Title: Diesel prices are at an all-time high. Ag prices are now moving higher. AIA Weekly Report 9.5.26 Show: AIA Weekly Market Update (Actionable Intelligence Alert — YouTube) Guest: John Polomny (solo host) Date: 2026-09-05 ("Today is Saturday, September 5th"; YouTube publishDate 2026-09-05) URL: https://youtu.be/oq9NylCbpbc Length: 58:45 Note: Captured from YouTube's "Show transcript" panel (auto-generated English) via Stephen's logged-in Chrome, segments merged into ~25-second (mm:ss) paragraphs. Verbal fillers (um/uh, interjection "you know") removed and stutters/false starts collapsed; wording otherwise verbatim and every (mm:ss) cue kept in place. Auto-transcript garbles corrected to the intended entity: "John Pauly"=John Polomny; "canon effect"/"Contion effect"/"Richard Canon"/"Canton"=Cantillon effect / Richard Cantillon; "Coaernick Advisors"=Kopernik (Dave Iben); "Lynn Alton"=Lyn Alden; "Bessant"=Bessent; "Murray Stall"=Murray Stahl; "landbridge"=LandBridge; "Donro doctrine"=Donroe doctrine (his coinage); "Vakam Muerta"=Vaca Muerta; "Kersners"=Kirchners; "Pierre Lassan"=Pierre Lassonde; "Charlie Mer"=Charlie Munger; "dear and company"/"deer"=Deere & Company; "POS, Texas"=Pecos, Texas; "Harry Brown"=Harry Browne; "Calumet" as spoken (Calumet, CLMT); "bolevik"=Bolshevik; "shyers"=shysters; "Opensecs.org"/"open secrets"=OpenSecrets.org; "geocynchronous"=geosynchronous; "Bubis"=Bubba. Left as spoken because the intended form is uncertain: "pre Brent premium" (a Shanghai-crude vs Brent spread chart), "Chris Wright was down there with G uh Verona", "the Contion effect" book title "essay on the nature of trade in general" (Cantillon's Essai sur la Nature du Commerce en General). "B3" is the Brazilian exchange operator (B3 S.A., US ADR BOLSY). Slide/chart references are to the deck he shares on screen. =====
00:01 Hey guys, John Polomny here, Actionable Intelligence. Today is Saturday, September 5th, and this is the weekly market update. Disclaimer: Anything that you hear or see on this podcast or video is not to be taken as investment advice. I am not a registered financial advisor and I cannot give you personal financial advice. Please do your own due
00:27 diligence. It's your money. It's your responsibility. Okay, let's start. So, I found this chart. I thought it was interesting. It shows the percent growth in the S&P 500 and production and nonsupervisory wages since 1964. And this is another demonstration of
00:53 what I've talked about in the past, the Cantillon effect, okay? In the assertion that I have made that money printing typically goes first to asset holders and increases their wealth and over time trickles down to average regular people and ends up being higher prices. And you can see
01:19 the discrepancy since 1964 in the return for the S&P 500 and just the increase in wages for basically working people. And you could see the problem. You could see where the wealth disparity comes from. You have to be in the markets when you're in a fiat-based monetary system. And so I'm
01:44 not going to go deeply into the Cantillon effect and who Richard Cantillon was. I'll just do a quick, got a few notes here. Basically, the Cantillon effect is the economic observation that new money does not enter an economy evenly, meaning those who receive the new money first benefit at the expense of those who receive it last. This is named after Richard Cantillon, the 18th century Irish
02:12 French economist and banker. And he introduced this concept in his book essay on the nature of trade in general. And he demonstrated that printing money or discovering new gold and silver deposits, I mean that was the currency back in his time in the late 1700s. We saw that happen in Spain back in the day when it was flooded with gold and silver from the new world. But
02:40 anyways, he demonstrated that printing money or discovering new gold and silver deposits changes relative prices rather than inflating everything uniformly. So basically how it works, new currency is injected into specific parts of the economy such as major financial institutions, banks or government contractors. The initial recipients spend the fresh
03:05 capital on goods and assets before general prices have adjusted upward. There's a lag as the money trickles down to ordinary workers and consumers. Demand pushes prices up across the board. By the time everyday wage earners receive any of the new money, inflation has already eroded their purchasing power. And so, okay, he was talking about this,
03:33 300 years ago and demonstrated it. And if you want some more information on this, if you want to delve into this more, go to Kopernik, Dave Iben wrote a paper. He has written papers about this. He's their chief investment officer. I wrote a paper in one of the newsletters probably two years ago summarizing this and kind of
03:58 demonstrating how it works. And so how is it relevant to us? Well, it explains how quantitative easing and central bank bailouts disproportionately enrich asset owners, hedge funds, and large corporations. It's widely cited as a key driver of modern wealth inequality where asset prices, stocks, real estate, etc. surge long before wages catch up. And this is demonstrated by Dave Iben. What he
04:27 uses is the Mississippi River as an example. If you have this huge snow melt up in the boundary waters of northern Minnesota and all these rivers that flow into the Mississippi from North Dakota and all these places and you have this excess water from the snow melt. Well, that would be similar to the money, all this new money coming
04:52 into the system. You're putting all this water into this Mississippi River system. You're putting all this money into economy. Well, it doesn't initially affect anything down in New Orleans or Memphis or St. Louis. But as that excess water starts flowing down the Mississippi, well, you don't know if it's going to overflow dikes in Iowa or what's going to happen further down. You can't project, okay? But it's going to have an effect. It's the same thing with monetary injections, right? It
05:23 doesn't uniformly enter the economy. And so this is why I say when I make the comment, you must be at the table. You must be in the game in a fiat money system. This is how you have to stay ahead. If you're not an asset owner, you are out of business. Look at the chart. If your only income is wages, you are going to be shining people's shoes.
