All commodities have been exploding higher since the start of the year but since Russia's incursion into Ukraine at the end of February, has sparked a massive jump higher for palladium, wheat, silver, copper and corn, to name a few. Gold has breached the $2,000 mark and overnight went as high as $2,024 and is presently at $2,010.
One commodity though, has sparked an unprecedented short squeeze, causing one of the four biggest banks in China to default. Losses are in the billions. Nickel has skyrocketed as high as 250% in the last two trading days. As a result, the LME (London Metals Exchange) has halted trading of nickel to prevent further carnage. Last Friday, nickel was trading at about $24,000 per ton. That number jumped to $48,000 by yesterday's closing and by the time trading was halted this morning, nickel was going for more than $100,000 per ton.
Nickel is a primary ingredient in electric vehicle batteries, among other things so expect an increase in the price of your new vehicle. Indonesia and the Philippines are likely to benefit from higher nickel prices as they are the number one and two producers in the world. Which country is third place? Why, it's Russia and they're being locked out. Nickel is also used for plating and as an alloy to produce stainless steel so expect that new kitchen sink to cost a little more.
The LBMA has also locked out 6 Russian gold refiners from the London market. This is driving gold prices past $2,000. I expect gold to go to $2,400 by summer.
We may also see an unprecedented squeeze in the silver markets as well. Silver is greatly undervalued and is expected to outperform gold when it finally rises. If a 250% increase in nickel in just two days is a shocker, just wait until silver does its thing. We'll probably see 250% increase every day, for a few days straight. I do see 1,000% increase in my crystal ball. It would 'only' bring silver to $260. Many are saying it's going to $600 and beyond. That would amount to a 2,000+% increase in dollar value.
Keep in mind that while everything appears to be costing more, what is really happening is that the purchasing power of your dollars (Yen, Euro, Ruble, Rupee, etc.) is collapsing. The only thing backing up our currencies is confidence. The way things are going, it seems more likely by the day that we're headed back to some form of metal backed system.
Personally, I believe North America is primed for a tri-metal based financial system using gold, silver and copper. North America is chock full of it so do foresee some kind of new monetary alliance forming between Canada, USA and Mexico. It appears Russia, China and Iran are doing that right now. Instead of a global order, we are headed for a regional order.
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