The Commodity Bull Market Has Begun (But So Has Inflation)

Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. Is it all doom and gloom? Heck no, I'm gonna show you where the biggest bull market has just begun. The following is the audio version of a video released at peakprosparity.com. Visit peakprosparity.com to watch the video and to find other insightful content such as articles, discussion forums, and exclusive subscriber-only content. Hello everyone, I am Chris Martensen, CEO and founder of Peakfinancialinvesting.com, also peakprosparity.com. And Paul Kiker is off today, so it's just gonna be a solo act and I'm gonna tell you about where I think this biggest bull market is right now and it's astonishing, it's just gotten started. And of course it's, of course, maybe you don't know this, but I'm a huge hard assets natural resources fan, particularly at this stage of the cycle. And this is a chart that comes to us courtesy of Gearing and Rogen Shwag. That's a little G&R down here. And they've run this chart, which let me just, let's talk through it. It looks at the ratio of spot commodities, spot prices for commodities compared to the S&P 500. And when it's, this little green line is that ratio. And when it gets all the way up to here, it's maybe commodities are overvalued when it's above this small red dotted line. It's fairly valued when it gets down into the range of this heavy red dotted line. And so you'd be a little agnostic when you're on the heavy red dotted line to on stocks. Well, commodities, I don't know. But when you get down here and that green line is now below the lower red dotted line, you are definitely in the mode of saying, I think I'd prefer to be overweight and commodities at this time compared to stocks or equities. And you can see through history, it's just cycled over and over again. So commodities got real expensive down here around 1980. That was at the tail end of that double hump inflation. Talk more about that in a minute. Commodities got really undervalued here and they are currently as of today super duper undervalued relative to equities. Now, why do commodities go through the cycle of being too expensive, too cheap, too expensive, too cheap. It's a well known phenomenon. It's called the commodities super cycle. And it starts here. You're at the top of the market. You have, there's, you know, just got this situation. We have demand destruction. You got mega mergers and all that stuff. But there's this moment where you have like too much investments. You have too much supply. And then you get into surplus. And people like, oh my god, get me out. We have way too much prices begin to fall. Projects continue to get finance, however. And then you have an extreme surplus because we just came out of a deficit. And now we're coming into surplus. Now we're an extreme surplus. And people are saying things like this is going to zero. I'm never investing in commodities again. Oil is going to be $12 a barrel because they don't know where they are in the cycle. This is just the commodity investment cycle. And then the market rebalances itself. You get down here to the bottom of the market. Why? Because surplus. You know what they say commodity is a cure for high prices is high prices. So you have all these high prices for commodities. People invest in those commodities, bring more oil. Well, is online. Be bring more copper mines online. They do those things. And then you know what happens. You get all this. Stuff that comes out. And so the cure for high prices was high prices because we brought more supply online. And that makes a price this fall again. And then you move into a situation where you start to move out of balance back into deficit again. And people become cautious. They're like, hey, let's see what's happening. You get a lot of M and A mergers and acquisition activity. Which by the way, we're seeing in the share oil patch big time right now also in the mining space. And this is when invest insiders and professionals begin buying. They start, you know, accumulating quietly. Contrary and allocations. So I'm a contrarian investor for the most part. And then people start to say things like, I can't believe how cheap this stuff is maybe maybe I should get some more of this stuff myself. And that's when the bull market starts. And then you start the bull market starts. But then you get into this place. We have these extreme deficits. Right. And so we are somewhere right down this. We're on this side of the chart over here. Okay. We're we're coming right up through this side of the investing cycle. So it was just a simple thing. We under invested for a while. So that led to less supply. Less supply leads to higher prices for those things. And then those higher prices are going to track more capital. And then more capital is going to come in. And we're going to create more supplies. That's the that's the commodity cycle. Well, we're coming out of one of the longest periods of under investment commodities in his. I mean, it's been a long dry road. You see here normally go up. You go down. Look at all this time. It's spent balance decades, right. Little high took decades to get back down to to undervalued. But here we went from undervalued and barely touched the line and went undervalued again. This is a long stretch of lack of investment in commodities. So what's the result of that we see here commodities total return. And I think commodities are just getting started here. I just do energy over the last year. The percentage gain is 96.2 for Brent oil WTI crude 95 call that 96 US natural gas down. Gas oil diesel 146% up New York ultra low sulfur diesel 130% gains gasoline up 89% OK, how about metals industrial metals. Wow, copper's up 38% over the last year aluminum 49% nickel 20% zinc 37% lead going backwards need less lead because we're using lift fewer lead batteries and cars and things like that. Precious metals. Let's go there for a quick gold up 45% silver 161. Oh my gosh, that's the top on the whole list here platinum 115 palladium 60. I'm going to give you data later that explains why those are probably going higher to supply story as well as demand story. Interestingly, the