Lukas Ekwueme
@ekwufinance • 49,756 subscribers
Geopolitics, macro & commodities. Newsletter coming soon ↓ https://t.co/fGvokQjNI5
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Jeffrey Currie: I can see $10,000 gold and $300 silver. The main driver is the debasement trade. The war has fooled us into believing that inflation is bearish for gold and silver because of the fear of higher interest rates. But Bessent's/Warsh's actions proved what I have been saying for quite some time... The US can't afford higher rates. In fact, they need to suppress them.... and they already are Deeply negative real rates are incredibly bullish for precious metals. The last time rates were deeply negative was 2021-2022... gold exploded 3x afterwards Before that was during the inflationary 1970s: - Gold: ~24x - Silver: ~29x Wars are inherently inflationary, and inflation benefits hard assets like gold and silver. US money supply is rising at the fastest pace since Covid... and we all know what happened to inflation after that. Currencies will continue to debase against gold and silver, pushing precious metals higher. As gold rises, central banks holding large gold reserves become more credible, while those with relatively small reserves are increasingly forced to buy more. Silver has an additional structural tailwind: solar demand. - 2016: 81.6 moz - 2024: 198 moz - 2030: 321-450 moz By 2030, more than 50% of global silver mine production could be used by the solar industry alone. And those projections were made before the Iran war. With energy security becoming an even bigger priority, solar deployment could exceed current forecasts. Like Jeffrey Currie, I'm extremely bullish on both gold and silver.
Lukas Ekwueme193,422 просмотров • 6 дней назад
Rick Rule: This energy crisis will be widely bullish for uranium in the long run The Japanese and French nuclear fleet, the 4th and 3rd largest in the world, was constructed as a result of the painful experience of the Arab oil embargo in 1973. The current energy crisis will have a similar effect, as uranium’s extremely high energy density allows countries to store years’ worth of energy supply with relative ease ...making it the best strategic energy source - Japan runs 15 of their 41 reactors – expect increased reactivations - Uranium is already in deficit - Available supplies at cheap prices are quickly running out - The pace of new plant construction will be red hot Uranium is the winner of the current energy crisis
Lukas Ekwueme31,651 просмотров • 2 дней назад
China is trying to pop the US AI bubble. Xi just announced China will provide 30 countries with 5,000 AI training and seminar opportunities while building international AI application cooperation centers. China and the US have a different definition of "winning" the AI race. The US strategy: Spend trillions building and controlling the AI infrastructure the world will depend on through a proprietary ecosystem. China is taking the opposite approach: Build cheaper open-source models with similar performance and encourage the world to build on top of them. The bet is simple: The winner of AI will not necessarily be whoever owns the infrastructure. .... It will be whoever builds the best companies on top of it. Just like in the post-dot-com era... The biggest winners were companies like Amazon, Google, and Microsoft that built businesses on top of open infrastructure.
Lukas Ekwueme196,966 просмотров • 28 дней назад
This is a perfect illustration of how we perceive the Hormuz risk. Everyone is seeing the avalanche coming, yet everyone thinks that somehow it is under control... it isn’t. There is no plan. No alternative routes that can scale fast enough... Hormuz opened or closed is all that matters. The current avalanche is so big and dangerous that markets think this will resolve quickly due to the heavy economic costs... it won’t. One month in, we hear reports that this operation might take from a few weeks to six months, to years... the avalanche will hit much earlier Within a few weeks: - Taiwan runs out of LNG -> no AI - Fertilizer supplies are getting decimated -> no food - Japan, Europe, Australia run out of diesel The only thing keeping markets afloat is an unreasonably high amount of hopium... once it's gone, expect a violent rerating
Lukas Ekwueme675,606 просмотров • 5 месяцев назад
Rick Rule: We’re in a bull market - don’t waste it. - In the 1970s, the gold price fell 3 times by 30% or more - 1971-1975: Gold increased 6x, from $35 to $200 - In 1975, gold fell from $200 to $100 Everyone shaken out at $100 missed the move to $850 by 1980 “You have to prepare yourself financially and psychologically for 20-50% pullbacks.” “You need to know your portfolio well enough that you have the conviction where price declines are opportunities instead of risks. The converse of that, is that when you see price spike up, you need to harvest gains.” “You have not made the money until you have taken the money.”
