Macro Outlook: The guests see the Iran-driven supply shock as inflationary, with oil potentially reaching $150, implying higher rates, volatility, and margin pressure across assets.
Energy Trades: They favor oil exposure via longer-dated WTI strip ETFs and may rotate into global producers and refiners, citing strong crack spreads and exceptional shareholder yields.
Debasement Pause: The gold miners trade is viewed as a temporary respite; once the conflict eases, they plan to redeploy into miners given margins and secular dollar weakness.
Defense Spending: Modern warfare’s shift to cheap missiles and drones supports sustained global increases in defense outlays, benefiting the Aerospace & Defense ecosystem and unmanned systems.
US–China Dynamics: A pragmatic detente is likely, with China aiding oil markets and both sides pushing for supply-chain independence while cooperating where necessary.
Electric Stack: Structural demand from EVs, solar, drones, and robotics underpins the “electric stack,” where China leads in manufacturing, automation, and embodied AI.
Nuclear Power: A global nuclear renaissance is expected; the US has bipartisan support, AP-1000/SMR momentum, and regulatory streamlining, though China remains ahead on cost and build speed.
Metals Positioning: Bullish views on nickel, aluminum, and copper reflect electric-stack demand and tight supply after years of underinvestment and emerging supply discipline.
Transcript
JD, thank you for flying the flag bright and early for us with this wonderful interview. Jumping on a call, speaking with Zach and Chase from Ballworker Capital, mate, I'm um I'm delighted to give this one a listen myself. I'm I'm I'm really interested in the uh the insights you managed to tease out of them, but it's not the only time you've been flying the flag for the both of us. In fact, [music] uh you don't know I'm going to say this, but Monday morning, we get into the office and you're like, "Mate, you would you wouldn't believe it. on the weekend. Two two pe two separate people came up to me and said, "Are you are you JD?" [laughter] >> This This did happen, didn't it? True story. >> It did. It did. At the pub in Freo. >> And let me guess, they didn't say, "Are you JD from Money Mind?" They said, "Are you JD from the director special?" [laughter] >> That's exactly what they said, mate. >> Which is my way of plugging our flagship daily email, the director special. 20,000 uh investment professionals, mining executives, people people who care about the industry, the stocks, the market dynamics, the politics of mining. Well, they get their daily update by going to moneym.com, putting their email in, and signing up to the director special. >> Threeminute read, all you need to know about mining. And you mentioned before, mate, we're speaking with Chase and Zach. Very excited to to share this one. [music] So, Chase, big macro thinker. Pineco macro is his bread and butter. and he later joined Zach at Bwork Capital. So, I don't think we need to say too much more. We'll talk about all the big issues today as well as the medals [music] we love and follow closely. But before we jump in, quick shout out to Exceed Capital, flying the flag for commercial property all up the eastern seabboard and in Adelaide as well. They're coming to Perth soon. These are the experts in unlisted commercial property. If you are sick and tired of the volatility that we speak about for the next hour in the market, you can park some of your money in the great Australian dream property. commercial property. Uh, I love volatility, but you know, some parts of my portfolio I just don't want it to be as crazy all the time. Commercial property makes lots of sense. Go Exceed Capital. Looking forward to tuning into this interview. >> Go Exceed. >> All righty, guys. Chase Taylor, Zack Abraham, thank you so much for for joining us here. I am very excited to talk about everything that's happening across the world, macro, micro, metals. I know you guys have jumped into quite a bit in the past. I think um a natural kind of starting point for the conversation and maybe I'll get you to jump in on this one, Chase, is Iran and how you kind of see the uh see the macro setup in the world pre and post I guess Feb Feb 28 when things kicked off and and how that's kind of dramatically changed what we are experiencing at a kind of macro level. I would say for macro the big thing is obviously just going to be inflation like oil prices up, chemical prices up, food prices up and those three food those three prices up kind of equal all prices up over time. So going to be in a higher rate environment uh going to be a higher volatility environment for a lot of assets um along the way and and this is with you know oil at 90 bucks which is in my opinion mispriced by at least $30 more. So, by the time we get through the summer, you're probably pushing 150ish, especially if this doesn't get uh better soon. And, you know, as we record here, it's getting worse at the moment. So, probably not getting better super quick. Um, so the biggest thing macro wise is is is that simple. Just it's going to be inflationary until it's over. Probably going to be inflationary for a few months after it's over, until energy markets kind of get back to normal. Um, and then even kind of bigger picture than that, a lot of geopolitical stuff is is changing. Um the the security picture for the world is just different than it was before this. It it a lot of this stuff was obvious but it sometimes you have to really put something in someone's face for them to get it. I think that's where we're at with just warfare. It's not even just US Iran. It's just warfare. If you watch Russia Ukraine really closely if you go back to the Armenia Azerbaijan conflict like just the role of drones the increasing role of FPV drones. Um, and not not to mention just cheap missiles. I mean, I don't know, you could see yesterday the Flamingo cruise missile that uh Ukraine launched into an important site in in Russia. Like, so cheap missiles, cheap drones kind of changing warfare. It's it's very asymmetric thing. So, I think the the world seeing that we can't really defend the Gulf from Iran because they have some missiles and drones that are cheap makes it clear like well, a lot of things can't get defended from a lot of different angles. So call it Korea, Japan versus China. Kind of the the big one that sticks out. So I think the defense side of this is a big deal too. The whole world is going to have to spend more on defense. Um and a lot of that's going to be around, you know, unmanned systems moving forward, which changes a lot. You know, a lot of the architecture of the way the whole global economy has worked for the last 70 years uh ends up changing because the way a lot the global security picture for the last 70 years works is changing. So it it seems like a little conflict stuck in the Middle East, but it does have a lot of ramifications for global macro and and kind of global defense policy and and obviously the investing around all that. >> So So you've got 16 17 years military experiences as I kind of understand it. Has this surprised you? >> Uh unfortunately not not really. I I did intelligence for uh like 12 of that 17 years something like that. Well, really more than that because even when I was doing acquisitions, I was I was doing a lot of that in the intelligence space and I spent a good good bit of time working on on Iran. I spent a good bit of time working with drones. Um I mean I worked with a small, you know, 75lb drone that we caught in a net. Um you launched on a little rail. So it being being kind of having a front seat to what this was going to look like, you know, a decade ago. Not not that surprising. I I kept trying to warn everyone I knew when it looked like this was going to happen like hey Iran's missiles are very very underrated like just because they haven't used them to hit something real like we're we're taking it easy and thinking like they're not going to do anything. If you go back to the last summer whenever there was a bit of a, you know, a joint strike for 12 days, 12 12-day war against Iran, they they did launch missiles back, but they they kind of went out of their way to not actually hit stuff, but they also were hitting like roads, you know, a couple blocks away from Assad headquarters and things like that. They were they were demonstrating like, hey, like if you if you guys keep doing this, like we can actually hit stuff. So whenever I knew we were going for the regime like for total regime change and the decapitation strikes and stuff, I mean obviously in that case you're not going to go bomb the road this time. You're going to bomb some real stuff. And I think this all came to a head whenever they bombed the uh the Qatari LNG facility and took off, you know, about a fifth of their capacity. That that was the moment that to me the whole war changed, the complexion of the war changed. Um so unfortunately g given my uh background doing a lot of work on on Iran I knew like hey their air force doesn't matter their conventional navy doesn't matter but what does matter is there there's their drones the straight of hormuz their missiles that that kind of stuff so I wish I could say that a lot of this surprised me but unfortunately it doesn't. If we if we look at how you guys have have thought about markets over the past three months and maybe Zach I'll get you to to to kind of jump in themes like the the debasement trade they sort of burst to life halfway through last year I'd say and you know a lot of people had been kind of paying attention the the US debt cycle for for a while before that but has this materially shifted any of your thinking on on that front or is it kind of steady and constant when you when you think about all those bigger picture movements at >> [clears throat] >> Well, I think that um you know, anytime you have a macro event like this going on, one of the things we've been saying, you know, on our own show is that regardless of what we attempt to discuss, we always end up back at the straight, right? And and the reason we do is because when you have an event like this going on that has the global implications that's that it has it it sort of trumps out pardon the pun it sort of trumps out any any anything else right um you know I mean I mean you look at the impact it's going to have on profit margins look at the impact it's going to have on consumer spending and CPI and rates and all the different things that we know about. So it it certainly takes center stage, but but I do think that that is a respit in that trade. Meaning once the once this macro issue, you know, works through the system, um you're going to be right back because because none of this changes any of that. If anything, I think it has the potential to exacerbate that issue. I mean, wars aren't cheap. The longer it goes, right, the worse it gets on that end of it. The other thing that it does is it's not doing any favors. You know, you probably have a lot of listeners outside the US and this is going to be one of those moments where they're like, "Yeah, really guy, you just figured that out." But, you know, I don't think it's doing any favors for us politically around the world. I certainly don't think it's engendering any um favor [laughter] around the world. That's my sus, you know, that would be my immediate thought. So, um yeah. So when this when this is over, I think you're going to, you know, for instance, we were big in gold miners last year. Um, we still have a decentsized position in them. Certainly bigger than most. Um, but we're hedged. Uh, we've been hedged on that position for a while, thank goodness. Um, and we took a lot of profits on the way up because, you know, I' I've been involved in metals markets. That's kind of the my origin story, honestly. Um, grew up on my gold mining operations. And so, you know, you always know in these metal bull markets, you get, you know, big moves up and you get consolidation patterns that typically, you know, if we're talking about the average gold miner and Chase and I were discussing it today, if you're in a gold, if you're in a metals bull market, I'm always expecting pullbacks in the underlying equities to be, you know, between 30 to 40%. They they they can hit you in the gut. Um, and and that's what's happening right now. I think this one is going to be a little bit more pernitious because of the issue currently going on, right? Like if we if our projections on oil are right, the dollar is going higher. Um when you have situations like this where governments are, you know, struggling to source fuels, source distillates, source oil, obviously, you know, them buying gold to to neutralize their dollar risk is falls down the list of priorities. So it doesn't doesn't surprise me at all that you've seen a bid come out of metals markets. But as soon as this issue is over, I think, you know, you look at what's going on with interest rates in the United States. You know, I mean, let's, you know, you do some really nasty calculations on the difference between our deficits if a 10-year is at, you know, 43 versus 5%, right? I mean, all that stuff just makes that picture worse. As a matter of fact, you know, one of the things that people have been celebrating here recently was the fact that deficits as a percentage of GDP finally slipped back below six, right? They're down in the fives. I think I will be shocked if we get through this through the next six months, especially the next 12 months and we don't have deficits again back over six% of GDP. So I think it's just a rest bit in the debasement trade and all of those things. And I think as soon as this is over and the the you know the critical nature of where we're at um in this current situation subsides then um you know I think the basement trades right back on. I think the dollar is going to resume its its secular bare trend. I that's what we believe that we've entered. I don't I think a lot of the talk of like, you know, hyperinflation and dollar collapse is way overcooked. But I mean, it very much looks like this strong dollar era um has has has passed. So yeah, I would expect a debasement trade. I think it's taken a break. I don't think it's going to not take a break until this is over though. I think you know for instance I mean one obviously we got to wait to see the way it looks and you know reserve the right to change your opinion but I mean you know I I know that when I've got a high level of confidence that this issue has resolved. Um from where I sit today I think one of the things I'll probably be buying the hardest will be metals miners again. Um because I I I love what we're seeing here right now as a bull and I think that this bull market metals and metals miners has a long way to go. I I I I think and I hope um and so when I see the way that these miners are getting pounded um it it it's looking it's it's looking really appetizing because I I think that um you know I understand why they're getting hit. I just think they're getting hit in a level and and this is what we thought would happen, but I think they're getting hit in a level that is really outside of fundamentals. Meaning, um, you know, when you look at the margins these things are throwing off, right? Like oil going up isn't helpful to their bottom line, but when you look at their what they're spending on oil and diesel and then you balance that against, you know, revenues and profits and all that kind of stuff. Okay, so oil so gold pulls back 15 or 20% and o oil goes up 30. It it really isn't changing the underlying fundamental picture on these things. >> So >> yeah, so I so I think it's just a respit and and quite honestly um we were just talking about it yesterday. It freaks me out to even say it because I don't want to jinx myself, but one of the things that we or we're talking about it today actually, but uh one of the things that we've done, we've hedged those we've hedged those gold positions. Um, we are very much planning on pulling the profits out of those hedges and redistributing across our favorite gold players because I I I do not think that that thing is close to being