“Commodities are collateral. Collateral is money” – Zoltan Pozsar
(I said it first, in 46,000 words though. He summarized my thoughts more precisely)
Brent Johnson has a “milkshake theory” and he’s known for that now, for better or worse. You have Maloney talking about a great transfer of Wealth into gold. You have Dent calling for $800 gold for a decade. Recently, I have heard about the AirBNBust with Amy Dixon and she has a pretty good understanding of the collapse of the short-term rental markets.
Here, I posit a theory I call “The Great Commodity Rotation” (GCR). I’ll have a chapter of this in third book I have cooking, which is advanced concepts of macro economics with gold and silver. However, most of these books will be finished in 3-6 months, are mostly written, but need a lot of editing by me with citations. The information below is the beginning of the avalanche starting, and by the time my books hit press middle to later this year, the mechanics would have already started.
THE GREAT COMMODITY ROTATION THEORY – “The Great Commodity Rotation” – is a theory in which trillions of dollars in US currency (financial energy) will move from equities, cash, and debt markets into commodities by the end of the decade primarily due to price discovery leaving the western based (or G7, however you want to define it) derivative markets to a BRICS-physical exchange that has a currency based on commodities as collateral. The rotation out of the business and property classes into the money class (commodities) – is THE move from the G7 economic domination to BRICS+ global economic advantage, and it’s in the form of REAL money – commodities. This initial move shocks banks and breaks our derivative-driven exchanges, allowing physical-based BRICS+ exchanges to be price setters. I believe the USD and other G7 currencies will rapidly lose value to them as none of us care to produce commodities in size anymore – but rather print green slips of paper to force them to give us their work product out of the ground. I believe “Green” is a smokescreen to continue to justify not producing goods locally, whilst demanding that same production you prevent from being extracted from your soil be done by BRICS+ nations at ever-decreasing costs under the guise of globalism. I believe that by 2024, the “Green” ruse will be unearthed, and unseated from Western cultures as severe recessions hit in 2023 and reveal the idiocy of these policies.
Major elements of theory:
- ULTIMATELY – Those heavily involved with resource investing could be the next class of billionaires and millionaires as trillions of dollars go into the money asset class (commodities) at the other end of this Great Recession. Gold is the best form of this money class, followed by silver – which will set the stage for other commodities to then catch up to gold and silver, relative to historic values.
- Commodities are the “money” asset class and extremely undervalued to the business and property asset classes, driven by years of price suppression by western-based exchanges. This price suppression game may have gone too far and destroyed the underlying faith in existing Western-based exchanges. We are starting to see faith in exchanges crumble, government interference in markets, and lack of supply hitting markets at these current price levels.
- BRICS+ nations appear to be major commodities producers and rumors of gold or commodity-backed currency are a potential challenge to the USD. As we saw the ruble catch a STRONG bid on the whiff of 5,000 rubles per gram, the currency has maintained strength just with the specter of this possibility. PhD economists who can use some or many commodities to base a BRICS basket on may devise a superior currency that can perform how the ruble did, to a factor of 10.
- An accelerated move away from the USD as the primary world’s reserve currency will drive down the USD value to money (commodities, which are produced foreign to US soil), appearing to bring a higher price to commodities. IF this move is only 5% more in 11 more years, status quo will remain. An underlying mechanic to this theory is predicated on continued moves away from the USD and treasuries.
- Sudden higher commodities price pressure in USD and lack of supply of commodities could have sharper prices break western-based exchanges. We have seen what nickel did to the LME – it is not hard to see markets stressed beyond any form of sanity to continue to make a handful of bankers in NY rich. This mechanism is about to correct itself.
- BRICS+ exchanges can become price makers and spearhead higher prices of commodities for their member nations. It stands to reason suppliers will sell to exchanges that give them the best price. With lack of actual supply in western-based exchanges, confidence in delivery fades, and the market price is not deliverable and irrelevant.
- Ghana has now demonstrated a model with how nations can acquire minerals without using USD, buying on an exchange, and defending their currency at the same time. This can be a vary palatable alternative to mine nationalization and would not stop Western investment in these companies, while also strengthening local currencies against the dollar due to lack of need to exchange.
- Money rotates from stocks and debt-based instruments (and real estate) to “money” in the form of commodities as debt increases and the high costs of commodities squeeze business profit margins, drive prices higher, and reduce demand. It flows first to the “best” forms of money which are gold and silver. Other commodities then catch fire as gold and silver get very overstretched. Historical oscillation charts will show the value of other commodities relative to gold, and they will re-price to catch up.
- Western-based countries will have to abandon “green energy” principles with respect to fossil fuels to begin to extract their own natural resources in order to produce “money” locally. It may force the west from a debt-based system to a commodities-based system IF they want to acquire commodities from the BRICS+ alliances. This will incentivize local mining companies to extract more resources.
- A possible world of BRICS+ vs G7 is brewing, and could be a resource/currency/energy/supply chain war. Globalization is replaced with regionalization and nationalization where supply chains are hardened locally as part of national security. This will force G7 nations to be able to supply raw materials as a matter of national security to be able to supply manufacturers.
- Unbacked fiat will die, forever. A new form of collateralized currency will be created, perhaps using the blockchain to settle debt. I believe the gross overspending and financialization of mountains of debt and excess will go down in textbooks for 500 years as to the final example of how fiat currencies, not based on any form of collateral, can ever exist again.
- Western hegemony is overtaken by a merchant-based economy spearheaded by BRICS+. The West’s solution to this is a 10-30 year struggle, which will involve exploring resources locally, ditching “green energy” as a primary means of electrical generation, introducing a lot of AI/automation with factories, and ultimately, mastering fusion technology to reduce the costs of producing commodities to then produce goods and services cheaper than BRICS+.
//Supporting case below…
The basis of money
The manifesto begins…this could be a separate book, but I don’t have 6 months to get this written and out to all of you, as this seems to be accelerating daily right now. Comes out to be nearly 50 pages double spaced in word, so the squirrels can stay up to with the summary to understand the nuts and bolts. The below goes into all of the macro items underlying it.
I obsess about commodities trading and resource investing. Had I even known this was even a career at 18, I would have probably gone into this game. No, the 14-hour days of being a rookie analyst isn’t something I’d do now at 47, but to me, my background of understanding a million things sort of all hit a crossroads here – economics, geology, history, monetary history, geopolitics, charts, finance, math, physics – it all just fits well with commodities and challenges thinking on all fronts at all times. It doesn’t mean I’d be any good at it (perhaps I would!), but it means it’s of tremendous interest to me – and those sorts of things I probably would do 14 hours a day if I was retired – for free.
The good news is, at 47, I can run my own investment fund – for ME!
