The Metal Shortage Reality Check

Hey, it’s Garrett. 

Silver just crossed $81. Gold's sitting above $4500.

To meet the green energy goals that keep getting pushed - whether it's this administration or the next one or the one after that, because these policies swing back and forth like pendulums - we need to increase production of 16 different metals by factors ranging from four to sixteen times current levels.

We have never, in the history of industrial mining, increased the production capacity of even ONE single metal by 100% in a decade. Ever.

You need five times the cobalt. Four times the lithium. You need 16 times the graphene. You need about nine times the zinc. A macro economist named Peter Zeihan did a video on it like two years ago and I never forgot it.

Silver? We already have structural shortages starting about a year ago. Copper? Structural shortages beginning roughly 18 months ago.

China just pulled another stimulus lever. 

They're not doing the traditional quantitative easing where they're pumping money into the system and buying their bonds back. 

What they're doing is they're providing debt relief to local governments. They're creating targeted programs for homeowners, stabilizing their domestic manufacturing economy.

When China does this, it's bullish for metals and commodities. China is a manufacturing economy, so when they engage in actual stimulus, they consume massive amounts of copper, silver, and industrial metals.

I've been watching the insider activity. Take UAMY - United States Antimony Corporation. Back in September, you saw nine different executives buying when the stock was under a dollar. 

Then the CEO came back in and bought another 100,000 shares at $6.13.

About a week later, the United States announced its investment.

This is a strategic commodity with a massive choke point in the US economy. This is one of the only companies that does this. 

When you see a company that creates anything that is rare commodity, anything that has a choke point to it, where only one or two companies are actually involved and the executive is buying the stock with their money, yeah, I'm in.

Stock went from five to 18 and then it crashed. Stock's right back where he bought it. $6.50 is where he purchased a hundred thousand shares. 

You're gonna speculate on something, you're gonna speculate on metals and America first and everything that comes with it.

For pure metals exposure, I keep pointing people toward CEF - the Sprott Physical Gold and Silver Trust. No exposure to the futures market. This is physical metal storage.

Gold holding above that breakout at $4500, then from there, about $4750. Silver blasting past $80 - spot markets internationally are in disarray. 

We've seen $130 an ounce in Tokyo at spot. People aren't bringing silver back to the market to sell it. How much higher can this go? A lot higher.

Copper hit $6. Higher copper prices lead to higher manufacturing, higher electricity, higher AI, higher anything cost related to real economy in the United States. That can lead to more recessionary pressures.

It's gonna look real gnarly when the market is sitting at 7150 on the SPX and we're at all time highs, and we're talking about minus one or 2% growth in the third quarter.

FCX, if I'm going to trade a spread, I'm looking to sell a put spread down around that $48, $47 level, not chasing overbought. 

If we break under those levels and get back to maybe $52, I'm willing to sell spreads down there for the purposes of building and accumulating positions in copper and in gold.

China imposed export controls on Japan - dual use items, semis, defense, advanced manufacturing. This quiet escalation hits supply chains first, headlines later. Keep a very close eye on names like Nvidia, ASML, TSM, and the Nikkei 225.

You can look at the EWJ, which is the iShares Japan, which has been continuing its momentum since they printed money. They said, hey, we're gonna inject $117 billion. And then the market went up as if liquidity is an elixir for momentum.

Come August, all those kids on the Reddits, they're gonna be saying, I'm long copper, I'm long aluminum. They're gonna become experts in aluminum trades. 

They're gonna understand aluminum smelting. They're gonna be talking about Reynolds wrap. They're gonna be going to the store saying, I bought a box of Reynolds wrap for a dollar and then I sold it for a $1.50 on the internet.

Crazy wearing it on their heads for hats.

But we're nowhere near that yet.

Put your money in the stuff that matters.

If you want more actionable ideas, you can find me in the TheoTrade Chatroom M-F. 

Stay Positive,

Garrett Baldwin