Sharing insights and analysis from the mind of the legendary resource and commodities
#Investor
and
#Speculator
for the Rick Rule fans. (Not the real Rick Rule)
Trudeau has decided to ban chemical fertilisers.
Canada is the 4th largest exporter of grains and legumes in the world. If he gets away with this foolishness, Canada is going to have to import food.
It’s impossible to comprehend the woke stupidity of the ruling class.
The very big wins in my career, the 10 baggers, the 20 baggers, share two common features.
The first is they took over 5 years.
The second is the share price fell 50% or more during the course of me holding.
The Saudis are tired of the weaponisation of the U.S. Dollar. A good Saudi friend and former client summed it up for me last week by saying, “For 50 years we’ve felt secure being protected by the U.S… and now some of us feel the need to be protected from the U.S.”
There’s a
#copper
mine in the U.S. called Resolution. It was discovered 25 years ago. It’s a world scale deposit, over a billion tonnes with three times the average grade. It’s been in the permitting process for 20 years with no end in sight.
This is insanity.
In my career, I have never seen
#gold
stocks as cheap (Based on net present value relative to enterprise value) at todays gold prices as they are right now.
I watched
#gold
begin to move up in the year 2000. It was doing well in every currency except the USD.
Then in 2002 the U.S treasury backed off interest rates…and gold just ripped.
I’ve been saying for years to anyone who’d listen, the most important near term determinant of the price of
#uranium
is the pace of Japanese restarts. This isn’t going to occur in the future, it’s happening right now.
When I tip at a restaurant now, I tip in cash rather than with a credit card, and I tell my server that this is not a tip, it’s a gift.
Within the meaning of the IRS codes,
a tip is taxable, a gift is tax free.
We have spent about $4.6 trillion on various forms of alternative
#energy
and we’ve reduced the market share of
#oilandgas
from 82% to 81%. In the meantime we created tremendous dislocations in energy distribution and pricing.
"The very big wins in my career, the 10-baggers, the 20-baggers, share two common features.
The first is they took over 5 years; the second is the share price fell 50% or more during the course of me holding."
This may get me a lot of hate mail but I’d love to see a sovereign debt default. I would love to see the system of lies that we live in, including the lie of the fiat dollar… be shown for what it is.
"I haven't seen a greater disconnect between the
#gold
price and gold stocks in my career since the early '70s. I have also not seen as much investor hostility to gold stocks, nor have I seen gold stocks at these valuation levels relative to book or relative to free cash flow."
Do we need more solar? Yes
Do we need more wind? Yes
Do we need more geothermal? Yes
Do we need more low head hydro? Yes
Do we need more nuclear? Yes
Do we need more oil and gas? Yes
Do you get where I’m going with this?
"I've been in the
#GOLD
business for a very long time, and about 2 or 3 years out of every 10, it makes me an unbelievable amount of money. And for 6 or 7 years out of 10, it tortures me. I've come to tolerate it for what it is."
I noticed very recently that the Germans are knocking down a wind farm to expand a
#coal
mine.
I guess that’s what happens when perception collides with reality.
People are beginning to understand, you can’t reduce carbon loadings in the atmosphere by asking people to lower their material standard of living. You need to increase base load energy in a way the doesn’t generate carbon.
#Nuclear
energy does precisely that.
The most volatile asset class is
#silver
stocks. The combined market cap is insufficient to hold the flow of funds when the generalists become attracted to them. I’ve experienced it 3 times before in my career. It’s an awful lot of fun if you’re in place before the boom occurs.
We are in a market that is decidedly a risk off market. The consequence of that is I’ve decided to be risk on. I’m coming into the junior market very aggressively.
The world needs more electricity, and for the next 50 years much of it will be supplied by hydrocarbons…irrespective of what we do or think. That’s just the reality.
It’s highly amusing to me that the Germans and their wisdom shut down their
#nuclear
fleet and replaced the base load that they used to generate non carbon generating electricity, with lignite… A brown, sulphurous, dirty, ash heavy coal.
Ms Merkel’s green legacy.
If you’re a Chinese investor, Japanese investor, Swiss investor, European investor, Indian investor and you’re in gold… you’re having a good time.
#Gold
is in a bull market in every currency in the world expect the U.S. dollar.
Many people don’t understand the significance of a market where the paper market has 250 times the volume of the physical available for delivery.
#silver
I don’t believe that society gets better because of government. I believe society gets better in spite of government. Wealth and progress aren’t created by government… wealth and progress are created by individuals.
If you are looking for 10 to 1 returns, you must be using money that you can afford not to look at for a substantial period of time, and be able to tolerate at least 50% loss of principal.
Right now Apple is valued at $2 Trillion. For $2Trillion you could buy every single one of the top 100
#mining
companies in the world. Not just a few shares, I’m talking about taking over all of the companies.
The largest demand year for coal on record is 2021. The demand in 2022 will be higher.
#Coal
will continue to be an important supplier of electricity for 25-30 years and the companies are selling at 2-3 times free cash flow.
The incentive price for
#uranium
with inflation in the supply chain is $75/lb.
Given the world is using 180 million pounds and producing 120 million pounds – meaning that there is a 60 million pound per year shortfall – it’s a pretty simple outcome. There’s only two choices…
The average pump price in the United States contains about 7 cents per gallon of
#oil
industry profit, and $1.36 worth of tax. How can the president wrap himself around this arithmetic, saying the oil companies are gouging…when he is stealing?
