The Monthly Letter covers two topics this month. First, we take a look at Green Energy and how the wholesale move to these technologies likely will create a commodity boom. These technologies are surprisingly commodity intensive and thus, with their rapid adoption, they create a Demand Shock for a variety of Commodities. With mine exploration and development taking years, such a Demand Shock will likely produce a multi-year period of Supply chasing Demand. Second, the South China Sea continues to heat up. China, since the change in US Administration, continues to ramp up its challenge to the U.S. as a test of the Biden Administration. This comes in the form of rising violations of Taiwan’s airspace and increasing encroachment into The Philippines territorial waters. With the US possessing a Mutual Defense Treaty with The Philippines and an obligation under the Taiwan Relations Act “to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan”, a potential confrontation with China, similar to the Cuban Missile Crisis, could erupt at any time. And Third, as always, we close with brief comments of interest to our readers.
Should you have any questions on how the above issues or the items discussed in our accompanying cover letter impact your family’s financial position or your business’s future as well as the potential actions you could take in response, please do not hesitate to contact us. We welcome the opportunity to discuss this with you.
Paul L. Sloate
Chief Executive Officer
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