05:48 And you can go vote for whoever you want. This has been going on since 1964. Unless you have a Bolshevik revolution and they seize everybody's wealth, I guess, which is a possibility, this is going to continue until it can't continue anymore. And that's why you must be an asset holder. That's why you must understand the monetary system. That's why you must have a seat at the table. If you think you're just going to go in and work hard at your wage slave job,
06:19 then your boss is going to throw you a bone 2% or 3% raise every year, you're going to end up on that brown line at the bottom. You have to be an asset holder because this monetary situation is going to be driven by our fiscal decisions, poor decisions that we've made and it's going to be monetary injections ever increasingly going
06:47 forward that they're going to try to use to paper this thing over. I mean, you are certainly naive if you think we're all of a sudden going to wake up and fix this. You're living history here of a historical event that's happened many many times in the past because human nature doesn't change.
07:12 So, I thought this was an excellent chart and this kind of segues into a lot of things I'm talking about. The new portfolio I've created in the Actionable Intelligence Alert portfolio system that I have, we have the AIA portfolio for capital appreciation, we have the dividend portfolio which is high income with the spin of possible capital appreciation and now I've
07:38 created the permanent portfolio, a portfolio of real assets, income-producing assets, things that you can do to hopefully preserve your wealth as we go through this tumultuous time, this fourth turning of political, economic, social, and financial volatility. So, if you're interested in that,
08:05 this last issue, which is out, the September issue of the newsletter, I talked about the permanent portfolio and we actually added the first company to the portfolio. More to come on that obviously. And I kind of want to segue into something I want to talk about. I've been talking about this for a while. Then people have been sending emails and messages. Well, what should I do? Well,
08:34 I always go back to like Doug Casey says, five pillars or whatever, three pillars. I mean, how Harry Schultz started this back in the day, international man. You live in one country, bank in a second country, have your investments in a third. You're not tying all your eggs in one basket to one country. Well, this is very interesting and very James Bondish, but it doesn't really work for the average person. And so that's why I've created the permanent
09:04 portfolio. A way to work in the system because to really do that international man thing, you really have to be a high net worth individual. There's a lot of skullduggery and schemes and scams and this citizenship stuff and offshore banking and all these things. If you're high net worth, you can actually get access to legitimate people that can help you. If you're, like I said before, if you're somebody that just sold your business for a million and a half
09:33 dollars, you probably don't have the threshold to attract those type of people that can give you correct and prudent advice. What you're going to attract is a lot of shysters and scammers. And so it also goes down to what do you really want to do? I mean, people who have ties to this place, they have children and grandchildren and they have history here. They don't just want to pack up and move to Costa Rica. That's not for everybody, and then have to fly to Singapore to put their physical
10:04 gold in a depository. I mean, this turns into a job almost. It can. And this is why high net worth people have advisors and people and agents that do this for them. Okay? And so just depends on your temperament, your mentality, what you think is going to happen. What's the probabilities of this debt just steamrolling or snowballing into a
10:33 full-blown monetary crisis. Well, the chance isn't zero, but it's not very high in the next week or year, probably. But we don't know. We know that ultimately this poor stewardship of our country and these things are deteriorating. But again, you have to remember what Adam Smith said. There's a lot of ruin in a country. This is a very large and wealthy country, just like the Roman Empire was, and it took
10:59 centuries for it to decline. So, I'm not sure that that's the case here, but I don't think people have to go into panic mode and what should I do? I think you should look at things for the way they are and then adjust yourself. I'm going to talk about this later on. People are starting to self-segregate in this country as far as moving to areas where they have more kinship, more financial opportunity, lower taxes
11:27 and regulation. And that's starting to happen, okay, massively. That trend is going to accelerate. So, there's a whole bunch of options. It just depends how everything fits together best for you as an individual. And I can't give you that advice. I'm not even going to go there. I just am going to create this portfolio based on kind of what Harry Browne
11:56 kind of conceived, 50 or 60 years ago, a permanent portfolio, something that can take you through just about any type of whether you have a deflation, an inflation, recession, boom, whatever. You don't necessarily become super wealthy, but you are positioned for just about any outcome. And that's what we're trying to do. So, a little bit of advertising there. I'll
12:22 move on with the slideshow, but that's what I'm talking about. So, this is interesting. This is from Bloomberg and JP Morgan. Evidently hyperscaler, we're talking about the data centers and Nvidia debt issuance as a percent of treasury bond issuance. And so you can see the acceleration in debt issuance by these data center
12:48 people, these hyperscalers as they've consumed all their cash flow, current cash flow from their businesses. They're going into debt. Now again, I have no idea how this will end. I don't know if it will end. Some people have said we're in a new era and John, you don't get it. Yep. I probably don't. That's the problem. I don't play around in areas I don't know that much about. I certainly don't know a lot about technology. I use technology. I don't want to invest in
13:16 technology. Okay. It's a specialty that it's in the too hard pile for me. But when I see things like this, I've seen this movie before in the telecom bubble in the late 90s and in 2000 and how that ended. And this is far and beyond what that was. And so I hope that this thing doesn't blow up because if it does, it's going to be a disaster for a lot of investors.