grains have gone almost nowhere here over the past year, although they're really probably about to get started again because of the war in Iran because of the lack of fertilizer also because of a very crappy growing season for wheat here in the United States again, I'll show you some of that data later. And then we got these other things coffee cocoa cotton, but I believe we're just getting started on the commodity cycle. So let's explain that let's talk about this with that commodity investment cycle and let's take a quick peek at this. So I want to let's do this around copper. OK, and I think the copper bull market has arrived. It's not about to arrive. It has arrived. This is Robert Friedland. Here he is at the Qatar economic forum in 2023. I'm digging a little bit back into the history because I just want you to be aware of the fact that this come up. This copper bull market. It's not like it snuck up on us with no warning, right. Listen to Robert the really the person who knows more about copper than anybody else in the world talking to the guitarians about this back in 20. 23. Everything we do. Everything we touch. We they're minded or we grew it agriculturally. And our species is trying to green the world economy by reducing the consumption of coal and hydrocarbon. In the way we generate electrical energy, transmit electric electrical energy and actually utilize it in an object like a microwave oven or a washing machine or your electric car. As a species, we have to find a way to mine more copper in the next 20 to 25 years than we've mined throughout human history in a period where most of the great copper mines have already been mined and are depleted. If we picture the periodic table behind us, copper conducts electrical energy making these lights better than any other metal than gold and silver, which are too expensive for the purpose. It all makes sense. Why is in the message getting through? In New York, people think a ham sandwich comes from a refrigerator. So we are divorced from the supply chain. People flew here in airplanes or drove here in cars. If you're guilty of going to a hospital or riding a bicycle, you need metal. And the problem is that the real story of how the supply chain works is not well told. So ham sandwich has come from vending machines. The problem is that we just are our financial overlords and our press have really just forgotten. We've just we've just forgotten over time where things actually come from and then actual real value comes from the earth. So I talk about this in my crash course series as primary wealth, secondary wealth and tertiary wealth. And what Robert is describing is a lot of people have spent too much time around tertiary wealth and they've forgotten what primary and secondary means. So what's primary wealth? Primary wealth is a big copper mine. It hasn't been opened yet. It's copper ore in the ground. Nice beautiful azure malachite green blue stuff 10% ore grade. That would be primary wealth. It's the wealth that your nation had or has. You know, at the time when when people started finding it and making use of it, right? Secondary wealth is what happens when we take that copper ore and we produce copper ingots out of it or we bring fish from the ocean to market. Secondary wealth is the transformed value add of humans taking whatever the thing is and bringing it in a usable form to market. And it's also secondary wealth is the means of production, right? So good solid secondary wealth would be the oil well in all of its machinery as well. Turshary wealth, stocks and bonds and derivatives and ones and zeros and hard disks, its representations of wealth, but it's not actually real wealth. This is a study program. I go over over and over again. I teach this at college courses. I this is in the crash course series, in the books and the movies, the video series, but it's really important because money itself actually has no value, right? So if we're on a desert island together and a pallet washes up, if it's a pallet of $100 bills, we might be excited for a second, but it's actual value to us there on that island is going to be low. We would rather have a pallet of bananas or medicine, you know, anything else would be like very useful, something that's actual tangible primary or secondary wealth would be great. So the problem is is that we have a lot of people in positions of authority, even as you know, far low and goes 2023. And I've been talking about the copper story since since even before then, because it's been so obvious that we're not going to be able to get enough copper out of the ground to do all the things we're planning to do with it. And once I think maybe the green energy stories died back a bit because data centers came along. And now we have data centers. And those are all exciting and nobody's squawking about how much energy they waste or pollution they make data centers, but data centers need cooling. And to do that, they use these copper cooling jackets around or at least little bars that they put that around the CPU units themselves to transmit and carry that waste heat away. Bottom line is whether we're making green energy stuff, we're making EV cars, we're making windmills, we're building more cars, we're putting up more buildings, or whatever we're doing with it, make a data centers, we're going to need more copper. So that's an astonishing story. So it's very easy to find data like this out there. So this is coming from the global critical minerals outlook from 2025. And within 10 years, minerals critical to power infrastructure, battery technologies could face double, double digit shortfalls. These are massive. Look at copper. There's a 33% gap they're projecting here between what we're going to have expected supply and primary supply requirements. Like what do you mean? We're going to be missing tens of that, you know, thousands and thousands and thousands of kilo tons, right? You know, millions and millions of pounds lithium same thing huge gap, nickel, huge gap, cobalt, huge gap cobalt being used in batteries and as part of the annos at any rate, we're missing a lot and it's that's by 2035, according to the financial