We’re in a critical situation right now - there’s no easy fix to a lack of refinery capacity, a lack of strategic reserves and products, and now-depleted crude reserves. A route to partial normalisation would be looking to China to release spare refining capacity, which seems to be happening, but a return to full normalisation is unlikely any time soon. This will shape the broader commodity and macro-economic outlook. All other commodities are dirt and diesel: we saw all time highs in copper yesterday, record-high diesel last week - we’re going to see more highs across the non-energy complex. Throughout all this, the market is obsessed with crude oil - but everyone reading this right now, as well as the rest of the world, mostly has exposure to the refined product: gasoline, diesel, jet fuel. That will hit the headline CPI index very soon. And we’ve not event talked about food - Ukrainian strikes in the grain corridors in the Black Sea, as well as weather-impacted crop yields has combined to create a food crisis alongside the fuel crisis - wheat, corn and other crops have risen sharply over the summer. Again, that will hit the headline inflation number. The bottom line: this is a crisis not only caused by the Strait of Hormuz. Chokepoints from the Red Sea to the Black Sea grain corridor, the Rhine River, the Russian interior, the Panama Canal - weather, war and policymaking - have combined to create a crisis that has no easy way out. The energy crisis is here: it has arrived and it’s showing in the product prices, not in crude. My interview on @CNBC Access Middle East with @dan_murphy can be watched in full below - thanks to Dan and team for inviting me on.

Wake up, folks. Commodities are telling you something, and yesterday the Treasury confirmed it. Scarcity in the physical world. Repression in the financial one. Scarcity pushes prices up. Repression holds yields down. The gap between them is the debasement. Commodities are the only asset class that wins on both sides. The structural case for commodities has been turbo charged. Underinvestment, deglobalization and electrification all pushing markets like diesel cracks and copper to new highs. Meanwhile the chokepoints are increasing, from Hormuz to the Red Sea, the Rhine, the Panama Canal, the Black Sea grain corridor and Russian refining capacity. It is becoming increasingly apparent that not a single one of those is reachable by anything in Washington's toolkit whether it be caused by war or weather. The illusion of abundance is likely behind us. I said as much on CNBC this Monday, and I got long gold, silver and agriculture last week. Ten points for you to consider. (1/11)

Welcome to the most asymmetric trade in modern financial history. The thread below lays out why. The opportunity exists because capital has chased the AI trade while ignoring the physical assets AI requires to run — assets that have quietly become the best-performing asset class of the decade. Since October 2020 when we first called for the commodity super cycle: QCI Total Return +217%, GSCI Total Return +205%, Gold +140%. NASDAQ trails at +130%. S&P 500 at +85%. The top three are all commodities. Yet oil cannot get out of its own way while copper and the broader atom complex prints fresh highs . That is the dislocation. That is the trade. Get long. Buckle in. Hang on for the ride. Forgive the longer posts in this thread — attempting to mimic my old 10-bullet commodity takes. On to it.