The Incoming Commodity Supercycle

Published on
November 4th, 2020
52 minutes

The Incoming Commodity Supercycle

The Interview ·
Featuring Tian Yang and Simon White

Published on: November 4th, 2020 • Duration: 52 minutes

In a peer-to-peer conversation, Tian Yang and Simon White of Variant Perception explore how inflationary pressures could serve as rocket fuel for commodities such as gold and silver, as well as unloved hydrocarbons such as oil, gas, and even coal. White and Yang envision a world of "fiscal dominance" where huge budget deficits invite inflation the likes of which the U.S. hasn’t seen since the 1970s. In this inflationary regime, White and Yang argue, hard commodities will be a source of massive returns. Their thesis is also shaped by their theories on capital scarcity, in which the less capital is deployed in a sector, the greater potential for return. Filmed on October 28, 2020. Key learnings: Tian Yang and Simon White argue the world is on the brink of a new inflationary regime, driven by "fiscal dominance" and swollen central bank balance sheets, in which hard assets such as gold, silver, oil, gas, and coal will finally have their heyday. You can read more on the commodity supercycle here:



  • NN
    Naresh N.
    13 November 2020 @ 21:47
    Where can I find the report that Simon White released? Thank you.
  • AT
    Aleem T.
    4 November 2020 @ 08:50
    would be good to get speakers who are negative on Gold, Bitcoin, Silver, Precious Metal & Base Metal Miners so we can hear the other side of the argument. Too much confirmation bias going on with RV speakers.
    • MO
      Master O.
      4 November 2020 @ 10:21
      Agreed on this one.
    • ES
      Edward S.
      4 November 2020 @ 11:46
      Yes I agree. It also would be great if Raoul et al would let us know what scenarios they think could potentially happen that would lead bitcoin, gold etc to perform badly and what they believe the probabilities of those scenarios are. Not is certain, which means there is always a case for gold, bitcoin to struggle. What would those scenarios be and how likely are they?
    • JL
      J L.
      4 November 2020 @ 12:44
      You already have it, actually. Raoul's Winter of Discontent / insolvency and deflation / resurgent USD and Treasury bonds scenario is pure kryptonite for all of those, with Bitcoin merely the strongest of the lot due to flows.
    • AR
      Alexander R.
      4 November 2020 @ 14:29
      The words of PTJ ( I am a trader not an investor) quoting him as a reason to buy bitcoin for the investment perpose is probably not a valued argument Bernard Baruch : also my yjis lines, if you want to know when deflation is gonna end take a trip around the world and then come back and see deflation is still did not go anywhere. The point is : easy money create overcapacity, and to take overcapacity down it takes time and lots time. We will get structural inflation only, when Fed will directly send money to people to spent, MMT professors will take over government and we will completely decouple from China. If inflation was sob real Fed will not be buying TIPS ??????? Bottom line : inflation is gonna come but it is not anywhere close to next 12-24mo where investors usually look fir returns Stick with GOLD it would work no matter inflation/ deflation with the exception of liquidity problems in the market, which is a gift, and you should buy more
    • AR
      Andres R.
      4 November 2020 @ 22:52
      Do we know any?
    • ac
      adam c.
      4 November 2020 @ 23:38
      I believe Raoul has said, Gold hates it when the economy is basically ticking along nicely with interest rates not to high or not too low. A bit like a smile either side you have deflation or inflation and gold goes up in the middle it goes down. So you basically need to find someone who can argue that the worlds economy is in a good condition or that it can some how move forward without feeling any of the strains created by public and private debt etc.
    • WT
      William T.
      13 November 2020 @ 02:50
      Yes, I totally agree, we need a devil's advocate interview. I know a rocket scientist who put up 500M in BTC. That works for me!
  • BB
    Ben B.
    6 November 2020 @ 00:46
