Energy Is life and your living standard depends on how much you waste. This is LOTM’s investment theme for the next three to eight years.
How much right do world government have to decide who uses how much energy? This is a question we need to address from our general population perspective.
We have a management group who consumes a very high degree of energy in private jets, large (I mean large) homes and consume other forms of energy we can only dream of using. This group is telling us there are too many people on the planet, single family homes are a privilege of the past and we cannot sustain the world growth rate we have today, and we must reduce consumption and choose where this energy for consumption comes from. The group is the World Economic Forum (WEF). Left unchecked or un-monitored, WEF will make decisions for us. Their interests are not the same as our interests. They are the management group who is managing the general population (Gen Pop.)
The investment thesis LOTM is following is that the governments of the western world are both dictating a shift towards going all electric and restricting the materials and energy needed to make this transition. The bottle next created from this contrasting government policy will drive commodity prices substantially high in coming years. Energy is the life blood of an expanding economy. Let’s expand our thinking to outside the USA. The high percentage of the global population aspires to the American and European life style. They want what we want. For them, Energy is Life. The world see what we watch on TV at the same time we see it in TV. They watch movie releases the same day we see movie released on TV. Tell them they cannot have what we have and why. Does any one really think they will accept that.
The fact of current government policy goes well beyond subsiding going electric while restricting supply of substances that make going electric possible. The world does not have the minerals and energy (fossil fuel) to bring “the world” up to the American middle class life style. Therefore, as long as the current government energy policies are in force, commodity prices will go higher. It is simple supply and demand. Wind and solar ware less dense forms of energy than oil and gas or nuclear. Civilization has advanced at the highest pace when society moved from a less dense for of energy to a higher density for on energy. The only for of higher density form of energy than oil available today is nuclear. At some moment in time there will be a shift towards Nuclear as that denser form of energy. Wind and solar are valuable contributors but as less dense energy forms than oil and gas, they will never replace oil and gas. It is a fact of life and physics. There for commodities remain our primary choice of focus in investments.
Three timely and excellent interviews this past week:
I: Palisades Gold Radio interview with Doomberg – “Energy Trade-Offs, Unsustainable Policies, & Impeachable Offenses.” Feb 22, 2023.
II: Blockworks Macro: Japan matters – “There’s No Bull Case For Risk Asset’s” Feb 26, 2023. Regular hosts Alfonso and Andreas discuss the reasons growth is fully priced in the market, why interest rates will remain high, a long discussion on Real Estate and why Real Restate has an other 20 percent on the down side. Buying dividend paying stocks and short-duration bonds might be the best place to stay at this time. There is a good discussion on crypto and how the US Government will never allow crypto to be used as currency. LOTM: This does not mean Bitcoin will not be valuable but rather it will be treated as gold and silver as a store of value but not as currency.
III: Soar Financial interviews Andy Schectman, gold and silver dealer in Minneapolis, Minneapolis, Miles Franklin, “How gold and silver protect you.” Feb 24, 2023. Good discussion on Fait currency, Pure silver miners Vs Silver as secondary mining product. Conversation on size of silver and gold to accumulate. Extensive conversation on consumption exceeding produced supply, a LOTM bottle-neck constrained investment theme LOTM loves. Schectman is talking his book in that he sell physical gold and silver so of course he’s excited about physical gold and silver.
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Written February 26th, 2023, by Tom Linzmeier, for Tom’s LOTM Blog at https://lotm.substack.com/.
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