+1 (312) 520-0301 Give us a five star review on iTunes!
Send Buck a voice message!

273: The Rise of America with Marin Katusa

Share on social networks: Share on Facebook
Facebook
Tweet about this on Twitter
Twitter
Share on LinkedIn
Linkedin

Buck: Welcome back to the show, everyone. Today my guest on Wealth Formula podcast is a New York Times bestselling author. The book was The Colder War, and over the last two decades, he’s also become the largest independent finance here, the resource sector globally. His name is Marin Katusa. And when Marin talks, smart investors listen. And he just released his latest book, The Rise of America, Remaking of the World Order, which I think is an absolute must read and one that we’re going to read in our Wealth Formula Network book club. Marin, welcome to Wealth Formula podcast.

Marin: It’s my pleasure buddy. Long time no hear.

Buck: Yeah. It’s been a while. Before we get started because we were talking a little bit offline about where it all started for you, right? I mean, most guys with your background don’t end up becoming the biggest independent financier you know tell us where you came from, because obviously, it’s kind of inspiring to nerds around the world.

Marin: So born and raised in East Vancouver, Vancouver, and I would say it was a great neighborhood back in those days. It was where all the immigrants came. Think of it as like, the East Side of town, hard working, good people. But it was where you could actually buy a house, raise a family. And normally definitely the rougher side of town. Got an academic scholarship to UBC is the largest active scholarship that they gave out. And, you know, I was the first in my family to go to post-secondary. I never actually had any ambitions for post-secondary. I was just pretty good at school. I actually want to be, believe it or not, a cabinet and wood maker. I still to this day love working with my hands, fixing things around the house. My mother-in-law’s place. I just love doing that stuff. It’s blue-collar boy did well type of thing. So I went to University. The scholarship is something called Science One. And I realized that I didn’t want to be a doctor, no disrespect to you and your crew. But when I was volunteered at the hospital, I remember this one guy just had his thumb. He’s of construction work. His thumb was all I guess somehow he bursted his thumb. And I looked at that and went, Oh, I just didn’t have the stomach for it. And I went, I got to change things. And I’m like, Okay, what am I going to do now? Here’s my scholarship. I gotta keep this money. What do I do? And I said I’ll just get a math degree and originally organic chem and math. And then I was like, I really hate being in a lab for eight hours a day and just, like, mixing things and doing this lab, it was just so pointless, like, distilling stuff. So I kind of just stumbled along. And one of my math profs is like, H\hey, there’s this course. I think you’d really do well, teaching teachers how to teach math, and we’ll pay you. And I was like, Oh, is that right? So I would go around every Thursday as part of the program and go teach teachers how to teach math. And then, little by little, he became the Department for the education program for math. And he was like, look, I really think you’d be a good teacher. And I was like, Oh, man, teaching like this puts things into perspective.

My first year in teaching before taxes, before any deductions was 36 grand. I remember just sitting there going, You couldn’t pay for, like, rent in a basement suite in Vancouver. These poor teachers are driving an hour, hour, and a half each way to get to this job. And I just kind of like, okay, what do I got to do to get more? And I knew it wasn’t my final destination. I loved it. Started teaching review calculus sessions, marking credential exams, did the whole gambit. And I remember one of the calculus books that all of Canada used, even some places in the US. It was a Professor that I was working with. And he said to me, I was getting out of teaching, with all your talents, what are you doing? As my book is the book that everybody uses. And he goes, I can barely scrape out of living. And he goes, I’m the guy that really resonated to me. But remember, I grew up in this part of town with immigrant parents. I didn’t even know anyone that invested in the stock market, never mind someone in the business. So I stumbled upon it through just researching and wanting more. And then really, I guess my first big break was I was teaching these two brothers calculus. And they were one of them turned into mining engineering, other insurance, and civil engineering. Anyways, they would tell their dad about this wacky math teacher and who’s teaching calculus University how about you know he try to make it the real world. And I started rather than just taking pure mathematics in this abstract concept, I would just say, Okay, pretend you’re out of mind. You want to make this pit. And I try to make it fun for kids. And they would tell their dad about this stuff. And it just turned out that this guy had a big mining company, and he was trying to put this tungsten project into production. Portugal. And he goes into eight. And he went to his sons to ask if he could meet with me to work on some problems. So he came to my house. I was a young guy. And then that was kind of used my research. And I said, well, he’s like, Oh, I don’t have to worry about it. Tell me more about your company. And that was one of my first big investments in the business. And I learned the hardware, private placements. You don’t learn any of that in the SAS program? For the first 12 months, I was down 65% of my investment, which I borrowed off my line of credit on the house that I want, you know, the school of hard knocks and just bumbled around that worked out really well. Got into uranium very early in ‘03/’04, met some of the bigger players. And once again, learn is the bigger guys they love trying to find young talent to tap into to do the heavy lifting. And that’s what I meant. Some of the bigger players at that time partner at item is matured by them. And today we’re bigger than that whole crew, still friends with all those guys, still manage their money, but kind of fast forward 20 years later. But I guess this week actually is the five-year anniversary of actually launching Katusa research and six years on my own. So that’s kind of how we got to where we are.

Buck: Well, that’s just a great story. And I love it as an entrepreneur myself. And it’s just fun to see how people’s journeys get somewhere they go and especially for a guy who’s an academic guy. A lot of academic guys don’t end up making a bunch of money because they just get on this track and you get this Pavlovian feedback that keeps you on that track. People keep telling you how great you are and you don’t want to leave that. So this is good stuff. But I want to get to the book here because I thought it was fantastic. Now, it’s hard to put it all into a few words or an interview, but I’m going to try. But fundamentally, it seems to me like the book is really a thesis on the US and global debt, the current state of things, and really, ultimately, what you believe will be the outcome of this mess. Is that fair? And if it is, where are we right now?

