Copper could hit $12 as the AI bubble bursts

00:46 · Hormuz is being bypassed — "maybe half of it"

• The routes are real and he lists them: the east-west Saudi pipeline, the newly discussed Omani outlet that avoids entering the Gulf, "stuff from Iraq going into Syria with hundreds of truck," probably something via the Caspian.
• But the scale is guesswork and short: "maybe you're bypassing half of it… No one's going to know the exact number." Ships "make pick and runs through and get through," yet "it's not sufficient to restore trade there."

01:32 · The forgotten half of the Gulf loss — LNG, aluminium, fertilizer

• "It's not just oil, right? It's LNG. It's 6 or 7% of your aluminum smelting capacity is in the Gulf. Fertilizer production, nitrogen fertilizer" — the petrochemical complex built on cheap Gulf energy.
• Bypass routes move crude; they don't restore smelters or ammonia plants. "That's still a problem, too. And I think a lot of people have forgotten that."

02:31 · Coordinated drawdowns are finite — and the deal window is political

• "You've had coordinated withdrawals… the Chinese restricted their imports significantly and were drawing down their stocks. But again, this is all finite. It cannot just go on forever."
• Why Washington needs a deal now: three months from a congressional election, "they don't want oil prices spiking over 100 and gasoline five dollars plus a gallon and diesel six or seven." The tally of "a deal is imminent" claims he stopped counting at 38.

03:35 · The theory: China took the oil pressure off — and gets Taiwan

• Presented explicitly as somebody else's plausible theory, not knowledge: "It's impossible for us to know at our level." The question it answers is a good one — what motivates China "to stop importing four, five, six million barrels a day" and burn stocks "well over a billion barrels"?
• "What are they getting for it? And I think they're going to get Taiwan. I think we're going to back away from Taiwan and there's not going to be a military invasion… These things are already melding economically and politically."

05:00 · Hemispheric control points — the US falls back on its own hemisphere

• The 2027 China-war planning line from the previous administration's chief of naval operations is now "a ridiculous statement… that's just not going to be possible."
• His standing thesis restated: "the world's breaking down into hemispheric control points and the US is going to fall back onto its western hemisphere. And we don't have the ability, the money, the will to project this power anymore" — a "post World War II military mindset that asymmetric warfare has nullified."

06:53 · What would falsify the empire-decline thesis? A politician who holds spending

• "This is nothing new under the sun… the same thing happens to all empires. They go into decline because of military overreach and because they spend too much money, go into debt."
• The falsifier is named and dismissed in one move: "Name one congressman or senator or major politician that's talking about not just not even cutting spending, holding spending." Deficits ~$2 trillion, "you're going to crack 40 trillion in debt… It's going to continue until it can't continue."
• Why reform doesn't arrive first: "you're asking the establishment to correct the establishment." The Argentine sequence — crisis, then no other choice, then acceptance — is the template ("do like Milei did"), and "how long did Dodge last? There was no appetite for it."

09:34 · The provocation, stated as an investment premise

• "The United States will not exist as a political entity intact as it is now in a generation. It's impossible. And so invest accordingly." Immediately hedged on horizon, not on conviction: "Is that actionable tomorrow morning when the market opens? No, but it should be in the back of your mind."
• The lived reference is post-perestroika Russia: "massive inflation, massive taxation, political, economic, and social upheaval." Federalism is already fraying — blue states refusing federal law now, sheriffs refusing gun laws under the prior administration: "this is already the breakdown of federalism… insidious."
• "The average Roman living in Rome during its decline didn't know Rome was in decline." The UK is the softer analogue — Suez, or arguably World War I: it "didn't dry up and blow away," it just stopped mattering.

12:13 · Doug Casey's International Man — three political baskets

• "You should invest in one country, bank in a second, and live in a third. And the idea is don't have all your eggs in one political basket."
• The domestic trend he's diversifying against: a younger cohort that feels it hasn't benefited pushing "we're all in this together and everybody needs to pull their load. You can call it socialism… but you're seeing that. So, you need to prepare accordingly."

