Introduction: Marin Katusa is chief energy investment strategy for Casey Research and managing editor for Casey Energy Confidential Casey Energy Report and The Colder War Letter. Katusa's 2014 book, The Colder War, "is a timely and fascinating look at Vladimir Putin's master plan to make Russia a world leader again, and what this could mean for everyone's energy consumption in the decades to come."

Marin Katusa is a regular commentator on BNN and is a member of the Vancouver Angel Forum where he and his colleagues evaluate early-seed investment opportunities. He also manages a portfolio of international real estate projects.

Daily Bell: Marin, The Colder War is a great book. I took it with me as a companion on a long flight, and I'm glad I did. It's full of geopolitical history and insight, and it's a joy to read.

For the benefit of readers who haven't yet read The Colder War, please tell us what the war is about.

Marin Katusa: Vladimir Putin and his inner circle have set about to restore Russia's influence in the world, perhaps to the point of preeminence. That necessarily entails an attack on US economic and political power.

Like a pincer, Putin's Colder War strategy has two parts. First, exploit Russia's vast natural resources to achieve dominance in all aspects of the energy markets, including production, processing and transport of oil, natural gas and uranium. Make the world, especially Europe and Asia, so reliant on Russia for energy that no country will want to confront Russia about anything.

Second, undermine the U.S. dollar's position as the world's reserve currency. Control of world energy markets would get Putin more than half way to success in dethroning the dollar (which I call the petrodollar, because for the last 40 years it has been the nearly exclusive means for settling international trading in oil). Complete success in dethroning the dollar would be like attacking the U.S. with a financial nuclear weapon.

Daily Bell: We read a lot about alternative energy sources. Is it possible that in ten years the world won't need oil and gas? How about thorium or a Tesla-type energy application? Any of those things would ruin Putin's strategy for the Colder War.

Marin Katusa: Not going to happen, for so many reasons.

Thorium won't replace uranium as feed for power plants for at least 50 years. Thorium makes sense from a "technical" aspect, but the reality is it would cost trillions of dollars to replace the existing uranium infrastructure—it just won't happen. And fusion is nowhere near ready.

New technologies have emerged for exploiting oil, natural gas and uranium that will make it cost-effective to use resources that previously were uneconomic. That trend will continue, and fossil fuels will play a big role in the global economy for at least the next 50 years.

Daily Bell: What about wind and solar power?

Marin Katusa: It's improving, but I always think back to a fact I read years ago, that to have the US powered 25% by solar, the whole United States would have to be covered in solar panels—all of it, the whole nation's land mass. Do I see a future where it will be common for a building's exterior to function as a solar panel—yes, but again, that's decades away.

Daily Bell: Give us a little on Putin's background, going as far back as you can.

Marin Katusa: Vladimir Putin grew up in St. Petersburg, often under the care of his grandfather, who had been the personal chef for Lenin and then for Stalin. The boy heard some very inside stories. Putin later studied law and became the head of the KGB in East Germany during the Cold War. Putin saw the collapse of the USSR in real time; he was stationed in East Germany when it occurred.

Then he went back to the University of St. Petersburg and completed a Ph.D. While in St. Petersburg, Putin was mentored by Anatoly Sobchak, the city's major. Putin quickly rose through the political ranks and in 1999, though still little known to the public, became prime minister of Russia under Yeltsin. In that post, Putin became a national hero when under his leadership the Russian Army defeated an army of rebels in Chechnya. Months later, on Dec 31, 1999, Putin became the president of Russia when Yeltsin resigned.

Putin won his first election in 2000, then consolidated his power by taking down the oligarchs, the most famous being Khodorkovsky in 2003. By then, the bull market in oil had started, which gave Putin the revenue to reestablish Russia as a global superpower.

Daily Bell: Is it possible that Putin was groomed for great things right from the beginning because of his family's contacts?

Marin Katusa: No, I don't think so.

