In this episode of the Prospector Podcast, Michael Fox is joined by Mike McGlone the Senior Commodities Strategist from Bloomberg Intelligence to discuss the upcoming US election and its potential impact on the commodities market. Mike highlighted the uncertainty surrounding the election, particularly the risk of a non-peaceful transfer of power, which is not currently priced into markets. Despite this, the S&P 500 is near record highs and gold has reached record highs.

Stock Market, Commodity Prices, and Geopolitical Tensions

Mike discussed the current state of the stock market and commodity prices, expressing concern about the high prices of stocks and the potential for a reversion. He pointed out that gold has been performing better than the S&P 500, and that the stock market is at its highest level since 2007. Mike also highlighted the geopolitical tensions around the world, particularly the shift in the world order since the announcement of the unlimited friendship between Russia and China. He suggested that this shift is causing a reversion in the rapidly expanding emerging market of China. Mike also addressed the potential for geopolitical tensions to escalate in the coming months before the transfer of power in the US, but emphasized that the macroeconomic situation is more significant than any short-term geopolitical risks.

Crude Oil Market Factors and Political Impacts

Mike discussed the bearish factors for crude oil, including stagnant demand from China and excess supply from the US, Canada, and OPEC. He also highlighted the deflationary forces in China due to overproduction of EVs and renewables, and the potential for a shift in China’s export status. Mike concluded by stating that the Cold War 2 is heating up and that the potential for increased tariffs under a Trump presidency could negatively impact the economy. Michael added that both presidential candidates are pro-tariff, with Biden’s administration not revoking the tariffs imposed by Trump.

US Presidential Election Impact on Commodities

Mike discussed the potential impact of the upcoming US presidential election on the commodities market, particularly gold and crude oil. He suggested that if Trump is elected, it could accelerate existing trends, leading to higher gold prices and lower crude oil prices. However, if President Harris is elected, Mike believes the key issue will be the US deficit, which could be addressed by a split legislative and executive branch. He also expressed concern about the potential reversion of the Chinese economic miracle and growth, which could lead to a continued advance in the gold-silver ratio. Michael asked about the silver market, and Mike responded that he expects silver to underperform gold, particularly on a volatility-adjusted basis.

US Election Impact on Green Economy and EVs

Michael and Mike discussed the potential impact of the upcoming US election on the green economy and electric vehicle industry. Mike suggested that if former President Trump were to win, he would likely impose high tariffs on solar panels and electric vehicles, and possibly rescind the Inflation Reduction Act, which primarily supports renewable energy. However, Mike also noted that Trump’s stance might change once he understands the benefits of these technologies. Michael agreed, highlighting the potential slowing of the green energy revolution under Trump’s administration. Both agreed that the rapid advancement of renewable technology would likely overcome any short-term pushback from the government.

Electric Vehicles and Economic Impact Discussion

Mike and Michael discussed the rapid advancements in electric vehicle technology and its potential impact on the economy. Mike highlighted the shift from net energy importers to net energy exporters in the US and Canada over the last 20 years, and the potential for electric vehicles to further reduce demand for petroleum. They also touched on the differing visions of the two presidential candidates regarding reindustrialization and the creation of strategic reserves of critical metals. Mike expressed concerns about the responsibility of deficit spending and the potential for a sovereign wealth fund. The conversation concluded with Mike pointing out the necessity of the US Strategic Petroleum Reserve as a safety measure for the country, and the current net exports of crude oil and liquid fuel in the US and Canada.

US Presidential Election and Market Trends

Michael and Mike discussed the potential impact of the upcoming US presidential election on commodities. Mike suggested that a smooth transition to a female president could lead to a shake-up, while a Trump re-election might result in a continuation of his policies. They also discussed the current market trends, with Mike noting that the markets are priced for perfection and that a normal market correction is overdue.