over. And um, like I said, I think as soon as this as soon as we get some resolution or at least know we're on the path to resolution in this current situation, I would expect that that debasement trade and all the parts of it to come roaring back. >> The volatility has been been quite something to behold. And yeah, I mean to to the exact point you were making, these things started to look a bit expensive for a moment there and Jan early early Feb and you're thinking, "Oh, can I can I still buy them?" And the the animal spirits were were fighting within all of us to to round out on the the the bigger picture and you know, the the Trump piece. He made the comment last week that um yeah, I hope we can have this resolved maybe by September or something like that. and and that kind of that wording stuck out like a sore thumb. Chase, do you do you take that as a base case now that that we are still battling through this thing till September? >> I'm not sure. I I there was a point where I kind of had a base case on timing and I I just really don't anymore. Um, and the the biggest reason I've dropped that was trying to do all the barrel counting math was really important to try and figure out where like where it gets bad, where you have to go to like a really high price to where it's going to have a kind of a lasting macro impact. But for me, like we already got we've already made that spot because I think it takes months and months if not over a year to get back to normal once the straight is open. And let's say like for real open, not like not like throttled, you know, 30 to 50% open, but like no kidding, nobody cares who comes through anymore. Even at that, you have to clear out a bunch of inventory before you kind of restart the production that's got shut in. Um, you're talking months to to even get back to normal. and between here and there, you're going to be at levels of oil inventories as if if you just kind of think about it as days of demand cover that we've really just never seen. Um, again, even if we had open it right now. So, and that we'll have record low SPR coverage, all that kind of stuff by the end of this. So, from that perspective, yeah, I just don't see it. And and as far as what actually ends this on that, the base case is we do take a deal. the deal is not great for the US. Um, but as Zach and I have discussed a bunch, you know, like we we just think that is requires a lot of pressure from things like oil bond yields, you know, maybe stocks falling for the for the US to basically take the uh very unfunded and unpopular deal that is required to probably get out of this unless they can change the calculus in a real way uh militarily. And as of now, that that that's difficult to for me to imagine. And and I think if that was the case, we wouldn't have had a, you know, like a two-mon ceasefire. But, um, unless I see really big signals that the the battlefield picture is changing, I think this ends whenever oil oil gets expensive enough and bond yields go flying higher enough for the US to say, "All right, uncle, we're out." Like, you know, here's your bag of money. Uh, keep your missiles. Thank you for, you know, not not doing your uranium enrichment for a while, and we're just going to call it a day. You you made I had to guess when and I I would say July. Sorry. >> Yeah. Yeah. I mean, you made the comment earlier that oil was trading 30 bucks below perhaps where it should. How does that play into the the actual energy exposures you guys have in in the market? >> So, so this is hard for especially for us like it's funny because so the the biggest thing we're doing is is an oil ETF. First of all, we try to avoid K1s because in in the US, the K1 stuff like is is brutal for for paperwork and taxes and stuff. And there is a there's a wonderful ETF that kind of has the the one-year strip in it, but it's WTI. And I at some point, we're going to get to a point, I think, where product exports get choked down in the US, and then it's just going to get that much worse for the rest of the world. So, at that point, burnt WTI spread can probably widen out a good bit. Um, so at some point we're probably going to try and navigate that. We had producers for a while. Lately we've been really focused on that that oil ETF. I mean, and and that's been nice because the roll yield is is so positive as you go from the front month out to the rest of the curve out the year. Like like as we record here, like December 27 is actually at a new high. December 26 is very close while front month is like 20 bucks, you know, from the highs. Um, so having that stuff out on the back of the curve has been a has been honestly a game changer. Whereas like your average person, you know, focus on the front month a has way more volatility and b doesn't have the gains lately. Um, we may have to go back to producers and and some of like the global producers that can sell into to Brent pricing. Um, and some of that stuff has a shareholder yield that you know makes your eyes water. So it's not like it's a bad place to be. I would like to see it get beat up a little bit more before we have to do that. But so I think it'll be a mix. I think it'll be a mix of some producers um of that oil ETF we've we've been running with for a while. We do have a one um refiner and you know crack spreads are insane. So they're they're printing money and like many energy plays like they have the crazy free cash flow yield. They have no idea what to do with it. So they're just going to give us a dividend and buy back stock. So the shareholder yield is going to be amazing on all this stuff. So but it's it's a little imperfect for us. I I would say to at some point do a pivot from from over to Brent from WTI, but we're gonna have to in some way start grappling with that. Uh and and I think I think when gasoline prices on a retail level nationally in America hit about five, it becomes a political nightmare and that's when I would expect us to start throttling those product exports. >> I mean, where are they kind of at right now? It's hard for us to tell here in Australia because I understand that that is going to play a massive role in in the midterms as well and how that's you know how the politics of all that plays out in in the next few months is a is a pretty big deal for you guys. >> Yeah. Well, so uh funny enough, all of those things um led [clears throat] me to get this. So, the start of this conflict, Chase got 100% right and I got 100% wrong because of the dynamics that we saw heading into this um knowing how much time and focus Iran had put on the straight. Um the I remember the day that they pulled the the they brought the Ronald Reagan, the USS Ronald Reagan into the Gulf, uh Chase I think I walked into Chase's office and he's like, "Hey, we're going in. We're going into Iran." And I looked at him, I was like, "No, we're not, man. There's no way Trump's gonna There's no way Trump's going to do this. He He's not that dumb. He's He's not going to do this. So, what was it? 48 hours later, we started dropping bomb. And And uh and quite honestly, that's that's why I hired Chase. Um I I subscribed to his um research for probably what was that probably three years. Three or four years. And then uh >> sounds right. >> People are like, "Yeah, people are like does he do good research?" And I was like, "Well, I don't know. I unsubscribed from his research and hired him full-time." So that tells you what I think of him, [laughter] right? So he so he was he was right on that. But but the whole time um I just didn't think that he would do this because of all those things that you mentioned. And and not to mention that one of the tenants of his campaign was, you know, not getting involved in foreign wars or foreign conflicts. Um and so I was com I I just from the very beginning we looked at this as an all cost no benefit type exercise. um and one that could have really bad ramifications not just for us but for the rest of the world. And so I just didn't think we'd go in. Um and here we are. And um it it kind of I I think it was just a again I it's just a really hard it's a really hard call to understand. Um, I think what we said at the very beginning of this is that Trump is effectively biting a p a porcupine and there once we get in, it's going to be really hard to get out and we don't see how we have any advantage. You know, every's like, well, we can beat anybody militarily. And it's like, okay, well, are you prepared to put a million boots on the ground in Iran? And everybody's like, no. And we go, okay, well then then, you know, I'm not willing for us to put a million boots on the ground in Iran either. But if you're not willing to do that, then what what are we doing? Wasting our time, you know, dropping sordies and all that kind of stuff. You know, how how many regime changes have been engendered by bombing campaigns? None, right? Like didn't work on Berlin, right? We had to Russians had to roll into Berlin. So, I mean, it it just always seemed like a big waste of time. And that's why I didn't think we'd get involved. And then, you know, here we are. and and you know I don't want to I don't want to steal your platform for you but one of the things I've been interested in is what is your perspective on it like being from Australia is is the rest of the world looking at us and going what did you guys do or are they sympathetic I and I really don't know that question so I'd love to hear what you said. >> Yeah. Yeah. [laughter] The answer may not be what you what you want to hear, but I kind of think most people just think about themselves and their own and their family and and so on. And and petrol prices at the at the bowser here doubled like that's that's what you think about inflation in the shops, all of that. you you feel that sort of stuff and that like it has been navigated reasonably well, but we're we're still kind of in the in the early innings and and we're certainly not through it. So, there's there's still a lot of moving parts to to how this all kind of plays out. But I think to the comment you made earlier, Zach, it it's not endearing the US to to anyone else. And it just feels it feels rather pointless. You could kind of see the the outcome before it before it all happens. So that's the >> well and and and and you know we're look the things that have already happened to people around the world haven't made it comfortable but I don't think that we're actually seeing the real results of this. I think that it is guaranteed to get worse before it gets better as far as inflation and cost spirals and all that kind of stuff goes. And then the other side of it is you're bringing in the pot, and I don't want to overstate this because, you know, I don't want to be hyperbolic. That's not helpful to anything, but the bottom line is you're opening the door to potential humanitarian crisis, too. And the, you know, at some point the bill for all this is going to come due. And I think the whole world is justified in saying, "Okay, here's the bill. What did it get us? What what is the point of this?" Right? And from where we sit today, I think the net result is is we're going to leave Iran in a better, more powerful position than they've been in since the revolution 47 years ago. And right, we went in there with Israel and they bloodied our nose. I don't think anybody else is going to be too interested in going there and messing with them. So, so you know, in a way, I think that they've established their sovereignty, at least as it relates to their own borders, in a way that they probably never could have done on their own, right? They've showed the world that they can be a massive thorn in the in the side of of the global economy. And so all of this is to keep a nuke out of their hands. And I'm sitting there going, I don't think they need a nuke anymore. I think they've got one. And this nuke, once fully operational, will pay them a $500 million daily dividend via tolls through the straight. So I I just think I I I hope I'm wrong. I really hope this turns out well for the United States. It's hard to see it now. But from what we're looking at today, it's really hard not to sit there and go, I think this might go down in the Hall of Fame as one of the dumbest foreign ventures that the United States has ever gone on, right? And and I don't want to say the worst because, you know, I I think our involvement in Vietnam was far more destructive in terms of human life and things like that. And I think we've had work. But in terms of like if you look at the Vietnam situation as kind of a a comp that was a much like horrible conflict that we never should have been involved in, but you can understand why, right? Like you we had a we had a treaty with South Vietnam. You know what I mean? There were there were thing we were worried about the spread of communism. You can at least understand that. I I think one of the things that I'm afraid about this issue is that when it's all said and done, when the costs have been fully realized, I think a natural question everybody's going to ask is for what and and I don't think that there's an answer there. >> Just quickly, Trev, we spend a lot of time talking about the miners out there, but we need to flip the script. We need to look at the steel producers and the other buyers of metal and how they are changing how they source raw materials. >> They they've I mean, it makes a hell of a lot of sense for them to do it. Think of think of someone like autocompu right I mean does it really make sense for them to be procuring their raw materials by you know fiddling through long email chains or or using legacy non-industry specific software it just doesn't they they are migrating to metals and it makes perfect sense why >> it does make sense they're not the only ones RHI mag another group they've done over 400 million euros in procurement value on the platform 2x ROI 2% savings across the chain there is serious money being saved and time being saved by using MetalsHub. >> What a compoo, mate. Over a thousand different transactions across 50 different raw materials on Metals Hub already. I bet you know there were that many raw materials, mate. I actually want to buy like a little cube of every single raw material. I think I'm going to go to MetalsHub to to do it. >> You can do it on MetalsHub. >> You can focus more on your strategy on running the actual business as opposed to just doing admin by getting on MetalsHub. So check out metalshub.com/moneyofmind to find out more. >> Source smarter. when we like if we change tech a little bit to talk a bit about the US China relationship. So that has been the the defining feature of of macro markets for a long time and commodity markets what we focus on here and what we talk about and we we saw it from from rare earths and all these sorts of other niche and critical minerals playing through but maybe just to to start with a a kind of couple comments on how that relationship you see might have changed. So, we had the meeting between Gi and Trump a month or so ago, and there seemed to be a somewhat different tone to to the confrontational tone that we saw saw last year. Do you have any big thoughts on on that, Chase or or Zack? >> Well, I I'll go first and I'll kick it at Chase. um what I think what I think looks like uh to me that's happened and and I'm spitballing here so take it for what it's worth but um I I [clears throat] I to me it's very clear that you know I think that I think the Trump administration job owning has a lot to do with why oil is where it's at uh if not the vast majority to do why oil is where it's at. But on the physical side, China sitting out the market and not buying is the biggest impact I think on the on the flow of oil side, on the shortage side, and on and the fact that they came in here with record a record SPR build um and all that kind of stuff. What I think though, and we did an episode a few days back where it was called the quiet deal. I I think that there was a deal struck. There was a taunt between us and China where I think that we went to them and said, "Look, if you'll help us out here, hit hit your SPR aggressively." more most importantly, sit