Daily Bell: In a rise to power that you trace in The Colder War, in little more than three years, Putin went from the job of Deputy Chief of the Presidential Property Management Department to Deputy Chief of Presidential Staff to First Deputy Chief of Presidential Staff for regions to head of the FSB (successor to the KGB); became a permanent member of the Security Council of the Russian Federation and then its Secretary; was appointed First Deputy Prime Minister then as acting Prime Minister; then he ran for and won the Presidency of the Russian Federation. Not even Captain Marvel moves that fast. Was there something more to Putin's rise than cunning, drive and luck?

Marin Katusa: Yes. Before Putin, there were five prime ministers who all failed miserably. Putin recognized that unless he did something substantial, he would become failure number six. So he gambled by going to war with Chechnya. The risk paid off, and Putin gained a quick victory. Then he took on the oligarchs and won. His moves have been very calculated. Putin should never be underestimated; he is very smart. And he has surrounded himself with people who are completely loyal to his cause and to himself.

Daily Bell: The Colder War focuses on Putin, but should he be thought of as part of a political apparatus, the part that shows up in public? Is it possible that Putin is a front man for larger Russian interests? Or perhaps for internationalist interests?

Marin Katusa: Putin is the public face of a reestablished Russian superpower, but he's not just a front man. It was under his leadership that Russia reestablished itself as a global power, and with that, formed alliances with countries such as China that work against US global interests.

Daily Bell: Is Putin being deliberately positioned by the West as a kind of Hitler bogeyman?

Marin Katusa: I would say yes, as the Western media is automatically so anti-Putin.

Daily Bell: During Hitler's rise to power, Germany and its military-industrial complex were funded to a degree by Western interests. Is there any evidence that Western interests were complicit in Putin's rise? Is it possible that Putin is playing a kind of assigned role as an enemy of the West? That would be a dialectical pattern that history has repeated, especially in the past 100 years or so.

Marin Katusa: Definitely not.

Daily Bell: How do you expect the Ukraine conflict to play out?

Marin Katusa: Ukraine is a former Soviet Republic and is still home to many Russians, a majority of them in the eastern area. After Ukraine was destabilized earlier this year, Russia annexed Crimea. It's a warm-water, deep sea port for Russia. It lies along the route planned for Russia's South Stream gas pipeline for delivering Russian natural gas to Europe. And Crimea may have offshore oil and natural gas deposits.

I see further conflict in Ukraine, as the people and the nation are being pulled in two different directions. On the west, the EU and US interests want Ukraine to join the EU. I see that happening, but only after the EU puts up tens of billions of dollars to prop up Ukraine and billions more to pay Russia for past deliveries of natural gas. Otherwise, the flow of gas through Ukraine to the rest of Europe will stop.

Thus far, I'd say Russia has been getting the best of the deal. They got Crimea, something they have wanted for a long time, and the EU ends up with tens of billions of dollars of future liabilities. The Ukraine issue will continue for some time.

Daily Bell: The West obviously had a hand in destabilizing Ukraine. Has Putin outmaneuvered the West?

Marin Katusa: Yes.

Daily Bell: How will Europe try to deal with Putin?

Marin Katusa: They have tried, and they continue to fail. Putin is moving his agenda forward by signing major energy deals, such as the $400 billion natural gas deal with China. Another example is the Iranian nuclear deal.

The West has imposed economic sanctions, which have made life difficult for Russian companies, but ironically, have also hurt major companies in Germany. The sanctions have fostered a Sino-Russia alliance, a bad development for Europe in many ways.

Daily Bell: Has Putin essentially won in Ukraine? Does this make him more dangerous to Western interests?

Marin Katusa: The reason Putin has become more dangerous to Western interests is that he now has shown repeatedly that he will stand up to the EU and also to the US. The world has taken notice; other countries have seen that it is possible to say "no" to Washington.

Daily Bell: Is Russia essentially a European country?

Marin Katusa: Most Russians view themselves as Europeans. However, the rest of Europe sees them differently.

Daily Bell: Under Putin, will Russia recreate the USSR?

Marin Katusa: No. Putin is much too clever for that.

Daily Bell: The BRICS acronym was devised by a Goldman Sachs banker as a theoretical construct. Have those countries nonetheless emerged as a credible counterforce to Western interests?

Marin Katusa: It's already started, first with Russia and with the support of China. Consider, for example, how Russia and China questioned and opposed Obama's decisions in Syria last year – and, ironically, most of America agreed with Putin, not Obama. Another example is the BRICS bank being promoted as an alternative to the IMF.

