Hello, and welcome back to another episode of The Mark mass Show. Or of course, each and every week we're talking about the way the world is changing through what I call the decentralized revolution. If you haven't noticed, the world is changing, but you maybe don't understand what the heck is going on, and of course we talk about it each and every week most importantly so you can
understand where things are going. I was talking with my show producer Cue before we were recording and going through some of the show notes and talking about some of the different topics and you know, some of the big news topics that came out this week. He's like, Yeah, I don't know if it's that big of a story because it's not like tradeable. There's nothing that someone's going to do to change their investment portfolio off of this.
And that's absolutely right. What we talk about day to day isn't for you to go make a trade in your portfolio tonight on your e trade Charles Schwab or whatever and profit from this. What it is is it's about getting the direction right because the world's changing.
And so.
In the quote that's been used way too, way too moch used, I would say, but I'm going to use it anyway. And that's from the great Wayne Gretzky, the great one, one of the best hockey players of all time, and he said that the reason why he did so good paraphrasing was because he always skated to where the puck was going to be, not where the puck was right. So you've heard that before, so sorry for me to tell you again, but that's really the way it is.
The reason why it's used so much is because it's so true. And so what we want to do is we want to position ourselves to where things are going, not where they are. If we go to where they are, by the time we get there, it's going to be too late. And so we want to know where things are going, and so we look at the long lens. Warren Buffett, of course, you know, good old uncle Charlie
Warren Buffett. His partner Charlie Munger, has another quote that I like to use all the time, and he says that the big money is not made in the buying and the selling, it's made in the waiting. So you put those two things together, it's made in the waiting. Waiting for what waiting for the right opportunity waiting for that big fat pitch to come. But more importantly, when I get into that position, I have to also wait
or to develop. And so this is about the direction of where things are going, so we know that we're aligned properly as they continue to materialize. So in this hour, we're going to talk about the energy crisis and how the transition is causing the failure, how it's the transition that's causing the energy christap. We're going to talk about that. We're going to look at what the transitions are. We're going to look at this ESG, break that down environmental
social governance. We're going to talk about moving from reliable to unreliable energy. We're going to talk about why these transitions fail. We're going to cover the origins, the companies that are taking advantage of this, if there is any real progress, and so much more. This is a big show. I know I've talked about ESG a little bit in the past, We've never done this deep of a dive, and it's important for you to understand this because it
is literally changing the world. Without energy, I mean I can't even say without energy, Without energy, the whole world's dead.
I mean we need energy.
The law of energy states that energy cannot be created, energy can only be transferred. So everything in life is about energy. For example, for you to live, your body must burn calories. A calorie is a unit as a measurement unit of energy. Right, So the sun produces energy, it grows a plant, or the cow eats the plant, and that energy from the plant is from the sun to the plant, and then from the plant to the cow.
And then I eat the cow, which gives me energy and protein, and then that gives me energy to burn as calories.
And so that's how the whole world works.
And then I can dig oil out of the ground, which is more energy, which think that powers my car, and on and on and on. So it's important to understand that all of humanity's prosperity and flourishment comes because of energy. You know, things used to be really bad a long time ago, and really all of history is a story of people being cold and hungry. That's most of history people being cold and hungry. Read back through the early nineteen hundreds, eighteen hundreds to seventeen hundreds.
You've seen the movies.
The Game of Thrones, and it looks like all like, oh, look at them living in these beautiful castles and life is so good. No no, no, no, no, that's not how it worked. They were cold and they were hungry, and that's how most of the world is. Without energy. There was famines, there was droughts. But then we got energy, and we could build tractors that could build canals and bring water in amazing and it's through the use of
energy that we've been able to flourish. And you can trace back every prosperous nation back to the amount of energy that they have. And that's really where the United States took off in the lead because we were able to harness oil and energy, which led to the industrialization, which allowed to massive prosperity through using energy to manufacture goods and services that the world wanted, and so forth.
We're gonna talk about all this. I'm gonna break it down and again, if you want to be, if you want to be where the puck is going, you have to understand this. If you want your investments to be in the right place, then you need to understand this. Now I like to say it's not true, but of course, if you're not already in position, then I suppose you should be getting into position. But this is not financial advice. But you are listening to the Mark Ma Show. If you miss any of this, don't worry.