Marin: So take a step back. Being in the resource world of mining and energy development for the last two decades, there’s this perception that the US dollars trash all the gold bugs will crap on America, and it’s all about China. Build and make what China needs. And I didn’t believe that for a long time, and for a while that was the game. But while we were in the pandemic and my lifestyle, I was living in a room for decades in so many places, so many projects in so many things, good, bad, and the ugly learning the hard way. It kind of hit me. I’m like, wait a second. I’ve always said that when there’s a sell-off, everyone thinks gold is the place to be. It’s not. It’s the US dollar. And you put me in a room locked up for a while. That’s kind of how the first book happened because, after the recovery, heart surgery is about eight years ago now, nine years ago. And on this one, I was kind of like, I just disagreed with everything being the same. And part of the success of what I’ve done is mixing that academic technical ability, which I call Street sensor. Sure, independent thought. And as I was writing this stuff, I came up with the swap line concept for mining, and I was getting some really, really well known famous people, whether multi-billionaires, number-one New York Times bestsellers, reaching out to me saying, Hey, this is really interesting what you have. And we would just talk about it and a mutual friend of ours Robert Kiyosaki, and his wife Kim would be, Hey, what about this? And it got my brain going, and all these people are bringing these ideas and talking. And I started thinking about all these things, just as I was writing the newsletter and part of the best part of rating a newsletter. It forces you to write out your thoughts of what you come to your own conclusions, but you put it on paper so other people can read it and challenge it or direct them. You really hone in on writing. And it’s just been what I’ve been doing for 20 years. And that’s just how I work with my thoughts. And then I was kind of looking at going with all this stimulus coming, and you look what’s going on, what will be the end result. And you look at what Power just said today. As of July 14, he said, very large amounts of fiscal capital it’s going to happen. It’s not just going to go the way business used to be. It’s going to have new rules and expectations. And that’s where I came up with the whole carbon credit angle and what that’s going to be. Remember, that goes back to 2015/2014 when I was doing the heavy green energy projects that we did really well with. So it kind of put it all together. And as I would work it out, it was just this whole thing that everyone in our world of mining and oil and gas and energy fix that America’s done. And as you look at the demographics, from the logistics, from the resource standpoint, from the global macro perspective, I see nothing further from the truth. And I get it. You look at the media. Nothing’s been more polarizing than just watching the news. It’s disgusting, actually. It’s not even news anymore. It’s an agenda. For example, my book, the second book, hit number one in America for sale the second week off for both fiction and nonfiction. Very rare. That a non-fiction business book goes number one, not a single peer one. Mainstream media picked it up. My publisher and you have a PR for the publisher. They do all that stuff for you. My first book was The Colder War is about. And remember, my previous company had that anti-American edge because the right thinks that America is going down. And I had everything from CNN to Bloomberg to Fox, both Spectrums, from the far left and the far right. People love that fear and the doom. And then the division. This book was like, hold on a second. It really doesn’t matter if it’s Biden or Trump in power. This is what’s going to happen. And how wild is it that your book is number one, both on Amazon for fiction and nonfiction? And The Wall Street Journal and The New York Times didn’t even mention the book. And it cracked number one in sales. Not one. Tier 1 media picked it up. And my publishers like, what the hell is going on here? So they have these relationships. And they basically said that’s not the narrative that we want on our show. And no, I don’t know. I think it’s, for example, my book, I think it was the second or third week. I think they published the results in the third. So the second week, my book sold two and a half times more than the second-place book. That’s new. But they didn’t want the whole thing, that hate America is not that the politics, the media, they just didn’t want to hear. But it’s guys like you and Robert Kiki and all the different outlets that are saying, Hey, wait a second. We should talk about this. And no one’s looked at the track, not just our newsletter, the funds, or the top of the industry. We’re also the largest financier in the industry. Right. So the bankers don’t like this store either, because we don’t take fees. I’m trying to turn the whole system upside down, contrarian, and they don’t want this message out that Hey, for example, I use this analogy book, look what happened to Jon Mom for just making a couple of statements. Okay? Now think about Elon Musk after he basically flipped the finger through the regulators and the SEC or flat out said, I don’t respect them. If Jack Ma said that in China, imagine what would happen considering what he said. What Elon Musk, and basically within two years of Elon Musing that he became the world purchase math. What’s happened with Jack Ma? Look at today China’s trying to threaten Japan, that we are going to net you if you get in the way with Taiwan and try to defend Taiwan. And I get into all these different aspects that geopolitical the space race, I get into the critical metals. I get into, for example, just a simple message that I talk about that. For the last 20 years, Europeans and North America have basically turned a blind eye to the pollution that is caused by the manufacturing in China because of North American European demand. Good. So this report came out today that, Hey, of the most 25 polluting cities and 20 or 22 or 23 or from China. But China is just making the stuff that the Europeans and North Americans want because it was cheap. Everyone kind of turned a blind eye. Pollution, carbon dioxide, the Knox is all these different C two C 2 equivalent, the footprint that is a by-product, that’s a commodity. That is the pollution that we dealt with. Now ask yourself this, Amazon is the world’s largest facilitator of pollution on the planet. But yet they don’t talk about it. You now go buy plane tickets. It’ll tell you your carbon footprint across the US and North America and Europe. It’s part of the whole funding, the bailouts. That’s when you think we obviously are going to be able to pay for that footprint. But Amazon all they have to do with the data analytics they have and all the technology that they have right now, they can show. Why can’t you and your profile say, Hey, I want to buy net-zero products. America has low-cost energy, it has the funding, and now the robotics. It can compete and have net-zero products with things that are being produced out of China. So you think about the footprint of that that would turn China upside down. Walmart. Same thing. You’re telling me that they know exactly to the decimal where these things are made, the materials, the carbon footprint of all the stuff that they don’t want it because it’s going to uproot their system and they don’t want to think about the Waltons people became probably the wealthiest family of all time by being the largest facilitator of pollution. They didn’t have to pay for it. Yeah. So probably the wealthiest individual easily today didn’t have to pay for the pollution. That’s going to change. And those are all the aspects and other aspects. Not a single analyst in business includes the carbon footprint cost moving forward on any of these projects’ finances. And this is what I’ve been doing for a couple of years. And I’m telling everyone, Hey, guys, when you do your IRRs and MPV, it’s great to just calculate how much older oil or coffer you’re going to make. You also got to cover your tailings pond and your reclamation, which are all those things you have to do, but you’re going to have to include your carbon footprint also. So every project that we are involved in finance, the company has to make a commitment towards reducing carbon and everyone keeps going to America or tax bullshit. It’s a commodity. And Here’s the best part of it, the guys who get it. What they’re realizing is by going net-zero and reducing their carbon footprint for these resource projects, you’re actually reducing the cost of capital significantly. The guys who don’t because they just don’t believe in it, and they’re zombies. Why would you invest in a zombie? They’re basically business comes down to the cost of capital. And if there’s two guys producing the same thing, Let’s just look, if these assets are pretty much the same, the technology, both guys know it. But if one guy’s cost of capital is 3%, the other guy’s 7%, who’s going to win in the long run, it’s obviously the cost of capital. And that’s all I’m trying to explain to people. But my God has turned into a rat’s nest for me in the industry because a lot of guys don’t want to accept it. And frankly, it’s just a bunch of old dudes and bankers that have a nice system and the boards and all that. That’s why I avoid those companies. And we don’t do many deals, but the ones we do well and we stick to it. So that’s kind of how the book happened. Just by writing and publishing, giving talks, people would come back to me. Sure. And it turned out to be a 450-page book. The first one was 280, so it gives you the context of it’s a deep read, but I explained why its inflation is the target. You know, everyone here today, Jerome Power, kept emphasizing the number is the magic number we’re always going to stick to 2%, but they don’t ever explain why it’s 2%. So I go into the history of why it’s 2%, and it goes from New Zealand back to 150 years of gold production, how the economic cycles are based on that, and why these aren’t things you’re going to learn in business books. I just kind of being a large investor in these things and traveling the world and figuring out. And the last thing I would say for everyone who thinks that America’s best days or behind it, jump on a plane and go to South Africa, jump on a plane and go to jump on a plane and go to India, jump on a plane and travel across Europe. Do I rent a car from wherever you want to go? Drive through Spain, Portugal, go all the way to France, go up to Germany, go through the Balkans. You want to see the unemployment rate. You want to see how bad it is, go to Russia, go to the former Soviet Union state. Will America always be an Empire? Number one? Of course not. We all know those things, but remember, 700 years for the Roman Empire to fall apart. Right. So people forget that there’s evolutions. And I get into the central Bank currencies and the digital currencies and all the different inches. I get into gifts and good. And these things that people don’t talk about is it an easy read? I don’t know. You tell me. I doubt it. I doubt it’s something that the average person who just wants to talk about sports betting that’s not going to be a book for them. But if you want to better your macro understanding from a guy who’s fallen deep into the industry, it’s an insider skit.