13:48 So here's an interesting thing. I guess a chart here is China's buyer strike over. One of the things that has kind of kept the oil price from really blowing up to the upside has been the fact that China has been not importing oil from the market. It's been drawing down its inventories. Now, they're very opaque on reporting what they're doing obviously. But now it looks like
14:17 there may be some indication that they're re-entering the market. And if they're re-entering the market, that will reverse the benefit of what them not being in the market did in suppressing the oil price. And so this is something to watch. We now have oil prices around $90 a barrel. I'm going to talk about product prices later on in this presentation,
14:43 but this is something to watch. I think the first thing to note is the pre Brent premium is now went positive. That's the first time since May. So, this is showing you the Shanghai active contract versus the Brent contract. I mean, if China's coming back into the market, then we're probably going to be looking at crude above $100 a barrel. And we're less than
15:11 60 days to the election. And we've got record high diesel prices. We got gasoline. I think there's a record of over $4 a gallon on average during a Labor Day holiday. I mean, this is not good. So, anyway, I still remain bullish on oil. I have oil investments. They're doing
15:36 fine. I like companies that both have upstream and downstream. That's really doing well. Another thing that people aren't paying attention to is base oils. Things that are used for lubricants and your motor oil for your engine, things like this. This has went completely into geosynchronous orbit. I think Calumet is a company that some people have mentioned as a beneficiary of that. Not a recommendation, just interesting
16:01 that that company has a lot of business in that area. It is kind of a crapgo. So, buyer beware. Do your own due diligence. So, here it is. Record pump prices. 5.85 a gallon for diesel. And I did see a Love's truck stop put it on the Facebook. I'm in Pecos, Texas,
16:29 which is West Texas. $6 a gallon for diesel. I'm sure it's higher in California. I'm sure people in the comments will tell me that it's higher where they're living. This is not good because diesel, as we've talked about before, goes into everything. Okay? And so this is the highest recorded price for diesel. And this is where all of your food comes from on diesel trucks to your grocery store. Agricultural, the harvest
16:57 season's getting ready to kick in. They use diesel. Shipping, trains, other distillates like kerosene, jet fuel, all of these things are going crazy as we've talked about. Why? Because we've had refining capacity taken off in the Gulf. Okay? We don't have enough refining capacity in the West anymore because we're de-industrializing because of climate change and overregulation.
17:27 And so taking those refineries and shipments from the Middle East out of the equation and then our allies, Ukraine, firing missiles at Russian refineries. Well, if there's a set amount of diesel supply in the world that includes the refineries in the Gulf and the refineries in Russia and you take them offline and the demand
17:53 stays the same, you don't have enough diesel. The price goes up to ration that diesel supply. Get it? And so a lot of poor decisions on top of other poor decisions result in higher prices. Your Amazon packages that are getting delivered, all of these things rely on diesel and so it's going to trickle down. And I
18:18 think diesel prices are going to go higher. We need to resolve this situation in the Gulf, repair the damage to these refineries and get them back online. We need to come to a resolution in this conflict in the Russo-Ukrainian war and stop the tit for tat back and forth attacks on energy infrastructure. It benefits no one. Okay. But our leadership
18:44 class isn't interested in the everyman and his problems. They got their own things going on. So here it is right here. This is just a more visual experience for you. Diesel up 13% in the last four trading days. This is New York Harbor
19:10 ultra low sulfur diesel futures. The reason that there's a discrepancy here, 4.60, this is without all the taxes and everything, levies that are on it. So, but you get the point. You see what's happening. Okay. And like I said, the current administration promised lower energy
19:35 prices. We have record high prices. What do you think Bubba is going to do when he goes to the polls? So lumber prices are in a bear market obviously because the housing market's weak. Why is the housing market weak? Well, because prices are too high because of contributions of the Cantillon
20:02 effect. All that liquidity coming into the market over time flows into assets, i.e. housing. That's one reason. The other main reason is interest rates are higher, right? So the 10-year is up quite a bit. And mortgage rates are based on the 10-year. And so I remember when we were in
20:28 the period of a decade long period of zero interest rates, which wasn't too far back in the past, you could get a mortgage for under 3%. People were getting 2.8, 2.9% mortgages 30-year. Okay? And so now you have an inflation rate. So, this is a good deal because if you have an inflation rate above that, you're actually being paid to have that mortgage. And so, why would you pick up and move and go get a
20:55 mortgage for 8% and get rid of your 2.9%. So, this is another thing that's strangling the housing market. See, all of these things are interconnected and most people don't either think about that or know that, intermarket relationships. And if you have higher energy prices, higher agricultural prices, higher commodity prices, higher insurance prices, higher tuition prices, okay, this pushes up interest rates because inflation