When you think of commodities – essentially you have a lot of different categories, but at the core you have things that make other things. Cattle – food. Iron – steel. Silver, a million products. Oil – petroleum products. You get the idea.
But I had posited that commodities were MONEY two years ago, and I got sort of lit up by the internet. Below is an early graphic from these writings in early 2021. The $20 bill there was a 100-year-old one with the gold certificate on it.
I stood by it, and have dozens of writings using this as an economic basis for other economic theories. Now, in the last week I’ve seen this a few times – and never have before. Perhaps this is something monetary historians promote but there’s a tiny audience and it never caught on?
In this article earlier this week, I mentioned how Zoltan recently said commodities were money, and well, we know how a lot of FinTwit reads him. I wanted to write today’s article to discuss why this is such a big deal, and this is the foundation for why commodities will be the place to go.
I have heard people say “commodities super cycle”, so what I’m saying with this isn’t new – but perhaps WHY I think commodities will be the next big thing might add to others’ body of evidence. Maybe there are a few nuggets in here that support their price predictions or cycle predictions.
//Side note – USD versus assets
The big deal starts with the USD and the erosion of it. In a lot of my articles, I discuss the concept of going back 100 years and putting a $20 bill in a safe with an ounce of gold. Open it up 100 years later, and the gold is 90x more valuable than the $20 bill. Most common people on the street think gold “appreciated”, but us financially savvy Twitter folk are more nuanced to see the inverse. That is, the gold did not appreciate. It’s still the same thing. It’s that the dollar depreciated by 99% or so.
//End side note
Full stop. You need to understand this concept before moving on. The REASON this cash depreciated was that more and more was borrowed into existence over those 100 years, but the rate at which the gold increased from below the surface to above did not keep pace. Gold is mined at a rate of about 1.25% more per year more than the previous year. So the amount of cash in the system went up a LOT faster than the gold – or anything else – which then has those with more cash being able to outbid those with less cash to bring prices of everything up over 100 years.
Corn is money?
I created, in my writings, three distinct asset classes:
- Money (including gold, silver, and commodities)
- Business (yield bearing items, with inputs of financial energy, a business process, and an output, measured in ROI)
- Property (items you buy that have utility, such as homes, cars, baseball gloves, paintings, raw land, crypto currency)
Nate – corn is money? What? It’s a thing of value, but…money?
We now go back to what Zoltan said – and more clearly than I did – that commodities are collateral and collateral is money. This may be one of the things you see in memes with a headshot of him 100 years from now.
The corn in the fields all over the place – you have something of value you can borrow against, which gives you purchasing power. As you sell this corn, you can pay off the loan. More modern times allows you to sell this corn in a futures contract, get money, and then deliver against it at a later time. Meaning, you have something in your possession that can be converted to currency, ASAP. Now, perhaps a credit analyst will deem what you can borrow – but the point is that if you have commodities, there is a tangible thing that others can use that you can borrow against. Instead of thinking like barter with this, think “pawn shop” mentality. You have a gold bar and you can pawn it and buy it back later. The gold bar is your collateral.
This is the primary distinction between what I consider a gold monetary BACKED system (you can exchange 1:1 on demand) and a commodities monetary BASED system (borrow currency AGAINST your collateral). Us purists who championed 1:1 gold and a savings-based system are missing that the 21st century called and debt-based economics ARE how things run. I mean, credit has been around forever, but if someone is abusing debt and can continue to borrow to Buzz Lightyear infinity and beyond – it stands to reason that perhaps a rival system would be stood up to then use commodities as collateral to PREVENT this future abuse?
But what is the distinction between commodities and property? There’s a nuance there where the property is bought for utility, can be deeded, and has a useful life and maintenance costs. Once you buy most of these things, the resale value drops off of a cliff – cars, dishwashers, furniture. Only really land/housing stores long term value, but they are rather illiquid. However, you can borrow against them as well to get equity. With commodities, these are things that can make other things and are essentially the raw materials of society – but I feel tend to be far more liquid than anything in the property class. If you default on your loan in gold, that gold can be sold into the market in seconds and make the lender whole. With home equity loans, a default may then trigger the house put up for sale – and from the time the loan was made until now, the house could be underwater and take months to sell – at a loss. Same with pawn shop items – you could have a baseball card collection worth $1,000 – but if anyone has ever seen Pawn stars, he might then pawn it for $300 due to Rick’s lack of ability to then sell it at $1,000 later if it was defaulted on.
With commodities, I’m not REALLY talking about 3 corn stalks you have in your back yard, but it could be. I’m mostly focused on larger scale producers which have this inventory and are at relatively low risk to make good on delivering that commodity into the market if need be – or the cash equivalent.
I digress – the existence of that corn enables immediate purchasing power via loan/futures contract OR purchasing power with a gradual sale of it over a few months. Now – the question then becomes what is the RISK of the underlying collateral, and with this, you can then go into the line of work Rule did as a credit analyst. The same can be said if you had cows for beef, chicken for eggs or meat, or copper/tin/aluminum.
What you may find then is the BEST FORM of collateral may be that which lasts a VERY long time, can store well, is useful for a lot of things, and has a liquid market, today. Gold appears to be the best of these, which is why many talk about BRICS and gold-backed, but they are missing where silver, oil, copper, platinum, etc can create a collateral-BASED system to allow currencies to function with degrees of confidence. It doesn’t mean currencies cannot inflate, but that would be potentially in times of greater production due to previous scarcity and higher prices – but we all know the cure for higher prices? More gold or oil coming into the market saturates it, and less eventually is produced due to prices being pushed lower.
This is the whole damn heliocentric thing I discussed. It’s market cycles against gold. And, gold inflates at 1.25% per year, about the same rate at the human population. Some years it may be 1.4% with higher prices, and other times 1.0% with lower prices. These markets are SELF REGULATING with PRICE DISCOVERY.
Meaning – these commodities, in a free market, will always oscillate against each other. This is good price information – oil historically is worth about 1.2g of gold. This gives us a basis of relativism to understand if oil is under/overvalued to gold to then make decisions to produce more or less. Without THIS information, with some relativity, your fiat-based structures with zero collateral will inevitably….all go to zero because there is nothing to base this paper value on.
A market cycle….is a sine wave.
Which, when you take gold and measure it to other things, you have relativism….like planets orbiting the sun, commodities orbit gold. Oil below, gets stretched at times, but you can see oscillations that behave line sine waves.
If you have a situation where there is a run to gold, and silver – you know the price in USD goes up. However, given enough time, all of these commodities will reprice based on gold. A quick run up for gold to $4000 and back to $1900 isn’t going to do anything – but a sustained run to $4,000 over the next 7 years will have all commodity prices start playing catch up in 2024-2025 when the Great Recession slows.