times demand for copper is forecast to outstrips supply by a really wide margin like look at that. That's just massive. Now now we're missing millions of tons, 10 million tons probably just missing an action and that's that's crazy. That's crazy. So in I think I put this one out two years ago to my subscribers, I talked about how copper was maybe the new gold and those are copper big, big just sheets of copper that straight out of the refinery. So is copper the new gold meaning is copper about to go on a big bull run? What kind of has already started there here? We're looking at a monthly reading of copper. So this starts all the way back here in 2006. It went up a bit sort of bounced around here between three and four dollars a pound back in 2006, seven, eight collapsed all the way back to under two dollars a pound in 2008 and the construct of the great financial crisis 2009 lifts off again makes it all the way all the way back over four years and years and years and years of going down bounces back up to three years of going all the way back down to two bounces to four and here we come along and then finally here in 2025 starts to take off and look at this is a brand new closing monthly high that we're working on here in May 13th as of today 669 a pound and when we look at that on a per ton basis and because that's the other way the LME London Metal Exchange is pricing it by the ton T-O-N-N-E that's a thousand kilograms which is what 2200 pounds ish with a normal short ton being two thousand pounds but you can see here now we're plump you know approaching levels here over fourteen thousand dollars a ton when we were just at eleven thousand dollars a ton just back in November of 2025 so pretty big increases so that's what copper is doing but the problem with copper is this 20 years of paper price suppression so the copper is really like every commodity has been a victim of the so-called futures market where people speculators and big banks and and actual producers and consumers and commercial hedgers all come together to set the price for things everything wheat corn oil cocoa copper and for 20 years basically the price of copper really went nowhere I mean can you imagine here you are in 2026 at the beginning of it earning 450 a pound for copper but you could have earned that basically 20 years ago so listen mining is a very very capital intensive business and it's an energy intensive business and it's subject to all the inflationary forces inflation for the machines the equipment the energy the steel labor all of that can you imagine any business you're running if your business was had to accept the same price for its output product today that it did 20 years ago so what do you think the effect is though if this price suppression scheme I'm talking about has been right that prices have been reduced below their fair market price what do you think is happening to discoveries of new copper how incentivized are people going to be to go out and discover more copper mines not very is the answer and that's exactly what has happened 2015 zero new mines were found we have this one that was just got you know put online in 2016 discovered brought online 2017 zero and then 2018 one 2019 zero 2020 one 2021 zero 22 zero 23 one you can see all look look what we were doing back here in the 90s up through about 2006 seven right eight nine ten fifteen seventeen new mines discovered new copper discoveries found and wow that's terrible so just hold this and just hold this in your mind remember we're not we're not finding more copper because we're not really incentivized to find more copper or there isn't more to find but there's there's more to find but we're just not properly incentivized because the price is wrong the price signal is wrong the price signal has been wrong that's one of the things that the US markets excel at is making bad price signals and bad price signals lead to bad outcomes so carrying forward we're going to listen to Robert Friedland again here he is at a recent summit and so this is just from I think that's this is earlier this year let's listen in let me show you how bad this problem is in human history if we go back to Mahenja Daro we have mined 700 million metric tons of copper so we put that in a big cube you see the Eiffel Tower of rescale it's about 430 meters by 430 meters approximately 80 percent of all the copper we've ever mined is still in human possession now if you want to get that back no problem we can recycle that all we have to do is tear down every building in the United States every building in Europe every building in Japan and all of China and we can get back about 80 percent of that 700 million tons but we'll be living and freezing in the dark the lights are on here because the copper that's embedded in this building we can tear off this university and get the copper back yeah we can recycle it how much are we using we're consuming 30 million tons of copper we are only 4 million tons of which is recycled that means to maintain 3 percent GDP growth now listen carefully with no electrification this with burning well and gas to maintain global 3 percent GDP growth we have to mine the same amount of copper in the next 18 years as we mine in the last 10,000 years in the next 18 years I've got to mine the same amount of copper as it mine's less than 10,000 years without electrification what in the next 18 years just to maintain our 3 percent GDP growth we're going to have to mine another while as much as copper has been mined in all of human history wow all right he's going to drive this point on let's keep listening without data centers without solar and wind and the greening of the world economy you people have no idea whatsoever what we're facing you're dreaming since 1900 the energy to produce copper the energy you need to make copper is 16 fold up as the orgrade in the world goes down we need more more energy to these are all points I made in the crash course back in 2008 as the copper orgrades get get worse right instead of a 1 percent orgrade it becomes a 0.5 percent orgrade the amount of energy that's required to produce the copper out of that or doesn't go up linearly it's not