Daily Bell: Will China continue to side with Putin?

Marin Katusa: The $400 billion natural gas deal signed last summer is the largest ever construction project on Earth. This is the first of many giant deals between China and Russia. Yes, China will continue to back Putin's plans.

Daily Bell: Will the current US-led sanctions damage Putin politically in Russia? Are people in Russia getting tired of Putin? Is his popularity in decline?

Marin Katusa: No, his popularity is not in decline. As much as our Western media would like to say that his published approval ratings are fake, the reality is that Russia under Putin has increased its standard of living, increased its GDP and now, in 2014, for the first time since 1992, the birth rate in Russia is greater than the mortality rate. Interesting how the Western media never mention those facts.

Daily Bell: Were Putin to fall, would someone else come along to continue with his strategies? In other words, are those strategies as much the product of historical logic as they are of Putin himself?

Marin Katusa: Good question, and this is something we cover in the book. As I mentioned earlier, Putin has a loyal inner circle, whose members, such as Igor Sechin, would continue with Putin's grand plan. Putin is the leader, but there are many who would step up if for whatever reason Putin fell from power. Russia does not live or die by Putin's force; rather it was under Putin's leadership that Russia re-established itself as a superpower, and Putin was wise enough to surround himself with a loyal, capable group that will advance Russian interests.

Daily Bell: How do you see the world in ten years? Will it be a more dangerous place? Will the petrodollar be finished? What will have replaced it?

Marin Katusa: Sadly, with the evolution of modern warfare, I see more drones being used both above ground, on ground and in the oceans. I do not see peace in the Middle East any time soon; rather I see more chaos over the next 10 years.

I also believe there will be significant damage to the petrodollar over the next decade, even though the US will do whatever it can to resist that damage. Russia and China (and the governments of many other emerging economies) want to weaken the petrodollar by promoting the use of other currencies for trading oil and everything else.

Repeated jabs at the petrodollar will come from bi-lateral currency agreements. For example, the $400 billion Russia/China natural gas deal is actually a zero dollar agreement. Payment for the gas will be settled in rubles and yuan, not in US currency. Those countries also are tilting the composition of their official reserves toward gold and away from dollars.

Daily Bell: Is international commerce headed toward a basket of currencies, a kind of bancor good around the world?

Marin Katusa: Yes. I think that will be the straw that breaks the back of the petrodollar.

Daily Bell: Do you see any sign that Western interests themselves are destabilizing the dollar in order to move toward a more global financial system?

Marin Katusa: A recent example was France, with their food-for-oil program with Saddam Hussein. Most recently Total, France's largest oil company, attacked the sanctions against Russia and the petrodollar itself with a decision to make a $27 billion investment in the Russian Yamal LNG project and finance it without using dollars. The trend will continue.

Daily Bell: Tell us what will happen to Western societies as the Colder War progresses, especially if Putin prevails.

Marin Katusa: If the petrodollar dies, the US standard of living will be cut in half. It will be worse than the Great Depression. It will be worse than anything the US has ever seen.

Daily Bell: What should people do now to survive the Colder War and perhaps profit from it?

Marin Katusa: The first thing is to educate yourself about what is really going on with the Colder War. That's what the book is for. Then invest a portion of your net worth in resource companies that will benefit from the Colder War. Also, you will want some exposure to physical gold, which should profit from a depreciating US dollar. And having more than one passport is something I believe is prudent, as is keeping bank accounts in more than one country. If you can afford it, owning a home in more than one country is prudent internationalization.

Daily Bell: Given the maneuvering as Russia and the West face off over energy supplies, I can see how companies that provide oil and gas, especially to Europe, are going to reap terrific rewards. How would you go about identifying companies that will be aggressive about profiting from the conflict?

Marin Katusa: To win with resource investments, you need to go with the strongest management teams. They won't just have experience; they'll have experience with success. And they'll be investing personally in the company you're considering, right along with you.

For myself and the funds I manage, I look for companies run by the absolute best management teams, people who've proven they'll know how to profit from the Colder War.