21:27 causes the value of bonds to go down and bond buyers demand a higher rate to compensate them for that inflation risk, the fact that they're going to be paid back in dollars that are worth less. And so when you key everything, in business loans, housing, automobile loans, what have you, off the 10-year and the 10-year is going up because perceived inflation is going up
21:52 or actual and perceived future inflation is going up. You see how this all ties together. And I guarantee you, we have a very self-selected audience here of people that get this, but most people, guys, don't get this stuff. And this is why you're seeing the rise of all these easy answers. Well, we just need to confiscate the wealthy. Government needs to get involved. Just put the theater kids in charge and
22:19 they'll fix it all. That's all you have to do. And these are structural and institutional issues that are going to entail a lot of pain to correct. There is no easy fix. Again, for our purposes, it goes back to you got to be at the table. You have to be an asset owner. It sounds glib and cliche, but in the end, all roads lead to inflation. And as Lyn Alden
22:47 coined the phrase, there's nothing that's going to stop this train. We're on a section of track with straight ahead and they're just going to push the accelerator forward on this train until we ultimately run out of track or hit a wall. It's just that simple. They're not going to reform the system. They're not going to cut back on spending. They're not going to reform these entitlements. They're simply not. It's not politically
23:14 possible. It will not happen. Maybe it will happen like in Argentina when the wheels completely fall off and we have 270% inflation. Maybe everybody will go, gee, maybe we finally need to get with the program and live within our means and do things correctly. That's what happened in Argentina. A lot of people don't like that and they will disagree with that, but that's what happened.
23:41 Unfortunately, it took 70 years of pain to get to that point. You recall that Argentina at one point in the early 1900s was one of the wealthiest countries in the world. So that was squandered by statist policies that the people wanted. And so then all the other things that go along with that, dictatorships and the disappearing of people and all of those wonderful
24:10 things. So getting back to lumber prices, this is another reason why I've included, this is why I like forestry as an investment in the permanent portfolio. And you can say well why would I care about forestry? Look at these prices. Well
24:35 there's a lot of advantages to owning forestry. For example, trees in the forest don't care what Bessent's doing or what the recent Fed meeting at Jackson Hole, the stumpage, the volume of the trees, the growth of the trees continues irregardless of what's happening. Okay? And so your trees are getting more valuable over time. And I did not know this, but I learned this in my research. And this is
25:06 all in the current issue of the Actionable Intelligence Alert newsletter. As a tree matures, it gets more valuable. It transitions into a different stage of its cycle and can become more valuable. The other thing I like about some of these big forestry companies, there's a difference here. Okay, you have to be careful. People will come back and say, which is a legitimate criticism, well, if you buy one of these forestry
25:31 companies, yes, they're big. They have big land holdings and they have all these trees and blah blah blah, but they're still stocks. And if the stock market goes down, they'll go down. Yes, I agree with that. But what we're trading in a little bit more volatility is if you go out and just buy a thousand acres yourself, that's very illiquid. What if you need to get out of it? What if things really go off the
25:56 rails and you need to liquidate? How are you going to sell it? Okay. Now, if you don't care, if this is a multi-generational situation, well, you don't care. So, we trade off a little bit for liquidity purposes and for professional management purposes, which we get. We're going to have more volatility. Again, stocks are stocks and in a bear
26:26 market most stocks go down. What I like about it is the trees keep growing regardless. And so the other thing I like is when you're a very large landholder, and I've learned my lesson very well, thank you Murray Stahl for instilling this in me in your writings. Land is very important to own. And throughout history, many cultures have had investment theorems around land being a big portion of that.
26:53 And what I like about land is especially if you look at like the TPL model or the LandBridge model is optionality. If you own a large tract of land, for example, if I own a bunch of land, I'm a big forestry land holder and there are several publicly traded companies that can put you in this. They realize this also and you can look at, I can cut down a portion of a forest and if it's near a freeway or near a development I can say okay I get the
27:22 revenue from those trees and then I can maybe put a high-end development in there okay or I can lease land to a solar or wind farm or I can put hunting leases on there or I have mineral rights under that land. Okay, depending on how I own the land. And so there's all of these optionality. Okay, there
27:48 could be things relative to optionality that we can't forecast or see currently. So this is why I like it. And so this is giving us an opportunity because the prices for a lot of these companies are depressed because everybody just focuses on the housing market and how many 2x4s and plywood they're making. Okay. If you go deeper, you'll understand that it's actually a very interesting asset
28:18 class that can give you a lot of certainty going forward. So, one of my, I say it jokingly, I call this whole sifting out of the world into basically a multi-polar world. Looks like it's going to shake out into three areas.