just twice as bad at 0.5 percent as it is at 1 percent or grade for example it goes exponentially worse right it's just unbelievable so he's making so many good points here that it's just absolutely vital that we all absorb them produce the very metal that that produces the energy and water consumption is doubled. So grades are declining in the world's minds. The easier it is to get the higher levels of energy. copper mines remind they're like hundred-year-old ladies laying and bed waiting to die in Chile. So Chile counts for a lot. That's 24% of global copper mine production. But you know, they're costar in the third or fourth quarter of the world. They're very expensive. They burn coal in the Chilean grid. And solar doesn't work for a mine because it suddenly shines five hours a day. Solar is useless unless you have grid scale storage. So we're heading for a train ride in Chile. We need six giant tier one mines to come online every year between now and 2050 when I'm scheduled to be 100 years old. What we need six tier one mines coming online every year from now to 2050 to have this all balanced out. Do you see what the problem is here? I mean, it's just it's just so obvious. And it's just astonishing that copper its price has not been forward looking at all. It has not even begun to price in what he's talking about. It's not going to be there. It's just not. So what I said copper is the new gold is because we're you know, we have 10 years of data behind us right now and we have an average of less than one new mine coming online let alone six. So when's enough data? When we have 20 years of data, 40 years of data? To me, 10 years is planning. Okay. This is such an obvious story. So when I say the commodity super cycle is about to start, the commodities bull market started. In fact, we're just dialing in on copper, not because it's a special exemplar necessarily, it's special. But this story can be repeated across so many different commodities, including oil, including the grains, including all kinds of things, but silver to platinum. How did we get here? How did we forget the most basic things, which is before you can produce it, you got to find it. All right. So that's the point he goes on to make here now. We're going to have to talk about something because he had two important points in there. One, that over the next 18 years, right, we're going to have to mine as much copper as it's been mined in all of human history. 10,000 years of taking this stuff out of the ground. And in the next 18 years, we're going to have to get the same amount out. Okay. That's one. That's how what does that mean? How is that happening? And he tied that to three and a half percent GDP growth. He said, hey, if you want the GDP growth, you're going to have to do this. Okay. And there's a reason for that. And I'm going to, we have to talk about something so we can share the understanding of why that is. And it starts with this. It's this stuff called exponential growth. See, the problem here is that you and I were humans, which means we're really good at linear things, right? A linear thing might be, you know, a picture unleashes a hundred mile an hour fastball. The batter has less than a tenth of a second to calculate where it's going to be, what the rotation of the seems is, and make a very calculated adjustment to try and put the bat exactly where that ball is going to be. And people do it. It's astonishing. But the very minute that ball leaves the picture's hand, it begins to decelerate linearly. So we can make that calculation, even if it's in the blink of an eye, less than the blink of an eye. But that same batter, who's totally astonishingly amazing at doing that calculation, when they encounter an unexpected patch of ice on their front stoop, they're going to go down like a sack of potatoes just like the rest of us, right? Because when you slip on ice, you are no longer subject to a linear force. You're subject to gravity. Gravity is 9.8 meters per second squared, not linear squared. What is this exponential stuff? So we're just not really well constructed as humans to understand exponential functions. So I have a way of explaining it. Hopefully that makes it easy. I've done this many times. People seem to sort of get it. So what's exponential? The exponential growth is something that looks like you get these hockey stick charts. You know, the next 18 years, we're going to have to mine as much copper, has been mined in all the rest of history. So what that's talking about is it's a doubling. And it's a feature of exponential functions where the next doubling, when you go from, we've mined 700 million tons. Now we need another 700 million tons, right? That's mining as much as all of human history combined, right? Before I get, let me back that up. And that doubling means that it's an exponential function. And when exponential functions have a doubling, that next doubling consumes as much as all of the prior doubleings, prior, all the prior story combined. It's one of the amazing and also terrifying features of exponential functions. And so I got all of this from a series of lectures from Dr. Albert Bartlett had the great pleasure of meeting him, University of Colorado professor. He had this really brilliant discourse on exponential functions. You can look it up on YouTube and find it. It's brilliant, highly recommended. And one of his quotes, as he said, the greatest shortcoming of the human race is our inability to understand the exponential function. He's absolutely right. 