Actionable Intelligence Alert

Things are breaking due to rates being too high. In the past, every time we had a financial crisis the FED always went back to the playbook of papering over the problem. Are we closer to the end of the tightening cycle or the beginning? What asset classes benefit from a cycle of excess liquidity?

With the failure this week of Silicon Valley Bank I believe we are seeing the results of continuing liquidity tightening. If the FED continues raising rates and shrinking its balance sheet you will see more of this.

I had two tranches of coal producer Peabody Energy in the AIA portfolio.  I discuss why I bought the shares and why I recently sold both positions for 400-600% gains.

More data sets are lining up to indicate that the economy is weakening and yet the market has been rallying.   My view is the lag effects of the rapid rise in the FED funds rate still have not fully shown themselves in the economy.

I give my base case for the economy and what I am looking at for the rest of the year. I caveat this by reiterating that I am not an economist. I am looking at data points that in the past have led to certain outcomes. Notably a recession.    However, keep in my mind that as new information comes in I may change my forecast and that forces me to change course with various investments. Again this is not investment advice.

Cameco reported the largest fuel deal ever signed by the company. The deal is with the Ukraine State Energy Company.    Other discussion points This Week   -Japan reaffirms extensions to nuclear plants and commitment to nuclear energy.  -Shell's board being sued by climate activists -Duke Energy takes big impairment on sale of renewable business  -Jet fuel demand soaring as China leaves pandemic  -Investigative article on US complicity in Nordstream 2 sabotage

In this week's video:   -Yellowcake upsizes offering from $50 to $75 million  -Sprott Junior Uranium ETF begins trading  -How much spot uranium is really out there. One trader says if he tried to buy 1 million pounds it bump Uranium's price $5/lb  -Uh oh. Cramer said to buy oil.

Lots of news this week:   -KazAtomProm production downgraded by 4-5 million pounds in 2023  -Chile's copper production down for four years in a row.  -Biden administration kills major copper mine in Minnesota  -Chevron announces $75 billion stock buyback and increases dividend.

China set coal production records in 2022. The country will build 270 GW of New Coal Generation Capability by 2025.  Why? They say because of energy security.

One of the main ideas at AIA for 2023 is the return to normal of the Chinese economy and how this will affect oil and other commodity prices.   Traffic congestion and air travel are bouncing back quickly since the CCP lifted the lockdowns on Chinese citizens.   Forecasts are for up to 103 million barrels per day of oil demand by Q2 of 2023. The question is can the world produce this amount of oil?