What is happening in the agri-commodity universe? Everything from corn, lumber, soya bean oil and palm oil are strengthening?
I am bullish on agriculture. Commodities have been very strong. Copper and iron ore are making all-time highs. A lot of other commodities are also going up. I suspect they need to correct for a while, but I am not very good at trading.
I expect a correction in most commodities. The fundamentals are probably sound, but they have all been going straight up. When things go straight up, they usually correct for a while even if the bull market continues. Silver is up a lot, but it is still down 50 per cent from its all-time high. Be careful of those commodities, including copper, that have gone straight up.
Do you think fundamentals will continue to support the rally in metals? All parameters and data points are in support of a metals rally in the long term?
The world is going to have electric vehicles in the future. Electric cars use several time more copper than a regular car. So if we are going to have electric vehicles, we will use more copper and lithium. As the production of copper is not going up much, the fundamentals are there to support metals.
How much of support are metal prices getting from China’s infrastructure spending?
If US President Joe Biden spends huge amounts of money on infrastructure, it will certainly replace some of the Chinese demand which might slow down. The whole world wants to spend money on infrastructure now, so I would not give up on the infrastructure spending yet.
What about Bitcoin? Where is it headed?
I have never bought nor sold Bitcoin. So I am probably not the right person to ask. Just looking at the markets, it seems that Bitcoin and many other cryptocurrencies have peaked. There were thousands of them and hundreds of them have already disappeared. If you are very good at trading, it seems to be a nice trading vehicle. I am not a trader and I am not good at it. But if you are good at trading, why not (try) until they make it illegal.
I would not be trading them now as there has been too much of a bubble. Bubbles have always popped. I have no idea when this will pop. It does not look sound at the moment from a trading point of view. But then, I am a bad trader.
What stance are you taking on precious metals?
Silver has gone up a lot in the last couple of years. It has more than doubled, but it is still 50 per cent below its all-time high. I own silver and I expect it to make a new all-time high sometime in the next few years. And gold, too.
How do you compare the commodities boom that we are seeing now with the 2008 rally?
I am long on nearly all commodities. I suspect that commodities will go up for several years now. Oil is down 50 per cent from its all-time high, so there is a lot of upside left in commodities. I have no idea how long it will take. When stocks will go in a bear market sometime in 1-2 years, then probably commodities will also join them for a while. However, commodities can do very well during a bear phase in stocks because it is seen as an inflation hedge.
