You better watch out, You better not cry, You better not pout, I’m telling you why, Santa Claus is coming to town.
Why do I refer to this popular Christmas song? Because if you want your holiday gifts to arrive on time, you’d better get it together fast.
And it’s my hope that burning this tune into your brain will incite you to do just that.
See, procrastinating on your holiday shopping this year could cause a lot of disappointment in your family.
The reason, of course, is our supply chain crisis.
It’s one tangled mess.
For starters, we’ve got a shortage of truck drivers from coast to coast.
That shortage is impacting all manner of deliveries… none more so than those coming from our ports.
I pity the poor truckers who work the ports.
They typically find themselves waiting for shipping containers to be unloaded onto their trucks…
In fact, they routinely wait eight hours!
This is a huge problem for them because most are independent operators who get paid by the load.
So all that downtime nets them nothing.
What’s behind this debacle?
There aren’t enough dock workers to unload all the shipping containers
Worse, foreign ports are working 24/7 to ship us more and more containers.
So they’re stacking up like cordwood at our ports.
Now there’s no room for any more.
It’s a massive headache, especially for the busy Southern California ports in Long Beach and Los Angeles (which account for 40% of container imports to the U.S.).
Right now over half a million 20-foot shipping containers are stuck in cargo ships off the coast of Southern California.
They hold over 12 million metric tons of goods… things like food, clothing and – or course – holiday gifts.
And get this: some of these ships have been bobbing around the ocean for over a month!
There are so many, some are sitting 20 miles off the coast in order to keep shipping lanes open.
The situation’s gotten so bad that President Biden’s asked the executive directors of the Los Angeles and Long Beach ports to operate 24/7.
The Long Beach port has complied… sort of.
They’ve launched a pilot program to run 24 hours a day, Monday through Thursday.
Meanwhile, the Port of Los Angeles is maintaining its normal schedule of two shifts a day, five days a week.
Instead of expanding their hours, they’re (supposedly) focusing on making operations more efficient.
In the end, it doesn’t matter much.
That’s because no matter how many hours these ports operate…
No matter how efficient they make their operations…
They can’t overcome the core problem of a lack of workers any time soon.
Unfortunately, a labor shortage isn’t the only problem.
I live in one of the most beautiful parts of North America – Sonoma County in Northern California. The region features an embarrassment of riches.
We’re blessed here with stunning valleys… towering redwoods… scenic lakes… majestic mountains… dramatic coastlines…
It’s paradise for an outdoor nut like me.
And the weather!
You get mild winters, rain-free summers and abundant sunshine (over 300 days of sun a year).
Yes, it’s a superb place to live… but there’s a serpent in this Eden.
What if you could magically increase your bank account by 2,000%? That would sure make it easier to pay off your bills! Of course, there’s no way you can create money like that at the snap of a finger.
To be a gold investor one must possess the virtue of patience. You would think with the amount of debt and money printing that has happened since the beginning of the pandemic we would have seen gold go a lot higher. Gold after all is supposed to do well in an inflationary environment. And aren’t we seeing higher inflation now as the price of everything is going up. “Don’t worry, it’s just transitory”, the Fed keeps telling us.
Gold did have an impressive 20% run during the beginning of the pandemic, peaking at just over US$2000 an ounce before drifting back down the mid 1700’s, which is roughly where it sits today.
It’s been quite boring being a gold bug of late – there will be days when gold prices move up 2% and there is excitement in the market that gold has finally broken out, but these gains are lost a few days later. This can really eat away at any optimism, especially when gold equities keep selling off and seem to go lower and lower. However, things aren’t as bad as you think for gold if you sift through the market noise.
One day I was walking to the gym I frequent and noticed a Tesla parked out front with a custom license plate that read ‘LOL OIL’. I chuckled to myself, mainly because I found the vanity plate perfectly exemplified the somewhat self-righteous attitude of the typical Tesla driver. But it is my opinion that the average climate doomsday disciple, who has good intentions with respect to the environment, does not fully grasp the reality of how the global economy currently functions and the amount of energy needed to not only sustain it, but to allow it to continue to grow.
Governments, which in the West are mostly progressive and left-leaning, tend to speak in platitudes about green energy, but their policies are often insufficient and shortsighted.
Green energy is a great endeavor for our planet and commitments are being made mostly in the form of decarbonization measures such as emissions reduction targets, imposing carbon taxes and banning new car sales of petrol-fueled vehicles.
But the truth is these measures fall far short of disrupting the supremacy of fossil fuels in everyday life.
Remember that refrain? It comes from the 1976 Bob Marley hit, Exodus. In that classic reggae tune, Marley tied the story of Moses leading the Israelites out of Egypt to the desire of Rastafarians to be led to freedom. I’m listening to that song now. And as I do, I can’t help but see how it relates today to Californians.
Or should I say, ex-Californians.
It’s no secret that California’s losing some of its most productive citizens and businesses to other states.
High taxes… year-round wildfires… droughts… water rationing… vaccine and mask mandates… expensive housing… $5-a-gallon gas… stupid laws…
Back in 2005, I left my native Ohio. I’d had enough of the cold. My destination? Northern California.
I’ll never forget that first winter there. I froze my ass off. (Ironic, right?) See, I’d rented an old trailer out in rural Sonoma County.
It was a bargain… until around November.
That’s when a cold front revealed my home was insulated about as well as an 1800s log cabin.
In fact, it cost me about $300 a month to keep it a toasty 58 degrees that winter.
My heat source?
It turns out that natural gas prices were pretty high at the time.
Well guess what?
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.
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.