100%. So I'm going to, let's see if we can understand it together. So the hockey stick chart, how do we understand this? Okay, we can do a little thought experiment. Let's imagine I have a magic eyedropper and this magic eyedropper is magic because when I put that drop of water in your left hand there, it's going to double every minute. So after one minute, you have two drops, and after two minutes, you have four drops of water in your hand. And after about five minutes, you could fill a thimble up. That's how fast it's growing. Okay, so here's the thought experiment. We go to this random stadium that I've selected. It's Yankee Stadium. And I'm going to put a wall across that back wall right there. So the park is now watertight. And the second thing we're going to do is right up there at the highest road bleacher seats right there. We're going to handcuff you to that. Okay, so your handcuff to the highest road bleacher seats in this watertight park, 12 o'clock in the afternoon. Exactly. I put this magic drop down there on the pitcher's mound and it starts to do its thing. Question, how long do you have to escape from your handcuffs? People guess all kinds of things. I don't know what's in your head, but well, the answer is, if we begin this at 12 o'clock exactly, the stadium is going to be filled at 12.50. And if I've underestimated the volume of a park, the park by 100% then the answer is 12.50. This answer around 50 shows up almost at any scale when you're trying to figure out an exponential function. It's something really magic happens between somewhere between 45 and 55 of those doubling periods. All right, which relates to our debt markets believe it or not. That isn't an important question. Important question is what time is this park still 97% empty space? And how many of you realize the seriousness of your predicament? The answer is at 12.45 is still 97% empty space. There's only 3% water is like, you know, like needy in the infield. But then it goes from 3% to 6 to 12, 25, 50, 100, right? Pretty much. It's just, it's very fast. So look, we just live in a world surrounded by these exponential charts. Like I was born when I was born in 19 in the early 1960s. There were about 3 billion people on the planet. Now there's eight plus, right? Here's the important part. I don't need to understand math. It's just that exponential systems really speed up at the end. This is what Robert Friedland was referring to. We're at this speeding up portion and almost nobody is rocking it. They're still getting ham sandwiches out of ending machines. They fly there in airplanes and we've lost that physical connection to reality. But here's the reality when it comes to copper. Looking at major copper discoveries since 1900 going to 1920, 40, 60, 1980, the year 2000, 2020, you can see we found these big copper mines here. And the size of the circle, two things we're noting with this. The size of the circle is how big the copper discovery is. So diameter reference, this is 100 million metric tons. That's massive. We found these massive. These are even larger than that, you know, bigger. 200 million metric ton discoveries. And also how deep down they are, right? If they're right on the surface like these zeros, that's awesome. You just find this blue stuff sticking out of the side of the hill and you're like, great, dig here. And that's awesome. But then over time, two things have been happening. We've had to go deeper and deeper and deeper. Look, some of these things are down 500 meters. This one's almost down a thousand meters, three thousand feet underground. You know, hard it is to get down 3000 feet underground. It ain't easy. So it's very easy to see the story of the copper trajectory is that over time we've been finding fewer and they've been a lot deeper. And they've been a lot smaller. And by the way, many cases, what's being hidden in these smaller circles is the size of the deposit may be big, but it's now a really crappy or great where they were 10%, then five, then one percent. The average or grade last I looked in the world of new discoveries was clocking in about 0.5%. So these, these little circles just mean how much, how many metric tons are in there. But if these represent more dilute, that's, that is terrible yields in terms of or yields, then you have to work so much harder, more energy, much more cost. It's just so much harder, but this chart alone should be giving everybody exactly the understanding and the reference we need. We're going to have to struggle mightily to get more copper out of the ground. Going forward, let alone as much copper has been mined in all of history over the next 18 years. But then what about the 18 years after that? How do we continue to get this 3.5% mythical economic growth if we're running out of the raw feedstock for that stuff? Now I don't mean that we've run out, but I'm using the term running out and also guess what? The same story is true for all sorts of other different critical items. So we're going to take a quick break when we come back. I'm going to be talking about food as a part of this commodity super cycle story. We'll be right back. These market are more volatile than ever with ongoing economic and geopolitical uncertainty. Navigating such environments requires thoughtful, adaptive strategies, not a one-size-fits-all approach. At peak financial investing, our registered investment advisory firm connects clients with experienced wealth managers who focus on active portfolio management. These professionals use evidence-based strategies designed to respond to changing conditions, not outdated formulas, but customized approaches grounded in research, discipline, and risk awareness. We believe in open informed conversations, including discussing tools like precious metals and diversification as part of a broader financial strategy. Every investor situation is unique and our advisors tailor their guidance accordingly. Visit peakfinancialinvesting.com today to schedule your free consultation and explore how proactive management can support your financial goals. I'm Dr. Chris Martensen, proud to work with peak financial investing and my support reflects my professional views. I encourage you to take control of your financial future by making informed decisions. Welcome back everybody. As we're going to see, we're going to see much reduced yields around the world as well. We're going to see a lot less food produced in those countries, but they're still going to want to buy it. We're looking at food. Other things come into getting you. This is why we have an inflationary cycle this calendar year. In the United States, this is going to be our lowest-bore store. We've been working for the first wheat harvest in 14 years. When we look at wheat prices, this is current as of May 13th. You can see here this is the big run up in 2008. Remember, oil went to $148 a barrel. Oil and food prices very closely aligned. We had that big spike. Look at that. 14 dollars a bushel. 