Once again, we had a day in markets yesterday that left us with not much to talk about(!)
Thankfully, to help us sort through it all we were joined by the one and only Doomberg.
A GOLD CANARY?
Doomberg treats gold as the ultimate “insurance policy,” the kind of protection you pay for but hope you never have to use. “The one asset that I own that I’m not thrilled when it goes up too quickly is gold,” he said, because when it goes parabolic, it’s usually a “bad sign for the underlying currency.” So the current situation, where gold is “galloping against what is ostensibly the world’s global reserve currency is unsettling,” he said, and suggests a “major phase shift” is happening behind the scenes in global geopolitics.
Doom respects gold as a “significant” central bank reserve asset, adding that “If Treasury is no longer neutral, gold is nobody’s credit…. And so the value of central bank reserve assets that have been allocated to gold is catching up pretty quickly.”
💡”Full disclosure, I own a fair bit of gold but I couldn’t help but take some of it off today [Monday],” he said. “Historically when I do that I end up buying back on a dip. I just owned an irresponsible amount, which became irresponsible because of appreciation, not out of greed.”
SILVER TRADING LIKE A MEME STOCK
Yesterday was an extraordinary day for silver, as it posted two separate 4-sigma moves - one up and one down.
🤖Hey robot, how rare is two separate 4-sigma moves, one on the upside and another on the downside, in one day?
Doomberg looks at silver but has never owned it, and basically sees a chaotic retail party he doesn’t want to go to. He said silver is effectively “an industrial metal that has gone full meme,” and that the price action gives off “strong AMC or GME vibes.”
And while he says the silver bull case, “AI demand, solar demand, [etc],” might well be true, that’s a different argument from the flight to safe haven bet. He added that silver “used to be the minor monetary metal,” but he doesn’t view it as a monetary metal at all anymore.
ENERGY UPDATE
Doomberg says we’re still swimming in oil, and it has “never been cheaper in history” when you measure it in ounces of gold. In fact, the purchasing power is so skewed right now that “an ounce of silver buys you a barrel and a half of oil.” To him, the “long-term real price of oil is lower” in real terms.
When it comes to natural gas, he said that the latest big spikes have “everything to do with the weather” and wonky contract rollovers rather than a structural shift. He’s actually betting against the rally in his “YOLO account.” Using “puts in UNG just to play,” he’s fading the hype because the shale revolution ensures there is simply “so much” gas available. On a global scale, the molecule remains “dirt cheap.”
Bigger picture, geopolitically, energy is the ultimate leverage. Doomberg defines war as the “delivery of concentrated forms of energy in small spaces” to “make things go boom.” He labels the US a “global energy giga power.” Europe… not so much. Europe consumes 38 exojoules of hydrocarbons but only produces five, creating a “huge point of weakness,”
So, he said, if the US ever throttled LNG, domestic prices would “collapse,” which would be “great for US consumers” but leave Europe to “go full tilt” into a crisis. Russia is similarly insulated; since they produce double what they use, cutting their exports just makes fuel “cheaper domestically” for them while the rest of the world pays a higher price.
🪢For more from Doomberg on oil: “Crude Analysis”
EUROPE “AT WAR WITH EVERYBODY”
Doomie says “Europe is at war with everybody… Find me a part of the world that’s thrilled with Europe right now.” It’s more than just the rift with Russia; he said China is unhappy and Trump has been “beating them like drums” over the Greenland issue and NATO contributions.
He blames a leadership class that he believes “needs to be wiped away.” In his view, Brussels has devolved into a “giant useless bureaucracy that sort of acts like a vampire.” He’s convinced these “clowns” are leading the region into a crisis where the “dissolution risk” of the European Union is “higher than it’s ever been.”
The only way out for Europe is if “competency ejects incompetency,” he said, and he’s holding out a slim hope that “calmer heads will prevail,” even if he admits that might be naive.
🪢For more from Doomberg on Europe: “Borrowed Time.”
THE AI STORY
For Doomberg, the current AI story is absolutely a bubble, but also historic and mind-blowing. Both things can be true.
The economic landscape is being rewritten because “inference is cheap” and “open source models are available for free,” meaning the “moats of SaaS companies are eroding rapidly.”
Doomberg’s take on content creation is particularly sharp. He suspects a “giant algorithm” is already flooding platforms like YouTube with AI-generated content. The goal? He believes Google wants to create its own content so it can avoid paying the “55% cut to creators.” While this AI content doesn’t yet “pass the Turing test” and is prone to “hallucinating,” it is rapidly crowding out human creators.
However, he predicts the “value of authentically and provably human is going to skyrocket.” Well, here’s hoping…
🏠 Thank you Tom Kudla, Rick, Steve Schroeder, simeon pavlovic, MCH Capital, and many others for tuning into live…! We’ll be back Talking Markets at 4pm Wednesday, with the great Peter Boockvar.
Important Disclaimer: It is crucial to remember that this article is for informational purposes only and should not be considered investment advice. Consult with a qualified financial advisor to assess your risk tolerance, investment goals, and overall financial plan.
