In this episode of Monetary Matters, Max Wiethe sits down with Michael Kao, CIO of Cantos Capital Management and the Kao Family Office, to unpack the real energy risks facing the U.S. economy. The conversation opens with Venezuela and the Trump administration’s push to reshape global oil supply. Michael explains why Venezuela’s vast reserves are unlikely to move the market quickly, why OPEC spare capacity still caps oil prices, and why he remains structurally bearish on oil despite constant fears of shortages. From there, the focus shifts to what Michael believes is the true vulnerability: natural gas. He lays out a three-pillar thesis centered on premature electrification, the explosive growth of AI data centers, and expanding LNG exports. Together, these forces are driving electricity demand higher for the first time in decades, straining a power grid that increasingly depends on natural gas for baseload generation. The episode concludes with a discussion of how Michael is positioning for this shift, why he favors natural gas mineral rights over commodities or equities, and why natural gas is fundamentally different from oil when it comes to geopolitics and government intervention.
Read Michael’s Substack, “Macro/Geopolitics/Investing - The Energy Achilles' Heel of America” here: https://www.urbankaoboy.com/p/re-macrogeopoliticsinvesting-the
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Timestamps:
00:00 Introduction to Geopolitical Energy Security
00:46 US Energy Concerns and Venezuela
01:33 Venezuela's Oil Production Potential
03:22 Natural Gas: The New Dependency
04:49 Challenges in Oil Production and Pricing
15:16 The Role of Natural Gas in the Energy Market
20:58 The Future of Natural Gas and Electricity Demand
31:13 Investment Strategies in Natural Gas
32:03 Challenges and Risks in Natural Gas Trading
33:45 Advantages of Mineral Rights Investments
38:16 Global and Local Dynamics of Natural Gas
40:39 Data Centers and Energy Demand
42:39 Future of Natural Gas and Market Trends
52:26 Investment Considerations and Strategies
01:03:12 Conclusion and Final Thoughts