This is what a lot of my investment work is based on – understanding relativism to other things. If we understand what is undervalued, relative to other things, we can rotate financial energy out of what has become overvalued, relative to other things, and put that into asset classes that are undervalued, relative to other things. OR – if we have existing investment and do not want to sell, but perhaps a few thousand a month to invest, we might then rotate NEW investment money into those asset classes and gradually sell out of the other. This rotation doesn’t have to be all at once. In fact, I’d posit that this type of model eventually replaces a 60/40 in some way for the next decade. Why? Because the 40 year “cheap rates stonks go up” cycle may have just been double tapped. If you have stocks at historic overvalue to such things like real estate and gold, it then stands to reason “The Great Commodities Rotation” is to happen.
If you want to call this another depression, I get it. But economist propeller heads then get caught up in definitions rather than the big picture. This could be a severe draw down in our markets. You have to remember, in December 2019, by ALL metrics, our markets were massively overstretched. Everyone was expecting the March 2020 like move to occur, at some point. We are currently about 10-15% over those numbers AFTER a year of market beat downs. It stands to reason that due to record tightening in such a short time, this lagging effect will hit us all throughout 2023 and drive markets down – perhaps as low as 22,000-24,000 this year and if nothing changes, perhaps 14,000-17,000 in 2024.
I think it might be a “depression” for the SnapChats of the world, who only existed due to cheap unending money. I had called for a massive rotation out of tech going back to 2020, and I believe this sector rotation is what helped keep gold even for 2022. But IF there is a “Great Commodities Rotation” coming, it might a really, really good time to understand what is happening. This could be a short book in itself or a 30-page brochure for the Gold Newsletter like their Uranium piece.
The crimex? The LME nickel debacle? The loss of market confidence
I believe, over 50 years, our method of how we keep commodities prices lower is about to be reset – this is setting up the GRC. Why? I believe that American ingenuity found ways of exploiting this commodities system using high frequency trading and with this, turned this into a complete casino joke of an exchange. Using quant and highly sophisticated algos, a few very rich people found more and more clever ways to separate people from their hard-earned money.
Where you have legit corn producers that want to sell forward their production, you have thousands or millions of bets from someone who has never seen a cornfield happening each day. This obfuscates the underlying markets true nature, and ARTIFICIALLY drives down prices – which then cause massive short covering issues that can blow up markets. What eventually happens is that as this price is set lower and lower, it drives production costs down by finding areas of the world that WILL produce it for much lower costs. At some point the price is driven so low, and production of this commodity AT THIS price level cannot be sustained.
//Side story – my cousin and her husband lost their dairy farm in Indiana a few years ago that was in his family for generations due to the price of milk being contained by large producers able to scale up production to drive smaller dairy farmers out of business. Pain is real when you drive smaller scale producers out of business because billion-dollar companies can afford to take short term losses to then buy up smaller scale producers //
This is why the chart that SRS Rocco put up a few weeks ago makes sense. Because if you cannot cover your financial costs, in energy, to produce gold, it will not be produced. While many say you cannot have gold backwardated due to it being money, gold also has about a 10% industrial usage which is what DOES drive the backwardation. Jewelry, computer components, dental needs – these people at the margin may be the ones who actually drive the demand up due to the consumption of the metal. If gold had zero industrial usage, it would not have a need for more supply – rich people would just keep bidding it up. But gold’s role as jewelry stores WEALTH – so it is an industrial money function – let that one sink in!
While I politely disagree that this shows gold storing kinetic energy (I have showed how this is financial energy based on ROI for a business process, not physical newtons of force), I do believe it stores financial energy here – and remember the gold to oil ratio? If oil goes down a lot in price, it makes it cheaper to mine gold – which then makes gold mining more profitable – which then creates more production, which drives the price of gold down. The same can be said with higher oil prices. But the reverse happens with macro conditions, where an acute need for gold can drive prices much higher – they will eventually fall once the macro condition subsides – but what if it is a colossal change, and gold led this? Meaning – the price of oil, will go up, in gold. Not gold, coming down to oil. I think that is the error with the chart above. You see the cost to produce oil, but it’s missing the fact that this is distorted price information using a USD and not gold. More on this in discussion – but I can waste a whole chapter on this. The point is, if gold eventually goes way up in terms of USD, it is merely catching up to how stocks/RE were overpriced, and with this, other commodities will begin to reprice to a higher gold price, irrespective of currency.
The question which can bake your noodle- if oil is no longer used tomorrow, but fusion is now used worldwide, does the price of gold fall to nothing? No – the costs of the deuterium and tritium have costs. The facilities and workers have costs. The costs of the power lines to send things to batteries to then have joules of energy move rock trucks – there’s a unit cost of electricity there, and it may be far cheaper. Yes – 10-30 years from now if the cost of the energy to produce gold is cut in half – the price of gold eventually will drop in half due to the profits being made, it will drive over-supply and bring prices down. Remember the ROI? If gold is a constant at, perhaps 1.6:1, and the cost to produce in relation to energy is much cheaper (50%, for argument’s sake) the ROI will go to 3.2:1, and my theory here is the ROI will return to a natural 1.6:1. But this also reprices all commodities lower – which in turn then re-prices all goods and service lower. IF you do have a fusion reactor in production everywhere 20-30 years from now, this is highly deflationary in terms of production costs. This then allows anyone with this technology to produce goods and services at far more competitive prices than their competitors. Ultimately, this is the lever for either the G7 or BRICS+ to win the commodities wars. Meaning, the US probably needs to keep this tech a secret as much as possible.
With respect to near term higher gold prices – Is gold going up due to the depreciation of the dollar or the cost of the energy to produce gold? It is the depreciation of the dollar – but that is what many show as the efforts to extract energy are more and more costly, and this requires more financial energy and borrowing more into the system – and these additional costs are then passed on to consumers which you see as higher price inflation due to more currency in the system. There is a form of circular logic there, but this is represented by – oscillation over long term of price information.
Tomorrow, if you wake up and fusion has replaced oil and the cost to produce things drops to 10% of current costs, you would have a worldwide deflation. Energy countries like Russia, Iran, Saudi – they would all be doomed. Meaning, it is in the West’s financial interest to then continue on with the fusion energy reality that is coming. It could be 30-40 years from now, and during that time, the oil-rich countries that are part of BRICS may flourish with oil as part of their entire credit/collateral system.
But with the COMEX, we see distorted prices today which aren’t necessarily healthy for trade – which is a potential driver to break us into a rival system of East (BRICS+) vs West (G7+). I feel that if we truly fixed the commodities exchanges, today, it would destroy any BRICS momentum overnight. But, we aren’t, because a very, very small percent of the people in the West who control this make an awful lot of money and they really don’t care if East or West is running the show – they will remain rich either way. Who then suffers is the middle class in the US as this split happens and causes a lot of inflation. I would posit that fixing our exchanges, at this point, should be a top 5 national security issue, but I fear those making decisions don’t have this in the top 1,000 of things to worry about.