    1900-2016 Gold discovered = 327,000t. Gold Mined in the same period 158,000t allow for 90% recovery factor = 175,000t of discovered gold mined. Thats around 150,000t still in the ground. 50,000t is in reserves. So we have around 100,000t that are stranded. Keep in mind this is for discoveries that are over 100,000Oz's of gold. Just about no-one in mining cares about that fact. Its a similar story for most mined commodities.
    • WT
      William T.
      13 November 2020 @ 02:25
  • WT
    William T.
    13 November 2020 @ 02:23
    Excellent piece. I like how the interviewer almost becomes the interviewee. Like getting a two-for-one. Very well done.
  • AR
    Anthony R.
    12 November 2020 @ 14:24
    Own Farmland. Gold with a dividend. Along with ag commodities, very rarely talked about here.
  • DS
    David S.
    5 November 2020 @ 01:01
    I find it interesting that Raoul just reminded viewers in his "Winter of Discontent" vid that commodities is a crowded long trade that is getting ready to breakdown while this interview, bullish on commodities, is featured right next to it here on RV.
    • PB
      Paolo B.
      5 November 2020 @ 03:49
      It is probably crowded now, as the inflationary theme, together with dollar bearishness, have gone mainstream and it is very possibile that they will take a decent share of pain in a deflationary shock now in Q4. Bearish short term, neutral mid term, bullish long term. That is how I view it.
    • GS
      Gerald S.
      6 November 2020 @ 00:10
      Commodities are at 20 year lows. Not sure how over crowded they can really be.
    • LS
      L S.
      8 November 2020 @ 15:24
      More doom and gloom "winter of discontent"
    • AN
      Arno N.
      12 November 2020 @ 13:15
      Would also argue the difference in time horizons. Yes commodities are crowded by fast money and prone to some kind of pullback but over the longer term this sector has sooo many things going for it. This recession also shows to be soo much different than previous ones: when did we see Caterpillar, Deere crawling back and making newer highs.. A big shift is on here IMO and a big downturn will probably trigger even more government intervention
  • TS
    Theodoros S.
    4 November 2020 @ 14:45
    Inflation will come but in 2023. So until then...
    • LS
      L S.
      8 November 2020 @ 15:25
      That's right.
  • TR
    Thomas R.
    6 November 2020 @ 16:29
    Very useful
  • TM
    The-First-James M.
    5 November 2020 @ 23:39
    Interesting. I can recall Jonathan Tepper putting his boot into Bitcoin and the Crypto bubble in 2017, so interesting to see his research shop changing its opinion now. For me, it's yet another sign the asset class is growing up.
  • MR
    Michael R.
    5 November 2020 @ 01:32
    Bitcoin is a commodity. So, we're good.
  • JT
    John T.
    4 November 2020 @ 23:09
    How can you talk about US inflation in the 1970's without mentioning the Vietnam War? The war machine uses a lot of metals, oil, etc while disrupting supply chains and paying people for work that is not resource producing.
    • RS
      Roger S.
      4 November 2020 @ 23:36
      Not to mention the cost of Johnson's great society at the same time as the war. The mantra was we can have both guns and butter without raising taxes to pay for it. I was getting 10-15% annual raises in the 70's and actually just holding even with inflation.
  • JV
    J V.
    4 November 2020 @ 19:47
    Please include a link to the report Simon mentions and indicates will be made available to RV subscribers. thanks
  • TZ
    Tibor Z.
    4 November 2020 @ 19:25
    How do we know which content is sponsored on RV?
  • PJ
    Peter J.
    4 November 2020 @ 10:10
    A very thorough and professional review making a well worthwhile watch. I did think it skirted around the timeline. We are still in the deflationary shock from Covid and the residual structural deflationary elements. The Fiscal expansion has not really taken off in earnest yet. So it would have been even more interesting to get some scenarios of different timelines as to when they think the Fiscal could potentially override these and lead to the inflation they believe is coming.
  • AI
    Andras I.
    4 November 2020 @ 09:14
    The charts and another interview available on MacroVoices (after reg):