1350 ish. Here again in 2022 when we had that other inflationary spike coming out of COVID plus also the issue around the Russia Ukraine conflict. We saw another spike again somewhere between 11, 12, 13 dollars a bushel. Yes wheat is now clocked some pretty good returns here over the past few days coming into 2026, but it's got a long way to go still. We're going to see a lot of food pressures and food pricing increases as we go forward. I was just shocked. I was shocked a year ago going to the grocery store a year and a half ago. I was just shocked again recently. Shocked again. It's just been astonishing. The same story though of sometimes it's just mother nature, sometimes it's bad luck, but also we have human derived things that are conspiring in here that create much higher food price inflation pressures going forward in the United States. We also have the unfortunate situation that for reasons our cattle herds are at the lowest they've been since the 50s. So on a per capita basis you can imagine it's even worse than that. Some of the lowest beef levels we have in the United States and ever and that's going to create higher prices for beef as well. If we see the kind of increases I think we're going to see in the prices for corn, for soybeans, for other grains those are the things that you then feed to chickens and to poultry chickens other poultry pork and beef to fatten them up. These get more expensive than these get more expensive. So we're going to see a lot of food inflationary pressures over this next year as well as energy pressures. Again, a lot of that because of the human decision to do some silly things by my estimation, my judgment in the middle east, but we're going to have to live with the consequences of that. It's going to be tricky. So now let's take a quick look at silver and platinum. As I think representatives to this commodity super cycle that's about to really kick off, silver had this enormous run coming out of 2024, vaulted all the way up to 120 and announced this is a monthly chart so each one of these little bars is a month. And then I had this big decline rump here at the beginning of 2026 and it's been since climbing back. Same story for platinum and both of these have pretty intense or they almost look like identical charts, right? So clearly you can see this isn't just a silver story because silver and platinum are totally different metals with totally different uses and totally different supply demand characteristics. But their price action has been behaving very similarly from a correlation standpoint. Highly correlated. They look a lot alike. All right. Silver on a daily chart rose recently. It's just started to poke its head up again. Time I took this chart here. Snapshot on May 13th. It was up another $3.67 and ounce to 89.26 came out of this wedge, this falling wedge right here and it popped out decisively. That's called a breakout and technical terms off it goes. Now why do that? Why did it suddenly decide may, you know, here we go. You may have something to do with this China's net silver imports in tons highest in ever as far as I'm aware and largest in 20 years and I think that's 20 years of data. But suddenly China was like on a net basis was like consuming a lot of silver. It's suddenly you turned on that. So could be a little bit of demand there. In India, the Prime Minister Modi actually implored his people of his land to stop buying so much gold and silver because they're trying to preserve their foreign exchange reserves, which otherwise we get spent on importing gold and silver because they're going to need to import food, fertilizer and energy going forward. So yeah, a lot of people are not fooled by that and would rather have silver than money. All right. China is also buying platinum too. So this is an article in Bloomberg from May 10th. It's a company's refiner, the headline reads here, seeing strong platinum demand from new contracts. So they have a futures exchange there and their futures exchange operates with a lot more clear delivery apparatus. The United States ones a little murky on purpose. So carrying on from the article here, quote, a major Chinese metals refiner is seeing a large volume of demand for platinum to deliver against a new local futures contract. A sign of how the product is luring more of the metal into the country and pro tip folks. There isn't that much of this stuff kicking around in the world for a lot of reasons. The increased Chinese demand is likely to tighten international supply of the precious metal you bet it well, particularly as Bayjing has long maintained restrictions on exports. Global prices of platinum, which also has industrial uses have more than doubled over the past year. As of the end of last week, there was around 14.4 tons of open interest for the platinum futures contract for June delivery with around 0.6 tons or 600 kilograms of warehouse inventories on warrants. Well, we can have the deliver 14.4 tons potentially, but don't worry, we have 0.6 tons. So this is creating a bit of a stir, obviously. Shen Zhen, Wai Xin is one of the biggest precious metals for fighters in China producing around 200 tons of gold, 20 tons of platinum. Next year, many clients are asking to sign long term contracts with us in order to supply secure supply of platinum in the future, weighing said, adding these are still under consideration. So we're getting to the scrambly stage here where people just want to have access. We just want to get it. Like we need to need the platinum and platinum in the United States. You know, we probably think of it as sort of like a in the jewelry store. That's where platinum shows up. But it actually has extraordinary industrial applications as a catalyst and you might know them as cattle that it converters in a car. There's a lot of platinum. Sometimes it's hot, swappable with palladium, platinum palladium, but platinum is the ultimate catalyst function. And of course, you use that in industrial processes as well. It looks like China is trying to