This week, I appeared on Mario Nawfal’s show to discuss hard assets like farmland, gold, and copper in a world of dollar debasement and tight commodity markets. We walked through copper’s long-term structural shortage, record diesel prices, the drawdown of the U.S. Strategic Petroleum Reserve, and why years of underinvestment plus long lead times will keep energy and metals scarce. The conversation also covered geopolitical strain around Iran and the Strait of Hormuz, and the wider shift toward a multipolar world as countries pull gold home and look past the U.S.-led system.
Record Diesel. I have that feeling when you’re on a roller coaster and you are inching toward the top of the first really high part. You are just about at the top and you are terrified. Know that feeling?
Riyadh told OPEC that crude production collapsed by 1.9 million barrels per day in August to just 6.238 million barrels per day, the lowest Saudi production since 1990 and even below the wartime low reached earlier this year.
What will September’s numbers look like now that pipeline has been hit?
Diesel is $6.39 in Florida. Unfortunately some people are buying into Trump’s narrative that Canada’s and Venezuela’s oil will save us. I can’t see how this ends peacefully.
Very interesting interview. Thought provoking! Thanks for the new info and insights.
Some time in the future, can you express how you view the economic linkages so I/we can get an idea of how things might unravel. For example, despite record prices for copper, there appears to be an undercurrent concern that shortages will be insufficient to maintain copper prices if the world runs into the predicted shortages of fuels derived from petroleum. The strategic thinking appears to be that lack of sufficient petroleum rolls into lack of petroleum products which rolls into decreased economic activity which then becomes a financial “problem” of insufficient income to support debt. Without support for debt service, the money supply will collapse. In turn, lack of money would feed both deflation and still greater economic issues. In my mind, the linkages are mighty strong but that does not leave me feeling I am really correct. Or, maybe I just do not want to be correct.
I’m in France right now. Today the posted fuel price for premium gasoline where I am is Euro 2.20 per liter or around $9.50 per gallon. The amount of traffic has declined noticeably since I was here last year.
Venezuela oil was ~1mn barrels per day before january, now almost doubled but this hit cancels that out and more. I didnt expect Saudis to be hit this bad early this year.
Does anyone remember the biodiesel interest decades ago? At the time it seemed that there was a lot of interest by amateurs but it was lacking someone who was a chemist. I vaguely recall that the exhaust had unpleasant smells. Interest should rise again amongst farmers and ranchers whose machines require diesel.
The “progressive” era from 1900 to 1920 resulted in lots of changes that have ruined America. Amongst these was the push to consume seed oils which were previously considered unfit for public consumption. This ruined the health of Americans. We need to go backwards and stop using corn oil for food and make diesel instead.
It also reminds me of the idiotic practice of making ethanol from corn to add to gasoline. The farmers that raise the corn all use diesel. The whole industry never made sense and was basically a government boondoggle.
Using copper for plumbing makes no sense as there are many plastics that can last “forever” that are much less expensive. China has recently discovered a huge deposit of copper that also contains a lot of gold. It is just core drilling now but will really help China move away from fossil fuels.
China has also developed an inexpensive battery using sodium that functions at low temperatures. This will revolutionize energy storage on non transport applications. Using lithium batteries for these applications will end and lives will be saved.