I got your back.
Check me out on the podcast. Just search the Mark Ma Show on any of your favorite podcast players. And if you could just do me a huge favor while you're there, just click on the like review button on the podcast. Share it with somebody who you think could benefit from it.
That'd mean the world to me, I'll ask. Okay, so let's talk about this for a little bit.
I want to break this down. We got a lot to cover. So first of all, ESG, what is it? More importantly, how did we even get here? Okay, now, if you want to look at how we got here, we kind of have to go back to the origins and what we can see that the origins of ESG and ESG investing really came by the key decision makers who wanted to use social responsibility as like an investing thesis. And I have no problem with that. As a matter
of fact, I'm a huge proponent of that. As a matter of fact, I constantly pound the table on that we should be voting with our money. So I shouldn't be giving my money to things I don't like. So, for example, I've been writing a financial newsletter for the last seven years where I do give people information on what they should be buying and selling. If you want to check that out, just go to my website at one Mark Moss and you can find out how to
get access to the newsletter there. But in this newsletter, I used to recommend that we bought stocks in China. As a matter of fact, we did really really well investing into Chinese companies in Chinese stock markets and Chinese funds and things like that. Emerging markets are a great place to get alpha right out to get profits. But about when the pandemic came out, all of a sudden, I just thought about it, and I'm like, I don't really want to be supporting China anymore.
There's millions of places to invest. Why do I.
Need to put my money into those I don't agree with them, so I'm no longer going to give them my money. So I believe in using your money to voice your vote, but also to build the world that you want. So, for example, you also know that I'm a huge bitcoin proponent. I believe that bitcoin is the only tool that we see right now today that can change the world, that can free us, and that can change the world for better. If not bitcoin, then what
I don't see anything else now. Maybe something else comes in the future, but as of now, that's the only one. So I believe that you don't have to that's okay, and so I want to see that flourish. So I
want to put my money into bitcoin. I also want to support the ecosystem, so I invest through the entire bitcoin ecosystem, including I'm an advisor to a bitcoin venture capital fund, Trammel Venture Partners, and I also started my own bitcoin fund called the Bitcoin Opportunity Fund, and we're investing through the entire bitcoin ecosystem because I want to put my money to build the world that I want.
Now.
If you'd like to learn more about the Bigcoin Opportunity Fund, check it out Bitcoin Opportunity dot Fund. It's go onto your website Bitcoin Opportunity Dot Fund. You do need to be a credit investor for that, but it's a good way to get access to this entire industry that way. So anyway, I am a big proponent. I recommend everybody invest into building the world that they that we want.
And so that's how ESG got started, right. It started in the nineteen sixties as socially responsible investing, which sounds pretty good. Nineteen seventy one, the packs World Fund was established by two United Methodist ministers who opposed the Vietnam War, so they didn't want to invest any money that would go towards the war. Great we saw Amy Dominie, who managed KLD Research and Analytics. She created a Domini four hundred index in nineteen ninety.
You know, we can kind of go through this.
ESG largely came from a combination of national and international standards. One of the significant milestones was the United Nation Framework Convention on Climate Change in nineteen ninety two. And this is where things really started to go a different direction. So the UN pushing them in nineteen ninet two, and this is where I start to divert from their idea of investing socially and my idea of investing socially. I'm
going to talk about that in a second. If you're just tuning in right now, you're listening to the Markmas Show. Of course we're always talking about this decentralized revolution. I'm going to break this down, so you know where we're going.
I got to take a quick break.
But when I come back, we're go and continue talking about the origins of ESG.
You don't want to miss it. We'll be right back. All right, Welcome back.
If you're just tune in, you're listening to the Markmas Show and we're breaking down the history of ESG. We're talking about the energy crisis and how the transition is actually causing the crisis, causing the failure.
So we're running through ESG.
We were talking about some of the origins before and really where things I said that we should be investing socially, We should be investing along with our ideas, our values to build the world that we want. That's what we want to do, and so I'm okay with it in theory we should all be doing that.
But where it goes wrong is where it got hijacked.