12:42 · The sequence: double-digit inflation → yield curve control → capital controls

• "People think 3% or 4% inflation. Wait till you have double-digit inflation, wait till you have yield curve control, capital controls come after that" — citing Russell Napier and others.
• American exceptionalism is the thing he rejects: "it's happened in many, many countries around the world, and this idea that the United States is somehow exempt from economic laws and these political laws that go throughout history, it's not."

13:44 · M2 up ~50% since COVID — and Warsh in a Volcker costume

• On the host's M2 chart: money supply up almost 50% since COVID, so the job is simply to outperform it with hard assets. "Yes, that's your goal."
• "Mr. Warsh tried to portray himself as the new Volcker, which I think was a mistake. It's stupid. The people are all clowns. You don't get into those positions unless you're going to do what's required."

14:04 · The arithmetic that forbids a Volcker — $9T to roll, $2T new

• "These debts can't be paid. They got to roll 9 trillion this year, plus sell another 2 trillion in debt for the deficit."
• Chart instruction to the audience: pull up the 30-year and 10-year back to the '80s — "you can obviously see that the bond bull market was over a few years ago and we're going to be into many years of rates going up."
• The breaking point is named: "the US economy can't take 7 8% long bond yields. The thing will break."

15:33 · So they do what Japan did — and mandate the buyers

• "What did Japan do? What do all these countries do? They do yield curve control. The United States did yield curve control. Lyn Alden wrote about this… after World War II we had debt to GDP that exceeded what we did here."
• The objection ("I'm not going to buy those certificates of confiscation") is pre-answered: "Yes, you will. Because who makes the laws that regulate insurance companies, banks, pension funds? Congress. They'll mandate it. You have a Fidelity 401K, you'll buy 30%… You don't have a choice."
• The mechanism in one line: "they'll hold the rates low, inflation will be above that. That's yield curve control. And you slowly inflate the debt away over time." Even 3% for 20 years halves purchasing power.

16:39 · Cantillon — who touches the money first

• "Inflation, which is created by the state — you have to understand the Cantillon effect. He who is closest to the money printer wins. He who gets his hands on the money first and can put it into assets wins."
• The corollary is the whole positioning argument: be an asset owner early in the chain rather than a wage earner at the end of it.

17:01 · Wartime deficits with no war — and why they can't be withdrawn

• "You're running deficits as a percentage of GDP that are the same that you ran during World War II when you were fighting on two fronts… Where's the war? It's supposedly the best economy ever."
• The dependency is the trap: "You pull that two trillion out, you would have a collapse. This is another reason why you're not seeing the mass deportations. The country would collapse." So they kick the can — "this is the sandbox you have to play in, so invest and live accordingly."

18:42 · The AI buildout is the biggest bubble — bigger than 1999 and bigger than housing

• Asked whether photonics and a data-center backlash break the copper call, he starts by agreeing about the bubble: "as a percentage of GDP, this AI buildout exceeds what happened in 1999 and 2000" (fiber/telecom/internet) "and it also exceeds housing."
• The reason it must end: "the amount of capital that they're investing, they cannot get a return on… At some point, you have to have enough cash flow to justify the expense that you've made. They have not done this."

20:30 · The financing ladder — cash flow, then stock, now debt

• The tell he tracks isn't the capex number, it's how it is funded: hyperscalers "were doing it out of cash flow… Then when they exhausted their cash flow, some of them started issuing stock. Now, they're issuing debt. So, if you can't pay your debts, what's going to happen to these things?"
• And it never converts to maintenance capex: "it's not like I build this thing and it's a 20-year factory… It's a continuous arms race" — Zuckerberg's own word — with Nvidia's cadence forcing a reinvestment "every two or three years."

21:35 · The supply side is the reason the dip is temporary

• "There's not enough copper… We don't have enough copper mines. Chile's in terminal decline. Peru's having problems." (Friedland is the authority he points listeners to.)
• Demand isn't AI-dependent: "the demand for copper is not just for AI, it's for electrification and development in the global south and east."
• The jurisdiction filter: an $8bn eastern-DRC mine works for a Chinese-partnered developer, "but if you're Rio or BHP… selling that to your board is difficult." And the scale required is historic — "we have to mine as much copper as we've mined in the history of the world in the next 20 years… I don't see the investment."

