In a fresh round of stupid we have…
Now, I could show you multiple examples of this sort of narrative being now paraded by the MSM. The point is this. Governments — when faced with inflationary pressures such as they are now — must be seen to “do something”.
They can’t really raise interest rates as it’ll crush the overleveraged stock, bonds, and real estate markets, not to mention overwhelm their ability to finance government deficits. So that’s sorta out of the question.
Price controls are an easy “solution” that keeps an ignorant, gullible, brainwashed (by MSM) populace from revolting. What they do exacerbate always is bringing about shortages, which themselves lead to even higher prices.
Just ask Venezuela or the former USSR.
Now, aside from food and energy and a host of other necessities in life we have these complete abject morons touting their “green energy”. Pray tell, how we’re going to get all the minerals needed for this “green revolution” with price controls?
Sticking with this insanity of price controls…
In particular, the European Union worries that 98 percent of the rare earth metals that it needs in a host of industrial applications come from China.
These are all points we made waaay back in 2020 with respect to the cornering of the rare earths market by China. Then we highlighted the problems with magnesium earlier this year and how the energy crisis, which fed through into China, caused them to shut down aluminum smelters and resulted in shortages of supply to Europe.
Reading through the article we find what these central planners see as a “solution”.
The law will consist of a “toolbox of measures that can be activated to ensure security of supply during a crisis,” Breton wrote, which could mean export controls and powers for the EU to request information from companies on production, stockpiles and their supply chains.
Why, of course. When intrusion in the free market caused the problems in the first instance clearly intrusion into the market will solve the problem.
Export controls? Really?
Tell me exactly how limiting exports on products YOU DON’T have is going to do anything. And “gathering information on domestic companies’ stockpiles”. That goes only one way. And that is asset seizure… for the good of the community, of course.
Private companies will have their assets stolen by bureaucrats “for the good of the people” and in doing so will disincentivize further production.
Why make anything if you know it can only be seized?
Being long commodities here is a no brainer.
How Our Fund Is Playing 2022 And Beyond
- Copper - Copper prices have to rise to address a huge supply deficit looming on the horizon.
- Shipping - Shipping is vital for the functioning of the modern world, yet is priced for bankruptcy.
- Eastern Europe - Position for the long-term trend of capital moving from the West to the East with Polish and Russian equities markets.
- US Dollar - We’re bearish all paper currencies, but believe that the USD will outperform all others.
- Base Metals - Clean energy targets require more battery metals than existing global supply.
- Off Shore Oil & Gas - Offshore oil investment has been smashed, yet consumption continues to grow.
- Rare Earth Metals - A play on geopolitics and a cycle that should see a repricing of these commodities.
- Russion Oil & Gas - Virtue signaling abandonment of fossil fuels led by Western oil co’s means Russia is taking up the slack.
- Uranium - The looming supply deficit promises to pay handsomely when the market inevitably reprices.
- Gold - Gold sees the perfect storm; the turn of a cycle, supply issues and lack of faith in sovereign currency.
- Coal - Modern society is dependent on coal, with supply continually growing. Is there a more hated investment?
- Personal Defense - Order is breaking down in the US, and the unrest is giving us an opportunity to position for asymmetry.
- Agriculture - Lockdowns and monetary stimulus have ensured food prices will rise, providing deep value.
- Natural Gas - Supply and demand dynamics coupled with dependency from the US provides a great opportunity.
- Plus much much more...
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