And so I talked about how really in nineteen ninety two, the United Nations created this framework for climate change, and this is where things, like I said, really really went off the rails. Now we can go back and we can see all types of examples through history where people formed groups. So like there was one the Women's Christian Temperance Union WCTU founded in eighteen seventy four, and they promoted investing into things that they shared ideologies. So, for example,
they didn't invest in the companies that produced alcohol or tobacco. Great, if you don't like alcohol, tobacco, you don't want people to have it, then don't invest into it. That's fine. The company didn't want to invest into any companies that would exploit its workers or engage in unethical business practices, Great, don't do that if you don't want to.
I think that that is a good thing.
But these were like a really like OG, you know, old school in socially responsible investing group. And that's okay. But going back to ESG for a second, Like I said, it was introduced by the UN and we saw it really become officially introduced in two thousand SI again by the UND in their Principles for Responsible Investment Report pr I, and basically the ESG criteria were required to be incorporated
in the financial evaluations of companies. And so what that means is that they now had a set of metrics that they could regulate companies by. So we could say, hey, we're going to look at you company by all these metrics, and if you don't fit into them, then maybe there's no money for you. So we're gonna talk about this is it's really turned from cooperation and from preference to now coercion, and that's where things.
Fall off the rails.
Now I want to talk about again. I think this is a good thing. We should be investing into things that we believe. Milton Friedman a famous economist. If you haven't read his stuff, I highly recommend it. He wrote a paper on the socially responsibility. The social responsibility of business is to increase its profits, because that's sort of what a business is for. Now, if you want to go be you know, Mother Teresa or Gandhi, then you should certainly do that. If you're a church, then you
should certainly be feeding the poor. But business is in the business of business, which is to make profit, and it's the socially responsible thing to do. And what he says, and I'm going to paraphrase this, and I highly recommend you to go read it, but he basically says that through the pursuit of profit, you chase the most socially responsible goals. So let me give you an example there's
a local high school here by my studio. I drive by it every morning i'm away to the gym, And on those fences of the of like the baseball field, are like signs, and the whole school are signs of all the local businesses, local real estate agents, local dentists, orthodontics, whatever. Right, Why do they give money to the school to have their sign there? Why do they want to have their
sign there. Well, they hope it brings them business. So through the pursuit of profit it they're acting socially right. They're giving money to a good cause in returns of hopefully getting a profit back. Now, let me just say I also believe that we should all be giving money charitably. This is a really big problem that I want to
dive into just for a second. I was recently on an airplane, sitting in first class, sitting next to another guy who looked like he I kind of glanced over at his work and I could tell he was working on some like high level management stuff, and so I kind of struck up a conversation with him, which I don't always do, and we start then we start getting into like business stuff, and then we start getting into like investing, and then we start get into like social
political things. And you know, he really thought that, you know, the government needs to continue to tax us so much so that they the government, they after they tax us, can go do all these welfare programs and things like this. And I just said, hey, let let me ask you a personal question. I'm sorry if it's too personal, but how much of your income do you give to charity? Do you donate? Do you do you go on mission
trips with your kids and help poor people? And they said, no, we don't do any of that, and I said, yeah, I figured and the reason why is because because you don't give, then you feel that nobody else will give. And so the only way that those poor people get anything is if the government steals it from us and then redistributes it. But you see, I give a big chunk of what I earn, and so I don't see it that way. I see people all around me giving.
As a matter of fact, I just got back from my fifteenth annual dirt bike trip we do called the Baja Beach Bash dot com check it out, where we raised money for an orphanage down in Mexico this year. In twenty twenty three. In July, we raised about four hundred thousand dollars me and my buddies for this orphanage. We've raised over two point two million dollars for them since we've done that. This is just one thing, and I'm not here to brag. What I'm saying is that
we should all be doing this. That's the socially responsible thing to.
Do, all right.
Now, going back to this, So, this ESG thing, it really went off the rails because of the UN, and the UN tried to co opt this and then use it for coercion. So how did they do that? Well, they established these.
Principles, these ESG principles.
And they basically got sixty three investment companies with about six and a half trillion dollars in assets under management to come on board with them. And these these companies that controlled six and a half trillion dollars, they got them to basically agree that if these companies don't adhere to these arbitrary things that we've put together, then they get no money. As Mark Carney says, they'll be economic roadkill. So who are they? Well, Amy Dominie, we mentioned her
name before. Brian moynihan, he's the CEO of Bank America. Now what's important to understand is that, of course Bank of America Brian Monihan the CEO, alongside the Big four accounting firms. So you always hear reference to the Big four Deloitte, PwC, KPMG, and Ernst and Young. So if you're a public traded company or your big forty five hundred company, you need use a Big four accounting firm.