Only when I spent several years digging into the COMEX, LBMA, LME – etc coupled with my deep dive on how the mechanics and financing of mining work did I fully understand the structural problems that exist. This has now manifested itself over the last 3 years to me in the fact that you cannot really find a true silver miner anymore. Why? Because the grades are lower, the costs to produce are higher, and the only way anyone can produce silver now is as a byproduct of other metals. This is troubling, at best, when you consider how much the world needs silver today for cars and solar panels. Silver is in over 1,000 products, and is second only really to oil in terms of how important the commodity is to produce other things. You have seen issues with palladium pop, nickel and the LME go bat shit crazy, and now reports that the LME is the lowest in 25 years.
I’m not going to spend precious moments here going tinfoil hat, as it seems every month there’s another bombshell case of rigging commodities for millions of dollars in fines that cost millions of people in trades, and benefit a handful of people who are the puppet masters. It’s the cost of doing business, at this point, for them. If you can’t afford to mine silver in the USA, what happens? You end up mining it is really bad jurisdictions in the world where bad things can happen to your mine or workers. At best, a strike. At worst, nationalization. Now as a silver investor instead of being able to invest in silver mines in Nevada, I have to hope and pray my investments aren’t nationalized in countries that now seem very friendly to BRICS.
This is where it starts to go wrong. At the crux of western philosophy (and economics) is rule of law. Well, if a lot of commodities are now being produced in places with terrible rule of law, what happens? Investor risks go up, a LOT. However, without prices to go up, the upside on a lot of this starts to fade. What’s the saying – “the solution to low prices….is low prices”? This results in a lot of blow ups like Nickel about to happen when the casino loses bets. And when casinos are seen as rigging the games, less people come to play there.
This is also how these other physical-based exchanges are about to take price discovery away. And, if you can now have higher prices in some of these 3rd world countries, there’s a LOT of prosperity about to happen there. This now is VERY appealing for a lot of BRICS+ countries who are increasingly seeing our means of suppressing prices as a way of stealing their resources for peanuts. And……..they aren’t wrong, which is the kicker.
If you have driven the production of a lot of things off of your soil, onto the soil of others due to your pricing mechanism – due to globalism – you have to then hope your exchanges can be supplied by these entities at the price you set. Or – defaults happen. Remember about the corn being sold and the farmer delivers the corn? Well, we now have a lot of people betting gold price will go down, and none of them have gold to deliver (or silver, copper, platinum, etc). Obviously, there is a cash out mechanism for delivery with the Crimex, but the question then is – if you have an exchange where no one can deliver at that price, is your pricing wrong or are the exchanges broken? If you cannot actually supply buyers with the products you are selling them, what value does your exchange actually have?
So – I think the entire Western culture and economic fight that is taking place can be solved with immediate changes to the price discovery mechanism of our exchanges which needs to eliminate high frequency trading, today. Speculators are allowed, but these volumes of thousands of contracts in seconds from entities that also know where stops are, is the end of the Western-financial system as we know it. And, we all know it too.
What you have done is eliminate free market price discovery and driven profiteering to a few people who run casinos. When the house is rigged, more legitimate houses will be stood up to take fresh bets. And goods will be sold there, not on your exchanges.
If you look at the moves the last few years, you have now seen gold exchanges stood up all over the place. To me, I believe what is about to happen is a monumental shift in how commodities are priced. If these exchanges are now competing for supply, rather than only having one monopolistic price-setting mechanism – this competition will be bidding for the same commodities and thus drive UP prices. In a G7 vs BRICS system, you then have to wonder where the G7 is getting their raw materials – and you can then see the writing on the wall for much higher commodities prices sold by BRICs on their exchanges. This has the potential for the serious inflation many talk about ahead with money bombers.
Think about it – if you are a country like Ghana, who has a currency problem, you now have been able to force the sale of 20% of the producer of gold in cedi, and now they can use that gold to purchase oil. Whether by directing gold – or having that gold as collateral for the credit created with cedi. This has the effect of reducing the risk of these currencies and making them stronger against currencies with no such holdings. Or, they can sell that gold on a more local exchange that may want to actually deliver the physical metals for a currency preferential to BRICS+ nations. THIS is the differentiator with those markets – in that the more direct the exchange is with physical delivery, the more they will need the physical commodity. This will starve the Comex of supply. And the LME. And anyone else who is preventing free market discovery.
This is exactly what we are seeing with the Comex registered inventories in silver as well as the LBMA vault stock. Adding with the LME metals at 25-year lows, it stands to reason that one of a several things are happening:
- costs are too high for producers with metals prices too low so production slows
- inventory is getting bought from suppliers into other exchanges
- inflation had everyone buying “things” and drew down commodity stores much faster than production could keep up.
If you look at lens number three, you then might consider the hockey stick in fed funds rates to create demand destruction could have been a realization that most suppliers would have had bare stocks of metals/commodities inside of a year if demand for them wasn’t crushed. This also needs serious consideration, that there was an upper limit with inflation due to the supply of raw materials to make things could not keep up with demand at these low commodities prices. It takes years to bring new mines online, and it’s not a good look if most western corporations grind to a halt due to shortages in literally everything. THAT can lead to a depression. So – you have to destroy demand and crush markets and appetites to buy things in order to kick the can down the road another 3-5 years.
But I think the pivot has began, and that’s with all of these other exchanges getting stood up, along with the acceleration of BRICS+ members.
Now, if commodities are money, and there’s no money left in the warehouse, and companies make profits from selling things, and there’s no raw materials left to make things, what happens to American companies who literally cannot produce anything?
So, if you look at the vertical fed funds rate through that prism, it may have been an emergency button to preserve American industry and corporations. Of course – those who run the Fed and others were in the know about what was going to happen, and sold off at market peaks. They tell us everything is fine while they went squirrel and took the nuts to store for a brutal winter.
But – to me, that is also telling me that if price was higher for these commodities, more could be produced. Perhaps this is a breather to allow some stocks to rebound? With BRICS ramping up and standing up exchanges, now what we are in danger of is not being able to replenish the warehouses which give us “friendly” prices to make American goods.
THIS is the mechanism which flips the switch for commodities to roar in the second half of the decade.
Cash sloshing around
Over the last 100 years, as more and more cash entered the system, there are times the economy heats up where cash is borrowed into business processes and to buy things of utility. During these good times – you may also see many commodities that make things go up in value too. For example, during good times, more people might want to go out to get a steak. You might see new cars being built. All of these consumer items need commodities.
