Maria’s Note: Maria Bonaventura here, Rogue Economics’ senior managing editor. Today’s Inside Wall Street comes from colleague David Forest. And it touches on one of the top investment trends on Nomi’s radar: New Energy.
Dave is a professional geologist. And he has been investing in commodities for decades. Below, he shares insights on one commodity that is crucial in the global shift to cleaner energy…
Here’s a shocking chart.
This is the price for nickel, one of the leading components powering electric vehicles (EVs). In March, it went vertical.
I call nickel a “hard tech” metal… because it’s at the intersection between technology and the hard assets that power it (infrastructure). And it blew up 100% in a single day.
It’s one of the biggest price explosions in any market, ever.
Russia did it. The country produces about 10% of the world’s nickel supply. Now that it’s sanctioned, a critical reserve of nickel metal is lost.
A 10% supply cut sounds small. But it’s not.
In fact – for hard tech – it’s massive.
That’s because hard tech isn’t built in a factory. It’s mined, pumped, or collected from the ground.
Nature Only Made So Much
Which is a key point. It’s the reason hard tech makes millionaires overnight.
Compare hard tech to regular tech. We can make an iPhone nearly anywhere on the planet. You just need to build a factory.
Today, there are iPhone manufacturing centers on nearly every continent. If one went down, others could ramp up production. The supply gap gets covered.
But hard tech doesn’t work that way. Nature only blessed a few places on Earth with supply. In any other country, you could spend billions and not produce an ounce.
Look at nickel. Russia is the world’s third-largest producer. Outside of Russia, there’s only a handful of countries where you can find nickel in the ground.
Indonesia holds the world’s largest nickel resources by far. Indonesian mines give us 37% of the world’s nickel.
This is a complete accident of nature. The right geologic things happened in Indonesia to create giant nickel ores. So now, a third of global supply lies within the borders of this one country.
Unfortunately, it’s not the best place politically. The Indonesian government constantly threatens to ban exports of nickel. Plus… the government is notoriously corrupt.
Even worse, the same is true for the world’s second-largest nickel nation: the Philippines.
Mines in the Philippines produce 14% of our nickel supply. But that supply’s far from reliable. The Philippines’ hardline government banned mining for a few years recently.
Between Indonesia and the Philippines, that’s 50% of our nickel in shaky hands.
Few other options exist around the planet. Aside from Russia, other big nickel countries include China, Brazil, and the tiny island nation of New Caledonia.
How about in America? We have only one active primary nickel mine: Eagle in Michigan. That doesn’t even put it in the top 10 globally.
That’s a big problem.
This Problem Is Also an Opportunity
But it’s also a huge opportunity.
That’s because of investors’ biggest worry right now.
Inflation.
Here’s a chart that’s almost as shocking as the recent nickel spike.
Recently, prices exploded for nearly everything. It’s a big issue for investors. Today, we need bigger returns for our wealth to just keep up with our cost of living.
That’s where hard assets like nickel come in handy.
Commodities like this are a perfect way to protect ourselves – and profit – from inflation. When it comes to nickel, we just can’t create more. As I showed above, we’re stuck with what Earth gave us.
With a naturally limited supply, these commodities always get more valuable when money supply increases.
That’s exactly what’s happening right now. Our leaders minted nearly eight trillion new dollars since COVID hit. It’s blowing up prices for everything.
We Can Use This to Profit From Inflation… Not Suffer
This is a recipe for huge profits. Nearly unlimited dollars chasing a very limited supply of commodities like nickel (and oil, uranium, gold, copper… and a host of others).
Even better, metals like nickel are forefront in the tech boom. They’re some of the most important hard tech on the planet.
Trillions of dollars are lined up for massive tech trends like EVs. A big chunk of that money is looking to secure vital hard tech like nickel, lithium, and rare earths.
With hard tech, we get big growth potential – equal to what we saw in tech stocks the past decade.
But we also get protection from wealth-killers like inflation. These metals are natural hedges against tough times… and they’re also poised to benefit from the biggest trends on Earth.
If you want to dip your toes into profiting from the extreme price spikes in hard tech… you can check out the iShares S&P GSCI Commodity-Indexed Trust (GSG).
It tracks the GSCI Commodity Index… and includes other commodities set to rise, like energy and food.
And if you want even more ways to protect against the price of commodities… food… and other things you rely on everyday…
Check out the urgent briefing I just released with several steps you can take to get ahead of shortages and price hikes.
You can protect your wealth… your family… and even come out ahead during all this. Check it out right here.
Keep walking the path,
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David Forest
Editor, International Speculator
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