Kontrarian Korner #87 - Craig Tindale

Yesterday I had Craig Tindale on the podcast for the first time. For anyone interested in commodity and physical supply chains, it’s a must listen. We dove into the recent events in Iran and their impact on supply chains (not just for energy), and how insurance plays a role in global shipping markets. We also talked about China’s Unrestricted Warfare approach to global commodity supply chains and refining, and what the US needs to do to catch up. Then we spent some time on bottlenecks for the AI and data center buildout, and which commodities investors should keep an eye on with everything going on. You can find Craig on Twitter, and his Substack is below.

Podcast Summary

* The recent events in Iran, the impact on global supply chains, and how the Strait of Hormuz is kind of the jugular vein of the global trade system.

* How the global trade system has gotten more complex over the last several decades, and where that leaves us with the West trying to decouple some of these systems from China.

* The shipping insurance industry and the US DFC plans to step in to insure ships traveling through the Strait.

* The massive copper demand for building data centers and transmission lines, and the bottlenecks in the West for copper production and the smelting/refining capacity.

* How the Chinese have used economic warfare to take control of several important supply chains over the last couple decades, and how that has hollowed out industrial capacity across the West.

* How the economic models we currently use can be improved and connected to the real economy.

* The AI CAPEX boom, and how the companies involved don’t know if they will see a return on that investment over the next five years.

* How Nvidia could run into issues with their new chips as far as deployment and the supply chains for the metal inputs.

* Why he’s watching silver, and how you could have a hierarchy of demand with what price different customers are willing to pay.

* How Western commodity markets evolved as paper and derivative markets, while the Chinese markets are designed for physical delivery.

* Some of the different applications for rare earths, and how the US could address the bottlenecks we currently face.

* How the financial economy is extractive of the material economy, and why the material economy is way more important than the financial economy.

* Book Recommendation: Secret of the Veda by Sri Aurobindo.

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