out the market and don't buy here. We will pull missile systems out of Southeast Asia and deploy them to the Middle East. Um, and then like I said, I think not not many people talked about it, but when Trump came back from his trip from China, he went out of his way to reference how far away Taiwan was and how we're not, you know, just alluding to the fact that we're not interested. So, I I think that there was a deal cut. Um, and the reason I think there was a deal cut is because China jumping in the way they have and staying rel relatively non-critical toward what we're doing here in the US, that's very unlike them. Um, usually they're quite loud and viferous when they think that we're doing something that they don't like or that doesn't benefit them or that they don't think benefits the world or whatever. So I think they've been abnormally quiet and looking at them what I would have expected them to do and quite honestly had I been in their position this is how I would have handled it before I stepped in with my SPR and helping everybody else out. I would have let America drive oil prices to 1301 150 tick everybody off and then ride in there on my white horse and gender right get more countries coming to me for help as opposed to the US and that's the way they've played everything like this in the past. This is a departure from that. And I don't think that that happened just off of their own goodwill. I I don't think I think they're got they got to be getting something. And I think that there was a wink wink nod nod to taunt where it said, "Hey, we will pull more missile systems out of here. We will be less of a threat. We will soften our rhetoric toward Taiwan if you'll help us out." And and I and I think that's what's happened. >> Yeah. For for me, I I think we we have a pretty durable day at this point. And I think I think there's some parallels to to the the war in Iran right now. I think going back to that when Iran hit the LG facility that that was the moment I think it became clear they had escalation dominance like they had obviously the willingness and the capability to reach out and touch very important infrastructure for the whole world not just for like them or us or the the the region but like everyone on the planet. Um, and I think similarly, you know, if you go back to the the early days of the trade war in 2025, like I mean, we went we went mad max with like over 100% tariffs on China. Like, you could tell we were trying to bully them into backing down in some meaningful ways. And instead, they, you know, they escalated on us in a way that was more painful for us than 100% tariffs were on them. like you I'll never forget you had a very important meeting at the White House with uh the executives from Target, Walmart, and Home Depot. Right after that, policy changed dramatically. So I and we had literally we had production lines like halting for automotive production because we weren't getting you know magnet supply, rare supply. So I think it was a moment where we realized like oh our industrial economy literally depends on imports from China. There's nothing we can do about that. you you would talk about a frozen economy for years before you had that capacity. So once that once that becomes clear to you like you realize like oh we have to play ball with these people like there's nothing else we're going to do and whenever that becomes that clear then you know you obviously that has the makings for a a really significant day taunt between the two sides and to be clear like the two sides need each other immensely like it the two countries in a lot of ways fit each other like puzzle pieces I mean one is a massive producer one's a massive consumer um it just it just makes sense that it would work that way. You know, one is in one hemisphere, one is in another. It just so I think it makes way more sense for the two countries to kind of do what they've been doing lately. Like, yeah, we're still competing. You know, we still uh push back on each other in important arenas, but at the same time, like, we have to get along in in a meaningful ways and in the areas where we don't have to compete. Like, we really have to find common ground. So, I I think from here, you're going to see more of that. They're going to try to get away from the stuff they depend on us for, like oil. And that's why they've, you know, went really intensely with the electric stack, whether it's, you know, EVs or or solar power and all that kind of stuff. And that, you know, we're going to try to do the same by trying to have our own supply chains we can depend on for critical minerals and stuff. So, I think both sides would try to be more independent as we go, but it it's very difficult for me to imagine either side being independent enough to like really ruin this day anytime soon. >> Chase, you you had a fantastic podcast with with Demetri Cafus um about six odd months ago, I think, and you mentioning the the electric stack there sparked it in in in my mind again. Has your has your thinking changed at all since when you spoke with him late last year on on how that's playing out and how the US is responding? >> Yeah, it's funny you mentioned that because if you think about it, if anything, it's just gotten way more important because a huge part of the the electric stack is is drones. Like, and drones are again making themselves self-apparently critical for for defense, you know, for the next century. And but at the same time like solar power is and EVs are making themselves that much more intensely important as people have you know shortages of of gasoline and and and diesel. Like so if anything it's just that much more important and it it's still alarming to me how far you know most of the west not just the US most of the west is behind China on those supply chains and and the manufacturing side of EVs you know whether it's drones EVs really it's it's the stuff that you build out of them though the the electric motors the magnets the the rarers like you talked about but but even even some of the basics you know like aluminum smelting and stuff that is radically important for all these things. I would say the US is still good at chemical production but a lot of the west has given up on it like a lot of Europe has just kind of handed it over to China like and making plastics for EVs shockingly important obviously the same and then another huge part of the electric stack that is not getting near enough play right now but is is robotics like whether it's humanoids or otherwise like embodied AI is going to be probably more important than you know nerd on computer AI I think and China's all about that like we've 've all seen the videos of the dark factories and all that kind of stuff like their ports are just completely automated almost robots doing everything that is such a massive competitive edge over the way we're doing things in the west. So yeah, to to me it almost every day, almost every headline I read, the the electric stack gets more important to me and and and I think it's interesting if you look at the investment side of the electric stack in 2026, like it whether it's solar or uh you know different parts of that supply chain, it's actually been some of these electrification ETFs and stuff have had really good runs. Um, while a lot of commodities have have struggled, uh, I think that it's becoming more clear and more acute to to people every day that electric stack is here to stay and you you better be competitive in it or you're going to get left behind in in the next century. >> That that word competitive kind of shines through and it's not not something we've been awfully competent at in in the West for for some time now. You also mentioned there so smelting refinering aluminum aluminium and I think it's kind of goes across the board you know copper zinc any any kind of metal and we see it here in Australia just yesterday another headline that the bailouts from the government are going to continue some of these smelters losing tens of millions of dollars each each month but we need to maintain that kind of competitiveness. My question here is do do you see an actual investment thesis out the at the back of this because a lot of these companies here are are private businesses. There's no there's no kind of angle but there is there is there something in that for investors that you see? >> Yes. But it is tough like because I think there are ways to get more competitive and then there are ways to to look like you're getting more competitive and I think so far most western governments have gone the here's a way to look more competitive that isn't actually more competitive. So whether it's a tariff wall that probably isn't going to help that much or you know just some blind subsidies of just throwing cash at something like or you know in the US we've done some like oh well the government now owns x% of company Y and it's like does that really fix it you know to because to me so it's funny with with China because everyone sees China what they're doing now with all these electric stack things and other things like they're so competitive and people are like oh yeah well that's because they're they they have industrial policy they do that and they've been doing that for like a decade you know made in China 2025 and it's like no no no no you got to go back like 40 years actually really since the cultural revolution ended and it's been like step by step for 40 years um and they had some massive education reforms about 30 years ago that I think is what really unlocked most of this stuff so to me what the west has to start with is is those education reforms what I what I refer to as making serious taking serious education seriously and you know it's like do we treat an engineering degree or you know the same as we treat the a philosophy degree or or you know something like that and maybe we shouldn't like I don't know may maybe you have to pay for basket weaving but you don't have to pay for uh you know being a mining engineer or something and just spitballing here but like that's kind of way China approached it was like hey look if you want to take these serious programs we will pay way more you'll get room and board and if you want to go do this remote job mining or whatever we know that sucks. So, here's a bag of money to go do that because we know that's the only way anyone's going to do these kind of, you know, projects or whatever. So, as just one example, like if you want to make it durable, it has to come from things like like education. The amount of like STEM graduates they have um it's just crazy. And and like there are single universities in China that have more mining engineering grads than the US has like across every school we have. So, and then they have like, you know, they'll have like 12 programs just about like rare earth mining or something and we're like, what's a rare earth mine? You know, so I to me it starts there. So, from the investment side, until I see like more serious policy, it's hard for me to get pumped about it. Now, yeah, tariff walls help some domestic companies a little bit along the way, but it's it's not the same as becoming competitive. Um, in fact, I would argue it's quite the opposite of becoming competitive. walling off yourself from competition is just going to make you less competitive because you literally don't have to compete. So, uh, >> go ahead. >> And, you know, if I can jump in here and piggyback off what he said, too. I I think and and I am not one of these guys. [clears throat] It was all um you know there was a whole contingent of investors that you know for a good 10 to 15 year stretch like it it seemed as though that there was no economic future for anybody outside of China. They were massive China cheerleaders. I'm I'm not one of those guys. So when I say this it's not coming from that perspective at all. But I think the other thing you've got to look at China I couldn't agree with with I couldn't agree more with what Jay said about education. The other thing that they're doing in a time where the West is beginning to economically pivot away from competitive and competitive marketplaces and free market ideals, China's embraced them in a way that has surprised even me. And if you look at their automobile industry, I think it's a perfect example of that. And you go look at, you know, it [clears throat] it was five, six years ago when guys like me were sitting there saying, "China can't innovate, right? They can just massproduce things." Then I'm watching videos of them having a car going 80 miles an hour down the road and jumping over potholes in an automated way. >> The latest Bay, unbelievable. >> Oh, unbelievable. And at the cost they're cranking that stuff out. And then you go look at what they did. So, you know, here in the United States, we're we're we're beginning and embracing so many of these socialist tendencies in an effort to improve the economy. And you're looking at them going, "Hey guys, you might want to pay attention to what the communists are doing, right? They're they're going the other way." And look, I'm not trying to sit there and say that China is becoming an economic bastion of freedom and economic mobility, but what I'm saying is they're smart enough to take a pragmatic approach. And one of the things that scares me is that that's happening at the exact same time. The West pivoting in the opposite direction. And you know, we're having this conversation from you from the belly of the beast. Washington State could not be a better example of that. Um, and the practices that we're putting in and they're anti-competitive and we're acting as if that's going to Now, there's a lot of societal and cultural reasons for that and I I don't blame all of the people that have those ideas because I understand the angst and and what's motivating them to have those ideas. But um you know you look at the push back against data centers here in the United States and I don't think data centers are the answer and I don't think data centers are what we should be putting as much uh emphasis on in the AI search. But you know you got places that a big a big popular move trying to outlaw data centers effectively trying to outlaw the progression of AI. And you're looking at people going, "Guys, that's not the answer, right? We need to be more competitive, not less. And if we don't, um, it's, you know, Chase brought up ports, you know, go. It's there's so many different things that if you looked at America and China and you and you didn't have the background information and you were to tell somebody, look, one of these is a free market capitalist economy and one is more of a socialist communist one." There's a now not everything right I'm not saying it applies but there's many different parts of our economies if you comped them and you put somebody up there that didn't have any working knowledge or understanding would be like oh yeah that's that's clearly the more competitive you know free market type economy where you know you'd look at the ports we've got robots unload loading ships over here and I love long shoreman I'm not no knockox against them but you're looking at unions and pensions and you know they can only work so many hours a day and all the rules that come with it and nobody would sit there and look at our setup and think it was a feature of a of a free market system. They'd look at China's and they'd be like that's all about efficiency and non-friction of movement and all these things that that's the free market system. So, um it's a really interesting pivot point here for the West at large. Are we going to, you know, are we going to go back into the trash bin of history and try to pull completely defunct ideas to fix current issues, or are we going to embrace the things that made our economies vibrant and dynamic that the communists are currently embracing themselves and seeing the dividends from it? And so, um, you know, it's a that's a it's a political issue. It's a cultural issue. Um, but you know, we've got we've got some really hard questions to answer here in the West. And um, right now I'm not too heartened by a lot of the decisions I