Commodity Supercycle Smiling on Energy Metals

Source: Streetwise Reports 05/24/2018

The commodity supercycle could be on an upward curve, and among the commodities, the energy metals could see the most lift, fed by demand for alternative energy going mainstream among consumers, posits Lobo Tiggre of Louis James Ltd. and founder and editor of Independent Speculator, in this interview with Streetwise Reports.

The Gold Report: Lobo, lots of readers know you as Louis James, your pen name for many years. After a long stint with Casey Research, you have gone off on your own, formed Louis James Ltd. and started the Independent Speculator newsletter. Would you tell us a little bit about your new publication?

Lobo Tiggre: Yes, I’m very happy to. I have worked with and learned from Doug Casey of Casey Research for almost 14 years. I would say he taught me everything I know, except that I had other teachers like Rick Rule and many famous geologists, who all gave generously of their time and understanding. I’ve gotten to the point now where I want to do it on my own, and have started the Independent Speculator.

I feel it’s important to have skin in the game. I like it when, in evaluating a resource company, I look at the ownership and see that management has put a significant amount of their own money in the stock, that they will suffer or celebrate the same ups and downs that their shareholders will. So I thought it was important for me to be able to offer the same thing to my readers, which I wasn’t able to do under my previous employment.

This is one of the main ideas of my new service. I write about what I’m investing in. I’m active as a speculator. I’m applying everything that Doug and company taught me. And I am very happy at this point in the commodity cycle to be able to put my own money into the market, to benefit from what I think is coming. And I want to have skin in the game with my readers, to be in the trenches with them.

TGR:Let’s talk about the commodity supercycle—where is it and where do you think it’s going?

LT: The commodity supercycle is interesting because it’s such a strong pattern. You see commodities moving together in big waves. They go down and up, and they all seem to move together. But if you look at what drives any particular commodity, it seems completely unrelated to anything else. Oil is up recently because of the Iran nuclear deal being scrapped by the U.S. administration. What does that have to do with the price of industrial metals? And yet, most are up this year.

I don’t have a really great explanation for why this is, or should be so, but it is a fact. The correlations are extremely high. And gold bugs should beware—silver bugs too—that the correlation between precious metals and other commodities is extremely high. I agree that they are also monetary metals and safe-haven assets, different from pork bellies and coffee. And they do diverge under moments of stress in the global economy, which is what they should do. But apart from those moments of acute stress, gold and silver tend to move with the other commodities.

That’s good news for us right now because the commodity supercycle is in an upward curve. I personally think that all that we saw from 2001 to 2011 was a warm-up. We’re going to see a bigger cycle and a bigger mania blow off at the top. It will take a while to gather steam, but I do think that’s what’s coming.

Why? It’s not just the supercycle. It has to do with my macroeconomic view. All the money printing that governments around the world have done is going to show up in real stuff, including commodities. Things are going to respond to all of the liquidity that has been created since 2008. So I’m very, very bullish. On the exact timing, I don’t have a crystal ball. But I do think it’s coming. And I do think that while the markets are still languishing in the remaining grips of the bear, it’s a great time to be buying. I’m very glad to be able to be doing that myself right now.

TGR: You said that in the supercycle commodities run generally in correlation, but do you see some doing better than others in this next cycle, this bullish cycle?

LT: I do. I’m particularly bullish on the energy minerals, excluding oil. Oil is the old energy mineral. The new energy minerals are set for a stellar run. This is driven by a true paradigm shift out of burning fossil fuels for energy and into renewable energy. That is big and real and powerful and gaining steam. It used to be the pet project of a few people with an ideological axe to grind. Then governments started putting in incentives, pushing to make it happen sooner than the market would have adopted it. But it’s gone beyond that now.

There’s really been a tidal shift. Consumers want these new products and services. Consumers want electric cars now. Before, EVs used to be like golf carts, right? Nobody wanted really an electric car unless they were really hard-core environmentalist types. But now, Tesla Motors Inc. (TSLA:NASDAQ) has smashed the old image of what an electric car could be. The change is not just about Tesla. Everybody’s getting into this because they realize that customers want these new products.

It used to be that solar power was very inefficient and expensive. It was just something for ideologically motivated people. But now it pays for itself, even without government subsidies in some areas, and there are government subsidies in many areas. If you go with a Tesla roof, you can even get financing. You don’t even have to cough up all the money up front and hope to get …read more

From:: The Energy Report