When you see the economy sputtering out, it could be for a lot of reasons. Right now, we are seeing high inflation so fed funds rates are being increased to then slow the rate at which more money is being brought into the system. Perhaps we might even have money contraction with the amount of loans being paid down are exceeding new loans. We just saw M2 money DECREASE the first time since I’ve been alive.
Let’s do a reverse in the safe. If we put an ounce of gold in the safe today with $1820 and draw down that M2 over the next 100 years, when you open up the safe, the cash might then be worth 90x the gold? That isn’t likely to happen, but you get the idea that this has a POTENTIAL to be deflationary, at least in the short term, perhaps on a 6 month lag.
That could also mean less people are being approved for loans. People may be missing credit card payments. Bad credit scores due to being maxed out. Perhaps the 90% drop in loan origination had something to do with it as a lot of older people right now are making their last loan payments on their homes. Don’t know. I’m not THAT far in the weeds on this, let’s get back up in the plane at 50,000 ft.
So all of this cash is created over time, and it finds its way into things. Overall, using Maloney’s wealth cycles, you can see when things are overvalued and undervalued to each other.
Right now, stocks are way overvalued to both real estate and gold.
Let’s now assume, for the sake of argument, we have a recession the next 6-12 months. What evidence is out there?
- Yield curve inversion
- 2 quarters of negative GDP, then they changed the definition
- Philly Fed states that BLS overestimated jobs by 1m.
- Tech sector layoffs everywhere
- housing market STOPPED
- markets off 20-34% over the last year
We can go on and on, but let’s just assume we are in a recession that is normal and USED to happen before Thanos came and snapped interest rates out of existence. The idea is most recessions are good. No one needs 312 brands and types of toothpaste. The best and strongest brands, companies, and products survive and thrive. The unhealthy are purged – so say a prayer for your favorite S&P zombie company about to have problems rolling over debt this year and going insolvent.
Job losses coming, less people are going to buy stupid shit. Got it. Less demand for commodities then kind of cures that acute problem short term.
But the USD. I started with this, and in MY opinion, and that of many others, there is a potential issue with rivals of China, Russia, and other BRICS+ nations standing up a currency. Rumors about gold backing or commodity backing (or basing for collateral) – those rumors might have legs, who knows. But – those exchanges taking more physical goods into them to deliver? Ouch. In a collateral-based system you would need to have government issuing debt with stores or access to commodities as collateral. Like Ghana having immediate access to buy gold with cedi gives it that credence.
However, with the US system, we have a ton of privately owned things. How does our government have any access to this collateral? They don’t, really – but they have access to tax people WITH that collateral. This essentially is how the USD has value – future tax revenues. But I ask you this – if all of these commodities are moving from west to east, and the production is in BRICS+, logically you can see US corporations having a hard time for the next 10 years, and elevated inflation and unemployment can lead to less future tax receipts, unless our tax rates substantially increase. Meanwhile, we keep issuing record debt.
It almost feels like we are, collectively, running up credit cards to get as much things until the music stops. And all of this is based on how much globalism we have, and how we now have pushed things off of our shores – we can no longer lay claim to these commodities or the future tax receipts.
The ultimate solution to this may be the US partnering with miners to accelerate production of resources – oil, gold, silver, rare earths. We have the resources, we just cannot exploit them in the “Green lunacy” policies of today. Our EVENTUAL solution to fight BRICS+ is
- Have the US partner with miners/drillers to extract resources. Lend them money, and perhaps there are payments in minerals/oils into a strategic reserve, of sorts that companies can buy from – which probably will get priced in BRIC$ or gold grams or something universal. This might be 10-20 years out.
- Continued heavy research on fusion to undercut oil rivals 20-30 years from now
- Build more nuclear plants ASAP to reduce needs on fossil fuels.
We HAVE seen record central bank gold buying. Why? We have also seen now a lot of countries scared shitless that if they disagree with us that they will also get Thanos snapped out of SWIFT. This means, essentially, that the world’s reserve currency is no longer a viable world reserve currency because it has been weaponized by one nation against another. 50 years from now, Yellen may go down as the fall guy to create the policy of banishing Russia and driving the creation of the alternate to SWIFT. THIS move, I believe, is the start of the avalanche.
Today, I can see how Milkshake and others might summarily dismiss this. I think about Brent’s theory a lot, and he makes a ton of great points. But….you gotta seriously ask – when should concern be had? When should we ask questions? At what point does confidence in the persistent strength of the USD become hubris and not fact-based reality? Remember, I’m telling you the “money” in the warehouses (vaults) is being run on. And to re-supply it, we have to get it from BRICS+ friendly nations who now have their own vaults?
To me, this is highly inflationary, specifically for commodities. Gold, yes. Silver, yes. But think about everything else we get from these nations which may be signing contracts with Shanghai as we speak? Our commodity money is leaving the vaults. Our collateral is going bye bye. What are the value of futures contracts where nothing can be delivered? There’s no collateral to create the contracts. There is no money. Why would people pay currency for an undeliverable contract?
You would think that open interest would drop? From what I’m understanding, gold and silver OI are at lows they haven’t been at in some time.
The steady slide of the USD against real things
To me, I believe that Lanci and Zoltan and others are correct – this all ends in a banking crisis when force majeurs happen. 2023? Maybe? Not likely with recession in near term and crushing demand, but you can see that if prices do not significantly improve, American companies would not be able to source – unless they were buying from BRICS+ vaults/exchanges. Today, they buy stuff presumably with a lot of USD. What happens then when a lot of these BRICS+ nations demand companies buy things in their local currencies or a BRICS+ currency (like a Euro)? IF this BRICS+ currency (which I had dubbed BRIC$) had some sort of ties or relations to these physical exchanges, you can see then how this currency has a commodities-BASED currency and not a commodities-BACKED currency. The difference is that the commodities are collateral, not something you would 1:1 exchange.
But Nate, American companies would never do that!! They will ALWAYS use USD.
Let’s look at some macro events that are out there…
- Ghana forcing gold miners to sell them 20% of gold in local currency. This can be a template for other countries to buy gold (and other commodities) direct from the ground in their countries, without nationalizing. Western companies – like how many mining companies are Canadian – then sell in the local currency to them. Now, these companies all have local employees, contracts, expenses, so only 20% is doable. This then has these smaller nations finding ways to avoid needing to buy USD, which defends their currency. Likewise, it’s a pin prick of not needing USD.
- Petro Yuan? You can see Xi warming up to the Saudis. Could Saudi accept Yuan for oil? Gold? There is a TAD bit of history with gold in the middle east. China doesn’t then need USD to buy oil.
- Russia selling energy in rubles or gold – or even local currencies to friendlies. I’m sure there’s a nuance of the day I’m missing here but the idea is that less USD needed.
- Japan selling UST to defend their currency and allowing rates to rise. Less USD needed.
- China selling down UST.
