Why I Love Commodities Today
Our economies are getting more complex every year.
The advancements in automation, robotics and AI will replace more and more jobs that used to be done by people…
Just think of all the robotic lawn mowers around today for example…
Or the increasingly automation in the big iron ore mines in Pilbara.
A car used to be a (relatively) simple thing that many people could tinker on and fix themselves without ever needing to go to a mechanic.
Today the cars are very much “digitized” and many people are forced to take them to an expert when problems arise.
On that note even some of the mechanics are forced to know something about IT today.
While all this is going on, children all over the western world are doing worse and worse in school.
Mathematics and physics are slowly being phased out and the schools are catering more and more to the student…
Resulting in an increased emphasis on subjects that the increasingly spoiled youth WANT to learn and not what they SHOULD learn.
As the printing of money and consumption through added debt reaches ever higher levels, the economic substance underneath has been eroding for a long time…
At least in the West.
However, the debt funded consumables, the automated production facilities, the automated lawn mowers and the automated iron ore trucks in Pilbara that are controlled from tall buildings in Perth hundreds of kilometres away from the actual mine…
All need... Commodities.
Commodities are used in every robot and every iphone which someone might have gone into debt to purchase.
Commodities are the bottleneck/gatekeeper to everything.
Even as the service industry typically grows larger and larger, as an economy becomes more “advanced”, the people working in the service industry will still want to purchase material things with their “service salary”.
It doesn’t matter how advanced an economy is and how technologically advanced it is. It still needs all kinds of commodities as inputs.
Is it a surprise that China has been buying up commodities, infrastructure and anything else of tangible value for the last X amount of years?
I consider it to be both a play on commodities as the “bottleneck” in a world that is getting increasingly automated/complex/digitized as well as a play on the death of FIAT.
… On that note there has lately been an increase of gold deposits being bought, or at least bid on, by Chinese players.
At this point in time, I unsurprisingly consider gold to be the king of the commodities.
Gold has been able to buy labor (actual labor or stored labor in the form of goods) for thousands of years.
It has never failed to do so while every FIAT currency in history has failed to last.
If we get massive deflation, the debt bubble explodes and many people lose their jobs and thus income, while many “assets” will be completely wiped out.
If we get massive inflation, real value items in all forms go up in relative value vs currencies and debt.
Either way, gold will still be there, and will still have value.
