Charts of the Month - October '21

Fertilizer Prices, Capital Goods Orders, Nuclear to the Rescue, Gilt's on the Move, Concentration of Media and Batteries

Charts of the Month - October '21

Fertilizer Prices

We asked the smartest Chicken on Twitter, Doomberg, to help us out with one of the more interesting charts and commentary they’ve put forward recently. (If you aren’t already, definitely subscribe to the newsletter).

Fertilizer prices, a non-negotiable requisite to growing food at scale, have skyrocketed in 2021, and the importance of this spike can not be overstated. Here’s what the chicken has to say about it:

“We are on the cusp of a significant mass starvation event of our own making. Soon, tens of millions of the world’s most impoverished people will die from an inability to feed themselves, while many of those comfortably getting by now – especially in the Western World – are in for an uncomfortable disruption. The energy shock in Europe has spread to China, and the Chinese have responded by limiting the production and export of certain critical goods.

One of those goods is phosphate. At the end of September, China stunned industry players by announcing a sweeping ban on phosphate exports until at least mid-2022.

To keep the chemistry lesson as simple as possible, you need natural gas to produce ammonia and energy from fossil fuels to mine for phosphate. You need ammonia and phosphate to make fertilizer. You need fertilizer to grow food at scale. You need food to keep the peace.

As you might expect, the price of fertilizer – already under pressure from gyrations in the natural gas sector globally – skyrocketed higher on the news that China is halting all phosphate exports. Farmers will either raise prices dramatically or go broke. Inevitably, we’ll see an unhealthy mix of both.”

Capital Goods Orders

Joe Calhoun, CEO of Alhambra Investments, writes an excellent weekly markets letter, and in his latest (one of his best IMO) he dropped this line… very subtly I might add:

“This may be the most important economic development in two decades.”

When someone of his caliber says something of this magnitude (he’s not known for hyperbole), we listen.

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