- Fed selling UST
At some point, a light switch is going to go off, and the realization that the USD currency is accelerating lower in value will start to hit everyone. Maybe this isn’t until 2024, 2025 – or even 2026. But when that switch is flipped, people will run to get out of USD. It will first go to the “BEST” money – gold. Then silver. But then you have to see that commodities are money and you may buy and hold ETFs or contracts in foreign countries with physical materials. Why? Land here is crucial – but I feel the best of each asset class gets bid up first. Farm land, blue chip stocks, gold/silver – but nothing can be built by companies without raw materials and ALL companies will have increased costs in USD to source raw materials due to the falling relative value of USD to BRIC$. Companies will bid up the raw materials and with this, will have cost inflation running crazy. It takes more and more USD to buy things – and this is the weakening of the USD. As we are forced to buy more and more stuff from foreign exchanges in their currencies, price inflation hits the American consumer. The underlying commodities are going vertical as they are now competing with foreign companies for these resources who pay for it in BRIC$. BRIC$ becomes a preferred currency to these commodity producers.
USD against BRIC$ currency steadily moves lower. DXY can still go up if CAD/EUR/JPY/GBP are all shit currencies. The question is – is gold going UP against the USD even as the DXY could be going up? See – Brent’s theory works with the DXY but completely 100% disavows any threat from BRICS as benign or annoying. What I’m talking about is the USD going DOWN against real things (money). Meaning – you will need more USD currency units to buy….money.
So the DXY is a shitty measure of the strength of the USD and could possibly get to the 130 or 150 that Brent and others talk about. However, it is an irrelevant metric in regards to our cost in USD to buy things in BRICS+ nations. I believe we need to fully understand the importance of commodities in our industry and realize how fucked we are with globalization, and how production of a lot of this is now on BRICS+ friendly soil.
This is not happening in 6 months. But – the explosion went off in the canyon and the snow at the top has been jostled loose and is now starting to come down – slowly at first – but suddenly, as it approaches us. Nickel may have been the dynamite placed there for the beginning of the avalanche.
Overall, we have runaway debt and death by a thousand paper cuts coming if less countries are needing USD for commerce. From what I had read, there’s $17T in cash all over the world outside of US borders. I then believe this $17T is going to try and find its way towards money. Maloney had talks about this – so not my original thought, but I independently now came to the same conclusion with these macro events. Which bids up commodities.
Remember how high oil prices (commodity) used to make gold can hurt gold producer’s profits? Now imagine all commodities going up in USD terms and you are a company on the S&P or Dow, etc that produces goods? Your profits erode at first, which is NOT good for earnings (stocks suck) but these costs have to be passed to consumers. Unless wages go up, substantially, demand will be lackluster with these higher input costs. But increasing wages also increases input costs. Added with the debt burden, you now have the secret sauce for a hyperinflationary event
- World currency of USD is eroded, rapidly, over 5 years by a currency which has commodities as collateral against debts issued. This has the demand for USD lessening over time, perhaps accelerating.
- Petro dollar ending and world players now seem to be actively making 5 year plans to get out of dollars, and a lot.
- Existing USD bid up what things are available to buy. Those in the know are buying things like gold and silver first. Others start to buy gold and silver miners. Then USD starts to find its ways into commodities on other exchanges or buying of debt in other countries begins to become appealing
- Acceleration of the de-valuing of the USD currency then has bills passed to bail out just about everything. Pensions, banks – this creation of more debt on balance sheets deals the spending power of the USD its final blow
The good news is most hyperinflationary events are short term, and this might not be 50% per month, but maybe a super inflation of 50-100% year over year. While much different than a Weimar event, the same type of loss of faith in currency exists. However, I feel that as this crisis brews, many will realize that we have massive resources to then sell into these BRICS+ exchanges and our resource exploration begins anew here perhaps 2025-2027. Uranium, silver, gold, lithium, copper, nickel, oil – you name it. I believe by our elections in 2024, it might get so bad that resource exploration might be a key talking point which wins the election. It might then take 1-3 years to start to see the effects of these policies begin to stabilize our currency against a BRICS+ basket.
With our debt levels and balance sheets – and the inability to stop spending in an accelerated fashion, you see that the only way to service the debt is to essentially have people be able to continually borrow more and more and more, then tax the shit out of them.
If M2 is going down, doesn’t that tell you perhaps we have all, collectively, hit our credit limits? The obstacle, of course, is higher interest rates, which now makes borrowing a LOT more expensive. I believe we hit that point where the American public is…tapped out to buy new things. Credit is contracting. Stores of value now are needing to be found, and if debt is being sold into this, it stands to reason bonds won’t increase a ton in value even as people rotate out of stocks.
I say gold gets a STRONG bid in this environment and kicks in the door, then silver clears the room.
But what after?
Maloney says the words “unobtainium and unaffordium” to talk about gold and silver when the run starts. IF collectively, people realize China, Russia, and others are about to make gold a means of settlement again – even in a FRACTIONAL form of a BASED system with collateral, then western banks who are short gold and silver are about to get rugged. This, Vince Lanci goes more into detail about. Apparently, the entire gold system now is set up under the guise that it would never be used for a method of settlement, ever again. Well…..if that changes, big, big problems near term.
But if you cannot get gold and silver, and you realize that you may have a monetary crisis on your hands, isn’t this the time maybe that you start stocking up on food? If you are a company and see low commodity prices, low inventories, and your company has a lot of cash – aren’t you perhaps stocking up on commodities and converting some of that cash into money in the form of commodities to then make things later with them? Would you not fill your copper yards or vaults while you can? This also may create demand-based inflation, anticipating the day when the dollar buys less and actually causes supply-based cost inflation.
If you are worried your bank may have issues, are you not trying to draw cash out to buy things with it? I’m not saying that you are running out and stocking up on soy. However, IF you feel there are currency problems ahead, how do you get things? Maybe I need to buy them now.
IF commodities are collateral and collateral is money – and these countries are creating an economic alliance to counter the USD, they would do so by making a currency that has a tie to money, and then they would be able to buy this money with currency from friendly countries who have issues with US policy.
It stands to reason that the DXY is a useless metric, at this point, when considering a future BRICS+ alliance of nearly 100 countries. In 2016 at the end of my MBA I did a massive project with international marketing – taking a real company in a real industry into an emerging market. My 125-page paper with the team was the auto industry, with TESLA, going into South Korea. At the time, it was the BRICS+16. or so. That was 7 years ago, and many more nations want to ally themselves with anti-USD interests.