Buck: Yeah. And I actually think you do have to be awake when you’re reading it. Right.

Marin: Hopefully it’s not what you read before you go to bed.

Buck: Right. You have to be focused, but there’s lots of really cool stuff. And they’re one of the things I did want to get a chance to talk to you about because I do think it’s an idea of central importance that I’m sure that very few people know what you’re talking about. This is sort of the inevitability of what you call basically the coordination between the Fed and the government. The likelihood of something is known as AMT. And it’s such an important thing, I think, for people to understand, because even for me, when I think about when I listen to people and I look at what’s going around, I’m like, gosh, that is a lot of debt. But then I ask myself, does debt even matter anymore? And so fundamentally, that’s kind of what this addresses this potential transition.

Marin: So let’s first talk about why I had a whole chapter to understand that. Does it even matter anymore? And what I’m trying to explain to people is you can’t use linear mathematics when you’re in a quantum. Of course, it’s just different. It’s like looking at Euclidean geometry. Remember, back in school, it’s just different, right? And the problem with most and they’re applying linear techniques to a quantum framework. What do I mean by that? Everyone just assumed they jump right into the MMT. Lots of guys like Peter Schiff, they’re like, Oh, they’re printing. There’s no discipline. First of all, we’re not a modern monetary theory, which is MMT. We’re not there yet. And I explain what MMT is and really detail what it is. But I say before we get there, we’re in something called etc, which is fiscal monetary coordination. And guess what? The guy who invented FMC is the guy whose name is on the Federal Reserve Building. Marriner Eccles. Now, how this all happened is kind of an interesting story. When you go through our book tours and you do all the stuff, they take you to all these things and give a talk at the New York Stock Storage, New York. And I looked at it, and then he was a book to 2014 or the room. He’s 13. I looked at that name and it’s kind of like the boy named Sue. You got a weird name growing up that no one could ever understand. You got a chip on your shoulder. He went, Marin Katusa. That’s a guy who probably got, you know, beat up as a kid because of his name. And I go, Who the hell is Marriner Eccles? Well, he’s the most powerful Fred Reserve of all time. That’s why his name is on the building. This guy behind the scene was through more presidents than anyone else. He’s the guy that implemented FMC fiscal monetary coordination. So think about it. What financed World War Two. It runs like a JP market. Bullshit. It was the Fed, this Fool monetary coordination, meaning the Fed and the Senate got together and said, This is what we got to do. The expansion of the West. What builds all the dams, like the Hoover Dam. You know, guys just lookup. Guys like Kaiser. Kaiser industry. He’s the name that nobody talks about today. But back in the day, he was kind of like the Elon Musk of his era in that he built these boats faster than anyone else. That really helped me in the war effort. And basically, the term is industries that we’re going to become to help the military effort. And the government-funded all of these private work projects with private enterprise. But as coordination of that was done, FMC, what we’re doing right now is the exact same as what happened and built America’s West. Now, of course, it can be. How did Power know that today when he said, I even tweeted it: very strong fiscal support coming. It’s actually 3.5 trillion. They talked about numbers 1.6 or eight, maybe 2, 2.2. Why do you really think this is the last one? Yeah, of course not. It’s going to be tied and drilling. But now think about it. These are not printing presses. These are digits. And it’s investing in their system. Now that actually when I get into the details of what all happens is the dollar went up on this news. And so did gold. Gold up 20 bucks today. So what I’m trying to get at is, yes, again, in the old days, my former mentors and partners would be like, Marin, what the hell are you talking about? Negative interest rates. I would go up on stage and 2012. So we’re going to get into negative interest rates. I remember my good buddy Doug Cases, a very close friend of mine. He goes, Marie, that’s metaphysically impossible. No, it’s not. And he goes, What do you mean, it’s not? And we would get into this debate publicly. I’m like, of course, you can have a negative interest rate. He goes, Who the hell would ever do that? And I go, It’s about convexity. And then I talk about that book. And it’s not just a couple of idiots in the market that are willing to take negative interest rates. It’s trillions and trillions of dollars. So there’s a new paradigm. It’s evolved the bond market in many sectors. It’s not about what you’re getting on the coupon. It’s what the coupon is. So I get into that in the book. And then when I was trying to get, the whole conclusion of this is there’s trillions of dollars in ESG funds, like when you think of Home Depot, you know, like the place where you go buy, like, paint when your kid breaks your wall and you gotta put it up. And I do all this stuff, like Home Depot lumber and long supplies and crap. Do you think that that should be the eighth largest holding in the Ester? But where are most of that stuff made in China? Right. So what I’m getting at is there’s no options at the ESG stands for environmental, social, and governance. Right. It’s got to fit those three criteria, because how many mining companies meet the criteria? I mean, oil companies, none. But I lay out the business framework of how you can meet that. And then instead of paying interest for a gold mine, you can pay three. That’s huge. That difference. That 7% difference is the difference. It doubles the free cash flow of the gold mine. And in the gold mining business, you have windows, remember, because the price is cyclical. It’s all about the payback period. If you can reduce your payback period, that is truly Golden. So I get into all these facts. And there’s so many misconceptions out in the market. Gold can’t go up. If the US dollars going on the same, right? That’s wrong. You’re going to see both gold and the US dollar go up. They’re going to print all that money. The US dollar is going to go down wrong. And there’s also Fed Power basically said today it’s evolving and gives us time to prove what we’re doing is right. And we basically said the inflation is about 2% and it can break down the different components, not just about lumber that you’ve seen pullback in price, it’s about wage inflation on the different factors. So we’re not yet at MMT. And it’s going to be many years before we’re active in it. But when MMT does kick in, it’s going to be multi decades. You see the framework that the Federal Reserve in the Senate used for funding. It’s not like a company that does quarterly budget needed. Think of it as a huge greater, and it takes so long for it to play out and work its way through the system. So that framework will be around for many decades eventually. Of course, it’s humans and politicians. Politicians are guaranteed to pack it up. That’s what they do.