see being made and and the directions that we're going. >> I had to I had to get a flavor for for what the communists were doing. So over the Christmas break, I went up to China for the first time just to just to get a feel for it. And it was it was jaw-dropping like the the highspeed rail, the the I mean there was so many different facets of how the city just operated and worked, the the metro systems, the cars, >> and to your point of, you know, it not being a perfect comparison. The security was insane. Like there's a lot of things I wouldn't want to swap that we have here. >> But it was very interesting to see how how it kind of functioned and getting a small kind of sample. one one of the other areas I mean this is like the big thing we're talking about here is is energy and the component I want to speak about here is is nuclear because they are having a massive nuclear buildout and they are super effective at it I mean they're I think the US has done Vogle Vogle 2 or or what have you and they have done one overbudget nuclear reactor in in the past 10 years and the Chinese are spinning that out in in a year or in in two years so it's it's kind of remarkable But the Trump administration did come out last year with the deal with with Westinghouse and Camo and say we're going to spin up 10 AP-1000s. And I'm not sure how much time you guys have spent on on nuclear and and uranium and so on, but do do you see that being something that is actually going to press ahead and and get the the US back on on par in in some small way with the Chinese? >> I think it is going to be helpful. And one one really good thing about nuclear in the US is actually bipartisan. Like it may be the only thing that we can point to that it's like something that totally makes sense and then both parties are like, "Yeah, I like that." So we have that going for us where it's not like an election is going to blow it up. Um and and to be fair, like a lot of the rest of the world is slowly coming around. Like we saw Well, I mean, you guys still have some work to do down under, but you know, like Korea kind of did a U-turn. Like uh Japan obviously did a U-turn. Like a lot of countries in Europe have done U-turns where they were like no nuclear and then some time went by and they kind of thought about it and looked at it, saw what happens when you have a gas price squeeze and we're like well maybe. So I I think it's going to go global. It is unfortunate because we're falling behind China on that as well. They're they're basically a generation ahead of us. And then when it comes to again cost competitiveness like not close but to go back to Vogle like it it was wildly overbudget took forever but it was the first one we built in a long time. you know, whenever back in like the 70s and 80s, just mostly 70s when we were building a lot of them. We got good at it. We got good at doing it at a reasonable price. My dad actually helped build the the South Texas project uh nuclear plant. But even that one, like that thing is cited to hold like six reactors. I think they built two, stopped uh like 10 years ago. They started talking about putting in another reactor or two, didn't do it. Ran into some red tape or some cost overruns and it was like, ah, let's not do it. And that we've seen some of that like and a lot of a lot of the nuclear sites in America are cited to add more reactors. So there's even super lowhanging fruit for those AP 1000s to be like well just put it here like you got all the permits and stuff you need basically ready to go >> and the impetus came after that Iran crisis back in the 70s as well. So the funny how it all yeah it all comes back around right. So yeah, I I do think I I think a nuclear renaissance is here for the globe and I think the US is going to be part of that. One one good thing I will say from the US side is like when it comes to some of the designs for SMRs for micro reactors like there's some awesome like technical leadership in the US on that. So I think I think we might be able to do well especially on some of the smaller stuff. Um, now it's it's moving slow because our regulatory structure has been slow, but we've we've seen like very solid legislation to to speed that stuff up, to pull out some of the red tape to just to to be more like helpful instead of in the way from the regulatory side. Um, the problem with it is it's going to be expensive at first. It's going to go over time and over budget because it's new, like it's new technology. So, I hope the investments made to where they can keep iterating until they make it, you know, quick and efficient and smart and bring the cost down because you're building, you know, a thousand of them instead of three of them. Like, you can get those, you know, the the benefits of scale and everything. So, I I do think that is a a bright spot for America, but at the same time, like we're not breaking ground on too many of these things yet, and that part's frustrating. So, I'm hopeful, but I would like to see a lot of shovels in the ground, a lot of permits, and and you know, this stuff getting built. >> Fingers crossed. >> Little little [clears throat] little addendum to put on there, too. Um, I think that this also highlights one of the issues that the West is dealing with, and I don't think it's just uniquely American. And I think I' I see evidence of it all over Europe as well. But excessive regulation, especially regulatory capture, meaning some a lot of our biggest companies figured out something really smart in the last 20 years, which was if I get a supremacy position in any industry and I'm swinging a bigger stick than everybody else, then regulation actually has become my best friend. Bill, are unfamiliar with this topic, there's a I think a brilliant guy named Bill Gurley that did a TED talk on this uh and and everybody should look it up and go because it's exactly what's happened here. And again, I think it has to go kind of along the same lines of us embracing other things. I at some point we all started believing regulation was just the answer to everything. And I think we failed to see that regulation by its very nature, is it needed? Absolutely. Um, but one of the biggest things regulation does is creates barriers to entry inside of sectors and and in inside of economies. And who benefits the most from that? The guy at the top of the stack, right? And and you can see it in every single metric you look at in the United States as it relates to our economy. Meaning, you know, look at an industry where 30 years ago there were 11 to 15 players. You're down to two or three now, right? And you've just consolidated. And so, not only do they have tremendous pricing power, but you've got a you've got a you've got a um a tax system in the United States that is grotesqually uh favorable toward large corporations as opposed to small corporations. And then, you know, when you're a startup trying to break into something, the costs of that regulation by definition are much more impactful and much more penal to you. And um so I think it's sort of we talk about this in the United States at all all your as it relates to the US economy, but you have this unholy union right now between large corporations and large government and um the regulations that we used to think were a way to really keep these guys in line and hold the line. The these guys are really smart and they figured out, hey, we'll welcome the regulations because when you're the biggest guy with the lowest cost, a regulation is a competitive edge for you. just full stop. Right? So, that's that's that's another thing that I think the the West is choking on right now and they need to get we we need to get some answers and and like Chase alluded to it. You know, look at what China's doing. We don't lack the innovation and and the gumption and the American get-go spirit and all that kind we we we've got the ability to do that same thing, too. Why are we not? It's regulation, pure and simple. the other metals out there that really stick out and are interesting to you. I wanna I want to get a quick kind of take on this. Uh Chase, I know you spoke about nickel not too long ago. I think you did a post about this and that really sparked my interest because I I'm pretty excited about nickel. I think you know everything all the foundations are being laid for for the capital cycle to to do what it does. So maybe if that's the one capturing your your imagination, keen to hear your thoughts or if there's anything else jumping out at you right now, I would love to hear that. >> And hasn't worked since I wrote that piece. But yeah, I I like nickel. I mean the the demand side first of all just go look at the electric stack. There's your demand side and then obviously just steel which you know would probably need some steel but uh and and then supply side is really was honestly become really the story because we have you know supply discipline finally out of Indonesia and and it looks like in a meaningful way. So as long as you keep that supply discipline out of Indonesia like I just think that you project supply and demand out a few years as long as they keep that discipline you're going to be in great shape. I've been also really really excited about aluminum for very similar reasons. Uh the demand side, electric stack, massive demand driver for aluminum. Um and on the supply side, and speaking of that, like you look at EVs, some of these castings for EVs, they require essentially new aluminum. It can't be recycled for whatever reason. I don't understand it, but um so I kind of like that because it is imminently recyclable, right? Um but China's supply discipline is very very helpful. So, as long as China keeps supply discipline discipline on your aluminum, I think aluminum is going to be a good place to be. And obviously, we've lost some smelting capacity and and some exports out of the Gulf that that could end up helping a lot too in the next few years. And I liked it more, you know, a few months ago whenever it just broke out. But th those are two metals that I I I think have a an kind of a underrated future for the next few years. Zach, anything anything jumping out at you on on on the medals front there? >> Again, due to my background, I mean, gold is an obvious one, but I I continue to see a need for gold. Um, just to just to I mean, you know, you look at the last 20 years and there was really no need to sterilize dollar exposure on a central bank balance sheet. I I think that there's clearly a need to do that now. I don't see that need going away at any time soon. As a matter of fact, if I look at anything here internally in the United States, it's really hard not to project there to be a greater need to sterilize dollar exposure 10 years from now. I hope I'm wrong, right? I hope there's things that we do that change the trajectory of that. Um, and then I I was listening to the nickel thing and I was actually looking something up regarding nickel on my phone to remind me of. And did Chase mention copper? >> No, we haven't had the word copper yet. >> Yeah. So, so copper is another one for me. I let's go right back to the electrical stack. And then this is something that guys that are focused on metals and commodities in Perth probably have their hands around. Uh uh and I'm probably not going to tell you anything you don't know, but one of the things in metals that I think misses a lot of investors right now is the fact that um I don't want to say ever just because my you know I didn't and I've been doing this for about 20 years. So, you know, I'm not like one of those guys that's been in the sea for 45, but um the the bare market in metals was really unlike any cycle I've ever seen on the downside. Meaning, you know, if you didn't want to get any returned phone calls or you didn't want to be invited to any conferences for more than a decade, just mention the fact that you're into commodities and metals, right? And and when you see the level of that that industry was starved of capital and you look at the lack of new mine openings and then you look at the shifts that we're making in terms of rebuilding grids and the electrical stack and all the things we're talking about. I think people are looking at current supply and demand dynamics and making the same mistake. You know, we've all seen this, right? What makes a commodity bull market? A bare market long enough for people to for people and investors to forget how commodities work, right? And if you need commodities, commodities are the tree that you better plant today if you want shade 20 years from now. And we haven't been planting any trees flat out, right? I mean, I virtually every PM and every industrial metal has had net mine closings over the last, you know, how many years, right? And so go look at population and GDP growth over that same period of time. It's you don't have to be an expert to sit there and go we got a problem. And I I think in a technologically driven world and as stupid as this sounds, guys like us that are so in tune to it, we forget. But everybody I think you're seeing a lot of it play out in oil markets right now, right? People, we're so used to pushing a button. We can order something on Amazon and have it delivered to our front door in seven hours, right? And I think that that is really that and a lot of other things and just ignorance when it comes to it. If you don't have a bunch of mine openings right now, if you're not starting a bunch of new mines right now, and we can already see potential copper shortages 36 48 months out. I I mean, it it seems like a pretty good bet over the next 10 years um that you're going to need a lot more copper. And how do you get a lot more copper? Make it more economically feasible to mine. What does that price go up? Right? And so I that one just seems like an obvious one to me. Um anytime you're dealing with a metal like copper though, you've got to be looking over your shoulder at recycling, right? There's a lot of other places that it can come from. But um I it's just it's really hard for me to look at the way the world is getting electrified and look at the way that so much of this innovation is going. You know, just think about like think about if we start replacing large parts of of global militaries with drones, right? Like they that's going to be a substantial input of copper. Um and so I you know and you again you see it in so many other places where the need for you know things that are really good you know really good conductors of electricity things of that nature. So I I think I think copper is going to be a great one. Um, and I'm sure there's going to be some obscure metals out there, possibly nickel, that that will end up, you know, one of the things we talk about is in in commodity cycles or in commodity pinches, the things that end up being the best performers are almost never the things that everybody is betting on, right? It's always like some obscure thing somewhere in some, right? Those weird things. So, that will probably be the case. But, I mean, when you look at both uh copper and nickel, I it's really hard for me not to see a really steady demand and higher prices into the future. >> Yeah. Yeah, definitely. Guys, this has been awesome. Really appreciate your your time. We'll link to the research you do, the the podcast you do in in the show notes, but thank you for for for joining me and and sharing your thoughts on on what's happening in the wider world and and some of the metals that we follow pretty closely here. >> Hey, man, thanks for having us. And it's great to connect with uh we love Australians, love the Aussies, great to connect with some friends from down under and uh at some point I I know I would like to get down there and visit that beautiful country of yours and if we do that we'll make sure we reach out and give you a ring. >> 100% looking forward to it. Thank you to Sanvic ground support in links focus the platform by market tech [music] capital MetalsHub and Costine Intelligence money miners. Now remember, I'm an idiot. JD is an idiot. If you thought any of this was anything other than entertainment, you're an idiot and you need to read our disclaimer.