22:00 · "$10 or $12 a pound" by the end of the decade

• Framed as a question with a range, not a target: "by the end of the decade, where's copper going to be? $10 or $12 a pound? Who knows? It's in the future, but the supply — you have to look at both sides of it."
• The path there is explicitly bumpy: a temporary pullback if the AI build-up blows up, "yes, absolutely. Will that be permanent? No, because the supply is just not there," with resources "deeper, harder, more complex, and more politically volatile."

23:56 · Photonics doesn't touch the copper that matters

• Direct answer to the question: the substitution is in data transport, not power. "What goes into the transformers and all the wiring for the power. That's where a lot of the copper's consumed."
• Cyclicality is the lesson wrapped around it: "you don't just buy and hold and forget about it like it's buying Monster or some growth stock and you just sit back for 20 years. That's not how you play resources."

24:12 · The trade in the bust: $4/$3.50 is the median cost of production — "back the truck up"

• "When this bubble blows up, which it will, we're going to have a deep recession… copper go down to four or 350, that's kind of median price of production. That'll be a buy, you should back the truck up."
• Why: "what's the Federal Reserve going to do? They're going to come in and print more money than any — that's what they always do and then what happens to all these hard assets? Just look at history. They rally."
• And the pre-emptive half of it: "if the bubble's popping… I have some copper stocks that are up several hundred percent, maybe I sell them then and buy them back later. That's what you have to do in this sector."

24:49 · You will not "ride through" a 50–60% decline

• "Everybody says you're just going to ride through. You're not going to ride through a 50 or 60% decline. 999 out of a thousand people will sell. And they'll sell at the bottom."
• So the discipline is pre-commitment: "if you have profits in the hundreds of percent in a couple years, you might want to think about taking some off the table… you have to manage these positions and understand it's cyclical."

25:39 · "I don't have magic formulas" — and a blunt gate on the sector

• Refuses the 30%-rule question on principle: "What I do is not going to be appropriate for what other people do. I don't know this person."
• The gate, stated to offend: "Most of you people should not be putting your money into these things. You don't have the background, you don't have the knowledge, you don't have the constitution." Then: "But you're going to buy these things, okay?" — so learn the volatility first.

26:22 · Measure the volatility before you own it

• The homework is concrete: "Look at the high and low. Go back all the stats available. Go back each year and look at the difference in the high and low. These things can move 50 or 60% up and down each year in the middle of a bull market."
• Rick Rule's rule as he cites it: "you have to make that volatility your friend."

26:48 · The logbook — write the thesis down so the drawdown can be judged

• "If I buy XYZ copper company — have you written it down in your logbook, what's your thesis behind it? Is it a developmental company? Is it run by people that have serially been successful before? Like a Ross Beaty or the Lundin family."
• The written thesis is what makes the fall actionable: "if it drops 60% and nothing's changed with the thesis just because the market took a short-term blip, you should be buying more."
• The failure mode is the inverse: "First thing I ask them is why did you buy this? And there's a long pause… 'I saw something on Twitter.' So you didn't do any research… and now it's down 50% and you're upset."

27:16 · Two sizing rules: half off after a double, and sleep as the position limit

• "If you're in resource stocks and you're selling after 30% gains, you need to get out of resource stocks." The concession he will make: "some people say it goes up 100%. Maybe you could take down half your money. Now you've recovered your initial capital and you can let it ride."
• The universal rule: "if your stomach is hurting and you can't sleep and you're worried all the time, then your position is too big. You should sell it down."

28:34 · Canned peaches in heavy syrup

• "When the masses are selling and there's nothing fundamentally wrong with the company and your thesis is intact, then you could buy more."
• The framing device: peaches at a dollar a can at Kroger go to 40 cents and your wife tells you to buy a couple of cases. "Well, this is the exact opposite of what people do in these markets." Get knowledge — "this is a knowledge-based business."

30:00 · What's behind the host's paywall (not captured)

• The interview continues for the host's premium subscribers: "where he sees opportunity in oil and gas royalty companies. How he thinks about oil services. And we also get into his number one focus right now for what he thinks could be the biggest opportunity ahead."
• That portion is not archived here — any names discussed there are outside this page's coverage.