I am an American patriot – and wish to see good for my country. I have no ill will towards the people of any other nation. Politicians turn us all against each other. But it is clear to me that my country is a rule of law based system, which then allows for economic freedom with free markets. What transpired over the last 1-2 decades here is rule of law becomes….malleable and the free market system actually has more thumbs on the scale than ever before. I feel we have a GREAT system that needs IMMEDIATE attention to fix the broken “free” markets. Let’s start with HFT on commodities exchanges so big players cannot CREATE price.
But from my cheerleading section, my entire country cannot digest the economic hellscape that is coming in the second half of this decade until they understand what is wrong with all of this debt creation, how we understand money, and valuing commodities at more fair market value with real physical exchanges. Without some recognition of the problem, at a national level, our USD is going into the shitter by the end of the decade – which mostly means the cost of our goods and services will go vertical. This could be a form of hyper inflationary event that many are predicting.
Those that understand this and participate in The Great Rotation will make out like bandits. Unfortunately, many will be late to this train.
Yes, in the short term, the DXY can go up with stock market sell offs. But all of us are hunting much, much bigger game.
If we have a Great Rotation into commodities, this is what I like, and why.
Things that interest me – in order
Gold – Gold will kick in the door. I don’t own any at the house, but I use Kinesis. I feel that as this story starts to unfold, many may discover what Kinesis and a lot of these other asset backed digital currencies are and while commodities may be industrial and nation-state money, Kinesis has the ability to be retail money for every day people. If we start pricing things in gold grams or oz of silver, the concept of the USD becomes…outdated. IF gold is the center of the economic solar system, then it stands to reason that this is the first place BRICS+ nations would go. And, they are. Look at central bank gold buying this year – it’s the highest since 1968. Why?
Silver – Silver will clear the room. Most people cannot afford gold, so they will gravitate towards silver. We have seen many of silver apes front run the silver move – just like the uranium guys all got in last year and front ran the contract cycle this year. Silver deficits are astronomical, and silver primary producers can no longer make money. Yet, it is vital to over 1000 products. This is going to disappear from American production and can cripple our production. It is likely that someday, if this gets bad, you will see many companies buying into SLV or PSLV and withdrawing millions of oz of silver immediately. The stocks are there, but those who hold these shares may get quite a profit as industry needs to go to these places then to pull silver stocks. You wonder how much foreign interest can also bid this up with USD in foreign reserves they want to convert into money.
Uranium – I believe 2023 is where a lot of the contract cycle is going to be re-bid. Don’t quote me on this. I haven’t looked at U charts in awhile, but can see my U friends devastated by the mining stock draw downs. But most don’t realize there are two really big games in town with Cameco (Canada) and Kazataprom (Kazakhstan). It stands to reason that with the West alienating Russia right now, that it is possible that U stocks from KP are sold first to the Chinese and friendly nations of BRICS+. As China has a lot of nuke plants coming online, Kazataprom can produce U pretty cheap in situ. I had once heard as low as $15-25 per pound – but this may be higher now. There’s no production in the US, as it may cost us $55 per pound to produce it. IF the contract cycle is up now, and many of these nuke plants need more supply – would these entities not be allowed to buy from Kazataprom? What if they make contracts with KP for $40 per pound and Russia has them tear it up? Or, would Russia forbid them from selling to us at all? That might then have Cameco and some other larger Western producers by forced to deliver a lot more U than before to the G7 folks. I don’t know how this is going to play out, but you can see a potential for massive profits with a Cameco coming with a long hold of 3-7 years. I’m not great with the juniors story here, but later in the decade you would expect US legislation at some point to force us to buy domestic U, which really doesn’t exist today. So I have my eyes on some long shot US companies at spec holding – many could go to zero, but some of these could 10-30x.
Oil/Natgas – With the SPR being tapped, it’s artificially driving down the price of oil. SRSRocco talks about how OPEC might not even be ABLE to increase production if they wanted to. Capping Russian oil prices will create shortages. Russia is also denying sales to those who want to cap. With a recession here, I can see prices gliding down short term – but with China re-opening and the eventual stoppage of the SPR draw down, oil should increase throughout this year – and given how Saudis are now more friendly with China – it stands to reason the price in USD will continue higher throughout the rest of the decade. Obviously, increasing domestic production would help this but I don’t see reinforcements until 2024, at the earliest – and we can already have $150 oil by then. It’s possible we are seeing $175-$200 oil by the end of the decade. Banks are denying loans to oil companies due to the harm of the environment. This is when you get a FNV/WPM company stood up for energy to be the bank for them.
Copper – most of the big mines are over 100 years old and running out. I think a lot of the nations that produce this might be more friendly to BRICS+. While a recession can keep this price lower, coming out of a recession at some point might then have this going nickel. I’m not buying this story yet, as a deep US recession could hinder prices short term. But all of this talk of electrifying Africa, EVs – along with the structural deficits has many people suggesting the demand for copper to double by 2035 with existing mines on their last legs suggest that billions upon billions will have to be invested into this mining sector. Copper mines are massively expensive to stand up, so as supplies draw down, you could see this price being bid up, a lot, by 2030 until more supply can come online. Most don’t realize a mine can take 15 years from start to end to get going, so existing mine supply could get bid up.
Battery metals – copper is used in this as well, but other things like lithium, nickel, cobalt – base metals miners like Vale are really cyclical plays. But Vale is also a $79B market cap company listed on the NYSE with a P/E ratio of 3.83. I think it’s a Brazilian company listed on several exchanges.
Vale operates in a lot of countries and produces a lot of metals. But Brazil is part of BRICS+. I’m not a Brazil expert, but wow that election cycle has been crazy. It stands to reason that this country could move more towards the BRICS+ and how better to improve your country’s economy than to get paid more for the natural resources you are providing to Western exchanges? Could Brazil then force Vale to sell 20% of the gold, silver, nickel, copper it mines to them in Real? It seems like Brazilian interest rates are at 13%???
Like Ghana – you might now be able to see a lot of these countries start to force the sale of products in local currencies.
Vale’s stupid low P/E ratio shows mostly that they are expecting some rough water ahead. But again – in 2024/2025, how vital is a company like this globally? It has a $79b mkt cap at a 4x P/E? What’s going to happen when shortages start popping up this year and next to the values of metals and the stocks of these companies? If it goes nuts to maybe a 20x P/E ratio, that’s a 5x in mkt cap from here which could be EXPECTING big earnings to come.
There are major forces at play here:
- US debt increasing at accelerated rate
- World having problems with USD currency dilution and usage of USD as hammer
- “Green” energy fuck show causing problems in Europe, Japan, USA driving production costs higher of goods and services
- Countries selling out of treasuries to get to USD – to buy gold
- DXY is a measure mostly of EUR/JPY/GBP/CAD and is not equipped to be a metric in dealing with BRICS+ currency
- Structural deficits in commodities are the result of 40 years of smashing prices and pushing production to the far hell corners of the world
- Commodities are money, and it stands to reason with Mises regression theorem that as the run for gold/silver start, you may also get a run with property and commodities. Strong blue chip US companies may survive and thrive, but commodities will get the most attention as stocks are dangerously low
- US about to hit a recession for the first time since 2009. While it may last 6-18 months, when coming out of the recession, a scramble for commodities to make things will begin a massive run up.