So with Bank of America and the Big Four, they accelerated this ESG transformation through the establishment of a set of standardized measurements of twenty two specific metrics to create a framework for companies to report their results. And if the results are favorable, they get funding. If the reports are unfavorable, then they get no funding. No money for you like the Soup Nazi, all right, So that's sort of how this happened. Then we saw other institutions, institutional investors.
Grab onto this.
Of course, we talk about Black Rock doing this all time, State Street Global Advisors of course as well, and on and on and on and so this is a really big thing. This is how they've been they've been tackling this. Now we can see that a twenty twenty two report by the Global Sustainable Investment Alliance found that global ESG assets under management reached thirty five point three trillion in twenty twenty one, up from twenty two point nine trillion
in twenty twenty sixteen. So we can see that these investment groups are moving into this and putting money into anything that could be deemed ESG. But does that change the incentive structure just because they say they're ESG, are they really how are they reporting this? Well, we're going to dig into that. We're going to dig into that. We're going to talk about the problems that this has created, the crisis that we're literally in because of this, and
where this goes. If you're just tuning in and you're listening to the Mark Mass Show, of course we're aways talking about the decentralized revolution, and this is a good example of how, you know, good intentions have turned bad have now caused a massive crisis that we're dealing with. So I'm going to continue to break this down. I'm
going to show you exactly what ESG is. I'm going to show you how these investments are turning sour and actually how through mismatched incentives it's causing the crisis that we're in. We'll go through some specific examples, especially what's happening right now in Saudi Arabia, what's happening in South Africa, what's happening in Germany, and yes even here in the United States.
Back of that and more in a minute. Don't go away, I'll bear back.
All right, welcome back if you're just tune in here listening to the Mark Moss Show. We're talking today about, of course, like always, the decentralized revolution, how the world's changing, but specifically today we're talking about the energy crisis and how the transition is causing the failure.
Yeah, that's what's happening now.
We're talking about these esg these twenty two specific goals that companies have to meet if they want to get money, if they want investment, and of course if you're a business, then you don't have any capital, you don't have a business, so of course they have to do that. But what's happened is, you know, these create perverted incentives. Remember we talked about Freedman talking about really the socially responsible thing
for businesses to pursue profit. That should be the incentive and through that incentive, then they'll have good, you know, good things that they do, like giving money to the local high school. But when you start to change the incentives, then people start optimizing for other incentives.
So for example, like ESG.
So if you have to meet all the factors of a ESG, you get a lot of money. So what do you think happens, Well, companies start trying to optimize for ESG, so they get a lot of money.
And how do they do that?
Well, they do that through lying and stealing, because of course there is really no way to hit all those goals without that, so they do what we call green washing, so they pretend like they're green even though they're not really. How do they do that well? So, for example, one of the things is to reduce emissions, that's only part of it. So the environmental E, environmental S social G is governance. So the E environmental is like how much carbon is are you outputting? For example?
Right?
Then there's the social so then that's like what are you doing socially? And then there's the governance. Do you have a diversified board of people on your government board? But on the environmental side, you need to not produce as much carbon, because supposedly carbon is somehow like thermometer of the world.
That's pretty strange if you think about it.
But anyway, they're raided by how much carbon they produce or don't produce. So one of the things that they do is they buy offsets carbon credits. So for some reason, there's certain things that you can do that create carbon credits. So, for example, Tesla by making electric vehicles somehow creates carbon
credits that can then be sold. And then these companies that produce lots of carbon just buy these carbon credits and then somehow that gives them a net zero net being you take the total amount they emit minus what they bought the credits give them a net zero score. Right, that's what they're aiming for, the net they're trying to bring down. The problem is is that this is all
sort of like a big scam. So where are these credits being created from, how are they being traded, and what is that even doing for the economy or I'm sorry for the environment at all. As a matter of fact, emissions have not gone down at all. Businesses now just spend more money to buy offsets, so they haven't changed the amount of carbon going into the world. They've just
now created a side market. Now, what's wrong with that? Well, the side market means that for no other reason than to have some arbitrary goal of bringing down carbon, which hasn't done any of that. But now they created this market which now companies have to buy into, which makes their expenses go up, which means they have to bring their prices up, which means that you get to pay more for your products and services, which means that your
quality of life went down. It means you have to work more hours now to have just the same quality of life that you had before because costs have gone up so much.
