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$22.3m follower assets
Brace Yourselves: The Energy Crisis Stands To Get Much Worse
As the new month begins, the high-pressure systems over the Northern Hemisphere will advance. The forecast image below shows two main high-pressure areas trying to connect across the north pole. During Winter, this might have enough power to create cross-polar ridging, which is a very potent cold winter pattern.

SNOW COVER FROM OCTOBER TO WINTER

Fall weather can influence the Polar Vortex by building an extensive snow cover over Siberia. Multiple studies have proved that the snow cover extent in October over Siberia has an effect on the weakening of the stratospheric polar vortex.

A stronger winter high-pressure system can develop over the region due to snow cover. The high-pressure area affects the polar vortex, as it helps to send more vertical energy up into the Stratosphere. A weaker polar vortex naturally means weaker polar circulation and a greater chance of cold air outbreaks over the United States and Europe during Winter.

A higher North Hemispheric snow cover in Fall is linked with higher pressure over the polar regions in Winter. This shows a weak polar circulation, meaning that colder air has an easier path out of the arctic circle and down towards the United States and Europe.

Currently, we are already seeing more snowfall than usual over Siberia. The graph below shows the snow cover extent over Eurasia already above the normal levels, with more to come.

The image below shows the snow cover analysis, revealing the current snow extent across the Northern Hemisphere. A large batch is already present over Siberia, earlier than normal.

We can see that if we look at Rutgers‘s great snow cover analysis, showing the snow cover anomaly over the Northern Hemisphere. There is a large anomalous area of increased snow cover over Siberia.

Looking below at the 10-day snowfall forecast, we can see a substantial increase in snow cover. Blue colors indicate snowfall and snow depth increase. All areas from North America to Siberia will increase snow cover.

As pressure systems get stronger and more energy goes upwards into the Stratosphere, it can reach a point where the Polar Vortex can completely collapse. That is called a Sudden Stratospheric Warming event and basically means a strong warming event of the Stratosphere and a following collapse of the Polar Vortex.

The corresponding average temperature 0-30 days after an SSW event shows that most of the United States is typically colder than normal, along with Europe.

According to GoRozen's July 2019 Agricultural Markets post:

There is mounting evidence indicating we are entering a potential period of very low sunspot activity, caused by a confluence of overlapping Gleissberg and Suess-DeVries Cycles. If this is indeed the case, the impact on the earth’s climate and by extension growing conditions could be material.

We are putting forth two very controversial ideas. Before we begin, we would like to state that we are not trying to weigh in on the impact of CO2 to global warming. Instead, we would like to draw attention to a completely different factor impacting global temperatures. What’s remarkable about this other factor is that no one has paid any attention to it whatsoever. We are contrarian investors and pride ourselves on trying to identify trends that few others have considered. While we admit that the science is far from certain, the implications of what we are about to discuss are important enough that we believe the investment community needs to, at the very least, consider it.

We believe changes are now taking place on the sun’s surface that could ultimately usher in a significant shift in global weather patterns over the next 20 years. If the world were to enter a period of cooling for any reason, our research tells us that global growing conditions could become much more challenging and that the trend of relentlessly-advancing crop yields we have experienced for almost four generations could reverse.

Scientists, astrophysicists, and meteorologists all carry on a vigorous debate regarding the impact on terrestrial weather of the sun’s changing phases. There is no agreement on the subjects we are about to discuss, so please read to what we have to say with an open mind. All we ask is that you decide for yourself. Stories of the financial difficulties faced by farmers today abound. Low grain prices have reduced profits margins to zero while debt financing requirements continue to grow. If we are right about the upcoming change in global weather conditions, the seven-year bear market in grain prices could end in the not-too-distant future causing agricultural-related investments to surge.


In my Twitter post dated September 10, 2021, I discussed a speech given by renowned historical climatologist, Evelyn Browning-Garriss. I would like to reiterate that my views regarding the extent to which humans have impacted the climate are irrelevant. Natural processes have always affected both climate and weather from the beginning of time, that fact is inarguable.

One of the critical pieces of information I recall that was shared by Ms. Browning-Garriss was the significant impact of early snowfall in Siberia. As you can see from the Severe Weather Europe post above, snow has indeed arrived early in Siberia meaning a potentially severe winter for Europe.

The July 2019 GoRozen report above suggests even more trouble lies ahead for agricultural markets, already struggling with high energy prices and fertilizer shortages.

The coming months will likely prove to be devastating for those that must decide between heating their homes or feeding their families, small business owners forced to close as they battle high energy prices, and global food shortages causing famine in several countries.

A good time to be a commodity investor, but a heartbreaking time for humanity.




$VET.TO $WCP.TO $MOS $LXU
Please DYODD and I'm always happy to answer any questions that I can.
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Jennifer's avatar
$22.3m follower assets
G&R: Commodity Bull Market's Hardly Begun
Not only is the commodity bull market not over, it has hardly begun. Look carefully at the chart below:

The latest Market Commentary by Goehring & Rozencwajg released on May 18, 2022 is another must read (download link: http://gorozen.com).

If investors had constructed a natural resource equity portfolio consisting of 25% energy, 25% metals & mining, 25% precious metals, and 25% agriculture, they would have significantly beaten the stock market in three historical periods of radical undervaluation (1929, late 60's, late 90's). Another time period in which commodity equities are radically undervalued? Today. Most importantly, in 1970 a similarly constructed portfolio would have returned 400% over a decade, handily beating the stock market which only returned 80% in that inflationary time frame.

G&R states that if the stock market stays at present levels, commodity prices would have to surge 600% to become overvalued relative to the stock market.

"The great commodity bull market has only started, and investors should use any resource market pullback as an opportunity to increase their exposure."

My commodity portfolio includes some of the following:

Energy

$ARX.TO (gas & condensate)
$SDE.TO (oil & gas)
$WCP.TO (oil)
$VET.TO (oil & gas)
$STEP.TO (oil field services)

Metals & Mining

$AN.V (lithium)
$ATX.V (copper)
$BRW.V (lithium)
$FDY.CN (copper)
$PMET.CN (lithium)
$FL.V (lithium)
$FPX.V (nickel)
$SPC.V (nickel)
$NGEX.V (copper)
$SR.V (vanadium)
$SURG.V (copper)
$VCU.V (copper)

Precious Metals

$FOXG.V (gold)
$KGC.V (gold)
$OZ.V (gold)
$AU.V (gold)
$APGO.V (silver)

Agriculture

$ERTH.CN (fertilizer)
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Jennifer's avatar
$22.3m follower assets
JP Morgan: Buy Oil & Gas

'Oil and gas stocks offer a natural hedge against inflation -- particularly energy inflation -- and have outperformed broader indexes by a wide margin through 2021 and so far in 2022.'

$VET.TO
$STEP.TO
$ROK.V
$WCP.TO
$TCW.TO
$SDE.TO
$MEG.TO
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