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What Powell Said
On January 24th, NATO began a drill called Steadfast Defender 2024.
One week later, I have hardly seen media coverage about it, so I want to make sure that you aren’t left out and know exactly what’s happening.
Comprised of 90,000 soldiers, 50 ships, 1,100 combat vehicles, and aimed to practice defense against near-peer adversaries (like Russia), it is the largest NATO exercise since 1988 when the final blows were dealt to the USSR in the era of the Cold War.
This is a significant stride!
It means that the West is signaling to Russia that the United States is not just funding Ukraine, but that Russia should be ready to consider the ramifications of what it’s doing. The West wants Russia to know that invading a NATO member will bring destruction of epic proportions upon it.
Russia is well aware of the risks. With China’s real estate giant, Evergrande Group, in liquidation, the Red Dragon is extremely uninterested in entangling itself in favor of Russia when its domestic economy is in shambles.
China is investing in its recovery, and it is not looking to expose itself to turmoil when already facing problems.
Preparing for war is precisely what you must do knowing that, as it stands, the odds of war are diminishing.
What both Trump supporters and Biden’s voters share is this:
- The United States is not in the business of solving military conflicts around the globe anymore. Instead, it must empower its allies and partners but not force its form of governance on mismatched cultures that don’t care for it.
- China is the main threat to American hegemony.
- Both Biden and Trump know that the globalization of supply chains is over!
Therefore, when I look at critical metals, two that come to mind are uranium and nickel. It’s a bipartisan priority to make sure that no country can disrupt the logistics of it. Uranium fuels and heats the homes of tens of millions of Americans, and nickel is not only essential and indispensable to defense superalloy manufacturing, like tanks, but also the growth of the EV industry!
Uranium is already trading at a multi-decade high. It’s up 600% from the bottom in 2016. It’s firing on all cylinders, and two nickel companies have direct investments in them from Tesla and Samsung, so the industry is getting hot! Nickel today reminds me of uranium a couple of years ago, when its price was $55, before it doubled.
POWELL’S STUTTERING FOMC MEETING
I’ve never seen Jerome Powell talk mumbo jumbo like yesterday.
Rates will be cut, and Powell tried his hardest not to promise when, but the market sees ahead and understands that inflation has mostly been crushed by the restrictive policy. Make no mistake, though; the demographics in the United States don’t leave room for doubt!
This means the labor market will continue to be tight. Just like you’d imagine, this means inflation won’t be subdued like in the 2010s.
Gold and commodities are set to soar if this remains the case.
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