Disruptive Discoveries Journal

commodities

Four Questions for 2016 - Donald Trump, Deflation, China, & Oil

Chris BerryComment

By Chris Berry (@cberry1)

For a pdf copy of this note, please click here.

 

Ed. Note: The following remarks were those I made to investor audiences during a recent bus tour in Munich, Geneva, Zurich, and Frankfurt.

 

Ladies and Gentlemen, thank you for coming today and investing your most valuable asset in us, which is of course, your time. Speaking of time, what I’d like to do today is take a look back and a look forward and briefly offer some thoughts on where we’ve been in the global economy in the past year and what some of the key questions are in 2016 likely to drive the commodity and broader markets altogether.

Rather than make excuses or guesses as to why commodities continue to under perform, I’d like to examine some of our thoughts from a year ago when we were last here in Europe and see what has transpired.

The Grand Disconnect As The Geopolitical Great Game Starts Anew

Chris BerryComment

By Chris Berry (@cberry1)

 

For a PDF version of this note, please click here.

 

By the time you read this, I’ll be in London attending Mines and Money as a speaker and hosting a roundtable on Energy Metals. I think it’s fitting that I’ll be in the city which was at the heart of the last Great Game, the name for the geopolitical and strategic rivalry between the British and Russian empires in the 19th century. After last week’s events in the financial markets, it appears that a new Great Game has begun. The carnage last week made two issues abundantly clear.

First, OPEC has thrown down the gauntlet and is serious about asserting its dominance in the global oil markets.

The Wall Street Journal Gets It (Mostly) Right on Commodities

Chris BerryComment

By Chris Berry

 

 

  •  On Monday, the Wall Street Journal published an article titled “Commodities Rally is Half Baked” (sub, req’d).
  •  There are a number of reasons for this, but clearly excess supply is the main culprit.
  •  Not all commodities have under performed, however, and uranium offers an interesting and painful case study into how to equilibrate supply and demand.

 

 

An Unfortunate Validation of Our Thesis

Yesterday, the Wall Street Journal published an article titled “Commodities Rally is Half Baked” (sub, req’d). The gist of the article is that while 2014 started off as a positive year for commodity returns in general, the tide has turned and many commodities (as measured by various indexes) are now under performing the typical equity index as the latter continue to reach all time highs.