That's one example.
We can see report after report after report how it's plagued by fraud. At twenty twenty one report by the Carbon market Watch found that the carbon credit market is plagued by all kinds of fraud. There's double counting, there's wash trading, there's green washing. As I said, green washing is when a company makes false or misleading claims, but it's environmental credentials in order to sell carbon credits. We
see large corporations exploiting ESG principles. For instance, some might use shell companies to make your operations appear more ESG compliant than they are. And this isn't just like some theory. We see this over and over and over and over.
As a matter of fact.
A twenty twenty one report by the Environmental Investigation Agency found that several large corporations were using shell companies to avoid environmental regulations. Saudi Aramco, one of the largest companies in the entire world, has done this with a twenty eight billion dollars worth of funds.
So this is what's happening.
When you create a perverse set of incentives, then you get perverse actions. Now to take advantage of this, of course, the big Evil Empire, the largest asset manager of the world, black Rock, has jumped into the mix and they started creating ESG funds. So now we're going to create these ees ETFs that have all these ESG companies in there, so we can raise investment capital directly into this ESG fund. But turns out when you invest money, you're trying to
get money back. So if I'm investing money, I wanted to go to the companies that have the best chance of returning my capital, unless it's a donation. Like I said, invest in things that you want. So I give my money to things that maybe I don't expect the best return from just because that's where I want my money going. But for the most part, if you're investing your money,
you're trying to get the best return possible. It turns out when you run a business based off of their ESG scores and they're not optimizing for profit, well it turns out they don't have the best profit. So it turns out they don't do very well. And as a matter of fact, es I'm sorry, Blackrock had to close their ESG fund because of a lack of interest. Why
because it had poor performance. So you look at all the funds that Blackrock has and the ones that have the worst performance, you don't want to invest into them. And of course that's the ESG because they weren't optimizing for profits, and so you know, there's other parts of it. So then there's the social side, which then kind of led to this DEI diversity, equity and inclusion. So it's
sort of like virtue signaling. This is what's led to a lot of the Dylan Mrvany Moving, you know, Budweiser controversy, things like that because they're trying to now optimize for that, for this DEI diversity, equity and inclusion. We can see that a Just Capital report around that twenty percent of companies with dedicated DEI roles have eliminated or disregarded those
roles altogether. So they're adopting it, and they're trying to do it, but then they realize it doesn't really work and it's actually hurting their business of being in business, of being in business of making profits, and they end up abandoning them. So what they're doing is they're they're doing some sort of virtue signaling, but really they're not doing anything at all, which is part of the reason why you see Nike running Colin Kaepernick or you know,
like I said, Budweiser with Dylan Morvany. They're trying to appease these DEI you know gods, these DEI regulators, if you will. But it's a bigger problem than that. So ESG is actually causing, as we started out, talking about, an actual crisis. So what do I mean by that, Well, the biggest thing the E in ESG is environmental, and supposedly the goal is to bring carbon down and the number one enemy according to them is now energy, specifically fossil fuel energy, which is oil and gas, oil and
natural gas. Now it's funny because do you know what fossil fuel is fossil It comes from fossils, So it makes you think, like some bad connotations, Well fossil fuel, And I'm not a geologist, so if you are, go ahead and leave me comments and tell me if I get this wrong. But fossil fuel come from fossils, which are actually old plants that are in layers of the earth that have been carbonized and have turned into oil and gas, and so we harvest those out, so sort
of like environmental, sort of like renewable. But what they've done is they've now labeled those to be bad, and so now we have to go to wind and solar what they call renewable, which is pretty weird because solar panels and windmills last about twenty years.
They're not renewable at all, they're consumable. But anyway, they want to go to these renewables.
So like in Germany, for example, well because of these est metrics, they want to transition their energy into green, so they want to have wind and solar, and so they've started to shut down their energy, including their nuclear reactors. Now just recently nuclear actors are now coming back as being green, but skipping that what.