get as much as they can because, ooh, turns out Russia's not producing as much. platinum and South Africa's have in its own difficulties. Meanwhile, you know, copper, the story of silver from a supply standpoint, silver, 70% of that is a byproduct of other metals mining, particularly zinc and copper. So look at this. Here's a big old chart of what's going on. We have one, two, three, four, five, six, seven mines that are not operating all that well for copper, starting with the cobre pandemon. It has its approximate copper capacity output in kilo tons per annum, 300,000 tons to 350,000 tons of copper fully offline. So this is a political dispute, you know, mining contract ruled unconstitutional, so that's sort of a Panama thing. The Graspberg and Indonesia is the number two mine in the world, 722 to 775,000 tons of copper partially offline, and at underground mud rush, the Camoa, Calua mine, number eight in the world in the DRC, materially constrained, teniente is partially offline. This one is constrained, this one's below plans, structly constrained. So we're already having difficulties. In fact, when we look at 2025, six out of ten copper producers missed their production targets in 2025, and this would be the production target. And here's the blue bars what they actually produce. So they missed these people missed, these missed, missed, missed, missed. But yeah, these are the ones. So five of them sort of hit their hit or exceeded. This one did exceed their targets down here. But again, we're just, we have the story that there's some struggle to output struggle struggle as the world struggles with missing sulfuric acid from the Gulf of Mexico because of the closure of the straighter from moves. That's going to impact a lot of the copper mining operations out there because they use sulfuric acid to leech the copper out of the war as part of the refining process. But as well, the Russian concern, Norellis, Nisk, Nickle is one of the world's largest Nickle in palladium producers. It just announced the following production declines quarter over quarter here on May 3rd, Nickle down 28%. Ah, it's a huge decline. Copper down 12%. Oops. palladium down 14% and oh, platinum down 26%. This is again, one of the one of the larger producers of these things. So we, I'm starting to see supply shortfalls show up all over the commodity space and all of these ripples and impacts from the straight of Hormuz closure are just going to absolutely ripple through this industry in a big way. So not only are we seeing geological depletion where the mines are just getting fewer and farther and deeper and harder to prosecute, we're seeing as well, all sorts of other impacts that are about to come up because of the energy part of this story. So this all kind of conspires to say we're going to see a lot higher prices for a lot of these things, which means of course that the next thing we're going to have to prepare for in palladium I have been warning everybody about this for a long time is that the next part of this story is that inflation is coming. Warning folks, inflation is inbound. So let's talk about that really quickly. The bad news is that the most recent reading for this week on May 13th, the producer price index, the reading came in scorching hot, came in at about 6% PPI of course is being driven and no small measure by the price increases for energy due to the straight of Hormuz closure. And as goes PPI, so goes CPI just with a lag of about two months. Robert Infroth here says, I got bad news and I got really bad news. PPI leads CPI by about two months. So you see here this CPPI reading in white has just been put put forward about two months in time. And then it overlaps with CPI very nicely over time. And CPI is already printed at the highest level in three years and it looks like it's only going to get much worse. So PPI is up here. CPI is weighed on here. CPI is going to follow. So what does that mean CPI at 6% and what is this really going to look like again, Paul Keiker of Keiker Wealth Management and myself have been talking about this particular next chart for months because I've been worried about this. And now it looks like it's happening. Do we have a nearly perfect inflationary repeat here of everything we see in the world probably probably so didn't the 1970s versus the dark blue light is the 1970s so bad old 1970s that inflation. And what we had here was this blue line rose all the way up here right hand scale. And so it went up to 12 ish percent fell all the way back to just about 5% and then climbed all the way up to nearly 15% and then it fell back again. But notice here this is 1972 74 76. So that was a four year inflationary burn about a two year law. And then there was this four year inflationary burn again here because we went from 26 28 30 or 78 80 82. So if we're just getting started if we're going to be repeating it means that about two years from now we're going to hit a peak that I estimate is going to be a far higher than this one because this energy shock is way worse than the energy shocks and that led to this. The money printing today is far worse than the money printing that led to this. So what did we have in the 70s and 80s? Well you still had all that excess government deficit spending because you know there was the Vietnam war back here. We also had the OPEC energy crisis then we had this other energy crisis. So energy shocks plus printing and bad governance those gave you your shocks. What do we have in place today? Money printing energy shock and bad governance. So if this is right my my I think we're going to go way over 10% inflation. In fact my bogey for this next run is going to take us about two years from now to about 18% inflation. Market down. Hope I'm wrong. Now what happens though if you have inflation you know what happens when you have inflation? It's actually it's a it's a multi-edge sword and one of the edges of that sword is that well I don't want to hold bonds yielding three or four percent if inflation is going to be 12 or 13 percent because then it turns out that we're going to remember a phrase from the 70s where investors used to call US Treasuries certificates of