Lukas Ekwueme597,621 просмотров • 7 месяцев назад
Australia is preparing a fuel rationing scheme - 90% of Australia’s fuel comes from Asia, which gets it from the Middle East - 42 stations have no fuel at all - 107 have run out of diesel Meanwhile, the war is escalating... this is quickly getting out of control.
Lukas Ekwueme399,756 просмотров • 5 месяцев назад
This is still the perfect illustration of how we perceive the Hormuz risk. Everyone is seeing the avalanche coming, yet everyone thinks that somehow it is under control... it isn't. There is no plan. No alternative routes that can scale fast enough... Hormuz open or closed is all that matters. For all parties involved, this is existential... so don't expect a quick resolution. So far, IEA releases and China's oil demand reduction have bought us time... but that is reversing. - China's oil imports are rebounding sharply - IEA releases run out within weeks And it's not just about oil. - Fertilizer - Sulfur - LNG The building blocks of our modern society all flow through this narrow choke point. The only thing keeping markets afloat is an unreasonably high amount of hopium... once it's gone, expect a violent rerating.
Lukas Ekwueme101,107 просмотров • 1 месяц назад
Eric Sprott: There will be a shortage of gold. - China imported 163t of gold in May. - We mine ~3,600 and recycle ~1,400t annually. Annualized, China's May imports alone amount to roughly 2,000t... That's ~40% of annual global mine + recycled supply. And that's before considering that China produces another 400-500t annually, virtually none of which leaves the country. China isn't just buying gold...it's building a financial system around it With the introduction of interest-bearing gold accounts, accessible through online banking and paying roughly 1% in gold, China is beginning to eliminate one of gold's biggest historical disadvantages: "Gold pays no interest." At the same time, China is gradually opening international trade through gold. Trade can be settled in yuan, while surplus balances can ultimately be converted into physical gold. China is even building gold vaults abroad, allowing bullion to be stored in friendly jurisdictions rather than Western financial centers. So is basically saying use our currency and if you don't trust us change it to gold and store it locally In a world where trust is declining, China is using gold's 5,000-year monetary history to gradually increase the international role of the yuan.
Lukas Ekwueme95,875 просмотров • 1 месяц назад
Rick Rule: On why he sold 80% of his physical silver. - He bought silver because it was hated - Now that it is no longer hated, he sold it When the reason for owning an asset goes away, the asset has to go away. - He sold physical silver to buy silver mining stocks - Silver miners are discounting $40 silver In other words, even if silver corrects, miners should outperform. Silver miners are, at this point, a superior speculation.
Lukas Ekwueme334,161 просмотров • 7 месяцев назад
Rick Rule: Gold is stupidly underowned. Today, almost nobody owns gold. - Rick Rule: ~0.5% of US financial assets are in gold. - Goldman Sachs: ~0.18%. Goldman estimates that every additional 0.01% allocation to gold would increase its price by roughly 1.4%. For perspective, the 40-year average allocation is roughly 4%. Historically, gold performs best when purchasing power is being destroyed. Meanwhile, inflationary pressures continue to build: - US M2 money supply is growing at the fastest pace in 5 years. - The war in Iran is escalating. - Governments around the world run massive deficits. - Debt across the developed world continues to grow. Yet gold remains one of the most underowned assets in the world. Gold isn't something you buy because you're certain a crisis will happen tomorrow. Gold is insurance... And you buy insurance before there's an accident.
Lukas Ekwueme71,703 просмотров • 1 месяц назад
Stan Druckenmiller: You don’t have to be a genius to be long copper. - There is no meaningful supply coming online in the next 8 years. - AI and data centers are adding demand. - Not long copper equities, but futures. Being long copper just makes sense.
