Commodity supercycle is premature due to recession
The guest argued that the consensus view of a new commodity supercycle is premature because an impending global recession will sharply depress physical demand.
The argument
While supply-side constraints exist, a projected economic slowdown by late 2024 and a deeper recession in 2025 will cut off commodity demand. Furthermore, AI-driven copper demand is overstated, with companies like Nvidia actively transitioning to copper-free silicon photonics by 2028.
The thesis, stress-tested
✓ What validates it
- ✓Nvidia successfully phasing out copper in data centers by 2028
- ✓Global manufacturing PMIs falling further into contractionary territory by late 2024
▸ Risks discussed
- ▸Wartime strategic stockpiling by governments could artificially support demand
- ▸Supply disruptions like sulfuric acid shortages could worsen
Hear it yourself
"Means that if Saudi wants to convert Chinese currency into gold, do it in their own country, hold the gold, this same platform will be delivered across all BRICS member countries. The one that is all has already, I think, been completed is in Hong Kong. With gold trading at new all time highs, gold producers are printing money. And this means that for the first time in years, money is beginning to flow into expiration. This is a trend that we at Palisades Gold Corp have long anticipated, which is why we spent the last decade assembling the largest junior held mineral claim package in The United States through our subsidiary Made in America Gold Corp."
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