Buying Gold Miners When Everyone is Selling
Summary
Transcript
JD, thank you for flying the flag bright and early for us with this wonderful interview. Jumping on a call, speaking with Zach and Chase from Ballworker Capital, mate, I'm um I'm delighted to give this one a listen myself. I'm I'm I'm really interested in the uh the insights you managed to tease out of them, but it's not the only time you've been flying the flag for the both of us. In fact, [music] uh you don't know I'm going to say this, but Monday morning, we get into the office and you're like, "Mate, you would you wouldn't believe it. on the weekend. Two two pe two separate people came up to me and said, "Are you are you JD?" [laughter] >> This This did happen, didn't it? True story. >> It did. It did. At the pub in Freo. >> And let me guess, they didn't say, "Are you JD from Money Mind?" They said, "Are you JD from the director special?" [laughter] >> That's exactly what they said, mate. >> Which is my way of plugging our flagship daily email, the director special. 20,000 uh investment professionals, mining executives, people people who care about the industry, the stocks, the market dynamics, the politics of mining. Well, they get their daily update by going to moneym.com, putting their email in, and signing up to the director special. >> Threeminute read, all you need to know about mining. And you mentioned before, mate, we're speaking with Chase and Zach. Very excited to to share this one. [music] So, Chase, big macro thinker. Pineco macro is his bread and butter. and he later joined Zach at Bwork Capital. So, I don't think we need to say too much more. We'll talk about all the big issues today as well as the medals [music] we love and follow closely. But before we jump in, quick shout out to Exceed Capital, flying the flag for commercial property all up the eastern seabboard and in Adelaide as well. They're coming to Perth soon. These are the experts in unlisted commercial property. If you are sick and tired of the volatility that we speak about for the next hour in the market, you can park some of your money in the great Australian dream property. commercial property. Uh, I love volatility, but you know, some parts of my portfolio I just don't want it to be as crazy all the time. Commercial property makes lots of sense. Go Exceed Capital. Looking forward to tuning into this interview. >> Go Exceed. >> All righty, guys. Chase Taylor, Zack Abraham, thank you so much for for joining us here. I am very excited to talk about everything that's happening across the world, macro, micro, metals. I know you guys have jumped into quite a bit in the past. I think um a natural kind of starting point for the conversation and maybe I'll get you to jump in on this one, Chase, is Iran and how you kind of see the uh see the macro setup in the world pre and post I guess Feb Feb 28 when things kicked off and and how that's kind of dramatically changed what we are experiencing at a kind of macro level. I would say for macro the big thing is obviously just going to be inflation like oil prices up, chemical prices up, food prices up and those three food those three prices up kind of equal all prices up over time. So going to be in a higher rate environment uh going to be a higher volatility environment for a lot of assets um along the way and and this is with you know oil at 90 bucks which is in my opinion mispriced by at least $30 more. So, by the time we get through the summer, you're probably pushing 150ish, especially if this doesn't get uh better soon. And, you know, as we record here, it's getting worse at the moment. So, probably not getting better super quick. Um, so the biggest thing macro wise is is is that simple. Just it's going to be inflationary until it's over. Probably going to be inflationary for a few months after it's over, until energy markets kind of get back to normal. Um, and then even kind of bigger picture than that, a lot of geopolitical stuff is is changing. Um the the security picture for the world is just different than it was before this. It it a lot of this stuff was obvious but it sometimes you have to really put something in someone's face for them to get it. I think that's where we're at with just warfare. It's not even just US Iran. It's just warfare. If you watch Russia Ukraine really closely if you go back to the Armenia Azerbaijan conflict like just the role of drones the increasing role of FPV drones. Um, and not not to mention just cheap missiles. I mean, I don't know, you could see yesterday the Flamingo cruise missile that uh Ukraine launched into an important site in in Russia. Like, so cheap missiles, cheap drones kind of changing warfare. It's it's very asymmetric thing. So, I think the the world seeing that we can't really defend the Gulf from Iran because they have some missiles and drones that are cheap makes it clear like well, a lot of things can't get defended from a lot of different angles. So call it Korea, Japan versus China. Kind of the the big one that sticks out. So I think the defense side of this is a big deal too. The whole world is going to have to spend more on defense. Um and a lot of that's going to be around, you know, unmanned systems moving forward, which changes a lot. You know, a lot of the architecture of the way the whole global economy has worked for the last 70 years uh ends up changing because the way a lot the global security picture for the last 70 years works is changing. So it it seems like a little conflict stuck in the Middle East, but it does have a lot of ramifications for global macro and and kind of global defense policy and and obviously the investing around all that. >> So So you've got 16 17 years military experiences as I kind of understand it. Has this surprised you? >> Uh unfortunately not not really. I I did intelligence for uh like 12 of that 17 years something like that. Well, really more than that because even when I was doing acquisitions, I was I was doing a lot of that in the intelligence space and I spent a good good bit of time working on on Iran. I spent a good bit of time working with drones. Um I mean I worked with a small, you know, 75lb drone that we caught in a net. Um you launched on a little rail. So it being being kind of having a front seat to what this was going to look like, you know, a decade ago. Not not that surprising. I I kept trying to warn everyone I knew when it looked like this was going to happen like hey Iran's missiles are very very underrated like just because they haven't used them to hit something real like we're we're taking it easy and thinking like they're not going to do anything. If you go back to the last summer whenever there was a bit of a, you know, a joint strike for 12 days, 12 12-day war against Iran, they they did launch missiles back, but they they kind of went out of their way to not actually hit stuff, but they also were hitting like roads, you know, a couple blocks away from Assad headquarters and things like that. They were they were demonstrating like, hey, like if you if you guys keep doing this, like we can actually hit stuff. So whenever I knew we were going for the regime like for total regime change and the decapitation strikes and stuff, I mean obviously in that case you're not going to go bomb the road this time. You're going to bomb some real stuff. And I think this all came to a head whenever they bombed the uh the Qatari LNG facility and took off, you know, about a fifth of their capacity. That that was the moment that to me the whole war changed, the complexion of the war changed. Um so unfortunately g given my uh background doing a lot of work on on Iran I knew like hey their air force doesn't matter their conventional navy doesn't matter but what does matter is there there's their drones the straight of hormuz their missiles that that kind of stuff so I wish I could say that a lot of this surprised me but unfortunately it doesn't. If we if we look at how you guys have have thought about markets over the past three months and maybe Zach I'll get you to to to kind of jump in themes like the the debasement trade they sort of burst to life halfway through last year I'd say and you know a lot of people had been kind of paying attention the the US debt cycle for for a while before that but has this materially shifted any of your thinking on on that front or is it kind of steady and constant when you when you think about all those bigger picture movements at >> [clears throat] >> Well, I think that um you know, anytime you have a macro event like this going on, one of the things we've been saying, you know, on our own show is that regardless of what we attempt to discuss, we always end up back at the straight, right? And and the reason we do is because when you have an event like this going on that has the global implications that's that it has it it sort of trumps out pardon the pun it sort of trumps out any any anything else right um you know I mean I mean you look at the impact it's going to have on profit margins look at the impact it's going to have on consumer spending and CPI and rates and all the different things that we know about. So it it certainly takes center stage, but but I do think that that is a respit in that trade. Meaning once the once this macro issue, you know, works through the system, um you're going to be right back because because none of this changes any of that. If anything, I think it has the potential to exacerbate that issue. I mean, wars aren't cheap. The longer it goes, right, the worse it gets on that end of it. The other thing that it does is it's not doing any favors. You know, you probably have a lot of listeners outside the US and this is going to be one of those moments where they're like, "Yeah, really guy, you just figured that out." But, you know, I don't think it's doing any favors for us politically around the world. I certainly don't think it's engendering any um favor [laughter] around the world. That's my sus, you know, that would be my immediate thought. So, um yeah. So when this when this is over, I think you're going to, you know, for instance, we were big in gold miners last year. Um, we still have a decentsized position in them. Certainly bigger than most. Um, but we're hedged. Uh, we've been hedged on that position for a while, thank goodness. Um, and we took a lot of profits on the way up because, you know, I' I've been involved in metals markets. That's kind of the my origin story, honestly. Um, grew up on my gold mining operations. And so, you know, you always know in these metal bull markets, you get, you know, big moves up and you get consolidation patterns that typically, you know, if we're talking about the average gold miner and Chase and I were discussing it today, if you're in a gold, if you're in a metals bull market, I'm always expecting pullbacks in the underlying equities to be, you know, between 30 to 40%. They they they can hit you in the gut. Um, and and that's what's happening right now. I think this one is going to be a little bit more pernitious because of the issue currently going on, right? Like if we if our projections on oil are right, the dollar is going higher. Um when you have situations like this where governments are, you know, struggling to source fuels, source distillates, source oil, obviously, you know, them buying gold to to neutralize their dollar risk is falls down the list of priorities. So it doesn't doesn't surprise me at all that you've seen a bid come out of metals markets. But as soon as this issue is over, I think, you know, you look at what's going on with interest rates in the United States. You know, I mean, let's, you know, you do some really nasty calculations on the difference between our deficits if a 10-year is at, you know, 43 versus 5%, right? I mean, all that stuff just makes that picture worse. As a matter of fact, you know, one of the things that people have been celebrating here recently was the fact that deficits as a percentage of GDP finally slipped back below six, right? They're down in the fives. I think I will be shocked if we get through this through the next six months, especially the next 12 months and we don't have deficits again back over six% of GDP. So I think it's just a rest bit in the debasement trade and all of those things. And I think as soon as this is over and the the you know the critical nature of where we're at um in this current situation subsides then um you know I think the basement trades right back on. I think the dollar is going to resume its its secular bare trend. I that's what we believe that we've entered. I don't I think a lot of the talk of like, you know, hyperinflation and dollar collapse is way overcooked. But I mean, it very much looks like this strong dollar era um has has has passed. So yeah, I would expect a debasement trade. I think it's taken a break. I don't think it's going to not take a break until this is over though. I think you know for instance I mean one obviously we got to wait to see the way it looks and you know reserve the right to change your opinion but I mean you know I I know that when I've got a high level of confidence that this issue has resolved. Um from where I sit today I think one of the things I'll probably be buying the hardest will be metals miners again. Um because I I I love what we're seeing here right now as a bull and I think that this bull market metals and metals miners has a long way to go. I I I I think and I hope um and so when I see the way that these miners are getting pounded um it it it's looking it's it's looking really appetizing because I I think that um you know I understand why they're getting hit. I just think they're getting hit in a level and and this is what we thought would happen, but I think they're getting hit in a level that is really outside of fundamentals. Meaning, um, you know, when you look at the margins these things are throwing off, right? Like oil going up isn't helpful to their bottom line, but when you look at their what they're spending on oil and diesel and then you balance that against, you know, revenues and profits and all that kind of stuff. Okay, so oil so gold pulls back 15 or 20% and o oil goes up 30. It it really isn't changing the underlying fundamental picture on these things. >> So >> yeah, so I so I think it's just a respit and and quite honestly um we were just talking about it yesterday. It freaks me out to even say it because I don't want to jinx myself, but one of the things that we or we're talking about it today actually, but uh one of the things that we've done, we've hedged those we've hedged those gold positions. Um, we are very much planning on pulling the profits out of those hedges and redistributing across our favorite gold players because I I I do not think that that thing is close to being over. And um, like I said, I think as soon as this as soon as we get some resolution or at least know we're on the path to resolution in this current situation, I would expect that that debasement trade and all the parts of it to come roaring back. >> The volatility has been been quite something to behold. And yeah, I mean to to the exact point you were making, these things started to look a bit expensive for a moment there and Jan early early Feb and you're thinking, "Oh, can I can I still buy them?" And the the animal spirits were were fighting within all of us to to round out on the the the bigger picture and you know, the the Trump piece. He made the comment last week that um yeah, I hope we can have this resolved maybe by September or something like that. and and that kind of that wording stuck out like a sore thumb. Chase, do you do you take that as a base case now that that we are still battling through this thing till September? >> I'm not sure. I I there was a point where I kind of had a base case on timing and I I