28:43 One of which being the Western Hemisphere. I've called it not the Monroe Doctrine, but the Donroe doctrine. The United States is going to have to collapse into its own hemisphere just because we won't have the money or the industrial capacity or the will to be the world's hegemon going forward. It's simply not going to happen like that as we get pushed out of other parts of the world. We will have the ability and capability to
29:14 enforce our doctrine, our will on the Western Hemisphere. And that's happening. And that means all the way from the Arctic to Patagonia and you're seeing that. That's what a lot of the conflict is with Canada right now. And things like that, trade war. But we have a lot of positive things happening like in South America. South America is really tremendous. The political change there. And
29:41 this situation with Venezuela. Did I agree with what they did? No. But again, things are what they are, not what I want them to be. Believe me, if I was king for a day, we all have this fantasy in our head. If only I was in charge, I would do this, that, and the other. Well, you're not, and I'm not. And so, we have to play the cards that are dealt to us. And so, the Donroe doctrine is taking effect in Venezuela. And the news flow, I have a bot set up that just tracks stuff and sends me information in real time. And
30:12 so things are really moving forward in Venezuela. It's a tremendous asset. 300 billion barrels of oil. There's probably a lot more because of the optionality. And now things are accelerating as the US consolidates. Basically turns Venezuela into a colony is I guess, I don't know better how to say it.
30:39 It's a colonial, neocolonial type setup where we're just going to control that asset. At least for the rest of the Trump administration. I don't know what happens when AOC or Gavin Newsom gets in there. Who knows? But for right now, this is investable and things are happening. So, on September 4th, 2026, a Pentagon official said the US has taken a 35% equity stake in North
31:08 American Blue Energy Partners, the company holding 100-year rights to 17 Venezuelan oil fields with an estimated 65 billion barrels of reserves. More importantly, the agreement gives the Pentagon a right of first offer on Venezuelan oil production, including the ability to purchase a 20% share of output at cost. That moves US involvement beyond sanctions policy, licensing, or diplomatic influence into direct
31:37 economic ownership and preferential access to Venezuelan energy production. This materially strengthens the Western Hemisphere thesis. Washington is now embedding itself institutionally in Venezuela's resource base in a way designed to survive future financing rounds and potentially future political changes. In strategic terms, this makes it harder for China, Russia or Iran to regain the dominant energy position they held under Maduro. You
32:08 see, this is why I call it the Donroe doctrine. We assert our hegemony in the western hemisphere including South America and we basically kick out China, Russia and other parties. Okay, that's what they're going to do in their spheres of influence whether it's Russia and the Eurasia issue because eventually the
32:33 Ukrainian Russo war will be resolved. Russia will win. Things will realign. Europe, especially Western Europe will continue to decline in importance and go through whatever transitions it's going to go through as it's invaded by the global south and Arab nations and then China of course continuing to rise in Asia and so these blocks are forming and people
33:01 are going to do things to, it's the great game again whether we like it or not and all these people are sociopaths, but this is what's happening. And so I saw that another deal with a publicly traded company. Another company signed a deal. I'll probably talk about it in the newsletter or internally on our Discord, but
33:26 shouldn't be hard for people to find out. Deals are getting signed. Things are happening. And so this is what's happening. And this cuts China in particular, out of the Venezuelan oil situation. So these are all strategic moves, if you will, whether we like them or not, that the people in power think that they need to happen and there's going to be an opportunity to cash in on this. And that's
33:51 what's going to happen. And so we could still assert our military dominance in our own hemisphere even as we're basically having to pull back in the Middle East. That's the thesis I've been talking about for years and it's happening as we move into this multi-polar world whether we like it or not. This is what's happening. So, I thought this was interesting. There'll be more news on
34:16 this. This is accelerating. A lot of things are happening and I think Chris Wright was down there with G uh Verona, they were talking about big five gigawatts of gas turbine deals being done to get the electricity grid back going so things are happening and again use AI, use tracking, you can get all this news fed to you, you can be on the front line of this understanding what's going on okay and
34:42 so that's why we do these weekly videos, that's why we have the newsletter. We're trying to stay ahead of everybody else. By the time everybody else figures out what's going on, we're already positioned. So, I thought this was interesting. Just wanted to show this Deere & Company. They make the agricultural equipment, tractors and implements. Not that I'm suggesting you buy it, but this is a classic breakout. I mean, the thing
35:10 is extremely overvalued, but this is an indication of what's happening in the ag sector. The agricultural sector has woken up, has awakened. It's moving forward. It's entering a bull market. It's in a bull market. We have things across the board making new highs and this is going to be reflected in a higher price for Deere. Okay. So, and other implement makers, there will
35:35 be winners and losers in the agricultural market. This is another reason why I like South America. This is why I'm getting more and more bullish on Argentina. I just read an article by a guy that's down there that I follow and I was still mildly bullish on Argentina, but I didn't realize the full extent of what's going on. It has the chance to really go nuts. A lot of those countries down there do. So
36:03 I think our Latin American call which was several years old now and we've made some decent money. We have a long way to go on that as long as the political reforms are maintained and it is South America, it is Latin America, it is what it is. But it will be volatile but I think right now the trend is correct and so that has big agricultural importance. So a lot of things are happening. This is a classic breakout.