Buck: Listen just real quick to talk about MMT. The concept is a tricky one, because basically in this MMT is essentially debt doesn’t matter. And instead of worrying about repayments, worrying about what’s backing what, you had a concept that I thought was pretty interesting to use as a framework, which was looking at the enterprise value of the US as a sort of backing the concept. And to me, that made a lot of sense. So if you could take a second, explain in very basic terms what MMT is and why that would be possible because of the enterprise value of the US?

Marin: Okay. So there’s a saying that people say that that doesn’t matter. Well, it depends on your balance sheet. What is the value of your balance sheet? Let’s take America as a whole greatest military on the planet. If you could pick a country from a landmass, it’s the best-situated country on the planet. When you think about where it is to invade, it is incredibly hard. You have the Rocky Mountains, you got the Mississippi River, the Canadians up North. It’s like the little brother of the US. You got NAFTA in the back, but it’s kind of tore down incredibly rich in resources, natural gas, oil, rare uranium, copper, gold. People forget how wealthy America is. Innovation, technology. So the big harbinger of America was electricity. Look what’s going on with electricity prices. Texas has become Saudi Arabia, and I was like, oh, but it froze and you’re shipped out. Remember, these are still early days. This is just going to get better and better in cost and software technologies deflation. So you have that approval. Second, the key component of MMT is to maximize employment in your society. What did Jerome Powell talk about today? He goes, look at the unemployment of the African Americans in the Latino population. It’s way higher than when, if you compare to the whites. Secondly, he said just before COVID, it was at the all-time most. But then COVID happened, and then it all unraveled and it literally doubled. Tripled unemployment rates faster than the population. So what MMT is trying to do using technology, imagine you can break it down. It’s eventually going to break down the Jo sectors where the stimulus is needed is going to get it, rather than just throwing it towards the economy, which now it’s an emergency patchwork. Bailout the airline to keep the system going, bail out the rail lines to keep the system going, bail out the unions to keep the system going. But that doesn’t really help the bottom up. So what MMP is all about is, you know, optimize employment, minimum unemployment. And what taxes are about is to keep the demand in the circle for the currency. So it’s not just about the US being the largest currency for global trade, like in oil and technology and commodities. But the whole point of taxes isn’t to pay back the debt is to keep demand on the other side of the balance sheet. So think of it as two parts of the balance sheet, the government side, which invest the money into their enterprise. And then they clip back not to pay back the debt, but to keep the demand and the value of the US dollar within the system. That’s the missing part that a lot of people don’t get on that. But we’re not there yet. And it’s cool to talk about MMT as if, Oh, it’s going to screw everything up because they’re just going to print unbelievable amounts. Well, they’re going to print unbelievable amounts of money. Like, today, they just committed three and a half tree rain, and it’s not going to end there. And I talk about all these things. It’s going to be tens of trillions, but they’re going to modernize the economy. And you can sit there and bitch about this that it wasn’t like how it was when your dad grew up. Or you can say, Fuck it. This is the framework. I see where the puck is going to, like, rain recipe says, How can I get my piece of the action in the lowest risk way to do that is carbon credits.

Buck: So Let’s talk about carbon credits. What are they, carbon streaming? Talk about some of these things that you’ve been talking about in your newsletter.