"The real
#silver
squeeze will happen when entities like pension funds go from holding no precious metals to allocating 2 or 3 percent, and that's precisely what I think is going to happen."
For income
#investors
it’s a no brainier, you want to be in the
#Oil
and
#gas
space. The companies are generating massive free cash flows and they’re afraid to re-invest them because governments around the world are trying to put them out of business.
"About 2.5% of my portfolio is
#silver
centric. If past is prologue, that 2.5% might become 25% without any more additions. Which is to say, the upside around the silver stocks when they run is truly, truly, truly stupid."
I’m struck at conferences by people saying with some glee, that
#gold
could go to $10,000. The circumstance that would see that occur would be very difficult on your lifestyle. My lifestyle is good, and don’t want to see it altered.
One thing that everyone needs to be aware of is there’s a tremendous amount of cash on the sidelines….We don’t know where that money is going to go, we just know it’s going to go somewhere.
Big banks like JPMorgan Chase will tell you that although they have $50 trillion of nominal derivatives exposure…their real exposure is much less, because they’re offset long against shorts. What they forget to tell you is - that assumes the counterparties pay.
The Bidens of the world are telling
#oil
companies to produce more oil and invest more money. At the same time saying they’re going to make the oil business cease to exist in 2030. Why would you invest $50 billion when the legislature says they’re going to put you out of business
#Copper
mines are getting long of tooth. Bingham Canyon has been producing for 120 years, Chuquicamata 105 years, Grasberg 50 years. You can’t stand at the top of a pit, throw in fertiliser and have it grow more copper and there’s nothing to take their place.
"The
#gold
stocks will run again, but most investors won't have the courage to buy the stocks before the run. Most investors will, because of their greed, buy them after the stocks have run."
"I own
#Gold
because I believe that gold is a great form of liquidity. It's insurance against collective stupidity, and collective stupidity is in great abundance."
In the 1970s, we had a spectacular resource market, in particular for
#gold
. The price soared from $35 to $850. In the middle of that secular bull market, gold had fallen by 50%. Those who sold missed an 800% move in six years.
All of the problems that I see… all of them, are a function of people trying to express their will through governments rather than markets. In a market, you have to convince the counterparty. If you have control of a government, you can coerce the counterparty.
The
#Gold
and
#Silver
bullion that I own isn’t for sale at a price like this.
So given that it isn’t for sale, and I’d like to own more, it’s in my interest to see the price go down.
I haven’t started collecting my social security but I’m going to begin too. I’m going to contribute every cheque to various anti government organisations in the United States.
We've learned in Germany, Holland, and France, and we'll learn in North America, that the type of economic sacrifice the big thinkers are asking everyone else to make (at conferences they fly to in private jets) is unacceptable to western consumers.
"It's interesting to me that nobody cared about
#silver
at all at $24, and people are starting to care about it at $30, which is to say that people don't care about a narrative until the price action of the commodity has made the narrative less valuable."
We need to be developing a very large
#copper
mine every year to keep up with demand.
We are developing a very large copper mine every 5 years.
What’s the likely outcome?
We saw recently in Sri Lanka, a broke country decided, as a consequence of it’s s leaders preference, that all food production was going to be organic.
In only one year that resulted in a failed harvest and starvation, in a country that had been a food exporter.
"I read all kinds of stuff on the internet about the fact that
#silver
might go to $35. I could care less about a $5 move in silver. I've experienced a couple of 10-fold moves and one 50-fold move, so a $5 move is of no particular interest to me."
A big U.S utility that will go un-named was telling me that SPUT is an ETF, and as demand and price fall we would have to sell to satisfy redemption. I said,
“No, it’s a trust, a closed end fund and when
#uranium
goes in there, from your point of view it went to uranium heaven.
I’d like to ask my German friends to look at their power bill over the last two years. Do you think the big thinkers in Germany made the right decision? For the younger, environmentally aware ones… how do you feel about the rapid increase in
#coal
consumption in Germany?
The idea that we’re going to replace
#fossilfuels
in the next 25 years is a joke…so is the idea that we’re going to replace them ever, without increasing our
#nuclear
fleet.
Telling the
#oilandgas
space that you’re going to put them out of business in 2030, is not really a good way to get them to invest hundreds of billions of dollars today.
The future of electricity is not just about electric cars. It’s about the fact that 1.2 billion people on earth have no primary access to electricity. Another 2 billion people have access to intermittent or affordable electricity.
"I own
#Gold
because I’m afraid of the possibility of a real rout in the US dollar, the type of rout that we saw in the decade of the 1970s. If that happens, I’m not saying it’s going to, but if it happens, you won’t see $2500 gold; you’ll see $5000 gold, $6000 gold, or $8000
"The most volatile asset class is
#silver
stocks. The combined market cap is insufficient to hold the flow of funds when the generalists become attracted to them. I’ve experienced it 3 times before in my career. It’s an awful lot of fun if you’re in place before the boom occurs."
Without substantial new investment in the
#zinc
and
#copper
business, zinc and copper production are going to begin to falter dramatically in five years. That means byproduct
#silver
production falters too.