36:33 So again, not advocating you go out and buy it, but I think it's indicative of what's happening in the agricultural sector. So here's corn prices. Look at, they've just basically rocketed. We're going to have food issues. This is going to be an effect of fertilizer and fuel prices being at record highs. We have not resolved. We had the initial discussion
36:58 when the war broke out and the Gulf got constrained exports and everything and things were damaged there because of the tit for tat back and forth. But again, 30% of your ammonia fertilizer comes out of there. That's not been resolved. And diesel prices again are making all-time highs. So input prices are going nuts. Many farmers already didn't plant or didn't apply the requisite fertilizer or
37:28 are going out of business and so supply will be constrained possibly and demand doesn't change. People got to eat. Throw on top of that a record El Nino and this could affect prices also. So this is across the board. We're seeing this. This isn't just corn. We're seeing it across the agricultural sector.
37:55 So this is a chart from Tavi Costa. He is from Brazil, so I think he's partial to it. But again, you could accuse Tavi or me for putting this up here of chart porn. Well, it depends where you draw the crayon line whether you got a breakout. I think Brazil, with the rest of Latin America doing what it's doing, I think that Brazil will maybe be a laggard but will participate just because of its agricultural and energy prowess.
38:25 I don't know, a rising tide lifts all boats. I'm playing this, one of the ways I like this is you can now trade Brazilian stocks on Interactive Brokers. I'm not going to do a lot of research because I don't have a lot of bandwidth to dive into the Brazilian market. There's people that you can follow that do that. You can curate their work and then go from there. I just buy the Brazilian stock
38:52 exchange. You can buy that. I think it has an ADR here in the US and you can just buy it directly. I think the symbol's B3 in the Brazilian market. But anyways, that's how I'm playing it. But again, this is just another indication of what's happening in Latin America with all of the political change, Colombia, Bolivia, Argentina, Chile, I mean, right
39:17 down the line, Peru, all the casting off of all this left-wing ideology. And look, there's a lot of corruption, there's a lot of nonsense, but there's a lot of stuff happening. Even a country like Paraguay, there's a lot of things happening. Are they investable? Well, if you could move to Paraguay and set up a big ranch or farm, you'd probably do well. But me personally, I don't want to live in Paraguay. But I'm just telling you that there's a lot of opportunity around the world. Someone asked me the
39:46 other day, I was talking to them like, "What would I do if I was like 22? I would go to some of these places where things are happening, where there's less friction in the economy. There's not a lot of bias against you if you're of a certain race or sex." And if you're a competent person, you can go into a place where competency is bought at a premium and you can do well. You can arbitrage your competency, your work ethic, your youth into good
40:17 outcome. That's not saying that there's not potential in the United States. The United States still has a lot of potential in many places, but not everywhere. And so that's what I would do. And so this is what I was talking about. I'll put a link to this article. I think it's behind a paywall. It's a guy I follow that's based in Argentina. Maybe I'll reach out to this particular individual and
40:42 see if they're willing to come on for a podcast, but the article title was Patagonian Qatar. And so this is just a blurb and this is just the first introduction to the article, which I'll put a link to in the show notes. Global banks are lining up 17 billion dollars for Vaca Muerta's LNG buildout. Argentina is about to switch sides of the gas trade. Yeah. At one point, even though they were endowed with all of
41:08 this tremendous resource, they were importing gas, right? Why? Because of poor policies pursued by the Peron governments, Peronist type governments, Kirchners, because they were just there to steal and stay in power. Okay? So now you have these reforms going on and people are bringing capital in. The Vaca Muerta is exploding. It's just unbelievable what's happening. And so going on, the introduction paragraph,
41:33 Argentina's oil and gas region of Vaca Muerta is booming. Global banks are lining up over 17 billion to build out the country's LNG export capacity. As we are watching the conversion of Argentina as an energy powerhouse play out in real time, it makes sense to go over the latest developments that will have an impact for decades to come. So this is another reason why I've become very bullish on Argentina. Notwithstanding the fact that it's a tremendous
41:59 agricultural powerhouse, they're slowly but surely deregulating agriculture. Argentina can produce far more food than it needs and it would go into the export market. So this is excellent. Another advantage is the fact that the growing seasons are reversed, remember, from the north and southern hemisphere. So when the US and Europe and Russia and
42:27 all these places are in fall and winter harvesting, the demand for fertilizer is lower and so there's a possibility they get an advantage on that because they can buy fertilizer at a cheaper price. I do know that there's a big project being contemplated. I don't know if it got a final investment decision, for a big ammonia plant in Argentina to do what? Take advantage of the natural gas feedstock from the Vaca Muerta. So, a lot of things
42:56 happening and again this is why you need to be informed so that you can allocate capital efficiently and correctly to take advantage of these ideas. So this is copper project approvals are lagging behind what is needed for projected demand. I've talked about this over and over. The copper price is making new highs. The zinc price just made a new high. We're just in a general
43:23 commodity bull market. Investment has not been sufficient to meet the demands that are out there. And we are starting to see that now across the board in higher prices. And I think prices are going to go higher. Yes, you could have a global recession at some point and that would put the brakes on things temporarily, but it still doesn't alleviate the long-term structural issue that there's
43:55 been insufficient investment in new production. And so you can just see these years out here where you have, greenfield is what we want to look at. This is projects that are just new. They're not recycling another project or an extension of another project. I don't want to discount the
44:21 optionality as Pierre Lassonde has said many times, who is the former CEO, I think he's chairman emeritus now of Franco-Nevada, the best place to find another mine is right next to a discovered mine and we've seen that over and over, that's been the model for like Franco-Nevada right, you own a royalty on a company for a mine and then you work it into the royalty contract that you have the ability to
44:49 have exposure to any kind of additional finds that are around the mine. And that has worked out very well. It's like he has said many times, I like some of these comments these guys make. He said if you've got five or six million acres of land that you have options on, at some point you just get lucky. So
45:14 interesting on that, that's why you see here expansions, extensions, greenfield, restarts, but you see the trend is down. Okay, if you want to do some chart porn and draw a crayon, you can see from the mid 2000s, well 2008-09, we had a big commodity boom. It kind of peaked with
45:39 the GFC and we've been in decline ever since. But these existing mines are depleting and so they need to have capital. We need more capital and a higher price. You can see the copper price here in yellow kind of showing you the result of that. Less supply, demand going up, price goes up.
