BullishAgXAGSilverSilverCuCOPPERURNMSprott Uranium Miners ETFSprott Uranium Miners ETF

1w ago on

Commodities are hugely cyclical. It’s worth spending the time to understand the cycles and preparing a shopping list for the bad times when the world sours on them. But, when you see huge margins and record profits it’s usually time to exit. Rare exceptions occur when sector specific events allow margins to stay high for extended periods. Sometimes a sector can come into favour. The buyers become price takers for close to a decade. I think the what we are seeing in copper, uranium, silver and oil… to name a few. There’s also similar potential developing in minor metals.

For most of the 10+ years I spent at Sprott, we had a running inflation/deflation debate that often got rather heated. Each time the economy and the stock market collapsed, Eric grew very weary of a deflationary depression. I always argued (to the point of nearly being fired on my early years) that the central bankers will bail out their banker buddies as they always have. That they will create money and monetize any bad debts they see fit. That they can and will push prices up of anything they choose. Preventing deflation is rather easy if you really want to be a reckless government with a supportive central bank. Maintaining reasonable employment levels is at the core more important than inflation targeting. Still, the drawdowns in these periods of retrenchment can be extremely nasty. Like we are seeing now. Gold and silver can drop 50-70% no problem. It’s happened over and over again as golds moved from $20 to $6000 in the century. All this said, I always felt long term inflation is the greatest worry. Especially for younger people But now, I’m starting to get really concerned about the 3 massive deflationary forces that are building up. Robotics, Ai and nanotechnology. The combo is going to super deflationary. Huge job losses… and frankly I don’t think anyone has a clue where people getting laid off will end up getting hired. It’s easy for those doing the firing to say that it will sort itself out. But, as companies cut 10’s of thousands of high paying middle aged workers and our youth graduate school with completely useless degrees…. Well, Houston… we got a problem. I think the response will be printing and bailing along with infrastructure spending. Governments will have no choice but to fund these massive projects and use freshly printed money to do it. This remains core to my investment thesis. We must prepare for the downside and expect high volatility. But, position for what sectors will experience growth and margin expansion. Quality producers of commodities and nano tech companies with valuable patent portfolios will ultimately prove to be the best safe haven over this next decade. Just like how the tech stocks mostly had a lost decade post Y2K with many failing. We will see a lot of struggles in today’s bubble stocks We likely have barely heard of the companies that will be the best for performing stocks of the next 10-15 years. Many are probably still private and just getting started. :)

Being overweight anything is so stressful. Funny. In these times even when one tries to be conservative and raise cash, the cash weighting is stressful. Over the last few decades when I haven’t like the over all market and fear a melt down could come. Loke 2008 or covid times etc. I’ve gone to 30% cash. Sometimes finding myself quickly at 50% cash cause what I own gets whacked in a broad market decline. But it’s always been the case that quickly get stressed about holding cash. I see the deficits, the money printing and inflation and feel like I’m going to suffer inevitable losses to inflation. Thats why gold and silver have remained a core holding. Yes I will trim after massive runs. But major pullbacks always draw me back in. Just a matter of timing and risk reward.

What we are seeing is a classic game of chicken as the Fed attempts to scare the commodity bulls. They always attempt to trying to break the inflationary price spikes without destroying the financial system. (Causing a 2008 like collapse) They try to thread a needle and break speculation and discourage hoarding/stock piling. But, their efforts in the short run typically make things works and stretches out the bull market commodity cycle. High prices and lower interest rates lead to investment in supply and that’s what needed. The market needs to view higher commodity prices as having a decent sustainable upside in order to make the significant capex investments to balance supply/demand. I think we are going to see the Fed’s hand forced at some point where they will begin to monetize and perform yield curve control. But, it’s always tough to predict the turn. Many factors at play. With the elections looming, the potential for dems regaining house and senate, the situation becomes more complicated as Trump is clearly saying that the market will melt down if dems get control. If this plays out, is he most likely to throw up his hands. Begin to focus on ‘life post presidency’ and use the power flip as an opportunity to say ‘I told you so’ as the market slides. Negative wealth effect seems to take hold quicker than expected and I think the yield curve will invert and we will flip to talk of rate cuts being needed next year instead of hiking. I expect that gold and silver will struggle until it seems that the next moves are more likely cuts and QE than hikes. The only question… timing.

NeutralAgXAGSilverSilverCuCOPPERQQQNasdaqNasdaqSPYS&P 500S&P 500

8/11/2026 on

BOJ and Fed will not be giving up. Ridiculous to think so. The recent interventions will only increase in size. Iran and the Middle East situation is a complete mess. Hard to say how much Russian and middle eastern infrastructure is permanently damaged and how to it will take to repair it all. Seem lying Russian energy infrastructure is getting blown up on a regular basis now. The admin and its clearly supportive Fed will try to juice the markets into the mid terms. There’s no doubt whom ever is in power in the USA they must keep yields down and try to grow the economy faster than the national debt. Historically, these efforts have failed as 1 dollar of added debt has never resulted in more than 1 dollar in gdp growth for any sustained period. The answer is plainly obvious. They WILL be monetizing the debt. In basic terms they will buy back the debt and pay interest to themselves. Thereby defacto cancelling the debts they buy back. It’s a public relations game to keep debt purchases by the Fed on the books, nothing more. The other game that’s played, that’s simply disgusting, is the way they promise the banks that they will keep short rates low and get them to buy and hold longer duration bonds to help with yield curve control. They do this in combo with allowing banks to hold massive amounts of USA government bonds with little to no collateral at times. This is a huge grift that takes tax dollars that go to fund debt interest payments and hands it over to the bankers for free. It would be considered a criminal practice if the public wasn’t too dumb to understand or to complacent to do anything about it. I will get to the bottom line of this post.. money is going to continuely be devalued. 30 years ago a Big Mac combo in Canada was around $3.15 today it’s over $15. 4-5x. For those of you in your early 20’s starting to invest… just know what you’re up against. Expect another 4-5x or $70+ fast food price 25-30 years from now. Copper’s gone from just over $1 to over $6. On its way to $10 at least this cycle. Will it be $30+ in 30 years. Ya. Probably. I started loading up on silver sub $4 in 1998-2000 era. $65 now. It will be $300 in the next decade. Government and central bankers are never going to just let the financial system go completely insolvent in a deflationary collapse. I’ve been arguing this for decades with old men who studied the post 1929 depression. Everyone in power gets tossed out of office in a deflationary collapse scenario. Look at the tools they have and expect them to use them. This means they will monetize by any means necessary. Good business that will produce margin, especially well timed resource company purchases are a good bed. Tech with patents and barriers to entry can be extremely rewarding. Other than that this market is priced to have a lost decade. Similar to the y2k tech bubble. Vs inflation… bask t buying the s&p 500 or worse the QQQ will likely yield a negative real return 10 years from now. It’s gonna continue to be choppy and highly volatile. Still. We’ve had major corrections post this first powerful leg of the precious metals bull and I think the trend will be up now… so much money piled up in crappy low yield government paper while governments all have terrible balance sheets. The money creation process is necessary and will continue.