If the King looks weak, every Pawn will make a move.

Photo: If the King looks weak, every Pawn will make a move.

In the late 19th and early 20th century, the United States went to war for bananas.

The Banana Wars were a series of military interventions into the Caribbean to protect the interests of the United Fruit Company. Tens of thousands of people died in countries like Haiti, Nicaragua, the Dominican Republic, Cuba, Panama and Honduras.

The battles were fought for the same reason we see military occupations today - to secure one country's interest in another country's resources.

We tend to associate wars like this with oil - the world's most important commodity. But a quick glance at the history books will find wars fought over nutmeg, rubber, salt, gold, silver, tobacco… and bananas.

My life, until now, has been the era of globalization. Trust existed, fragile as it may have been, for the world to function as one global marketplace. If you had the money (or credit), you could buy whatever commodities your country needed.

But on the back of currency wars, trade wars and now hot wars, that era is over. I don’t think the transition to whatever comes next will be simple, quick or predictable. But I do think that our supply of commodities will become more vulnerable than it has been in my lifetime.

Understanding the world of commodities gives you a unique lens through which you can view global events - because the distribution of these raw materials is what leads to the distribution of power.

If you understand which commodities are most important - who has them and who needs them, then you understand a lot about the world.

We will experience a transition of global power.

Over the last 600 years, we have seen the rise and fall of the Portuguese Empire, the Spanish Empire, the Dutch Empire and the British Empire. We are now in the era of the American Empire. Five empires in 600 years gives us a hint at the expeditious nature with which power rotates around the world.

Transition periods are volatile. They begin with the leading power becoming insolvent. That leading power traditionally papers over its deficits by aggressively expanding the money supply. This is followed by a surge in internal conflict - civil divisions and unrest that border on civil war. Generally, this is paired with the rise of a competing external power - although in most cases, it is not one solo power that rises, but a syndicate of smaller nations who are able to pause their ideological differences temporarily in order to challenge the existing world order.

It is worth noting that because the United States is a large country that controls a continent “from sea to shining sea,” we may assume that the next power will also be a large country. But this is not an attribute that Britain, Holland, Spain or Portugal share.

Predicting geopolitics is harder than we think. I usually find truth by following the money - but in the case of global power, the money follows commodities.

If the King looks weak, every Pawn will make a move.

The world is marching towards renewable energy technologies, batteries and electric vehicles. A critical ingredient to all of this development is nickel - a mineral that neither of the world's two largest economies (The US and China) produce much of. As a consequence, suppliers of nickel find themselves in a position of influence.

Indonesia is the world's largest supplier of nickel. Recognizing this opportunity, in 2022, President Jocko Widodo announced a ban on raw nickel exports, putting the entire world on notice.

It wasn’t necessarily a hostile move; he was playing his hand.

To add context, historically, Indonesia exported raw nickel that would be purchased and processed in other countries. President Widodo’s ban means that he is now processing within the country and selling the finished product (at a healthy premium) instead of shipping the raw material.

The significance? Indonesia's processed nickel revenue has grown by 30X.

But the exporters' gain comes at the importers' expense.

The EU, China, Japan, Russia, Saudi Arabia, and the US have all raised concerns with the World Trade Organization about Indonesia’s strategy.

Moves like this are being made by the producers of uranium, copper and cobalt all over the world.

President Widodo will need to walk a fine line between raising the wealth and influence of his country and avoiding a Banana Wars scenario.

“We have to dare to take these steps,” - Indonesian President Widodo.

There has never been a more important time to understand the world of commodities, and en masse, the world is waking up to this truth. In fact, over the last 18 months, I have been flooded with inquiries from new subscribers asking how they can begin to understand the world of commodity investing.

So, for the last three months, my team and I have been building a new project that will open the door to this new era - and teach investors how to cash in on the opportunity of a generation.

I call it The Commodity University.

The Commodity University is a ten-chapter video course that introduces the world of commodity investing, covering topics such as:

Commodity Fundamentals

History of Commodity Investing

Supply-Side Dynamics

Demand-Side Dynamics

Geopolitical Considerations

Deep Dives into Select Key Metals

Portfolio Construction

Risk Management

Real Investor Stories from myself and many others

Feedback thus far has been incredible:

“I would have killed for this course when I began investing ten years ago!” - Jonathan P.

“This is what I have been looking for! Amazing!” - Chris G.

“This is the intro course every new commodity investor should start with!’ - Salima S.