46:09 So want to use a Charlie Munger quip. Show me the incentives and I will show you the outcomes. This is from the National Taxpayers Union Foundation. High-income taxpayers flee high tax states, move to lower tax ones. These are states ranked by net changes in residents earning $200,000 plus from interstate migration in 2022. And so
46:34 people with money do move based on tax policy and quality of life. It's interesting because you will hear a lot of left-wing people or progressives say, well, people don't just move because of taxes. No, that's true. Some people do. But what's interesting is if you add taxes, higher taxes, more regulation, lower
47:00 quality of life. Because you can see across many of these places, you get a lower quality of life. You get more nonsense. You get higher crime in many of these areas. You get less career opportunities because businesses move out. Okay. You have more nonsense going on. And people don't want to live, if they have the means, it all adds up into creating a decision. It may not just
47:26 singularly be well my taxes went up 10%. I'm out of here. But all of these things are death by a thousand cuts because it's not like, well, everything's wonderful here. Like California, the weather's great. It's a tremendous climate. It's a good place to live. But when you tax people to death, and then you turn around and say, "Well, the traffic and all of the other nonsense that goes on there, and you just say, I'm out of
47:52 here." Why do I need to stay here? And so, you see, people are incentivized. And if you have more of the theater kids taking over like in Washington, like in Seattle, this woman is ridiculous. I mean, she couldn't run a lemonade stand. I don't mean that. It's an easy target. You can't sit around and make fun of a special needs kid cuz he can't do calculus. This is just cruel. This woman just is not a
48:22 capable person and she surrounded herself with a bunch of other incapable people and then that result is chaos. Same thing in New York City. These are theater kids. These are offspring of high net worth people. They never worked and they're just play acting now at socialism and policy and it's not going
48:47 to work. And people that are serious people that have businesses and wealth look at this and say I'm out of here. Nobody wants to be standing at a crosswalk and just have a hobo come up behind him and hit him in the head with a piece of rebar. I mean, this is the kind of stuff that goes on, okay? There's no order, chaos, nonsense, more regulation, more nonsense on top of more nonsense. So, this is not just a thing about taxes. It's a whole quality of life issue. Who do I want to live around? What kind
49:17 of environment do I want to live in? And taxes are one portion of it. It just goes without saying, and you can just see that all of these places that are progressive have the most people leaving them. If you have the means, people are out. Now, the poor, the indigent, the tax consumers, people on welfare and want free everything,
49:43 they're going to stay. But who's going to support this? And so once this begins, it creates a cascading effect because the government then has made a lot of promises to stay in power, obtain power, and then they can't deliver them. They've already said that just based on, for New York City, for example, I think there was an estimate that over $5 billion in potential tax revenue has left the city
50:09 because who's going to stick around and be taxed to death? Okay, now I'm going to give you the bad news is that eventually the whole country will end up being like this just because as soon as this administration's over with and you get an AOC or Gavin Newsom or whatever you're going to get next, they're just going to reverse everything, all the executive orders that Trump did and you're just going to flood the country with 40 million people. You're going to have the Washington Generals aka the Republican party, the RINOs.
