Commodities: More Important Than Ever
By Stephen Leeb
I've said it before, but it bears repeating: Today's world is unlike anything we've seen.
One reason is that for the first time, our country's two longstanding sources of power, our military and our dollar, can't get us what we want.
We still have the world's largest military. But that counts for less than before, because today some of our adversaries, including China, have militaries whose technological capabilities surpass ours in significant ways. They've spent less, but they've spent more efficiently.
Sanctions Have Backfired
With our military less able to impose our will on the world, we've turned to relying more on the power of the dollar. The dollar's status as the world's chief reserve currency has made it a powerful weapon in the U.S. arsenal.
However, the Ukraine war has exposed its limits as well. Dollar sanctions on Russia, the most extensive ever imposed, have largely boomeranged. Rather than bringing down Russia, they are hurting the U.S. and, even more, our European allies and Japan.
The U.S. has long assumed that money can solve any problem. But the Ukraine war has exposed a caveat: Money can buy only what's for sale. The U.S. and our Western allies are in a tightening bind because we're not self-sufficient in the most critical resources, i.e., food and energy. And these are getting harder to buy.
You might think that for the U.S., food, at least, wouldn't be a problem. After all, we're the world's biggest exporter of grains and other food products. But we're also one of the biggest importers of fertilizers, which are critical to our food production. Thus, we aren't completely self reliant.
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