Marin: Yeah. So it was a concept that I first published. I think it was in 2014/15 when Ross Beaty was building up Alterra, which was Canada’s largest green energy company. And I guess I’m showing my age in this business. But in 2009, Obama came in, it was the Green Dream member items. We have two thermal and solar and all this stuff. And I was like, I am just a math guy looking at this going, Holy crap. This stuff was getting crazy valuations. So, for example, Ross’s company at the time, Alterra was about 25 Bucks a share in 2,009 and they hadn’t built anything yet. So you see how these analysts would do this? They would do MPDs and show all this stuff. And I remember, as at a key conference, I was the moderator. We had three billionaires on this panel. And they’re talking. I remember Buddy Rick goes, I’m embarrassed how much money we’re going to make. It’s like the ultimate APM, which is going to print out the money in theory. Yes. So someone you know, you’re at a conference, I was asked to be a moderator. I’m not here to stir the ship panel. And someone in the audience goes, Hey, Mary, you’re the mathematician, and you’re usually pretty opinionated. What’s your opinion on the valuation? And I said, Look, these guys are billionaires. I’m not. So take my opinion with a grain of salt. There’s a videotape recording us a lot chubbier back then I go, The price to perfection. And there’s no upside. They have to do everything they say they’re going to do. It’s hard. Building stuff sucks. It’s really hard. Nothing ever goes as plan. When you build a big geothermal plant or a big copper mine or a line stuff that you can’t even think about. And everybody was relying on these technical reports. And I go, I taught probability. And at the time I wrote an article in 2009 piece. So what? Because the whole industry was basically these things on probabilities, a company go to Mexico Auto by Schlumberger. I was writing all these 100 megawatts with the P 90 and all these banks. Look at this. Look at this. And I was like, Oh, my God, this is so false construing what the seven means. And I go, That’s not how probability works. So literally, within I said, I don’t know. I think it could correct 50–67 in the next few years. Or I have an idea. But why would you buy something? That’s the price of perfection, literally. But within 2,014, the stock went down to three Bucks a share from 25. The best part, they didn’t build everything they were saying they were going to do. And they had all those complications. And now this thing, nobody wanted it because nobody wants to stick around during instruction. I call it divorced death, right? You ever built a house with your wife or redo the house? Yeah. Okay. Good luck with that, right. I call it divorced death. And that’s what’s, like building a big project. You have rock slides, you have injuries, and all this stuff happens, and fast forward. Five years. I’m sitting there going about this thing’s treating at Math. It’s built and no one cared. And I tried to tell people they didn’t know what is 200 megawatts. People couldn’t relate. I know what 100,000 ounces of gold per year of production is. They can kind of visualize it. They can visualize what a barrel of oil looked like. So I came up with something called GBO, and I showed all this fancy math. And I’m sure you read it in the book and I kind of show all that stuff. And then that’s when I said a by-product, when you build the whole the best business model and mining is streaming loyalty. And that’s when I publish that. Hey, like, these green energy companies, when they build this, they also have a byproduct of carbon credits. And at the time, I was just a bit too early, and people thought I was a wacko. And it was at that point that I met a bunch of the directors of the biggest oil companies. And, for example, Canada’s largest oil producer is called Sun Court. One of the directors, I walked him all through this and they said cool math. I don’t know what the hell you’re talking about, but we’re not gonna get in the green energy business. I go, you could buy all of this for less than 10% because the cost of capital, insane. You can double your green barrels of oil production if you take and you can start unwinding your barrels of oil and start producing green barrels and your cost. And they were like, what the hell are you talking about? One of America’s largest oil companies, the director who endorsed his name on the back of my first book. He was like, Yeah, this is really up there. You kind of have an idea. No one’s been done before. Fast forward five years, about a year ago. These guys are like, can you walk me through your Gbo stuff? And these are guys I knew from, like, 10 years ago, and they were building this company. And I thought, Holy crap. These guys are doing what I was talking about five years ago. So I became a large section of the deal. And now you see in the carbon credit. So what is the carbon credit? Well, carbon credit, one credit. Carbon is the equivalent to one ton of carbon emissions in the atmosphere. So you have different forms. You have no X’s, you have methane, all these different types of CO2 equivalents. And it was kind of the wild, wild West days. And that’s like, anything new. And now it’s evolved to the point because it would happen in Paris. And you have a mandatory, compliant carbon market, and you have a voluntary carbon market. And I started digging into all this research about a year ago, and you read it as a subscriber. And I was saying, this is wild during the pandemic. As I’m writing my book and thinking about all this, I just thought with the world shutting down, we’re going to reduce our carbon emissions by like, I Yeah, that was kind of like that call when we looked at the data. It reduces it by, like, 3%. I don’t know how I started digging into it. And for example, if you take every vehicle on the planet, you know, car every car in India, China, Russia, Canada, America everywhere, Europe everywhere. Take every car in the world that Burns gasoline or diesel or propane and our compression natural gas and put it into one basket. The carbon emissions from every vehicle on the planet are about equal to a little bit less than the carbon emissions just from annual Chinese concrete production and consumption. So why? So I was digging all this. I like what I’m like, really. I’m looking at all these data because I’m a data nerd, right? Stuff in a spreadsheet. How you make concrete to make cement that goes back to the Egyptians. Nothing’s changed technically, from the carbon from the concrete. To make cement, you got to basically roast the crap out of the limestone. And for every ton of limestone converted into cement, you release carbon. And that’s a huge opportunity to quest your carbon from the atmosphere at the point. But China’s moving forward and you start looking at the data. It ain’t going to stop anytime soon. So do I start thinking going, holy crap. So everybody’s focusing on now. I’m going to do my part by buying a Tesla and just going, That’s great that you’re doing the part. Fuck all on the Grand scheme. Yeah. So then I started looking at things going, Okay, how do you question the best way to get rid of the carbon? Is that the source? Right? Whether it’s a gas well or see whatever. And I started looking in. The first thing that the UN was funding after the cure protocol was obviously planted, right? And they would screw up huge. In Brazil, the UN-funded a popular plantation as popular trees grow a lot faster than other trees, but. But they did not expect it. The second-order thinking, Right. So what happened when he went down a bunch of ex-Pats to go to Brazil with a bunch of UN money? Higher the locals, which meant I made it way more expensive for the local farmers to be able to do what they were doing. Popular because the mass sucked out so much water. And now that created issues for the other farmers. And then the way the bacteria and the different plantation and the bugs, it just causes the shit show for the locals. So it was trial by error, and that’s already Balding. And I just started doing the data. I stumbled along things like, the ocean is getting harvested. Everyone knows about the rainforest privations, but people aren’t paying attention to the man girls deforestation by Chinese shrimp farmers. What the hell is this? Is researching and going and figuring this stuff out because the mangroves are basically, think of it as a forest in the ocean where the ocean meets the coastal waters. I think of it as almost like swamps in the ocean, and 70% of the tree is underwater 30% above water. But these companies come and clear cut it on the water so they can do it’s, like the perfect environment for ship farming to meet the Chinese demand. And I was starting researching this, going, I never thought about this before. And then I started doing separate research. And I’m like, wait a second per square kilometer of this absorbs 10 times the carbon from the environment, then equal size on land force and a temporary rainforest-like Pacific Northwest in Seattle or Vancouver, the Coast that think of is and whatever. And I’m sitting there going fully crap, but it’s not even that you’re going to have second-order effects, like the core. You’re saving the turtles to biodiversity, the Sharks, the whale, they take everything on it. And I’m going, wow, all be to the shrimp part. But if you take these things out, it takes a long time for them to go back. You never hear about that in the media. So as I was writing and stuff and publishing, of course, there’s something here. But who’s going to fund this stuff? Right? Because you’re competing with these big, efficient companies that are backed by the government of China and all these different places. And the Japanese aren’t Angels either in that sector. So I said, bucket, I’ll do it. And that’s how we started investing in. Now the company is one of the largest. I think it’s the largest carbon credit producer in the world. And moving forward. And what it’s about is taking the risks I learned in mining, taking the best business model, which is streaming and loyalty, and getting near-term cash flow. And I think the biggest upside is going to be the voluntary card market. So what is the voluntary card market? So if you pick compliant, that’s like the government saying it’s going to do this and you have this many missions allowed, that’s fine. I don’t want to screw around in the government, because if you get the old bureaucrat politicians, that’s that. But the voluntary market is, for example, if you take Shell. Last month, Shell lost on the Dutch in court the ruling that, Hey, you have to reduce your carbon footprint. So what are they going to do? They probably produce, like, 130,000,000 tons of carbon dioxide equivalent per year the next day. So I want to take you guys into a little bit of Nerd oil history. There’s a guy I had lunch with. His name. He’s passed now. He’s really mad. Cool. Badass guy name is T. Boone Pickens. T. Boone was known as the first corporate Raider than the oil companies, and he’d have to buy five or 10. Then he merged the companies, get rid of useless management and optimized shareholder value. He became like the first hero for shareholder guys who were milking the tip for a long time or seven sister companies. So anyway, this guy would have to put up serious, though, like to buy five or 10% of the companies here. A hedge fund that nobody’s ever heard of is called like engine number one, put up 20,000,000 Bucks, 20,000,000 Bucks, and they were able to take on the board of Exxon. Now, I can’t guarantee the fact that I’m going to say next, but I’m willing to bet that the board of Exxon and the management of Exxon spent millions and millions and millions and legal fees and PR to take on this little company. So Let’s call it 20,000,000 Bucks. I think about 20,000,000 Bucks for a big oil company to deal with their lawyers. Isn’t that much money, right. And a little fund for 20,000,000 Bucks was able to turn the whole board upside down. Got two board seats that 40. 50 years ago, T. Boone Pickens would have to buy 10% of the company. That’s where it’s gone. And what is it about? Exelon is not doing enough about it. And it’s true. They’re not putting the investments into the carbon sequestration trying to reduce their carbon footprint. Chevron same thing. Two days later after that, last month, a Chevron shareholder said, Hey, we got to move forward in this oil companies that are doing this thing excellent. Probably the largest publicly traded oil company damage Chevron and a company that produces 100,000 barrels of oil. I was able to go into the bond market and get a 50% less cost of capital because they went in and said, We’re green oil and we’ve reduced our carbon footprint and we have a net zero now and then all the CST ports at Suite you meet our criteria on the ball market on that’s a big difference. 33 Costco. And they produce 3 4,000,000 barrels a day equivalent. So what I’m trying to get is a voluntary market. Last year, they produced about call it 200,000,000 credits. And you can’t just make these credits without being certified by a proper validator. Just like, you know, back in the old days of mining, a company would say, we got 10,000,000 ounces of gold. Then you had Trex happen in the late nineties, and then the industry set hold on a second. You got to get certified by a firm that is reputable and the industry itself corrected itself. It wasn’t the lawmakers, it was the industry regulatory body, right? It hasn’t been government that mandated. And now you can’t just claim that you got 10,000,000 ounces. You have to do the proper work to prove the technical aspect when you move forward. That’s where it’s happened in the last 20 years in the carbon market, because I would never buy a carbon credit from 20 years ago from some bucket shop that you can’t really verify. Carbon credits trade on extremes and platforms. And they created a futures market for carbon and a company like a shell. Well, put this into context. Apple went and invested millions of dollars three years ago onto blue carbon. And they’re going to get 30,000 credits a year from that. Right. So for Shell to be able to get 100 or 130,000,000 credits, that’s over of the market right there. So if you just took Exxon and Shell, and then there’s something called Scope one, that’s direct card an emission scope to direct and indirect scope three, just exons. Scope three would need 450,000,000 carbon credits a year for the next 30 years to go net neutral. They only produced 200 last year. So I want that to really speak into all the audiences.

