'Should Scare Everybody’: Nuclear Risk Spikes, Markets Should Brace For Chaos | Doomberg
Speakers
Summary
Doomberg discusses Russia's new nuclear-capable Skyfall missile and the collapse of New START, warning of a renewed US-Russia-China nuclear arms race. He also covers Ukraine peace prospects, China's thorium reactor news, and US energy policy, favoring natural gas and nuclear over intermittent renewables. On markets, he remains bearish on oil due to abundant supply and natural gas co-production, while the host suggests gold as the preferred commodity allocation.
- Russia tested a nuclear-capable Skyfall missile, raising nuclear risk and arms-race concerns.
- New START expiration in February could trigger a US-Russia-China nuclear arms race.
- Doomberg expects the Ukraine war to end militarily, not through negotiation.
- China's thorium reactor breakthrough is not a game-changer because nuclear technology is not rate-limiting.
- US energy policy should prioritize natural gas and nuclear, especially for off-grid data centers.
- Doomberg is bearish on oil, citing abundant supply, no bullish catalyst, and co-production with natural gas.
- David Lin says gold is the commodity to own if investors must have commodity exposure.
Ideas
Nuclear power is key energy solution
Doomberg favors nuclear power as a key solution to expanding US energy supply. He says nuclear is clean, safe, and scalable, and the technology is not rate-limiting. Existing designs like AP1000 reactors should be deployed repeatedly rather than chasing exotic designs like thorium. He supports building out nuclear power to meet data center and economy-wide electricity demand.
Renewables raise costs and destabilize grids
Doomberg is negative on intermittent renewables. He argues more renewables on a grid correlate with higher electricity costs, and when renewables swamp dispatchable power, grids become unstable. He points to California and Germany as examples of expensive electricity with high renewables. His plan is to stop loading intermittent renewables onto existing grids and instead expand natural gas and nuclear.
Oil prices face more downward pressure
Doomberg remains bearish on oil prices. There is no bullish catalyst on the horizon, and there is too much oil and natural gas. Because oil and natural gas are co-produced in major US basins like the Permian, abundant natural gas can pressure oil lower. If natural gas prices rise, co-producers may drill for gas and give away oil. He also notes up to 10 million barrels per day of incremental oil supply potential in the Western Hemisphere across Argentina, Mexico, Venezuela, Guyana, Colombia, and Brazil. He sees more downward pressure.
Commodities lack long-term real return appeal
Doomberg says there is nothing about owning commodities or commodity producers that excites him. He believes the long-term real price of all commodities is lower. This is a broad bearish/avoid stance on commodities and commodity producers.
Gold is preferred commodity allocation
David Lin says oil's real inflation-adjusted price has not gone up over the multi-year period. Against that backdrop, if an investor has to buy a commodity, gold is the preferred choice. Doomberg agrees. The implied thesis is that gold is a better commodity store of value than oil.
