Supply Destruction

Assets are ephemeral… - Robert Friedland

I’m more attracted to ‘When’ questions than ‘if’ questions… - Rick Rule

We’re always fighting the last War… - Old General’s Tale [Recency Bias]

[picture - Bingham Canyon Copper Mine - Utah]

The Efficient Market Theory may prove to be Increasingly Inefficacious.

Every day we witness increasing signs of Extraordinary Popular Delusions & The Madness of Crowds [Charles Mackay].

Detachment from Natural Surroundings. OSS/CIA/DARPA/Bank of England smart device asset bubble economy has ensured there are all kinds of experts on what appears to be a transition in leadership.

Our focus to understand the macro is essential to Ride the new Entropy appearing to be building. While flow of funds is significant and ultimately launches confirmation bias the world of extraction markets has been experiencing disruptive forces for some time now resulting in supply destruction. This process of negative sustaining capital is hard to envision by ubiquitous smart screen watching consumers. 

Massive distortions created by the largest fiscal intervention in financial history [western nation central bankers] has created a halcyon moment where liquidity eased any fears of solvency.

A sobering period in the 1970’s saw world debt to GDP around 100%. Today, debt to GDP exceeds 350%. There is no going back to the old ways of honoring debt thru traditional means.

Young people believe consumption based businesses built upon the grace of foreign capital may be endless unicorns.

Real Entrepreneurs who serve markets know to humbly remain inquisitive & curios to new opportunities. This entails understanding the macro supply / demand dynamics.

Companies that solely focus on competition will die. Those that focus on value creation will thrive. – Edward de Bono

This coming fall is unknowable but we see many similarities to the echo rally on the NASDAQ in 2001. During this time oil was in a bear market for over 21 years with zero interest in energy or materials investments by institutions. Contrarians noted opportunities.

Numerous grifters experienced success in digital nothing during the decade of free money now appear to be moving to consulting upon Leadership, Health or New Adaption Solutions.

Don’t Confuse a Bull Market with Brains. - Rick Rule

Living out of a new VW Eurovan back in 2002 to maximize water time, research & entrepreneurial activity helped prepare for this potential cycle. Unlike 2001 the fixed income [debt] markets experienced a blow off mania in 2021. Europe led the way with over $17T in negative yielding debt and over 50% spending upon consumption [welfare] in 2016. Much easier to have the natives focused on picking up quarters in front of a steam roller to build their own prison. Western Europe is the Leading Model for young Marxist Students in USA East India Flag Co Inc.

The Best surfers at Pipeline in Hawaii are the ones ‘who put in time’ to achieve tacit knowledge within the many mini cycles within the secular moves of entropy. Riding the most dangerous wave in the world with precision remains among the experienced who physically act.

We may be incorrect but the cycle for exploration companies seems most long in the tooth [oversold].

A natural Refuge in commodities from inflation is has always aided investors who understand the macro.

Not owning collateral > sleep walking down a dangerous plank. Residential Real Estate during the Great Depression was a disaster. Today, many houses in Greece and parts of Italy are seen as liabilities [taxes]. We see this possibility for California and other areas of the world thought not possible.

Inflection points are exciting and often pay off when most are asleep.

To be successful in the market, 99% of the people have to think you’re wrong. 

- Jeb Handwerger

Take a look at all the things around you made of metal. The world is filled with new people seeking a higher standard in Life & society has been living off deposits discovered decades or even a century past.

Not expecting to see kids flowing into geology schools like the late 70’s but for those seeking an advantage and enjoy the outdoors it’s far easier to SELL SOLUTIONS than everyday information. Rockefeller made more in oil than Ford selling cars.

This isn’t about Napoleon Hill’s wealth thru interviewing the financial elite. Our philosophy is riding the distortions while ensuring daily health.

A potential C5 Hurricane is coming for the larger producers. The discount to NAV of select teams projects is incredible. Most people I meet don’t understand the metric of how a metal is priced on the COMEX much less where it sits in the periodic table.

A Ham Sandwich Comes from the Refrigerator - Robert Friedland > Today’s tech / financial screen watcher economy.

Good Hunting -

Christoper

 

P.S. The Gift > Comments below are EVEN MORE EXTREME today:

When the major mining companies downsized their exploration efforts during the Nineties they not only curtailed exploration expenditures, they fired most of their geologists, closed regional offices and let many of their projects go. This caused a shift in exploration demographics -- the more innovative and experienced exploration professionals got together and formed new junior exploration companies, and picked up many of the projects the majors dropped. As a result, major mining companies now lack the human resources needed to explore for new ore deposits.

Still, mining is a depleting business -- the more you mine, the less you have left to mine and without exploration, mining will cease very rapidly. The mining companies know they need access to good exploration projects and, more importantly, good exploration teams. We know it too. - Paul Van Eeden [January 2006]

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Nearly every time I have strayed from the heard, I’ve made a lot of money. Wandering away from the action is the way to find the new action. -Jim Rogers

Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in sails. Explore. Dream. Discover. - Mark Twain