Daily Bell: What specifically should people look for in oil and gas companies?

Marin Katusa: First, there's skill at keeping ahead in the technology race. Super fracs and Super pads were science fiction terms just a few years ago, but now they're becoming ho-hum. Fracking and other unconventional technologies are advancing and evolving so fast that you want to make sure you are invested with people who can keep up.

Next, there's land. The best geologists and management teams will pick up big sections of land before an area has attracted a crowd. Some companies we've invested in picked up land for less than $1 an acre and now it's valued at over $1,000 an acre.

Third, there's business basics. A successful management team must be able to fund their exploration and productions plans and manage the risks. When oil prices dip, a company with two much debt leverage gets crippled.

Daily Bell: Is there room for small energy companies to profit from the Colder War, or will all the winnings go to the energy giants?

Marin Katusa: There will definitely be little companies that benefit from the Colder War. Many already have. For example, in 2007 we invested in Cuadrilla Resources, a company premised on the UK's need to diversify away from Russian natural gas. They picked up cheap land in the UK and Netherlands. The company has been a huge success for investors because it had the three critical elements – advanced technology, a big land position and the ability to execute without taking on too much debt.

The smaller resource companies are where the richest investor profits will be made.

Daily Bell: In assessing the promise of investment classes during the Colder War, you mention gold and silver, including the physical metals. But you also mention junior miners, even though they're currently out of favor among investors. What makes you enthusiastic about the sector for the long term?

Marin Katusa: First off, to be successful in resource speculation, you need to see everything through the eyes of a contrarian: Yes, junior resource stocks are out of flavor… so they're very cheap. It's not easy to buy low and sell high, but we are currently in a period where the "buy low" part isn't that difficult. While the stocks of junior resource companies have been falling 75% or so in that last few years, many of those companies have doubled or tripled their ounces in the ground.

One of our funds has bought millions of dollars' worth of shares in companies that exactly fit that profile. We can now buy the best management teams and world-class assets at a fraction of what they traded at 3 to 4 years ago. With a 5- to 10-year time horizon, buying those stocks will work out very well.

Daily Bell: Thanks, Marin, for a fascinating interview and for giving us an advance peek at a great book.

After Thoughts

The Colder War sets up an insightful paradigm that can yield a variety of melancholy yet promising conclusions. On the one hand, we have a kind of directed history that has allowed the current belligerence to form and proceed. On the other hand, we have a basic free-market viewpoint that tells us countries don't naturally evolve into corporate fiefdoms without considerable effort and expense. The arbitrage between these points of view provides the potential yield.

If Russia is indeed under Putin turning into the next pre-World-War-II-Germany, then there is a certain logic flow that one must accept and incorporate to take advantage of trends that will likely occur. We don't need to decide whether a Colder-War-Russia is actively the work of Western elites to figure out how to approach Russia from an investment standpoint. We simply need to analyze Russia's ongoing position in the world, especially as it concerns Europe and the continued availability of energy in the West.

If indeed oil and gas are going to remain basic power staples – and it would seem so – then one must decide whether Putin's Russia is going to be successful at supplying them … and for how much?

One will also want to consider whether Putin will last or whether the West will destabilize him and his regime.

Finally, one needs to decide whether Putin is the driver of Russia or if historical trends are. If one decides that Russia's geopolitical stance is bigger than Putin himself, then the trends one is analyzing become part of a longer-term strategy. One can plan, therefore, with the surety that insights are not ephemeral, that conclusions may be considered fairly robust.

And what might these conclusions be? Among others, one will probably be that business interests large and small that can exploit the energy war between Europe and Russia will prosper, as will their shareholders.

Another conclusion that emerges from the book is that continued chaos is inevitable as Russia, Europe, China and the US line up on opposite sides of a Colder War.

Again, one doesn't need to explore the depths of what we call "directed history" to discover ramifications of what is taking place. There are bound to be a variety of opportunities emerging from the inexorable repositioning of the 21st century.

Real estate, farmland, gold, silver, resource companies, energy investments, secondary residences, additional passports and citizenships – these are all part of a forward-looking investment and asset-protection agenda in the era of The Colder War, as he explains. Our thanks for an insightful interview.