Lukas Ekwueme250,618 просмотров • 5 месяцев назад
Bailing Japan out isn't an act of altruism.... It's about survival. - Japan is the largest foreign holder of US Treasuries. - A weaker yen raises import costs. - Higher import costs fuel inflation. - Higher inflation increases pressure on the BoJ to hike rates. That leaves the BoJ with two realistic options... neither is good for the US. 1. Sell UST to support the yen. 2. Raise interest rates. Option 1 pushes US yields higher by adding Treasury supply to the market. Option 2 risks blowing up the yen carry trade... which also puts upward pressure on US yields. By stepping in to support the yen through EUR sales, the US shifts part of that pressure onto Europe. And by making the intervention public, the message is clear: "You've seen us intervene in oil. Now we're willing to intervene in the yen." A new front in this war has just opened... A war against the yen short sellers.
Lukas Ekwueme40,088 просмотров • 29 дней назад
The age of mining is about to begin. The West has spent decades underinvesting in mining while outsourcing the processing and industrial capacity that turns raw materials into everything from weapons to AI infrastructure. The cost was total dependence. The IEA estimates that China's chokehold on rare earths alone gives it leverage over industries worth roughly $6.5 trillion. Breaking that dependence doesn't just mean building factories. You need the mines, processing plants, refineries and infrastructure that feed those factories. That means decades of underinvestment now have to be reversed with a massive wave of capital. Reshoring is becoming a matter of national security. And you can't reshore an industrial economy without first reshoring its raw materials.
Lukas Ekwueme30,581 просмотров • 22 дней назад
Rick Rule: Gold will do well over the long term, but expect short-term volatility. In the short term, as a consequence of the Iran war: - Countries have to sell gold to fund domestic needs - Higher interest rates make the USD more attractive vs gold In the long term: - The US can't afford high rates - Debt-to-GDP is too high - Deficits are surging Which will result in massive money printing and a severe loss of purchasing power for the USD in the coming years, reminiscent of the 70s, which will be bullish for gold and other hard assets. Short term pain, long term gain
Lukas Ekwueme97,078 просмотров • 2 месяцев назад
Rick Rule: Oil surged in anticipation of a shortage...By 2029, we will experience a structural shortage. - The oil industry is underinvesting by ~$1B/day - The only supply growth, US shale, is peaking - Damaged oil infrastructure will take time to repair This will impact future oil production. Meanwhile: - Oil demand is growing by ~1mbpd annually - SPRs and inventories have to be refilled In other words, we have a perfect storm of lower future supply and higher future demand. This will set the stage for a prolonged oil bull market.
Lukas Ekwueme57,412 просмотров • 1 месяц назад
Rick Rule: This energy crisis will be widely bullish for uranium in the long run The Japanese nuclear fleet, the 2nd largest in the world, was constructed as a result of the painful experience of the Arab oil embargo in 1973. Currently, they run 15 of their 41 reactors, expect the reactivation schedule to increase. The current energy crisis will have a similar effect, as uranium’s extremely high energy density allows countries to store years’ worth of energy supply with relative ease - making it the best strategic energy source - Japan runs 15 of their 41 reactors – expect increased reactivations - Uranium is already in deficit - Available supplies at cheap prices are quickly running out - The pace of new plant construction will be red hot Uranium is the winner of the current energy crisis
Lukas Ekwueme141,523 просмотров • 5 месяцев назад
Rick Rule: Politically, the Fed will ultimately have to lower interest rates. We have entered an inflationary era similar to the 70s, but the fiscal situation is vastly different. - Debt/GDP: ~30% then vs ~123% now - Interest expense: ~$50B then vs ~$1.2T now - Deficits: ~1–4% then vs ~6% now In fact, the government now pays more in annual interest expenses than the entire US debt was in the late 70s. But it’s not just the government that can’t afford higher rates. Markets will feel it too: - Private credit - Consumer durables - Real estate All are heavily impacted by higher interest rates. Sooner rather than later, political pressure will force the Fed to lower rates. Volcker was able to hike aggressively because debt/GDP had been inflated away after WW2. Today, debt/GDP is above WW2-era levels, which is why the US can’t fight inflation the same way it did in the early 80s. First you inflate the debt away to a more manageable level... Then you raise rates to kill inflation. Not the other way around.
Lukas Ekwueme54,518 просмотров • 1 месяц назад