I HATE BEING RIGHT

No, really. Especially about crappy things like this. But here we are and the pointy shoes in Berlin have a solution to their self-inflicted energy catastrophe. You wanna know what it is?

Nationalize their energy assets.

I know, I know… it’s what Venezuala did and it’s been tried and tested hundreds of times all around the world. Fear not though, all those other times they just didn’t do it the “right way”. Germany will… or so they profess.

Berlin Federal Minister of Economics Robert Habeck (Greens) is stepping up preparations for the event of a serious energy crisis in Germany. A planned amendment to the Energy Security Act provides that in the event of a crisis, companies operating critical energy infrastructure can be placed under fiduciary administration. In extreme cases, expropriation is also possible, but the law already provided for this. The amendment was voted on Tuesday. First, the newspapers of the Funke Mediengruppe had reported on it.

Expropriation: Robert Habeck wants to nationalize energy companies in an emergency

The German Press Agency learned from circles of the ministry that it was about ensuring security of supply and ensuring the rapid ability to act in the event of a crisis. Therefore, the ministry is planning an amendment to the Energy Security Act, which dates back to 1975. The law was a reaction to the oil crisis at the time.

This creates a dynamic whereby not only will shortages increase (government and their idiotic bureaucracy are steroids for shortages), but an entire set of equities are removed from the investing landscape. Who, for example, wants to invest in German energy producers when the risk to their being nationalized?

No, this energy bull market is going to be a whopper.

Which is worth noting, and I put this out as a gentle reminder to those who, having seen commodities run lately, may be thinking to yourselves, “damn, that’s it. I’ve missed it.” I always like to step away from the daily noise, take a deep breath and try to figure out broadly where things are both on an absolute and relative scale.

That run we’ve just had… see the bottom right of the chart? Yes, that’s it.

Feel better now? Put another way here is a handy little chart of commodity bull and bear supercycles.

As you can see, the average bull market in commodities lasts around 17 years with gains around 250%.

Unfortunately during this cycle it’s not going to be enough for us to simply pick commodities and be done with it, because — like it or not — there is an ideological war taking place, and there are business and political influences shaping who will and who will not participate in what we believe will be an absolute whopper of a bull market.

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