From the Bonner-Denning Letter, a private investment newsletter that cannot be linked with subscription:
"I’ll be keeping my eye on the Baker Hughes rig count. (It’s a weekly census of the number of rigs actively exploring for or developing oil or natural gas in the U.S. and Canada.) It was up by 8 as of February 5. But it was down by 398 from this time last year. Some of that can be switched “on” easily. And some cannot, all of which means a surge in demand may take suppliers a while to catch up with (higher oil prices).
In the meantime, you’re starting to see fund managers and strategists banging the table for a “commodities super cycle.” JP Morgan’s Marko Kolanovic released a report in which he said there have been four commodities “super cycles” in the last 100 years, the last of which began in 1996, peaked in 2008, and bottomed 2020. Now, he says, a new one has begun."
[KH] When new fiat money hits the helicopter blades, the first things to go up in price are asset prices like stocks and real estate. Everyone is on to those already. Next are commodities, then wholesale prices, then retail prices.
In addition to crude prices, precious and semi-precious metals are going up. Palladium, of all metals, has skyrocketed! Grains are going up also. It seems to me that commodities are the best inflation hedge at this moment.
With the Biden restrictions on oil exploration on government lands and distribution via pipelines, the price of oil and its distillates are bound to go up more than other commodities.
Petroleum stocks look to have much more upside potential than high-flying equities like Tesla.