just really don't anymore. Um, and the the biggest reason I've dropped that was trying to do all the barrel counting math was really important to try and figure out where like where it gets bad, where you have to go to like a really high price to where it's going to have a kind of a lasting macro impact. But for me, like we already got we've already made that spot because I think it takes months and months if not over a year to get back to normal once the straight is open. And let's say like for real open, not like not like throttled, you know, 30 to 50% open, but like no kidding, nobody cares who comes through anymore. Even at that, you have to clear out a bunch of inventory before you kind of restart the production that's got shut in. Um, you're talking months to to even get back to normal. and between here and there, you're going to be at levels of oil inventories as if if you just kind of think about it as days of demand cover that we've really just never seen. Um, again, even if we had open it right now. So, and that we'll have record low SPR coverage, all that kind of stuff by the end of this. So, from that perspective, yeah, I just don't see it. And and as far as what actually ends this on that, the base case is we do take a deal. the deal is not great for the US. Um, but as Zach and I have discussed a bunch, you know, like we we just think that is requires a lot of pressure from things like oil bond yields, you know, maybe stocks falling for the for the US to basically take the uh very unfunded and unpopular deal that is required to probably get out of this unless they can change the calculus in a real way uh militarily. And as of now, that that that's difficult to for me to imagine. And and I think if that was the case, we wouldn't have had a, you know, like a two-mon ceasefire. But, um, unless I see really big signals that the the battlefield picture is changing, I think this ends whenever oil oil gets expensive enough and bond yields go flying higher enough for the US to say, "All right, uncle, we're out." Like, you know, here's your bag of money. Uh, keep your missiles. Thank you for, you know, not not doing your uranium enrichment for a while, and we're just going to call it a day. You you made I had to guess when and I I would say July. Sorry. >> Yeah. Yeah. I mean, you made the comment earlier that oil was trading 30 bucks below perhaps where it should. How does that play into the the actual energy exposures you guys have in in the market? >> So, so this is hard for especially for us like it's funny because so the the biggest thing we're doing is is an oil ETF. First of all, we try to avoid K1s because in in the US, the K1 stuff like is is brutal for for paperwork and taxes and stuff. And there is a there's a wonderful ETF that kind of has the the one-year strip in it, but it's WTI. And I at some point, we're going to get to a point, I think, where product exports get choked down in the US, and then it's just going to get that much worse for the rest of the world. So, at that point, burnt WTI spread can probably widen out a good bit. Um, so at some point we're probably going to try and navigate that. We had producers for a while. Lately we've been really focused on that that oil ETF. I mean, and and that's been nice because the roll yield is is so positive as you go from the front month out to the rest of the curve out the year. Like like as we record here, like December 27 is actually at a new high. December 26 is very close while front month is like 20 bucks, you know, from the highs. Um, so having that stuff out on the back of the curve has been a has been honestly a game changer. Whereas like your average person, you know, focus on the front month a has way more volatility and b doesn't have the gains lately. Um, we may have to go back to producers and and some of like the global producers that can sell into to Brent pricing. Um, and some of that stuff has a shareholder yield that you know makes your eyes water. So it's not like it's a bad place to be. I would like to see it get beat up a little bit more before we have to do that. But so I think it'll be a mix. I think it'll be a mix of some producers um of that oil ETF we've we've been running with for a while. We do have a one um refiner and you know crack spreads are insane. So they're they're printing money and like many energy plays like they have the crazy free cash flow yield. They have no idea what to do with it. So they're just going to give us a dividend and buy back stock. So the shareholder yield is going to be amazing on all this stuff. So but it's it's a little imperfect for us. I I would say to at some point do a pivot from from over to Brent from WTI, but we're gonna have to in some way start grappling with that. Uh and and I think I think when gasoline prices on a retail level nationally in America hit about five, it becomes a political nightmare and that's when I would expect us to start throttling those product exports. >> I mean, where are they kind of at right now? It's hard for us to tell here in Australia because I understand that that is going to play a massive role in in the midterms as well and how that's you know how the politics of all that plays out in in the next few months is a is a pretty big deal for you guys. >> Yeah. Well, so uh funny enough, all of those things um led [clears throat] me to get this. So, the start of this conflict, Chase got 100% right and I got 100% wrong because of the dynamics that we saw heading into this um knowing how much time and focus Iran had put on the straight. Um the I remember the day that they pulled the the they brought the Ronald Reagan, the USS Ronald Reagan into the Gulf, uh Chase I think I walked into Chase's office and he's like, "Hey, we're going in. We're going into Iran." And I looked at him, I was like, "No, we're not, man. There's no way Trump's gonna There's no way Trump's going to do this. He He's not that dumb. He's He's not going to do this. So, what was it? 48 hours later, we started dropping bomb. And And uh and quite honestly, that's that's why I hired Chase. Um I I subscribed to his um research for probably what was that probably three years. Three or four years. And then uh >> sounds right. >> People are like, "Yeah, people are like does he do good research?" And I was like, "Well, I don't know. I unsubscribed from his research and hired him full-time." So that tells you what I think of him, [laughter] right? So he so he was he was right on that. But but the whole time um I just didn't think that he would do this because of all those things that you mentioned. And and not to mention that one of the tenants of his campaign was, you know, not getting involved in foreign wars or foreign conflicts. Um and so I was com I I just from the very beginning we looked at this as an all cost no benefit type exercise. um and one that could have really bad ramifications not just for us but for the rest of the world. And so I just didn't think we'd go in. Um and here we are. And um it it kind of I I think it was just a again I it's just a really hard it's a really hard call to understand. Um, I think what we said at the very beginning of this is that Trump is effectively biting a p a porcupine and there once we get in, it's going to be really hard to get out and we don't see how we have any advantage. You know, every's like, well, we can beat anybody militarily. And it's like, okay, well, are you prepared to put a million boots on the ground in Iran? And everybody's like, no. And we go, okay, well then then, you know, I'm not willing for us to put a million boots on the ground in Iran either. But if you're not willing to do that, then what what are we doing? Wasting our time, you know, dropping sordies and all that kind of stuff. You know, how how many regime changes have been engendered by bombing campaigns? None, right? Like didn't work on Berlin, right? We had to Russians had to roll into Berlin. So, I mean, it it just always seemed like a big waste of time. And that's why I didn't think we'd get involved. And then, you know, here we are. and and you know I don't want to I don't want to steal your platform for you but one of the things I've been interested in is what is your perspective on it like being from Australia is is the rest of the world looking at us and going what did you guys do or are they sympathetic I and I really don't know that question so I'd love to hear what you said. >> Yeah. Yeah. [laughter] The answer may not be what you what you want to hear, but I kind of think most people just think about themselves and their own and their family and and so on. And and petrol prices at the at the bowser here doubled like that's that's what you think about inflation in the shops, all of that. you you feel that sort of stuff and that like it has been navigated reasonably well, but we're we're still kind of in the in the early innings and and we're certainly not through it. So, there's there's still a lot of moving parts to to how this all kind of plays out. But I think to the comment you made earlier, Zach, it it's not endearing the US to to anyone else. And it just feels it feels rather pointless. You could kind of see the the outcome before it before it all happens. So that's the >> well and and and and you know we're look the things that have already happened to people around the world haven't made it comfortable but I don't think that we're actually seeing the real results of this. I think that it is guaranteed to get worse before it gets better as far as inflation and cost spirals and all that kind of stuff goes. And then the other side of it is you're bringing in the pot, and I don't want to overstate this because, you know, I don't want to be hyperbolic. That's not helpful to anything, but the bottom line is you're opening the door to potential humanitarian crisis, too. And the, you know, at some point the bill for all this is going to come due. And I think the whole world is justified in saying, "Okay, here's the bill. What did it get us? What what is the point of this?" Right? And from where we sit today, I think the net result is is we're going to leave Iran in a better, more powerful position than they've been in since the revolution 47 years ago. And right, we went in there with Israel and they bloodied our nose. I don't think anybody else is going to be too interested in going there and messing with them. So, so you know, in a way, I think that they've established their sovereignty, at least as it relates to their own borders, in a way that they probably never could have done on their own, right? They've showed the world that they can be a massive thorn in the in the side of of the global economy. And so all of this is to keep a nuke out of their hands. And I'm sitting there going, I don't think they need a nuke anymore. I think they've got one. And this nuke, once fully operational, will pay them a $500 million daily dividend via tolls through the straight. So I I just think I I I hope I'm wrong. I really hope this turns out well for the United States. It's hard to see it now. But from what we're looking at today, it's really hard not to sit there and go, I think this might go down in the Hall of Fame as one of the dumbest foreign ventures that the United States has ever gone on, right? And and I don't want to say the worst because, you know, I I think our involvement in Vietnam was far more destructive in terms of human life and things like that. And I think we've had work. But in terms of like if you look at the Vietnam situation as kind of a a comp that was a much like horrible conflict that we never should have been involved in, but you can understand why, right? Like you we had a we had a treaty with South Vietnam. You know what I mean? There were there were thing we were worried about the spread of communism. You can at least understand that. I I think one of the things that I'm afraid about this issue is that when it's all said and done, when the costs have been fully realized, I think a natural question everybody's going to ask is for what and and I don't think that there's an answer there. >> Just quickly, Trev, we spend a lot of time talking about the miners out there, but we need to flip the script. We need to look at the steel producers and the other buyers of metal and how they are changing how they source raw materials. >> They they've I mean, it makes a hell of a lot of sense for them to do it. Think of think of someone like autocompu right I mean does it really make sense for them to be procuring their raw materials by you know fiddling through long email chains or or using legacy non-industry specific software it just doesn't they they are migrating to metals and it makes perfect sense why >> it does make sense they're not the only ones RHI mag another group they've done over 400 million euros in procurement value on the platform 2x ROI 2% savings across the chain there is serious money being saved and time being saved by using MetalsHub. >> What a compoo, mate. Over a thousand different transactions across 50 different raw materials on Metals Hub already. I bet you know there were that many raw materials, mate. I actually want to buy like a little cube of every single raw material. I think I'm going to go to MetalsHub to to do it. >> You can do it on MetalsHub. >> You can focus more on your strategy on running the actual business as opposed to just doing admin by getting on MetalsHub. So check out metalshub.com/moneyofmind to find out more. >> Source smarter. when we like if we change tech a little bit to talk a bit about the US China relationship. So that has been the the defining feature of of macro markets for a long time and commodity markets what we focus on here and what we talk about and we we saw it from from rare earths and all these sorts of other niche and critical minerals playing through but maybe just to to start with a a kind of couple comments on how that relationship you see might have changed. So, we had the meeting between Gi and Trump a month or so ago, and there seemed to be a somewhat different tone to to the confrontational tone that we saw saw last year. Do you have any big thoughts on on that, Chase or or Zack? >> Well, I I'll go first and I'll kick it at Chase. um what I think what I think looks like uh to me that's happened and and I'm spitballing here so take it for what it's worth but um I I [clears throat] I to me it's very clear that you know I think that I think the Trump administration job owning has a lot to do with why oil is where it's at uh if not the vast majority to do why oil is where it's at. But on the physical side, China sitting out the market and not buying is the biggest impact I think on the on the flow of oil side, on the shortage side, and on and the fact that they came in here with record a record SPR build um and all that kind of stuff. What I think though, and we did an episode a few days back where it was called the quiet deal. I I think that there was a deal struck. There was a taunt between us and China where I think that we went to them and said, "Look, if you'll help us out here, hit hit your SPR aggressively." more most importantly, sit out the market and don't buy here. We will pull missile systems out of Southeast Asia and deploy them to the Middle East. Um, and then like I said, I think not not many people talked about it, but when Trump came back from his trip from China, he went out of his way to reference how far away Taiwan was and how we're not, you know, just alluding to the fact that we're not interested. So, I I think that there was a deal cut. Um, and the reason I think there was a deal cut is because China jumping in the way they have and staying rel relatively non-critical toward what we're doing here in the US, that's very unlike them. Um, usually they're quite loud and viferous when they think that