Our World This Week - No Love For Commodities

📉  High Yield: A Losing Proposition

Take a look at this chart and then ask yourself what happens when folks wake to the reality that inflation is transitory in the same way as tofu is tasty?

Suddenly, that capital seeks inflation protection, that’s what.

💔  No Love For Commodities

Now, where could that capital seek a safe haven? Hint…

For the majority of investors out there, commodities are still as hated as ever.

To get a better sense of just how out of whack the market really is, it pays to take a step back and truly put things into perspective.

The run we’ve seen so far is far from over. We remain convinced it’s just getting started. Or we’re wrong, and we’re in for some wonderful exponential age of never ending prosperity brought to us by insanely overvalued tech companies and bond markets.

So maybe that, but the probability of it would mean that we would break a cyclical pattern that has lasted with us for hundreds of years. To us, all this seems like a pretty obvious bet.

☢️  Uranium: Going Nuclear

A lot has happened since we last discussed uranium in these missives a few weeks ago. The yellowcake has been on a tear — up 50% in the last month.

But just to give you some context of where we are in the cycle, here’s a long-term chart of the uranium ETF (URA) (hat tip to @NautilusCap for the chart). Side note: the ETF listing nicely coincided with the previous market top in uranium.

So hold on, folks. The best is yet to come.

🥡  Time To Go Shopping

It’s becoming more and more clear we’re heading for some serious food shortages. Here’s Bloomberg on the topic:

Adjusted for inflation and annualized, costs are already higher now than for almost anytime in the past six decades, according FAO data. Indeed, it’s now harder to afford food than it was during the 2011 protests in the Middle East that led to the overthrow of leaders in Tunisia, Libya and Egypt, said Alastair Smith, senior teaching fellow in global sustainable development at Warwick University in the U.K.

The below chart comes from Jared Dillian (@dailydirtnap). Over in the UK, food is flying off the shelves. It’s not much different in the US.


Disclaimer: This is not intended to render investment advice. None of the principles of Capex Administrative Ltd or Chris MacIntosh are licensed as financial professionals, brokers, bankers or even ...

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