Coke per million BTU.
“oil in the low60s landed LG in Europe at $11 a million BTU. Natural gas cost you a medium diet coke for a million BTUs in the US.”
Coffee tastes better out of the Doomberg mug.
“Coffee tastes better out of that mug for some reason.”