we're doing something that they don't like or that doesn't benefit them or that they don't think benefits the world or whatever. So I think they've been abnormally quiet and looking at them what I would have expected them to do and quite honestly had I been in their position this is how I would have handled it before I stepped in with my SPR and helping everybody else out. I would have let America drive oil prices to 1301 150 tick everybody off and then ride in there on my white horse and gender right get more countries coming to me for help as opposed to the US and that's the way they've played everything like this in the past. This is a departure from that. And I don't think that that happened just off of their own goodwill. I I don't think I think they're got they got to be getting something. And I think that there was a wink wink nod nod to taunt where it said, "Hey, we will pull more missile systems out of here. We will be less of a threat. We will soften our rhetoric toward Taiwan if you'll help us out." And and I and I think that's what's happened. >> Yeah. For for me, I I think we we have a pretty durable day at this point. And I think I think there's some parallels to to the the war in Iran right now. I think going back to that when Iran hit the LG facility that that was the moment I think it became clear they had escalation dominance like they had obviously the willingness and the capability to reach out and touch very important infrastructure for the whole world not just for like them or us or the the the region but like everyone on the planet. Um, and I think similarly, you know, if you go back to the the early days of the trade war in 2025, like I mean, we went we went mad max with like over 100% tariffs on China. Like, you could tell we were trying to bully them into backing down in some meaningful ways. And instead, they, you know, they escalated on us in a way that was more painful for us than 100% tariffs were on them. like you I'll never forget you had a very important meeting at the White House with uh the executives from Target, Walmart, and Home Depot. Right after that, policy changed dramatically. So I and we had literally we had production lines like halting for automotive production because we weren't getting you know magnet supply, rare supply. So I think it was a moment where we realized like oh our industrial economy literally depends on imports from China. There's nothing we can do about that. you you would talk about a frozen economy for years before you had that capacity. So once that once that becomes clear to you like you realize like oh we have to play ball with these people like there's nothing else we're going to do and whenever that becomes that clear then you know you obviously that has the makings for a a really significant day taunt between the two sides and to be clear like the two sides need each other immensely like it the two countries in a lot of ways fit each other like puzzle pieces I mean one is a massive producer one's a massive consumer um it just it just makes sense that it would work that way. You know, one is in one hemisphere, one is in another. It just so I think it makes way more sense for the two countries to kind of do what they've been doing lately. Like, yeah, we're still competing. You know, we still uh push back on each other in important arenas, but at the same time, like, we have to get along in in a meaningful ways and in the areas where we don't have to compete. Like, we really have to find common ground. So, I I think from here, you're going to see more of that. They're going to try to get away from the stuff they depend on us for, like oil. And that's why they've, you know, went really intensely with the electric stack, whether it's, you know, EVs or or solar power and all that kind of stuff. And that, you know, we're going to try to do the same by trying to have our own supply chains we can depend on for critical minerals and stuff. So, I think both sides would try to be more independent as we go, but it it's very difficult for me to imagine either side being independent enough to like really ruin this day anytime soon. >> Chase, you you had a fantastic podcast with with Demetri Cafus um about six odd months ago, I think, and you mentioning the the electric stack there sparked it in in in my mind again. Has your has your thinking changed at all since when you spoke with him late last year on on how that's playing out and how the US is responding? >> Yeah, it's funny you mentioned that because if you think about it, if anything, it's just gotten way more important because a huge part of the the electric stack is is drones. Like, and drones are again making themselves self-apparently critical for for defense, you know, for the next century. And but at the same time like solar power is and EVs are making themselves that much more intensely important as people have you know shortages of of gasoline and and and diesel. Like so if anything it's just that much more important and it it's still alarming to me how far you know most of the west not just the US most of the west is behind China on those supply chains and and the manufacturing side of EVs you know whether it's drones EVs really it's it's the stuff that you build out of them though the the electric motors the magnets the the rarers like you talked about but but even even some of the basics you know like aluminum smelting and stuff that is radically important for all these things. I would say the US is still good at chemical production but a lot of the west has given up on it like a lot of Europe has just kind of handed it over to China like and making plastics for EVs shockingly important obviously the same and then another huge part of the electric stack that is not getting near enough play right now but is is robotics like whether it's humanoids or otherwise like embodied AI is going to be probably more important than you know nerd on computer AI I think and China's all about that like we've 've all seen the videos of the dark factories and all that kind of stuff like their ports are just completely automated almost robots doing everything that is such a massive competitive edge over the way we're doing things in the west. So yeah, to to me it almost every day, almost every headline I read, the the electric stack gets more important to me and and and I think it's interesting if you look at the investment side of the electric stack in 2026, like it whether it's solar or uh you know different parts of that supply chain, it's actually been some of these electrification ETFs and stuff have had really good runs. Um, while a lot of commodities have have struggled, uh, I think that it's becoming more clear and more acute to to people every day that electric stack is here to stay and you you better be competitive in it or you're going to get left behind in in the next century. >> That that word competitive kind of shines through and it's not not something we've been awfully competent at in in the West for for some time now. You also mentioned there so smelting refinering aluminum aluminium and I think it's kind of goes across the board you know copper zinc any any kind of metal and we see it here in Australia just yesterday another headline that the bailouts from the government are going to continue some of these smelters losing tens of millions of dollars each each month but we need to maintain that kind of competitiveness. My question here is do do you see an actual investment thesis out the at the back of this because a lot of these companies here are are private businesses. There's no there's no kind of angle but there is there is there something in that for investors that you see? >> Yes. But it is tough like because I think there are ways to get more competitive and then there are ways to to look like you're getting more competitive and I think so far most western governments have gone the here's a way to look more competitive that isn't actually more competitive. So whether it's a tariff wall that probably isn't going to help that much or you know just some blind subsidies of just throwing cash at something like or you know in the US we've done some like oh well the government now owns x% of company Y and it's like does that really fix it you know to because to me so it's funny with with China because everyone sees China what they're doing now with all these electric stack things and other things like they're so competitive and people are like oh yeah well that's because they're they they have industrial policy they do that and they've been doing that for like a decade you know made in China 2025 and it's like no no no no you got to go back like 40 years actually really since the cultural revolution ended and it's been like step by step for 40 years um and they had some massive education reforms about 30 years ago that I think is what really unlocked most of this stuff so to me what the west has to start with is is those education reforms what I what I refer to as making serious taking serious education seriously and you know it's like do we treat an engineering degree or you know the same as we treat the a philosophy degree or or you know something like that and maybe we shouldn't like I don't know may maybe you have to pay for basket weaving but you don't have to pay for uh you know being a mining engineer or something and just spitballing here but like that's kind of way China approached it was like hey look if you want to take these serious programs we will pay way more you'll get room and board and if you want to go do this remote job mining or whatever we know that sucks. So, here's a bag of money to go do that because we know that's the only way anyone's going to do these kind of, you know, projects or whatever. So, as just one example, like if you want to make it durable, it has to come from things like like education. The amount of like STEM graduates they have um it's just crazy. And and like there are single universities in China that have more mining engineering grads than the US has like across every school we have. So, and then they have like, you know, they'll have like 12 programs just about like rare earth mining or something and we're like, what's a rare earth mine? You know, so I to me it starts there. So, from the investment side, until I see like more serious policy, it's hard for me to get pumped about it. Now, yeah, tariff walls help some domestic companies a little bit along the way, but it's it's not the same as becoming competitive. Um, in fact, I would argue it's quite the opposite of becoming competitive. walling off yourself from competition is just going to make you less competitive because you literally don't have to compete. So, uh, >> go ahead. >> And, you know, if I can jump in here and piggyback off what he said, too. I I think and and I am not one of these guys. [clears throat] It was all um you know there was a whole contingent of investors that you know for a good 10 to 15 year stretch like it it seemed as though that there was no economic future for anybody outside of China. They were massive China cheerleaders. I'm I'm not one of those guys. So when I say this it's not coming from that perspective at all. But I think the other thing you've got to look at China I couldn't agree with with I couldn't agree more with what Jay said about education. The other thing that they're doing in a time where the West is beginning to economically pivot away from competitive and competitive marketplaces and free market ideals, China's embraced them in a way that has surprised even me. And if you look at their automobile industry, I think it's a perfect example of that. And you go look at, you know, it [clears throat] it was five, six years ago when guys like me were sitting there saying, "China can't innovate, right? They can just massproduce things." Then I'm watching videos of them having a car going 80 miles an hour down the road and jumping over potholes in an automated way. >> The latest Bay, unbelievable. >> Oh, unbelievable. And at the cost they're cranking that stuff out. And then you go look at what they did. So, you know, here in the United States, we're we're we're beginning and embracing so many of these socialist tendencies in an effort to improve the economy. And you're looking at them going, "Hey guys, you might want to pay attention to what the communists are doing, right? They're they're going the other way." And look, I'm not trying to sit there and say that China is becoming an economic bastion of freedom and economic mobility, but what I'm saying is they're smart enough to take a pragmatic approach. And one of the things that scares me is that that's happening at the exact same time. The West pivoting in the opposite direction. And you know, we're having this conversation from you from the belly of the beast. Washington State could not be a better example of that. Um, and the practices that we're putting in and they're anti-competitive and we're acting as if that's going to Now, there's a lot of societal and cultural reasons for that and I I don't blame all of the people that have those ideas because I understand the angst and and what's motivating them to have those ideas. But um you know you look at the push back against data centers here in the United States and I don't think data centers are the answer and I don't think data centers are what we should be putting as much uh emphasis on in the AI search. But you know you got places that a big a big popular move trying to outlaw data centers effectively trying to outlaw the progression of AI. And you're looking at people going, "Guys, that's not the answer, right? We need to be more competitive, not less. And if we don't, um, it's, you know, Chase brought up ports, you know, go. It's there's so many different things that if you looked at America and China and you and you didn't have the background information and you were to tell somebody, look, one of these is a free market capitalist economy and one is more of a socialist communist one." There's a now not everything right I'm not saying it applies but there's many different parts of our economies if you comped them and you put somebody up there that didn't have any working knowledge or understanding would be like oh yeah that's that's clearly the more competitive you know free market type economy where you know you'd look at the ports we've got robots unload loading ships over here and I love long shoreman I'm not no knockox against them but you're looking at unions and pensions and you know they can only work so many hours a day and all the rules that come with it and nobody would sit there and look at our setup and think it was a feature of a of a free market system. They'd look at China's and they'd be like that's all about efficiency and non-friction of movement and all these things that that's the free market system. So, um it's a really interesting pivot point here for the West at large. Are we going to, you know, are we going to go back into the trash bin of history and try to pull completely defunct ideas to fix current issues, or are we going to embrace the things that made our economies vibrant and dynamic that the communists are currently embracing themselves and seeing the dividends from it? And so, um, you know, it's a that's a it's a political issue. It's a cultural issue. Um, but you know, we've got we've got some really hard questions to answer here in the West. And um, right now I'm not too heartened by a lot of the decisions I see being made and and the directions that we're going. >> I had to I had to get a flavor for for what the communists were doing. So over the Christmas break, I went up to China for the first time just to just to get a feel for it. And it was it was jaw-dropping like the the highspeed rail, the the I mean there was so many different facets of