We are all watching extraordinary moves in the market, from Bitcoin, to Gamestop, to AMC, to remarkable flows creating huge dislocations.
My view? First, money flows are bigger than the market, creating distortions that I have never seen before. This is something to think about.
But the real point? Just as a driver for the massive bids behind GME, for example, is apparently a short position, the market is short platinum group metals, and doesn't even know it. All of the PGMs, platinum, palladium, rhodium, iridium and ruthenium, are in deficit. They are critical and essential to the functioning of our civilian and military economies, and are pervasive throughout as industrial, strategic and precious metals.
As I have expressed so often here, and on my Twitter stream, the supply of these metals is truly tiny and indeed, all are already in deficit. If the world economy grows, this deficit will increase. There is no margin. Any bids by industrial or strategic users to increase inventory will lead to further pressure on the market. This of course is compounded by bids from investors. There will be a time where the valve of gradually rising prices no longer releases this building pressure leading to price explosions that will shock people.
Increased production is not a way out. Supplies only change marginally each year... at most 2% increases can be projected given the time, capital, and regulation involved in bringing it on.
The only path that I see to avoiding huge price spikes in these metals is a sharp decline in the economy. In fact, with money flows as they are, it appears that we are going in the opposite direction.
Bottom line, no way, no how would I want to be short the platinum group metals, and if I were a purchasing manager I would be looking at Game Stop with trepidation as a foreshadowing of what could occur.
As an investor, the answer is easy. Buy it, and buy it now. I own physical metal, SBSW, IMPUY and GENMF.