Free Weekly Email 9.11.24
Emerging Markets Poised to Outperform
I like to buy undervalued and under-owned assets. Currently, this looks like it is in emerging and frontier markets. I have been bullish and have been buying selected areas. As usual, I am early, which means the prices are low. They are cheap and ignored. With the FED entering a rate-cutting cycle, this could lead to a weaker dollar and emerging market outperformance.
Another reason I favor Emerging Markets over the US
I'm not too fond of extreme outliers like this. They always seem to mean revert.
Kazatomprom - Impact on SPUT & Uranium Price - Sprott's John Ciampaglia and Jimmy Connor
John Ciampaglia, CEO of Sprott Asset Management, and Jimmy Connor discuss the flows into the Sprott Physical Gold Trust on the back of higher gold prices and the Sprott Physical Uranium Trust on the news of lower production from Kazatoprom.
In the interview, he says that Kazatomprom, the world’s largest uranium producer, will not hit its production target next year or in 2026. This means a more prolonged bull market with higher prices. He also discusses why utilities are wrong about SPUT’s uranium assets being mobile. They are not.
Speaking of Uranium, a well-done X thread by a guy who I follow. Here are a few snippets:
I remain bullish on the sector. I continue to add to my uranium holdings opportunistically. I follow Buffett's axiom that the stock market exists to separate capital from the impatient to the patient. I think the overall stock market may be entering a bear market. If we get a bear market, even uranium stocks can and will go down. They are stocks, after all, and many of them are speculative trading sardines. That is your chance to get another bite of the apple. You either get it, or you don’t.
Volkswagen says it could close plant in Germany for the first time ever
Volkswagen says auto industry headwinds mean the German automaker can't rule out plant closings in its home country, while the company is also dropping a longstanding job protection pledge that would have barred layoffs through 2029.
"The European automotive industry is in a very demanding and serious situation," Oliver Blume, Volkswagen Group CEO, said in a statement Monday.
He cited new competitors entering the European markets, Germany's deteriorating position as a manufacturing location and the need to "act decisively."
(skip)
European automakers are facing increased competition from inexpensive Chinese electric cars. Volkswagen's half-year results indicate it will not achieve its target for 10 billion euros ($11 billion) in cost savings by 2026, the company said.
The European Union in July moved to impose provisional tariffs on Chinese EVs, although the EU will only collect the levies if talks with Beijing fail to yield a trade deal. The levies would consist of 17.4% on cars from BYD, 19.9% from Geely and 37.6% for vehicles exported by China's state-owned SAIC. Geely's brands include Polestar and Sweden's Volvo, while SAIC owns Britain's MG.
This is a big deal and ties into my longer-term view that the West is in terminal decline. The Chinese dominate the world auto export market, and Western manufacturers will have problems anyway. The issues for German business have been made worse by incompetent and weak leadership in the German government. Allowing the US to blow up your umbilical cord of cheap energy to Russia (Nordstream pipeline) and cause higher energy prices, which is now a cause of the decline in German manufacturing, was treasonous and an act of war by the US and UK against Germany.
Francis Melton of the “Manhattan Conservative” blog discusses Germany’s energy issues in a recent article entitled, In Germany, The Energy Transition Situation Only Gets Worse
Time for another update on Germany’s progress toward energy nirvana. The bottom line is that, like the Red Queen, Germany is running faster and faster to stay in place. In the meantime, it is destroying its economy.
Germany, which at one point in the recent past led the world in engineering and branded itself on “German engineering and manufacturing,” is now deindustrializing and submitting itself as a vassal to the declining Anglo-American hegemony. For what, so Merkel and fools like Scholz and Habeak can virtue signal to the other globalists (US and UK) in Brussels? It is mind-numbing.
Germany should cast off these so-called leaders (Sholz? Really, the poster boy for weak and ineffective) who seem to hate the German people. Stop participating with the US in its ridiculous effort to maintain the failing Atlantist hegemony and align its remaining industry, engineering, and manufacturing expertise with cheap Russian energy and raw materials and focus on serving the rising class of consumers (4 billion people) in the global south and east.
Will this happen? Likely not as long as the US maintains its policy of interference in Europe. As Lord Ismay said, NATO's goal for Europe (the hegemon in all truth) is “to keep the Russians out, the Americans in, and the Germans down.”
Ismay formulated that aphorism at the height of a new Cold War. The Soviet Red Army threatened to overrun Western Europe all the way to the English Channel. And few knew who or what exactly could stop it.
WW2 and the Cold War are over. Let's move on, please. Germany, you need to lead Europe; instead, your leadership is cucking to the US.
My last piece of advice for Germany, for heaven's sake, is to turn the nuclear reactors back on! Germany should be leading the world in this technology.
Key Recession Indicator Gives Stronger Recession Signal in August
A modified McKelvey recession indicator with no false positives or false negatives since 1953 suggests we are in recession now.
We are likely in for a bout of recession and disinflation. However, as I have pointed out, we are also now in a global synchronized central bank rate-cutting cycle, which will likely lead to the re-emergence of inflation and higher resource and commodity prices. I am still advocating holding cash in reserve as I think oil can go down into the $50’s before the effects of easy central bank policy fully kick in. I also believe there is a trading opportunity in government bonds both in the US and emerging markets, which I have discussed in the past.
Eric Weinstein - Are We On The Brink Of A Revolution?
The first 30 minutes are the most important in my view. Very thought provoking.
That is it for this week. Thanks for subscribing.
John Polomny
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The S&P 500 has little or no exposure to companies that produce the things we need, such as uranium, copper, gold, silver, oil, natural gas, coal, PGMS, and shipping/tankers.
The S&P 500 is also over exposed to overvalued tech stocks that will require more energy than we can sustain.
Meanwhile, US equities have had their best 40 year run in history.