After a 14-year bear market, the uranium meltdown is showing signs it could be over. Uranium prices peaked at US$140 per pound in 2007 before sliding down as low as US$16 per pound in 2016. Since these lows the price has been trending arduously higher, between $20-30 per pound, but with no real catalysts to increase investor sentiment and spur a significant breakout.
Forget for a moment that copper has run over 200% since COVID hit.
And forget that most copper producers have already seen a big stock spike.
After all, many sectors have surged since the March 2020 lows. Heck, even the S&P500 is closing in on a double.
And don’t get too hung up on the recent news that China dumped a bunch of its copper stockpile onto the market. They are trying a strategy best used to tame hot speculative commodites, which misses the point entirely.
The time was 2008.
The place, a supermarket in DeSoto, Texas.
Anita Ortez had just finished shopping there and was ready to head home.
But as she started her Toyota 4Runner, she knew something was very wrong.
Oil stocks to date have had a remarkable run since WTI oil futures were trading as low as -$40.32 per contract for a barrel of oil – a truly bizarre and unprecedented moment in global financial markets. The precipitous drop into negative territory occurred as the pandemic was unfolding, when countries went into lockdown and people were confined to their homes. Demand for crude evaporated in the market and supply became bloated as participants in the oil market sought whatever means to offload inventories of crude.
It was just before dawn when my train pulled into the station.
I surveyed the scene outside from the comfort of my first-class car.
It was shocking.
The railway platform was packed with ragged people sleeping under soiled blankets.
Have you ever bought a bag of chips but once you opened it, felt like the bag wasn’t even half-full? Or perhaps you grabbed a smoothie after a workout and finished it in little more than a few sips, leaving you feeling that the price you paid was not really worth it? This phenomenon tends to cause indignation amongst consumers, as it can leave them feeling cheated or ripped off – but as a retail investor you should also be paying attention to what it means for your portfolio.
The other night I was sitting around channel-surfing, determined to find something fun to watch.
That’s how I stumbled onto Narcos.
As you may know, Narcos is a Netflix series that highlights notorious Colombian drug lord Pablo Escobar.
He reportedly made $30 billion by trafficking cocaine to the U.S.
In the process of amassing that fortune, he turned his country into a war zone.
In fact, his crews killed so many rival drug gang members, cops, politicians, judges and innocent bystanders, Colombia became known as the murder capital of the world.
Those murders dropped off dramatically after Escobar was killed in a 1993 police shootout.
But the flood of Colombian cocaine into the U.S. continues to this day.
Rival drug cartels have seen to that.
You don’t hear much about cocaine from Colombia anymore.
“Inflation at these levels is, of course, a cause for concern. But that concern is tempered by a number of factors that suggest that these elevated readings are likely to prove temporary.”
That what the Fedearl Reserve Chairman Jerome Powell said in a speech last week to Jackson Hole Economic Policy Symposium which is sponsored by the Federal Reserve Bank of Kansas City.
The key word there is the last word – temporary.
But the speech was for 21 minutes and mentioned inflation 71 times (here is the transcript of the speech).
If it’s really “temporary,” why mention it every 18 seconds?
We weren’t buying it.
But then we realized that he may truly mean inflation is temporary.
At least temporary in the government sense of the term.
We know of many “temporary” government policies and projects.
All of the politicians hemming and hawing about budgets and spending…
It’s all theater.
All of it.
And it could be the foundation of a major run in one of the most out of favor asset classes.
And the next big run will be set to kick off by September 27th.
If you follow metals and mining on Twitter, you may have stumbled upon the hashtag #tinbaron, and asked yourself what is the big deal about a metal from antiquity?