The Next Commodity Supercycle Has Already Started
Authored by Chris Macintosh via InternationalMan.com,
The world rotates between two sectors: technology and energy.
You have to turn the lights on or nothing happens. You need both the lights and the energy to power them. No lights, only energy? Nothing. Lights with no energy? Nothing.
Essentially you have to innovate or you never progress. Markets tend to rotate between those two broad sectors accordingly.
Go back to the height of the energy boom in 2013 and 2014. You couldn’t give Microsoft away. Energy, on the other hand, could do no wrong. That was the time to own tech.
Then tech took a bottle of Viagra and proceeded to shoot the lights out from 2014 through roughly 2022 while energy was decimated and left for dead. The way it works is that the last clutch of investors in any given sector go about losing their shirts and as a result are extremely reluctant to re-enter it anytime soon.
Recall that in 2001, the NASDAQ pulled back by a whopping 75%. That unleashed a commodity supercycle that ran all the way to 2014. When the NASDAQ recovered to its prior high, oil rolled over almost to the day… and the cycle reset. History suggests oil goes up seven times on average during such a cycle. Historically, the NASDAQ gets taken down 50 to 75%.
We are at the point where we think both have pretty decent probabilities. Hence our long positions on energy and short positions on NASDAQ.
What Has Changed: China Weaponises the Periodic Table
This cycle is bigger — far bigger and more structurally meaningful — than anything I’ve ever seen or researched by looking back at prior decades. The key driver is geopolitical and elemental.
China has weaponised the periodic table. The world’s two largest powers have divided the material world between them.
China dominates the periodic table, namely metals, rare earths, and critical minerals. China is, in essence, an electron state.
The United States dominates the organic chemistry version: hydrocarbons, food, fuels. The US is a molecular state.
When China restricted exports of critical minerals and rare earth magnets in October of last year, it immediately revealed how fragile Western manufacturing supply chains are. A magnet might represent 0.00001% of GDP, but remove it and you shut down an entire industry.
The same logic applies to oil. People say oil is a small share of the economy, but you pull it out and everything stops. Efficiency gains over decades have actually made oil more critical, not less. We’ve stripped out all the low-priority uses, leaving only the essential ones. You cannot substitute away from what remains. No energy, no civilisation. Simple.
This power struggle between the United States and China is the central frame for understanding commodity markets over the coming decade.
The End of the Bretton Woods Hegemon
The broader geopolitical structure underpinning commodity markets is fracturing.
The Bretton Woods world was built in 1944 when the United States had the only functioning manufacturing supply chain on earth.
The grand bargain was simple: America would take its enormous navy — inherited from the British, who inherited it from the Spanish and Portuguese before them (a 400-year accumulation of ports, bases, and sea lanes) — and protect global shipping in exchange for the world trading in US dollars.
The most important commodity flowing through those lanes was, and still is, oil.
Three things have now broken that model:
The US shale revolution made America energy independent, removing its incentive to protect global supply lanes.
Higher interest rates then exposed the fiscal impossibility of maintaining that role — Medicare and Social Security are the largest line items in the US budget, interest costs are now second, and defence is third. The US simply cannot continue to be the world’s policeman at this cost structure. Socialism combined with fiscal irresponsibility, compounding.
And China is actively resupplying and supporting its allies — Russia and Iran — making any US-led enforcement action structurally harder.
When the US protects a ship carrying Chilean copper from Santiago to Shanghai, it is paying the security bill for its primary strategic competitor. That arrangement is now ending. The problem is there is no replacement hegemon large enough to step into that role.
The world may be reverting to something resembling the Dutch East India Company era — state-sponsored sovereign entities with their own security arrangements, trading in gold, silver, and hard assets, using mercenary forces to protect supply chains.
Large corporations like Apple and Exxon are beginning to look more like sovereign entities than conventional companies.
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The rotation from technology to energy and commodities is only one part of a much larger shift now underway. Debt, money printing, geopolitical conflict, and deep cultural changes are all colliding at the same time. That means the years ahead could bring extraordinary volatility—and extraordinary opportunity—for investors who understand what is really happening. That is why we recently prepared a free special report called Clash of the Systems: Thoughts on Investing at a Unique Point in Time. In it, contrarian money manager Chris MacIntosh explains the major economic, political, and cultural trends unfolding right now, what risks they could create for your money and personal freedom, and what you could do to stay one step ahead. You can get the full report here.
Badenoch blasts 'moaning' female Labour MPs over Burnham jobs 'quota'
Kemi Badenoch has told Labour women to earn a job in Andy Burnham's Cabinet instead of demanding they are handed jobs because of their gender.
The Tory leader lashed out today amid reports that female MPs are demanding the de-facto new prime minister introduce a 50:50 gender split 'quota' in his government.
Amid reports that former foreign secretary David Miliband is being lined up to return to the role, possibly with his brother Ed as Chancellor, one female minister also complained that Burnham could not have 'more Milibands than women' in the top posts.
But in a scathing article in the Times today Mrs Badenoch told them to 'stop moaning' and get chosen on merit instead of retreating into 'more of the failed identity politics that is holding back our country'.
'There are many, many reasons why you shouldn't have any Milibands in the cabinet,' she said.
'But complaining that the boys haven't given them the right jobs or that the boys are taking all the jobs, just shows that Labour's women still don't get it.'
The idea of quotas was also attacked by Baroness Jacqui Smith, Labour's Skills Minister.
Asked by Times Radio if Mr Burnham should reserve jobs for women, she said: 'No, I think what Andy Burnham should be doing is building the very best team around him to change this country.'
A letter written by the Women's Parliamentary Labour Party has called on Mr Burnham to ensure a 50:50 split between men and women in government jobs
Amid reports that former foreign secretary David Miliband (above, right, in 2010) is being lined up to return to the role, possibly with his brother Ed as Chancellor, one female minister complained that Burnham could not have 'more Milibands than women' in the top posts
But Mrs Badenoch told them to pipe down and get chosen on merit instead of retreating into 'more of the failed identity politics that is holding back our country'
A letter written by the Women's Parliamentary Labour Party and seen by the BBC has called on Mr Burnham to ensure a 50:50 split between men and women in government jobs after he succeeds Sir Keir Starmer.
'We are asking you to demonstrate this change from day one and address the toxicity and misogyny within our own party and government,' it said.
Labour has never had a female leader, while the Conservatives have had three, and Mrs Badenoch urged the government to follow its meritocratic example.
'If you run a meritocracy, then you do not have to worry about jobs for the boys,' she wrote.
'Every woman who is a Conservative MP, every woman who has ever won the leadership, has had to fight to get where she is.
'By contrast, Labour women are demanding guarantees from Burnham. But the truth is he doesn't have to give any guarantees.
'If none of Labour's women are prepared to get their hands dirty and challenge him for the leadership, their demands are toothless.'
'In fact, it's quite revealing that the women's parliamentary Labour Party has written to Burnham asking him to commit himself to at least 50 per cent female ministers.
'This has nothing to do with meritocracy. It is yet more of the failed identity politics that is holding back our country.'