- Gold is making a comeback as a future medium of exchange and method of settlement at the nation-state level
- BRICS+ is growing in size and economic importance by the day, and is being summarily dismissed by most people I read as more of an annoyance with incompetent governments that need the USD. The lack of concern…is concerning. With BRICS+ having 50% of the world’s population and 60% of resource production, a sharp move or catalyst can make this system accelerate in important very quickly.
- The fallacy that a gold BACKING is the future design where only a commodity-BASING is all that is needed to establish collateral. Rather than US treasuries as the collateral, reserve currencies (collateral) may be gold, silver, oil, etc.
- IF this is becoming a bi-polar system of West (G7) versus East (BRICS+) you essentially have an MMT system with no collateral in exchanges going against a system of gold and real collateral in their exchanges. This is EXTREMELY bearish for USD.
- Western energy policy is still living under the assumption of globalism, where they can wave a hand and force OPEC into supplying more oil. As SPR draws lower, and OPEC grows closer with China, we have less influence on the price of oil. Considering our current policy makers don’t want us to drill here, it’s expected that until we get people in office that will allow local exploration that we will see increased energy policies.
- The EU seems to hate U and is firing up coal plants over nuke plants. The insanity of woke green policy will drive the EU into depression, as their companies cannot compete on the world stage with ridiculously high energy costs. There is fracturing there already, and you can see Italy foaming at the mouth of France, and Germany needing Russian nat gas as a drive for them to move east.
- NATO are at each others’ throats, and it is plausible to attribute the Russian invasion of Ukraine on NATO expansionists wanting to add Ukraine. At some point, the eastern part of Ukraine may be either ceded to Russia or a new country is formed as a border country from Ukraine. It is obvious that the Russian policies with nat gas are causing NATO fragmentation – and the question of who blew up Nord Stream 1 and 2 – not covered in our news – could have earthquake implications on the unity and ability for NATO to exist in its current state moving forward. It is plausible to think that NATO might look vastly different five years from now, and not in a good way.
All of this evidence suggests that any bravado regarding the strength of the USD is short term in terms of measuring the DXY for currency trading, but ignores the economic avalanche that has started.
Commodities will be the next big thing, as countries all look to get out of shitty currencies and into money. Mises Regression Theorem is at play here (thanks Rafi!) where essentially the USD only has value as long as people will trade gold for it.
What can the US do? I do NOT think all hope is lost, I just think those in charge can only see five feet in front of them. I believe a lot of these solutions come up much later than sooner, which causes a lot of the issues raised above.
- Put a limit on how many contracts you can trade in a day, week, or month on the COMEX, immediately. If you remove massive amounts of high frequency trading, this may immediately help REAL price discovery. With this, not only will you have current producers in these countries making more USD to immediately help them locally, but you then perhaps incentivize production in better jurisdictions that may be more USD friendly. Perhaps allowing silver price to rise to a more reasonable value of $40-$50 would allow Nevada production of silver to be profitable. This may fix our exchanges from a casino to a more robust price discovery mechanism.
- The US must include gold and commodities in discussions with money and collateral. Rather than selling treasuries, the US government can sell gold at $1820 to raise cash. They could require that silver or gold producer in NV to sell them 20% of what they mine, in USD, to prevent our currency from hyper inflating. This can get us stocks of “stuff” which we can then sell to other governments.
- We must immediately work to end the Ukrainian/Russian conflict – as all this is doing is strengthening BRICS+ by the day. We need to go back to the drawing board of what NATO is and revisit the policy we had in 1991 with no further expansion east. It was supposed to be a defensive pact only, not a club to continue to grow and build economic unions with.
- My country needs to have a constitutional convention to revisit what is in the constitution and have the state remove powers of the Fed that have grown far beyond the constitution. Executive orders now appear to bypass congress. We fight wars without ever declaring war. Gold and silver are in the constitution, yet the Federal Reserve more or less made us ignore it. People try to expand the Supreme court to get things put into law that can’t make it through congress. Congress is owned by corporations and special interests. National elections are now nothing but wedge issues that should be decided at the community level and not dictating this to all citizens.
- We must immediately pass term limits and a balanced budget amendment. My elected officials, as a whole, are elected, get rich, spend YOUR tax money, and are set for life. While we CAN have deficits, we need to restrict these deficits to such things as Hurricane recovery and when we have official declarations of war. The last time we declared war was 1941. Yet we spend, spend, spend. To me, the gross display of where we are can be the homeless populations of any major city in this country are disgusting – yet we print $100 b to send to arm one of the most corrupt nations on earth.
- Our federal government needs to stay out of markets. Allow short term massive pain for years of economic freedoms with the free market. Today, the free market is mostly an illusion.
- Sherman anti-trust act of 1890 needs to limit corporation/company sizes. I do NOT want to take money from billionaires or millionaires – but the only other way of being more fair to everyone in the system is using the laws already on the books to limit how big companies can get, and break up giant companies that are there now. Think about how media is now centralized, and then owned by corporate interests – who all grew in size and ate up competitors. Preventing monopolies is the American thing to do. I do not TAKE from the pockets of people who earned their money – in whatever way. But I can PREVENT the abuse of the system moving forward to limit sizes of companies. This can potentially also prevent a CEO from running more than one company at a time. What happens is you eventually have fiduciary conflict – which we saw with solar city and tesla. Keeping companies smaller allows for more competition, and prevents the need to ever bail anyone out, ever again, because they are “too big to fail”.
- Elect politicians that are not globalists and want reduced government sizes. Only when you have fiscal responsibility with the checkbook can we stop the bleeding of our currency. Today, no matter who is elected, we promise billions to special interests. These people will also be against large corporations, against massive spending – and want to use what money we do collect to help our country improve. They are most likely against mainstream media interests. If our country is focused locally – we can then work to produce goods here, which is the only way we can compete against a BRICS+ like system.
The above items are the only way we can control debt and heal our money. It’s the only way we can be competitive with a future BRICS+ that will more or less dominate commodity production and sales worldwide.
January 7, 2023 at 1:54 pm
wow, dang, what an amazing article. A few things: Pay attention to the political landscape in brazil. Many experts are saying they are toast moving forward. also, mention how the inflation rate in other countries is now completely out of control, like Cuba for example. super article. lots of thought and effort put forth. thanks
January 7, 2023 at 4:52 pm
This report is so on the money! Thanks Nate for your excellent talent in seeing things how, why, and where they are what needs to be done.