by Morris Hubbartt, Gold Seek:
On the left-hand side, mine depletion, grade decline, deeper underground, population growth, urbanisation, supply underinvestment—that remains the same as it was over the last ten years.
If you think about it, mining and energy now is the intersection of AI, hyper-scalers capex, defence spending, infrastructure, electrification, decarbonisation.
Virtually all resources are now scarce. Now is the time to own scarcity. Charlie Aitken
A commodities and precious metals bull market is supported by severe supply shortages, soaring global debt, and intense geopolitical conflicts that push investors toward tangible real-world assets.
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Mining projects face long permitting delays and fewer major new discoveries. Global conflicts, such as the wars in Russia-Ukraine and the Middle East, disrupt energy, refinery, and fertilizer production.
The world is currently facing an unprecedented maritime crisis as three vital seas are under simultaneous siege, severely disrupting the global movement of commodities. Ongoing conflicts have effectively blocked or choked off the Strait of Hormuz, the Red Sea, and the Black Sea, creating massive supply chain bottlenecks for energy, grains, and fertilizers.
In the Strait of Hormuz weekly commercial traffic has plummeted by about 90% below prewar levels. This is the world’s most critical artery for crude oil and liquefied natural gas (LNG), forcing more than 150 tankers to idle, anchor, or turn back.
Following a brief period of calm, the crisis has escalated dramatically. Houthi forces have seized coastal areas, renewed drone and missile strikes and declared a maritime blockade against Saudi Arabian ports.
The critical Bab al-Mandeb strait—which normally handles 12% of global seaborne traded oil and 8% of grain—is no longer reliably open. Ships are forced to bypass the Suez Canal entirely and take the long, expensive route around Africa’s Cape of Good Hope, adding 10 to 14 days to transit times.
There are no longer safe alternative water routes between Asia, Europe, and the Middle East.
The Russia-Ukraine war has seen a deadly summer escalation. Both nations have intensified drone and missile strikes directly targeting oil tankers, commercial grain vessels, and port terminals.
Daily charter rates for tankers have spiked above $300,000 per day as war-risk insurance premiums double. Billions of dollars in vital wheat, corn, and agricultural exports are trapped or obstructed, driving up global food prices and threatening international food security
The convergence of these three crises has pushed global shipping risk to an alarming 8.3 out of 10. Maritime authorities from 18 nations have warned that the rules-based framework for free ocean navigation are fracturing.
Governments carry massive debt loads with little political appetite to fix fiscal deficits. Investors lose faith in paper (fiat) currencies and move their money into hard assets like gold and silver.
When investors lose faith in paper money because of massive government debt, it triggers a major financial shift called a flight to hard assets.
Governments cannot print gold and silver out of thin air. Real estate, agricultural land, and energy commodities are the primary hard assets investors rush to buy besides gold and silver when they lose faith in paper money.
*During extreme hyperinflation events, gold historically outperforms real estate by a massive margin. While both are hard assets, gold acts as a highly liquid, universal escape hatch, whereas real estate often becomes an illiquid, heavily taxed financial trap.
