Don't Give Up
We've got plenty of incredible news and updates to share with you in the coming days. Right now, we want to dedicate time to explain why the commodities supercycle has returned and why this was only the starting gun!
When oil futures reached negative territory in April 2020, we determined that commodities had finally bottomed, after a nearly 11-yr bear market.
Since then, every commodity play that we've highlighted has appreciated greatly.
In recent days, the attempt to squeeze the paper derivatives of the COMEX has backfired and this is really not the way to look at the bull market in silver.
What this bull market in commodities is all about is much bigger than a failed attempt to squeeze and shake out leveraged bettors in the futures contracts. Forget about that; it's not the reason that silver has legs.
Instead, immerse yourself in the underlying catalysts for commodities:
All major commodities, save for cocoa and zinc, are running annual deficits.
The pandemic has exposed the delicacy of global supply chains; each country is now in a natural resources race to build its reserves and shore up. China is gobbling up supply and Biden has also insisted that America must become more independent and manufacture locally.
In the past eleven years, investment funds have flowed towards tech and grossly neglected investments in commodities, to the point that production capacity is severely damaged.
ESG (Environmental, Social and Governance) is putting more restrictions on miners, which will further drive up the price, due to profitability struggles and higher barriers of entry. This is counter to logic, but economically sound.
Redistribution of Wealth policies are going to put stimulus funds in the hands of the working class and lower-income demographics, who spend these funds, not invest them.
Spending into the economy is much more inflationary than putting money into equities, bonds and real estate.
As emerging markets continue to grow more independent, their fiat currencies will be deemed more stable, which is another headwind for dollar hegemony.
This perfect storm will drive commodities prices higher.
Best Regards,
FutureMoneyTrends.com
