Chris’ note: This week at the Cut, we’re zeroing in on one of the most profitable megatrends on our radar – what renowned speculator Dave Forest calls the “EV superboom.”
He’s handed readers of our Strategic Trader advisory the chance to make an average gain of 867% on five electric vehicle (EV) recommendations. And he’s just getting started…
You can learn all about it next Wednesday, March 2, at 8 p.m. ET. That’s when he’s hosting his EV Superboom Summit and revealing details of his top EV pick for 2022.
So make sure to sign up for that here. Then read on for more on how to profit from Dave’s mentor and Legacy Research cofounder Doug Casey. It’s from a conversation Doug had about EVs at our Casey Daily Dispatch e-letter.
Yesterday, Doug showed us why the switch from gas guzzlers to EVs is an unstoppable investment megatrend. Today, he digs into how it’ll affect traditional energy sources…
Dispatch: In the first part of our chat, we showed that EVs are the future of transportation. Today, let’s explore some of the wider implications of this megatrend. As EVs and self-driving cars go mainstream, what happens to crude oil?
Doug: Almost all the gasoline we use right now is for vehicles. We use something like three-quarters of all oil production for transportation. So, the EV revolution will put a cap on petroleum prices. Eventually, there’s going to be a glut of oil.
Petroleum’s main use will be as a feedstock for plastics and things of that nature. It’s also going to collapse the production – if not the prices – of corn, palm oil, and perhaps sugar. Much of those crops are, idiotically, used as biofuels.
Based on that, it doesn’t make any sense to own an oil company for the long term. Pipelines, tank farms, refineries – there will be a lot fewer of them.
Also, the auto insurance industry is going to have to find something else to do for a living. Ambulance-chasing lawyers are going to get less business because there will be fewer auto accidents. With self-driving cars, drunk driving won’t be much of a problem.
Dispatch: What about the wider implications? How will the switch from gas guzzlers to EVs and self-driving cars shake up the geopolitical landscape?
Doug: Many countries, mostly in the Muslim world, produce nothing except oil. They got lucky that the stuff was buried under their sand and Westerners showed them what to do with it. But most of them have frittered away the proceeds. And they don’t know how to do anything but produce a surplus of unskilled people.
Those places are going to collapse. Oil will still be of value – but at nowhere near the gross revenues it is today. So, big geopolitical changes are coming to the Middle East.
This will also affect Russia. It’s essentially just a gas station with an attached gun store in the middle of a wheat field.
But it’s going to have a huge positive effect on oil importers – especially Japan. Self-driving EVs will cause a gigantic economic earthquake.
Dispatch: Other than crude oil and battery metals such as lithium, what commodities stand to gain or lose the most from EVs and self-driving vehicles?
Doug: I’ve long been a believer that nuclear is by far the safest, cheapest, and cleanest form of mass power generation.
Of course, it’s subject to so much mass hysteria and misinformation that it’s highly regulated and highly politicized. That’s why today’s energy costs are many times higher than they should be.
We’re using 60-year-old nuclear technology as a result. Which is silly. And still, nuclear power is far safer and cleaner than coal or oil.
If we had allowed nuclear technology to evolve in a free market, we wouldn’t be using gigantic, centralized, gigawatt-sized plants. We would instead be using small, self-contained, 50-megawatt units that can be buried, without needing service for 10 years, until they need to be refueled with uranium.
The technology is out there, but politics and hysteria have kept it in the closet. And the fuel doesn’t have to be uranium – which was used because of the U.S. nuclear weapons program. It could also be a radioactive metal called thorium, which is vastly harder to weaponize.
There’s no point crying over past mistakes though. It’s been said that, after hydrogen, stupidity is the most common thing in the universe.
One of the real bright sides about the switch to EVs is that it will greatly increase the demand for electricity. And there will be a boom in nuclear, which is the only sensible way to provide all that extra power.
The bottom line is the world is going electric. Fossil fuels are no longer going to be fuels.
Like I said, they’re going to basically be feedstocks. We’ll use them to make primarily plastics, fertilizers, chemicals, lubricants, and the like. The demand for gasoline and diesel – which is the vast majority of oil usage – is going to go way down.
Dispatch: It’s clear you have a lot of conviction in this idea. Have you made any major bets on EVs or self-driving cars?
Doug: I’ve made a large investment in a private company that’s accumulating royalties on battery metals.
I generally hate private companies. Especially now, when we’re on the ragged edge of a collapse of the financial markets. But it’s a royalty company. It collects royalty payments in return for financing mining operations. And that’s by far the safest way to invest in mining.
So that’s the way I’m speculating in weird metals that few people can find on the periodic table. That includes so-called rare earth elements. This group of 17 silvery-white metals are essential to a range of modem technology, including EVs.
Rare earth elements will become more and more important as technology keeps advancing. China produces about 80% of them. So, there will be opportunities for developing new deposits in more politically reliable parts of the world.
The changeover to EVs is going to happen very fast – starting right now. So make sure you’re not adversely affected by having money in the wrong places.
Chris’ note: To learn the right places to put your money… don’t forget to reserve your spot for Dave Forest’s EV Superboom Summit. You’ll discover how to profit as EVs rise from a total of 10 million to 145 million over the next decade. Plus, Dave will share details of his top EV pick for 2022. Here’s the link again to secure your spot.