Buck: The question is, how do you make money out for this? If you’re a retail investor?

Marin: There’s various ways. So I’m not an ETF guy because I believe you can get larger leverage by picking right and sitting tight. But there’s ETFs out there that you can go and buy for direct exposure to the carbon credit price. Like there’s RN and different. You can go to Europe. There’s many private companies trying to create sequestration. I don’t invest in science projects. There’s many companies trying to be DAC, which is called direct air capture, trying to sequester the card, and it’s already in the atmosphere. That, to me, is like producing gold from the ocean. There’s lots of gold in the ocean. Really multi-billion per billion could do it, but it costs you, like 100,000 dollars an ounce to do that. Probably the cost to do DC right now would be probably about 1,000 Bucks a ton for carbon. There’s a couple of companies doing it. The universities buy that sequestered carbon, and then their lab, they say they buy, like, five tons of it a year, not a big deal. I stay away from that. I think that’s 20, 30, 40 years away. Companies like Amazon and Google, they’re investing a huge amount of money into this sequestering. Oil companies believe it not. There’s a lot of oil companies using Huff and Puff technology trying to sequester it. They think they can do that for about 100 Bucks a time. Okay, so say they think they can do it, but then they need to build pipelines. Remember, moving Co two is not like you’re moving oil and gas. I do believe that’s a great solution. Sequestering from the source, which is the oil well, and it’s the material sector, mining and oil and gas guys, that you really need to approve this in North America, but it’s going to cost somewhere between 50 to 150 Bucks per ton once they figure this stuff out and build their pipeline over the next 10 years. The best way to do this is to go and buy carbon credits by billing companies that are doing this by certified groups, like by gold or Vera, different certification platforms. And they’re doing it for eight to 10 Bucks per ton right now. So you know that you’ve got a runway of 40–50 Bucks easily. Mark Carney and former Canada’s Bank governor of the Bank Canada, the former governor of England, on the few guys that has been the governor for two countries, he’s created this group working, saying that it’s about a billion dollars a year market. Right now for the monetary market, it has to get to a hundred billion. That’s a 100 fold increase. Angela Merkel, one of the longest-serving chancellors in Germany, said the price of carbon is not high enough. It has to go up to over 2 300 Bucks a town because the companies aren’t going to be forced to do it. And realistically, she’s right now for the people that don’t believe that carbon is the issue or it’s just natural. That doesn’t matter. But if I could take the royalty of the Catholic Church, that’s a pretty good business.