We can see has happened.
So we saw energy, the energy prices going through the roof because they shut down their energy their nuclear reactors. Turns out, supply and demand still matters. So when they got rid of their nuclear power, their energy prices went through the roof. But then the final straw was the Russia Ukraine War. They lost the North Stream pipelines and they don't have gas.
Now.
The reason why this is very very very important to understand is because in Europe you have the southern nations that we call the pigs Portugal, Italy, Greece, Spain, right, the pigs, and they don't really have any industry, they don't have any really economic output exports. They have tourism mostly and so they're part of the EU European Union. But it's Germany that's the manufacturing hub, it's the engine of Europe. They're the ones that produce all the exports,
produce all the money and help support everybody else. But because of what Germany has done by chasing ESG, they've basically shot themselves in the foot or really shot themselves in the head. And so now because of energy prices going sky high, it's caused a massive, massive problem. I'm gonna break that down for you in a second. If you just tune in, you're listening to the markmas Show. We're talking about ESG right now, and we're talking about
the problems that it's created. I'm gonna come back and tell you the rest of this in a second. Don't go away, I'll bear back, all right, Welcome back. If you're just tune in, you're listening to the Mark Maas Show when we are talking today about the energy crisis and how the transition is causing the failure. Really, we're breaking down what ESG is, Environmental social governance, what that means, and we're looking at the problem that it's created.
If you missed any of this, don't worry. Check me out on the podcast.
Just search the Mark mah Show in your favorite podcast player, or you can watch me and listen to me at the same time on YouTube. Just go to the Market Disruptors YouTube channel then you can check me out there.
But back to who we were talking about. I was setting up that Germany has put themselves into a danger situation, and not just for Germany, but for the entire European Union, because Germany, being the economic engine of the European Union, really kind of dragging or or polling the entire European Union along together. They embarked on some crazy radical ESG policies and that led to them shutting down their own energy because who needs it, right, Well, it turns out
we need it. Turns out it turns out if you want to produce goods and services, you need energy. And so with energy prices spiking so high, it became very problematic for the manufacturers that were usually energy to make goods and services. So they had to raise their prices, which made it very tough for people living in Germany because now all the prices went up on goods and services. But the real problem came during the Rush of Ukraine
situation where they lost access to their natural gas. And what we're witnessing now over the last year is that Germany is in a process of d industrializing estualizing through when we went from no machines to machines, we went from the farms into factories. But now they're de industrializing, meaning the factories are disappearing. Well that doesn't sound very good.
Well it's not so.
Because of the cost of energy are so high and unreliable. They're being ration they can't run all the time. Manufacturing companies have had to leave Germany. One of their largest companies, BASF, has left and they went to China. And when these companies leave, they don't just come back, so they're in the process of de industrializing.
Now that's bad for Germany, but it's bad for all of Europe.
As a matter of fact, the IMF International Monetary Fund expects the German economy to shrink by zero point three percent this year, which doesn't sound like a lot. But that's a bad deal. Economies should always be growing. We should always be producing more goods and.
Services, not less. It's a big deal.
Now that sounds bad. I want to jump to another story about South Africa. South Africa is in a world of and you won't even believe it. They've been struggling with power shortages for years because again, yes, they need to be more environmentally conscious, and they need to shut down their cheap, reliable, abundant energy sources and transition to very expensive, costly and unreliable energy sources for.
The e you know, the EESG. We got to do it right.
So in South Africa, they have been deteriorating for a long time. There's massive economic turmoil and social unrest that's happening right now. It's looming ahead of the elections that are coming next year, and it's getting really bad. Not only is it bad because of the transition, it's also hampered by massive amounts of debt, corruption, and yes, of course, sabotage. So they're trying to figure this out. They want to escape their dependence on coal, cheap, abundant energy and move
to as I said, unreliable you know, renewables, unreliables. So now they've been rash. Since two thousand and seven, s Com, which is their power company, has been forced to ration power through intentional blackouts known as something called load shedding, and we have the same thing in southern California for the exact same reasons. California has to also do load shedding because we can't produce enough energy for everybody.
But in South Africa it's way worse.
