Tuesday , 16 April 2024

Russia-Ukraine War Has Brought About A Commodity Black Swan

When sh-t happens at the end of an excessive bubble era, it will always be the worst kind, and what can be worse than a major war that could develop into a nuclear and world war.

If a miracle doesn’t stop this war very quickly (which is extremely unlikely), the world will soon be entering a hyperinflationary commodity explosion (think both energy, metals and food) combined with a cataclysmic deflationary asset implosion (think debt, stocks and property).

The Russian natural resource reserves are estimated at $75 trillion…[which] is 66% higher than the USA and more than twice as much as Saudi Arabia and Canada.

Russia has the largest commodity reserves of any nation.

Even if the total Russian supply is not lost to the world, it is clear that the West is determined to punish Russia to the furthest extent possible. Therefore, as we have already seen in the major escalation of oil and gas prices, the shortages will put insufferable pressure on the prices of natural resources…

What is happening now is a commodity black swan across both energy and agricultural resources. Energy and agricultural products are interlinked.

  • Gas is feedstock for fertilizer production in Europe with Russia and Belarus together accounting for 1/3 of the world’s potash exports.
  • Around 33% of world exports of barley come from Russia and Ukraine together, 30% of wheat, 20% of maize and 80% of sunflower oil.

The consequences are unforeseeable. Goldman Sachs Commodity Index is up 3X since April 2020 and the exponential phase of  the move has just started….

I have warned about the coming inflation, leading to hyperinflation, based on unlimited money printing for quite a few years now but the dynamite of a global commodity crisis and shortages thrown into the already catastrophic debt and global monetary fire will create an inferno of nuclear proportions…


Since a commodity inflation is guaranteed, it is obvious that physical gold and some silver will be a life saver against the coming bubble-asset destruction (stocks, bonds, property). [Illustrating]…what happens to gold when a currency collapses is the chart below that shows gold in Rubles since 2000. Gold is up 38X in the last 21 years. Just in the last 12 months, gold is up 89% in Rubles and the problems have just began.


The above version of the original article by Egon von Greyerz (goldswitzerland.com) was edited [ ] and abridged (…) to provide you with a faster and easier read. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

Sponsor an article for $10; Receive a 258-page book as a thank you. Click here