confiscation because the rate of inflation was much higher than the rate of interest on those bonds you lost money by holding them that money was confiscated. So that's why they called them jokingly waggishly but seriously certificates of confiscation. As of today we're seeing here that the 10-year yield is now at 4.475 it is up pretty strongly since the start of the war we now in the 20 year in the 30 year we are now over 5 percent and in fact this is the highest auction yield of over 5 percent on the 30 year which has got auctioned off this week since August of 2007 we've got we got to go way back to find you know yields on 30 or paper that there are this high they're going a lot higher. There's not a chance in the world if you ask me right now Chris what yield would you accept today to begin holding US government paper for 30 years it's high double digits honestly you'd have to pay me 15-16% today maybe 20-25% in a year or two when things get a little dice here maybe I don't know we'll have to see it unfolds but I'm not going to be buying US government paper for 30 years at 5% under these circumstances not a chance in the world but it goes well beyond the United States in Japan we've been watching all of their long maturity bond yields are just like scream and higher they have been since 2020 as they bottomed out and they've been coming up in here this includes the 30 year in red the 20 year in blue the 10 year in green the 40 year in gray and we can see they're just like whoop all going up a lot higher you know who else is you okay these are United Kingdom 30 year government bonds if you can't see what the heck's going on there good luck with your investing career these yields are skyrocketing it's going to create a fiscal crisis in the UK it's going to create a mortgage crisis it's the poor people of the UK they just can't catch a break these days and their bond market is just going insane now what are why are all these bond markets going crazy like this well it's mentioned inflation is about to go higher the fiscal irresponsibility of the various governments involved is extraordinary we're also at the tail end of a really really long credit cycle bubble that's been with us for for decades honestly and so it looks like that's about to crack and as well there are other pressures now at least on the US side where turns out for crazy reasons countries like China countries like Russia countries like the Gulf Coast states no longer want to hold treasuries or they're in a position of needing to sell their treasuries because they got a fund some local destruction back home and they're going to have to fund that somehow and so this is actually a pretty big deal we're witnessing I believe the end of this fiat currency regime and it's going to take a while for that to gasp its way to it to the finish line or its conclusion and along the way we're going to have to be exceedingly dynamic and nimble about how we see this coming on the one hand and then what do we do in order to protect ourselves on the other hand. So So this is why we strongly advise people work with a good financial advisor who's nimble, somebody like Paul Kiker and his team at Kiker Wealth Management. They see all this stuff. You can talk to them about any of these things we've talked about and they won't look at you like a dog listening to white noise, you know, they get it and they're not going to fight you on any of this. It's a good thing. You get to talk about it, have a reason discussion, discuss the risks as they actually are. If you're like me and you're thinking of the age, you're like, you know, retirement is like not that far away. The idea of double digit inflation is absolutely paralyzing as it should be. It's so difficult to make plans when you've got this uncertain of an environment. So that's why having a good strategy, a good plan, a non-emotional plan, a strategy that you know you can live by, those are really important to have right now. I mean, like I can't think of a more important time in history than right now to have a risk-managed strategy laid over your wealth and your portfolio. So that's the service that Paul Kiker and his team actually offer high-level planning and really good strategic risk mitigation strategies because let's face it, we're entering a commodity super cycle, which is also partly due to structural under-supply under-investment and partly due to magnificently bad decisions politically in the Middle East and also due to magnificent levels of money printing. The Federal Reserve, as we noted in the last week's FinanceU, has already printed this calendar year, 2026, as of May $176 billion, thrown it into the markets, driven the markets higher, but also now we're going to start seeing everything being highly inflationary. The idea of the Federal Reserve cutting interest rates and throwing more money into this environment is one of the most explosive ideas I can possibly imagine, especially for people who are trying to live on a fixed income or people who are trying to plan or anybody who isn't already making $250,000 or more a year, these things are just going to be absolutely devastating. And once you understand how that money printing connects to, well, how the financial markets actually work and you're looking at the pressure valves and gauges that tell you what's happening, that's the Treasury, Silver Price Gold, these things, these are all the dials and knobs we look at carefully on a daily basis. And then most importantly, you have to understand how energy feeds into all of that. And that is one of the most important insights you can possibly have and once you put all that into a mix, what do you get? Hopefully you have a plan. And that plan should include becoming more resilient, not having all your eggs in one basket being much more nimble and being absolutely dialed into what's happening in the world at least enough so that you know what you need to do next and how you should spend your precious time and where you should invest your precious stored wealth. So with that, thank you very much for listening and we'll have Paul Kiger back with us next week again. Hope you enjoyed this. Bye for now. [Music]