As a matter of fact, they've been shutting off the power for up to twelve hours per day, and now they're predicting that they're going to take the power outages up to sixteen hours per day no energy. Now what would happen if you shut the power off for sixteen hours a day, Well, it turns out you don't have a lot of economic activity. The power instability is so widespread that they don't They have very very very limited
hospital services. Turns out, if you go in the hospital, you probably need machines suck to electricity and it probably needs to be twenty four to seven sixteen hours a day of blackouse pride doesn't work, so very limited hospital services. Your kid was born premature, needs to go an incubator, Sorry, no electricity for you. Oh you had heart attacking, need to be on a heart monitor?
Up, Sorry, no electricity for you. You get the idea.
We have increasing food and water scarcity, rising bankruptcies, worsening crime rates, unemployment exceeding thirty percent, and South Africa's Central Bank warns that load shedding is going to cost the economy nearly thirteen billion this year.
So that's what ESG gets you. Good job.
The coal sector, which is what they're trying to get rid of, employees indirectly up to two point three million people. So aut a time when they already have unemployment exceeding thirty percent, they want to go ahead and just shed jobs for another two point three million people.
Sounds really good.
South Africa is on a course to see its most blackout days in history this year.
Wow.
So again, this is the same thing that's happened in California. It's not a big it's not it's nothing new.
So this is where ESG gets you.
You invest into companies who are not trying their best to produce profits. So they've gotten away with this because Blackrock, State Street, Vanguard they don't care about profits. Why don't they care about profits because it's not their money? Well, whose money is it? Well, it's your money, when your pension, when you're four oh one k, when your mutual fund goes into their management. Blackrock State Street of Vanguard manages almost you know, the majority of that. They are investing
your money and it's not their money. And they make money regardless, So what do they care if the companies underperform other companies? They would rather push an ideology. That's why when people say bud Light, you know they screwed up. Hittumar hurts, go woke, go broke. We're gonna, we're gonna,
we're gonna boycott them. Well, they don't really care. And the reason why they don't really care is because they've been taken over by these big institutional investors who don't invest their own money.
They invest your.
Money, and they're more and what they care about more is their ideology over profit. And again that's not a bad thing. We should be investing our money where we see fit. The problem is when you have corporations like black Rock, Wall Street, Vanguarden, State Street doing it with other people's money.
That's the problem. That's the way I have a problem. You should certainly.
Invest your money where you see fit, and if you lose your money, that's on you. But when you have these institutions taking your money and investing in a way that doesn't align with your visions. And on top of them, not only are they investing against your vision, your ideologies in the world that you want, they're not only going against that, they're also losing you money at the same time.
That's the problem. That's a big problem.
Now, this is a big deal for a lot of reasons. Obviously, one we know it doesn't work. Going back to what Friedman said, really the social responsible thing is to chase profits, because if you think about it, that drives everything. So for example, Patagonia is a massive, you know, clothing manufacturer, make really really high end jackets and things like that.
I'm sure you've heard of them.
Their whole mission is that they make you know, sustainable products. They give money back to the environment and things like that. So if I care about that and they want to make profit, then they do those things and we support them. So through their pursuit of profit, they are then doing
the social responsible thing. If there's two companies, one company wants to dump you know, hazardous waste into the desert and the other company wants to recycle and make sure that the hazards waste doesn't go into the environment, well then we would as consumers most likely we would support the company that's not turning my hometown into a hazardous wasteland. So I would support the one that doesn't, And so through their pursuit of profit, hoping that I give them business,
they do the socially responsible thing. The problem is when the incentives get perverted, when the government steps in, they and then they bring in the bankers and they bring in the investment companies and then they start giving money for things insane, things like this that don't work, and then people start to change their incentives. Perverse incentives lead to perverse outcomes. It all goes back to the money. We can talk about every problem in the world, and
it always comes back down to the money. When the money supply is broken, it changes the incentives of everything. And we know this.
It was told one hundred years ago.
Vladimir Lenin said that the best way to destroy capitalism is to debouch the currency through massive inflation. We can steal arbitrarily, so when they inflate money, they steal from you, and it can be done so far that all relation to money is lost and the best way to get rich is through gambling and theft. Very prophetic words from
the leader of the revolution and communist Russia. Anyway, if you're just tuning in you're listening to the Mark Mas Show, we just run through what esg is and the dangers to causes.
Hopefully that's helpful.
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Thanks so much for listening today.