Buck: Absolutely. I love that analogy, too, because I know, like, when we do this, we have some people. I’ve had people talk about green stuff, and I’ve had people talk about oil and gas, and I always get emails with people who have the political perspective, and that’s never really what I’m trying to do here. It’s just the facts. And the facts are that there’s a trend going on and there’s potentially money to be made with that trend. And that’s kind of what you’re talking about.

Marin: Well, look, all the banks, we’re just ahead of it. Here’s the exact truth, like, look at all the mining crypto miners. The Winklevoss twins. They said, okay, we got to go in and buy 4,000,000 credits a year until we reduce our own and create green energy. It’s happening across the board, and the voluntary market is the place to be. In my opinion, I put up serious money to do that. I’m not here to talk about my book. I just think it’s the best risk. I built a lot of mines, and it’s never easy. Nobody wants you to build a mine. Nobody wants it in their backyard, right? Hey, wait a second. This is called an iPhone. Where do you think they get the materials? Every year, Apple recycles something like 35,000 ounces of gold because they know they have to do. But where are they getting the cobalt and all these different factors? That’s the reality. But it’s still really hard to do it on this one, even if you don’t believe it and you think it’s carbon attacked. Well, you know that the sector is going to be a huge increase. And you know that with trillions of dollars of stimulus. And I just ask yourself, pull up the hottest days. Last week’s inventory. We have the hottest day ever on record for June. And so I decided to pull up all the daily records, the top 10 recorded days in the last hundred years. We’re all in the last six years. Now people argue, Yeah, that’s just like a natural heat cycle and Sun cycle. Okay. That’s what you want to believe. But the powers above control the FMC. And eventually, MMT. They’re going to put trillions of dollars towards it. And all I’m saying is you can get a piece of the action. Now, you could bitch and be part of the Peanut Gallery. And even if it works out that in 50 years, it proves that we humans weren’t the cause of this. And it was difficult. That’s fine. You could be right. But if you play this, you could be very rich. And I’d rather be rich, then. Bitter and right. You want to be the guy sitting in the corner. Bitter and right. You want to be that guy in the corner with all your friends and family and rich and happy.

Buck: I could talk to you forever, man, but I want to make sure I’m respectful of your time. Tell us a little bit about the. Well, obviously, we have the book and we’ve talked about that. That is called The Rise of America, Remaking the World Order, which I’ve gone through and we’re going to discuss in our private group. But you also have a great newsletter. Tell us a little bit about that and how people can get involved.

Marin: Sure. So the newsletter started five years ago this week and is basically and truly independent thought. You can’t pay me to get into our reports. It’s where I think there’s opportunities, you know, my style. I’ve got a pretty deep rolodex. We do videos and site visits where I bring my crew in. And I know that the average person if you’re a teacher, real estate or doctor or whatever engineer, you can’t do what I’m doing. And you could if you put the time in, but you have a job and family. Well, I go to these mines, I bring my film crew, and I show you what an underground mine looks like. And I show the problems or the, you know, the options of the optimism and how it goes, whether it’s from an oil well to a geothermal project, run a River, different places, gold mines, copper mines. We even went to we were the only group ever allowed to film the largest uranium mill on the planet. And that was equivalent of 2 8,000,000,000 barrels of oil a year of energy to put into peer comparable. So that’s what I write. We also one big benefit of what we call a choose a resource. Opportunities. I call it the CRO is when I do a large finance where I put up 10,000,000 personally into a deal, I tell the company I go, Hey, when I grew up in this business, I invent literally. I’m not here. I invented that model because I’d sit in the crowd. I was just a young guy man. I go to these investment conferences and all these big names, like dog chasing Rick Rue. I did that. PP, private placement, the stock and we ride the warrant even. What the fuck is a warrant? And I go back to see the big book like a nerd. There’s no warrant. Warrant. You Google it for your arrest, right? I’m doing the fuck is going on here. So after I figured this game out, I went fucking bullshit. The whole system was based on these management teams to get the cheat stock. Then they go back in the day, these old white guys who are influencers, they get the next seed. And then when they have big retailers and they were talking about the stock and everyone would blow up their paper to these crowds, I’m saying they go fuck in that shouldn’t find in the crowd. So in 2,006, I had this idea that why not let the crowd in at the same time, cut out the fucking bankers, and make the management pay the same price. Back then a very novel idea. And it turned out that people were craving this. And like, on the last day we had 360,000,000 US dollars in demand. The company is going to take a little over 105. And you the subscriber get to have the same price as the chairman of the company or the presidency company. The same price as me. And no fees are paid to any bankers because bankers are bankers. They add zero fucking value to the game. They wear fancy suits. You’ve never seen a fat banker because they have so much time to work out. And bullshit. They have nice hands. I got no time to even see my kids. I’m working like mad. All this packer comes in to pitch me a deal and I’m sitting there going, wait a second. I put this deal together and you want to see get the fuck out of here. Right? So that’s kind of the business. It’s caused me lots of enemies. It’s caused me a lot of problems. The regulators are like, Why the fuck are you doing this? If you’re not taking fees like millions of dollars and I get paid for my subscribers to cover the cost of research, I got a big staff to put it into perspective. You know what I did exactly this week? A year ago, we had a pandemic and we had to book a plane for my engineers and just to go to a project. After I spent three months on desktop analysis, like going through the data room. And then I had to go to the site and my subscribers got in at the same price as me at the same time, zero fees. And it turned out to be probably the number one performing gold stock in America. And that’s kind of what we do. It’s not every Wednesday we have a new stock pick. We went five months with no stock pick. Right? And I remember in September I put a big sell in all the gold. I don’t know if you remember that. Equinox was 17 and a half bucks. I said, Look, you guys should sell now, and I get hate mail. What the fuck is wrong with you. Gold’s going to the moon. It’s 2,000 dollars an ounce. I go, this stuff’s so cyclical. There’s an issue with mine. Just take some money off the table. Then I put the formula there. Now, that same company is eight and a half bucks. I’m personally buying a lot. And it’s a way better company today than a year ago. They bought another awesome gold deposit. But the market sentiment has changed. Yet gold is still 1800 and change is announced. Right? So the key is, I really show value and analysis of when to sell. What are the cattles? What are we looking for? Where am I wrong? I’m going to be wrong. I’m not perfect, just a normal guy who works hard, and that’s the same price as everyone else. But I break it down into changes. How do you go about investing? How much should you put in? What is speculation versus what is an investment? Right? So we break down all of these different features and every one of the financing. I say, hey, I’m the lead order. This is how much I’m taking at this price. If you guys want to come along, great. It makes no difference in my world whether you participate or not. But if you like it, contact the company. You can maybe get a set table. If you meet the criteria, usually the criteria. As you know, these lawyers, just pisses me off so much. The accredited factor. Now, when I first started the business, I knew nobody. I was into credit. And I remember sitting there going, What the fuck? You know? Why is this? You let me go to Vegas and gamble. You let me buy lottery tickets, let me buy booze. I’m old enough to go fight in a war for you. And you can do online sports gambling. But you’re not going to let me buy a fucking stock that I’ve done research on because you’re protecting me. And Here’s a perfect example. One of the stocks that we’ve done that you participated in, it was a dollar financing with a full five year Katusa warrant that’s going to list and trade on the big board in the US and the Nasdaq at about 50. The stock is trading 250 in the market. When I look, there’s no secret about it. It’s a pandemic. The company can do a roadshow. I said, I’ll put up 10,000,000 personally. My buddies will come in for the rest. I’ll guarantee you guys a 50,000,000 dollar deal. And they said, Well, you’re being we think it’s worth 252 bucks a share then go deal with the banker. I’m out. They came back and said, okay, guarantee it. Yeah, here it is in writing. Let’s move forward. We price-protected. Once the news came out, the stock went from, like, a buck 90 cents to mention, like, as high as five Bucks. And now it’s that two and a half buck range. But the regulators won’t allow you to buy it at a dollar. And you get a warrant out a buck 50, which is going to trade 50 cents to two dollars someone around that range, but they’ll let you buy that same stock for 250 in the open market. It blows my mind.