how the city just operated and worked, the the metro systems, the cars, >> and to your point of, you know, it not being a perfect comparison. The security was insane. Like there's a lot of things I wouldn't want to swap that we have here. >> But it was very interesting to see how how it kind of functioned and getting a small kind of sample. one one of the other areas I mean this is like the big thing we're talking about here is is energy and the component I want to speak about here is is nuclear because they are having a massive nuclear buildout and they are super effective at it I mean they're I think the US has done Vogle Vogle 2 or or what have you and they have done one overbudget nuclear reactor in in the past 10 years and the Chinese are spinning that out in in a year or in in two years so it's it's kind of remarkable But the Trump administration did come out last year with the deal with with Westinghouse and Camo and say we're going to spin up 10 AP-1000s. And I'm not sure how much time you guys have spent on on nuclear and and uranium and so on, but do do you see that being something that is actually going to press ahead and and get the the US back on on par in in some small way with the Chinese? >> I think it is going to be helpful. And one one really good thing about nuclear in the US is actually bipartisan. Like it may be the only thing that we can point to that it's like something that totally makes sense and then both parties are like, "Yeah, I like that." So we have that going for us where it's not like an election is going to blow it up. Um and and to be fair, like a lot of the rest of the world is slowly coming around. Like we saw Well, I mean, you guys still have some work to do down under, but you know, like Korea kind of did a U-turn. Like uh Japan obviously did a U-turn. Like a lot of countries in Europe have done U-turns where they were like no nuclear and then some time went by and they kind of thought about it and looked at it, saw what happens when you have a gas price squeeze and we're like well maybe. So I I think it's going to go global. It is unfortunate because we're falling behind China on that as well. They're they're basically a generation ahead of us. And then when it comes to again cost competitiveness like not close but to go back to Vogle like it it was wildly overbudget took forever but it was the first one we built in a long time. you know, whenever back in like the 70s and 80s, just mostly 70s when we were building a lot of them. We got good at it. We got good at doing it at a reasonable price. My dad actually helped build the the South Texas project uh nuclear plant. But even that one, like that thing is cited to hold like six reactors. I think they built two, stopped uh like 10 years ago. They started talking about putting in another reactor or two, didn't do it. Ran into some red tape or some cost overruns and it was like, ah, let's not do it. And that we've seen some of that like and a lot of a lot of the nuclear sites in America are cited to add more reactors. So there's even super lowhanging fruit for those AP 1000s to be like well just put it here like you got all the permits and stuff you need basically ready to go >> and the impetus came after that Iran crisis back in the 70s as well. So the funny how it all yeah it all comes back around right. So yeah, I I do think I I think a nuclear renaissance is here for the globe and I think the US is going to be part of that. One one good thing I will say from the US side is like when it comes to some of the designs for SMRs for micro reactors like there's some awesome like technical leadership in the US on that. So I think I think we might be able to do well especially on some of the smaller stuff. Um, now it's it's moving slow because our regulatory structure has been slow, but we've we've seen like very solid legislation to to speed that stuff up, to pull out some of the red tape to just to to be more like helpful instead of in the way from the regulatory side. Um, the problem with it is it's going to be expensive at first. It's going to go over time and over budget because it's new, like it's new technology. So, I hope the investments made to where they can keep iterating until they make it, you know, quick and efficient and smart and bring the cost down because you're building, you know, a thousand of them instead of three of them. Like, you can get those, you know, the the benefits of scale and everything. So, I I do think that is a a bright spot for America, but at the same time, like we're not breaking ground on too many of these things yet, and that part's frustrating. So, I'm hopeful, but I would like to see a lot of shovels in the ground, a lot of permits, and and you know, this stuff getting built. >> Fingers crossed. >> Little little [clears throat] little addendum to put on there, too. Um, I think that this also highlights one of the issues that the West is dealing with, and I don't think it's just uniquely American. And I think I' I see evidence of it all over Europe as well. But excessive regulation, especially regulatory capture, meaning some a lot of our biggest companies figured out something really smart in the last 20 years, which was if I get a supremacy position in any industry and I'm swinging a bigger stick than everybody else, then regulation actually has become my best friend. Bill, are unfamiliar with this topic, there's a I think a brilliant guy named Bill Gurley that did a TED talk on this uh and and everybody should look it up and go because it's exactly what's happened here. And again, I think it has to go kind of along the same lines of us embracing other things. I at some point we all started believing regulation was just the answer to everything. And I think we failed to see that regulation by its very nature, is it needed? Absolutely. Um, but one of the biggest things regulation does is creates barriers to entry inside of sectors and and in inside of economies. And who benefits the most from that? The guy at the top of the stack, right? And and you can see it in every single metric you look at in the United States as it relates to our economy. Meaning, you know, look at an industry where 30 years ago there were 11 to 15 players. You're down to two or three now, right? And you've just consolidated. And so, not only do they have tremendous pricing power, but you've got a you've got a you've got a um a tax system in the United States that is grotesqually uh favorable toward large corporations as opposed to small corporations. And then, you know, when you're a startup trying to break into something, the costs of that regulation by definition are much more impactful and much more penal to you. And um so I think it's sort of we talk about this in the United States at all all your as it relates to the US economy, but you have this unholy union right now between large corporations and large government and um the regulations that we used to think were a way to really keep these guys in line and hold the line. The these guys are really smart and they figured out, hey, we'll welcome the regulations because when you're the biggest guy with the lowest cost, a regulation is a competitive edge for you. just full stop. Right? So, that's that's that's another thing that I think the the West is choking on right now and they need to get we we need to get some answers and and like Chase alluded to it. You know, look at what China's doing. We don't lack the innovation and and the gumption and the American get-go spirit and all that kind we we we've got the ability to do that same thing, too. Why are we not? It's regulation, pure and simple. the other metals out there that really stick out and are interesting to you. I wanna I want to get a quick kind of take on this. Uh Chase, I know you spoke about nickel not too long ago. I think you did a post about this and that really sparked my interest because I I'm pretty excited about nickel. I think you know everything all the foundations are being laid for for the capital cycle to to do what it does. So maybe if that's the one capturing your your imagination, keen to hear your thoughts or if there's anything else jumping out at you right now, I would love to hear that. >> And hasn't worked since I wrote that piece. But yeah, I I like nickel. I mean the the demand side first of all just go look at the electric stack. There's your demand side and then obviously just steel which you know would probably need some steel but uh and and then supply side is really was honestly become really the story because we have you know supply discipline finally out of Indonesia and and it looks like in a meaningful way. So as long as you keep that supply discipline out of Indonesia like I just think that you project supply and demand out a few years as long as they keep that discipline you're going to be in great shape. I've been also really really excited about aluminum for very similar reasons. Uh the demand side, electric stack, massive demand driver for aluminum. Um and on the supply side, and speaking of that, like you look at EVs, some of these castings for EVs, they require essentially new aluminum. It can't be recycled for whatever reason. I don't understand it, but um so I kind of like that because it is imminently recyclable, right? Um but China's supply discipline is very very helpful. So, as long as China keeps supply discipline discipline on your aluminum, I think aluminum is going to be a good place to be. And obviously, we've lost some smelting capacity and and some exports out of the Gulf that that could end up helping a lot too in the next few years. And I liked it more, you know, a few months ago whenever it just broke out. But th those are two metals that I I I think have a an kind of a underrated future for the next few years. Zach, anything anything jumping out at you on on on the medals front there? >> Again, due to my background, I mean, gold is an obvious one, but I I continue to see a need for gold. Um, just to just to I mean, you know, you look at the last 20 years and there was really no need to sterilize dollar exposure on a central bank balance sheet. I I think that there's clearly a need to do that now. I don't see that need going away at any time soon. As a matter of fact, if I look at anything here internally in the United States, it's really hard not to project there to be a greater need to sterilize dollar exposure 10 years from now. I hope I'm wrong, right? I hope there's things that we do that change the trajectory of that. Um, and then I I was listening to the nickel thing and I was actually looking something up regarding nickel on my phone to remind me of. And did Chase mention copper? >> No, we haven't had the word copper yet. >> Yeah. So, so copper is another one for me. I let's go right back to the electrical stack. And then this is something that guys that are focused on metals and commodities in Perth probably have their hands around. Uh uh and I'm probably not going to tell you anything you don't know, but one of the things in metals that I think misses a lot of investors right now is the fact that um I don't want to say ever just because my you know I didn't and I've been doing this for about 20 years. So, you know, I'm not like one of those guys that's been in the sea for 45, but um the the bare market in metals was really unlike any cycle I've ever seen on the downside. Meaning, you know, if you didn't want to get any returned phone calls or you didn't want to be invited to any conferences for more than a decade, just mention the fact that you're into commodities and metals, right? And and when you see the level of that that industry was starved of capital and you look at the lack of new mine openings and then you look at the shifts that we're making in terms of rebuilding grids and the electrical stack and all the things we're talking about. I think people are looking at current supply and demand dynamics and making the same mistake. You know, we've all seen this, right? What makes a commodity bull market? A bare market long enough for people to for people and investors to forget how commodities work, right? And if you need commodities, commodities are the tree that you better plant today if you want shade 20 years from now. And we haven't been planting any trees flat out, right? I mean, I virtually every PM and every industrial metal has had net mine closings over the last, you know, how many years, right? And so go look at population and GDP growth over that same period of time. It's you don't have to be an expert to sit there and go we got a problem. And I I think in a technologically driven world and as stupid as this sounds, guys like us that are so in tune to it, we forget. But everybody I think you're seeing a lot of it play out in oil markets right now, right? People, we're so used to pushing a button. We can order something on Amazon and have it delivered to our front door in seven hours, right? And I think that that is really that and a lot of other things and just ignorance when it comes to it. If you don't have a bunch of mine openings right now, if you're not starting a bunch of new mines right now, and we can already see potential copper shortages 36 48 months out. I I mean, it it seems like a pretty good bet over the next 10 years um that you're going to need a lot more copper. And how do you get a lot more copper? Make it more economically feasible to mine. What does that price go up? Right? And so I that one just seems like an obvious one to me. Um anytime you're dealing with a metal like copper though, you've got to be looking over your shoulder at recycling, right? There's a lot of other places that it can come from. But um I it's just it's really hard for me to look at the way the world is getting electrified and look at the way that so much of this innovation is going. You know, just think about like think about if we start replacing large parts of of global militaries with drones, right? Like they that's going to be a substantial input of copper. Um and so I you know and you again you see it in so many other places where the need for you know things that are really good you know really good conductors of electricity things of that nature. So I I think I think copper is going to be a great one. Um, and I'm sure there's going to be some obscure metals out there, possibly nickel, that that will end up, you know, one of the things we talk about is in in commodity cycles or in commodity pinches, the things that end up being the best performers are almost never the things that everybody is betting on, right? It's always like some obscure thing somewhere in some, right? Those weird things. So, that will probably be the case. But, I mean, when you look at both uh copper and nickel, I it's really hard for me not to see a really steady demand and higher prices into the future. >> Yeah. Yeah, definitely. Guys, this has been awesome. Really appreciate your your time. We'll link to the research you do, the the podcast you do in in the show notes, but thank you for for for joining me and and sharing your thoughts on on what's happening in the wider world and and some of the metals that we follow pretty closely here. >> Hey, man, thanks for having us. And it's great to connect with uh we love Australians, love the Aussies, great to connect with some friends from down under and uh at some point I I know I would like to get down there and visit that beautiful country of yours and if we do that we'll make sure we reach out and give you a ring. >> 100% looking forward to it. Thank you to Sanvic ground support in links focus the platform by market tech [music] capital MetalsHub and Costine Intelligence money miners. Now remember, I'm an idiot. JD is an idiot. If you thought any of this was anything other than entertainment, you're an idiot and you need to read our disclaimer.