50:39 They'll have a comprehensive immigration thing and you'll naturalize 40 million people and that'll be, it'll be California. Where California is going is where the rest of the country is going to go and then you won't be able to go anywhere. Where are you going to run to then? There will be nowhere to run. You'll have to leave the country then. Okay. But maybe we don't even make it that far just because our fiscal situation is just going to deteriorate such that we're probably going to have a massive financial crisis at some
51:09 point and that will probably lead to political dissolution. But these are all talking speculations. Who knows? But this is what's happening now in real time. People are like I'm out of here. I'm not going to stick around and be taxed to death and then have my kids can't get a decent education. Crime rates are up. Place is turning into a dump. People are just going to get out. And
51:38 that looks like that's what's happening. Now, there will be people that come into the comments and argue, that's fine. You can do whatever you want to do, but these are the facts. Whether you want to look at this or look at U-Haul rates out of these places, versus into these places. I mean, you do you. Allah be with you. So, this is from the Washington, there's a Washington
52:08 tracker, state of Washington, of companies leaving. It says no city, state, or nation has ever taxed its way to prosperity or affordability. There's an actual site and I'll put a link to it. I think it's some organization in Washington tracking all this, but it just shows you the amount of companies that are leaving, the jobs lost and the tax revenue and it's kind of tracking it in real time. Why? Because
52:37 you create a climate, this should be obvious at this point. I mean this isn't even in question but I guess it still is, that if you create an environment that's positive for capital it will come in and you will have job growth, you will have prosperity. Will every single person benefit? No. Because there's some people that are just dumb. There's people that are substance abusers. Some people are just lazy. Some
53:05 people are addicted to alcohol and drugs. Some people have mental issues. Not everybody 100% is going to benefit, okay? But that's not the norm. The majority of people benefit. Their standard of living goes up. They progress. They have more opportunities. But we focus on this small percentage of people that don't. And we're going to turn the apple cart upside down. Is there wealth disparity? Yes. But it has
53:30 nothing to do with entrepreneurialism and capitalism and small business. It has to do with the monetary system which nobody except for people on Twitter and people like me and other channels talk about. We're out in the wilderness saying yes the Federal Reserve and your US government have caused most of this wealth disparity in the country. Okay. People benefit that are asset holders when they print money. Do you want to go back to hard money? That won't happen. But you won't
53:59 have a welfare state and you won't have a war-fighting state because people will not allow themselves, if everything was running on a gold standard or hard money and you actually had to give money to support all these programs because we're running a $2 trillion deficit. Remember we're taxing people at 5 trillion a year and spending 7 trillion. We wouldn't be able to have a welfare state. You wouldn't be
54:24 able to have these wars around the world. Okay. You'd actually have to pay for them. Would you want your taxes to go up 10, 20, 30% to pay for a war with Iran? No, you wouldn't. But because we have a fiat monetary system, you don't really see the cost. You see it in your standard of living going down over time and the wealth disparity and people think, well, we'll put the theater kids in and they'll confiscate the billionaires' wealth. Okay. Then
54:51 what do you do after you eat the seed corn? What do you do? The disruptions that's caused. Okay, so I guess we're going to go down this path regardless of history, but this is how it is. Again, it took 70 years in Argentina for them to figure it out. Took 70 or 80 years in the Soviet Union. So if you go down this path, understand it's going to take you generations to get off it.
55:22 This really bothers me. I mean, this was so obvious, okay, what was going to happen. This is our so-called health care system, the Affordable Care Act, that was going to fix everything. You could keep your doctor, don't worry. All the lies. And all it was is continued sop to the insurance companies. What I should have done this week in conjunction with this is went on OpenSecrets and
55:47 got all of the major recipients of insurance company and healthcare company lobbying money and it's mostly senators like Bernie Sanders and Elizabeth Warren. Now both parties are at fault, but it's amazing that the people that rail against this the most, take the most money from the companies that are benefiting the most. I mean, the thing to do when they passed the Affordable Care Act was
56:17 buy United Healthcare stock. You would have done tremendously well. And so this is going to continue until it can't continue anymore because people are starting to drop out of this now. This is crazy. I can't pay $26,000 a year for family insurance and have a $10,000 deductible. This is nuts. Okay. And so the calls will be of course
56:42 from the left and the progressives, the theater kids and the progressives and the old liberals, we need to have a Medicare for all program. Well, that's probably where we're going to end up. Good luck with that. My suggestion is start investigating how you can get medical care in other countries where you just have to pay up because it's not going to be, and then how do you afford that when you already have a $40 trillion deficit or
57:07 $40 trillion in debt and you have a $2 trillion a year deficit? I mean, I can't even imagine. And all of the fraud, waste, and abuse that's going to go along with this. I mean, it's just not going to be good. But this is how it is. Again, government creates a problem and then creates more problems for that problem. And like I said before, I just use the example of a band-aid on top of a band-aid on top of a band-aid. It doesn't do anything for the underlying sore. Just putting more
57:37 band-aids on it. So anyway, this just really gets on my nerves because there's a lot of people in politics that have benefited from this on both sides of the aisle. You can find out who they are. OpenSecrets.org. You can search this. You can find out who gives the money and who takes the money. And you're getting screwed. And you can vote for whoever you want. They're not there for you. They're there for themselves. Okay guys, that's it for this week.
58:07 Appreciate the attendance. Thank you for the support. The channel continues to grow and please check out this month's issue of the AIA. Most of, a half of the commentary is free. You can bring it up and read through the discussion around why I'm creating the AIA permanent portfolio and then if you're interested in that you can subscribe and
58:34 you can see what we're trying to do in real time. Okay guys, that's it for this week. We'll talk to you next week.