Buck: Yeah, no, absolutely. It’s an unfair situation. Totally. Fortunately, in my group and we have 2,000 accredited investors that are actually signed up for our private group. And I usually don’t make any suggestions to people publicly, but I do think that people really ought to be following Marin’s newsletter. Can you tell us again what’s the website again?

Marin: It’s KatusaResearch.com. And whether you sign up or not, there’s tons of heavy stuff. Like, every week I write about stuff. I’ll challenge management teams. When I publish my swap line stuff, I showed that pay. The bankers make 87% of their commissions from nonswap lie Nations. And I’m just telling them that their revenue is a bad place to be. So they did not like what I had to write. And it’s kind of our group, the subscribers. We raise more money for financing than the three largest Canadian brokerages combined. And we don’t take fees. So the bankers really don’t like me because I’m dipping into their Ferrari fund and their mistress fund. Right? It’s my style. And it’s part of the success. I started it. I got a chip on my shoulder. My parents called me Marin, and they called me Muddy. And growing up with a name like that, every teacher didn’t know how to say it. Of course, of course, I got a chip on my shoulder for five minutes. You know, I got a chip on my shoulder, but we worked their way up that I fight for the little guy. For example, I don’t know if you read last month’s newsletter that came out last week. I got a couple of really big swinging buddies and their multi-billionaires, and one of them asked for, like, 10,000,000 bucks, and I found Google. Dude, I can’t get you 10. Like, come on. Look, you’re just going to be passive. Think of this as a kiss. Take 250 and your kids will love it. He’s like, You know what, Marin? Send me an email. He goes. You know what? It’s not worth my time. Blah, blah, blah. Cool. But he was nice about another guy that I never even met. Wanted a big swing, same size and rated me the worst email. You can think you’re a fucking pricer an asshole. Who the fuck do you think you are? I’m like dude her out. I don’t give a shit, but all the guys who ask for 50 Grand or less, they got the full allocation. Of course, I’m not a part of the company and I’m not a broker, so I don’t get involved in the allocations. But you know, I made sure that the little guys were taking care of the big boys. They got pulled back because guess what? If I gave that 10,000,000 Bucks to that one guy and he’s already up two and a half three times his money with hatching his life, but taking 10,000,000 average 25. So taking 40 guys or 200 guys at 50 Grand and they can triple their money now that could actually change their life, right? So I’m about the little guy because I was the little guy when I started out. Like I didn’t have a brother or dad in the business. That was like the dude who can get me a job. And I literally knew nobody. I used to walk around these conferences. I was so scared. But to even ask questions of management to you? Sure. Because I didn’t know. Like, I didn’t want to feel stupid. Like I know nothing about this stuff, so I know what it feels like being the death now. You know, when I walk through the halls, the companies are scared that I’m going to expose them for being the fucking stupid ones right now. I just don’t touch you. Just don’t need what do we have? Five gold companies in our portfolio. That’s all you need. You don’t need 50. Like there’s guys out there, my peers, these news, other writers who are not allowed to buy stock, but they’re going to tell you what to buy. That makes sense. And they have 50 gold stocks. Why do you just buy the gold, which is a met and not bother? Because the commissions are going to kill you anyway, right? I don’t believe in that stuff. So that’s just kinda I guess I’m unique in my own perspective. Absolutely. And as long as I’m alive, I’m going to do it. Why? Because it’s fun. I have the best gig in the world.

Buck: I appreciate it, man. And I appreciate you very much. Marin Katusa, everybody. Marin, thanks again for being on Wealth Formula podcast. I’d love to have you back soon.

Marin: You have to make me a promise. You haven’t come to one of my conferences since 2017. I know I had Teeka there and I always love having you around. We’re going to do one next year. We’re going to call it Kiss. Because when I was a little kid, my favorite band is Kiss. Oh, it’s going to be called Katusa’s Investment Summit Series, just because it sounds cool. And what we’re going to do, I want to beat you up on stage, and then I’m going to have all the big Ballers in our mining world. There. I have some very special guests that are really, like top-tier people. But we’re also going to do a site visit on the third day to an operating gold mine. So we’re going to announce all that stuff. So you got to make a promise of being there because you missed the last few. You missed the last few.

Buck: I had a few things going on.

Marin: I heard. I heard. Pretty complicated. Glad you’re through it.

Buck: All right, buddy. Take care. We’ll love to have you back soon.