RE:RE:Undervaluation & CommoditiesYou shouldn't look at this graph from an x or y axis. The image is more meant to show why he thinks we're dealing or nearing a super cycle for commodities including Silver.
He’s bullish on silver like Sprott is.
It’s more or less explaining why The US stopped using the goldstandard>
https://www.stlouisfed.org/open-vault/2017/november/why-us-no-longer-follows-gold-standard Some economists and others, including
President Donald Trump and his
Federal Reserve Board of Governors nominee Judy Shelton, favor a return to the gold standard because
it would impose new rules and “discipline” on a central bank they view as too powerful and whose actions they consider flawed.
https://theconversation.com/whats-the-gold-standard-and-why-does-the-us-benefit-from-a-dollar-that-isnt-tied-to-the-value-of-a-glittery-hunk-of-metal-150340
What Are Disadvantages of the Gold Standard? There are significant problems with tying currency to the gold supply:
- It doesn’t guarantee financial or economic stability.
- It’s costly and environmentally damaging to mine.
- The supply of gold is not fixed.
“The U.S. mines a lot of gold, but we’re not the biggest producer,” Wheelock said. “The bigger suppliers of gold would have more control over our monetary policy, and there’s no reason to have it because we can get the advantages of the gold standard and avoid the disadvantages without being on a gold standard.”
https://sprott.com/insights/special-report-top-10-themes-for-2024/?alttemplate=printblogarticle#:~:text=We%20expect%20this%20process%20to,starkly%20with%20the%20supply%20side.
The concept of a "supercycle" in commodities refers to a prolonged period of rising prices driven by strong demand and constrained supply. To assess whether we're in a supercycle for commodities like silver, copper, and gold, consider several key factors:
- Demand Drivers:
- Infrastructure Investment: Increased spending on infrastructure, especially in developing countries and initiatives like green energy, can boost demand for copper and silver.
- Technological Advancements: The growth of electric vehicles (EVs) and renewable energy technologies increases demand for metals. For instance, copper is critical for electrical wiring, and silver is used in solar panels.
- Supply Constraints:
- Mining Challenges: Many major copper and silver mines face declining ore grades and rising operational costs, which can limit supply. Additionally, geopolitical factors can disrupt mining operations.
- Exploration and Development: Lower investment in new mining projects during previous downturns can lead to a supply shortage as older mines deplete.
- Inflation and Monetary Policy: High inflation often drives investors towards gold as a hedge, which can lead to rising prices. Central bank policies, such as low interest rates or quantitative easing, can also influence demand for precious metals.
- Global Economic Recovery: Strong global growth can lead to increased industrial demand for metals like copper.
- Investment Trends: Increased interest from institutional investors and retail investors in commodities as an asset class can indicate a supercycle. For example, the rise of exchange-traded funds (ETFs) focused on metals can drive prices.
- Examining past supercycles can provide insights. Previous cycles were often driven by similar dynamics, such as rapid industrialization or technological breakthroughs.
- Economic Conditions:
- Market Sentiment:
- Historical Context:
- After World War II, the leading Western powers adopted a new international monetary system that made the U.S. dollar the world’s reserve currency.
- All currencies fluctuated in relation to the dollar, which was convertible to gold at a rate of $35 an ounce. A variety of economic, political and global pressures in the 1960s and 1970s forced President Richard Nixon to abandon the gold standard once and for all by 1971.
If you have time left, then also delve into why Putin is so busy incorporating more countries into the BRICS. Or read the book by Willem Middelkoop "the Big Reset"