I still see and hear a lot of negative sentiment about global demand, the virus rampaging in India and Brazil, a weak Europe and Canadian lockdowns. I hear about working from home forever and even kids not going back to school for years (today's news in Ontario given the new directives for online learning until 2022). I hear about how much more deadly the new strains are, and how mass adoption of EV's is increasing.
The reality, at least for me and from my humble point of view, is that this is an extreme set of assumptions and that the sentiment is off-base given the actual facts.
Global demand is returning, and it is doing so at an increasing pace (exponential). Every exponential curve starts out timidly - you can't even tell that the curve is not linear at first. But as it gains ground, it becomes more apparent. The fact that the global recovery in demand and normalcy has not been well coordinated is providing the illusion that the demand will not and cannot recover fully in the short/medium term. Also, the intermittent nature of lockdowns and restrictions around the globe have muddied the data.
But none of that matters if we zoom out and take a bigger picture look at what is going on. What I am seeing is a general trend toward getting fed up of the lockdowns by the general populace, the untenability of governments to maintain such draconian measures, the economic infeasibility of incapacitating the hand that feeds you (the taxpaying public and the private sector), and the very real fact that ALL viruses, Covid included, do not last forever. In fact, the situation is getting better in most of the world. Whether this is due to the vaccine rollout, natural herd immunity or virus burnout is moot - what matter is that it is happening and will continue to accelerate.
India, Brazil, some parts of Europe and Canada are examples of how poor governance has delayed recoveries, or perhaps the Trump administration actually did something remarkable in proactively putting the US ahead of others. Regardless, the bottom line is that the countries currently struggling with the localized epidemics will need between a few weeks and at most a few months to get past their peak pain. But the rest of the world is chugging along. Some places, China included, are actually firing on more cylinders than they were pre-pandemic. What I am therefore interested in is the global aggregate of rate of change. And that is quickly improving. If you don't see it, you need to zoom out.
The new strains are not, in fact, more deadly than previous ones. I don't even refer to them as strains or variants. I use the same terminology that we always have - mutations. Leave the fear mongering to the media to talk about "variants" that the vaccines don't cover. This is nonsense. I have spoken to a number of MD's, as well as a few virologists and healthcare researchers who in turn have also been consulting with their peers. While they were not all on the same page regarding handling the pandemic, one thing was clear - none of them were worried about the variants. They all cited the fact that the vaccines have so far shown that they are HIGHLY effective on ALL of the 'strains.' Some of the TV doctors selling fear have turned out to not be practicing physicians at all. Some of our 'Health Table' doctors turn out not to be doctors at all. They are simply health administrators. Academics. Paper pushers. Pension seekers. Compromised tools of special interest groups. I could go on for a while... A few of them are lawyers. And most have open conflicts (being paid by unions and Pharma companies). This is not a conspiracy theory - it was openly revealed by the premier of Ontario. But they are in control. For whatever reason, they incessantly drive fear on the airwaves. And the lockdowns are constantly extended on this basis. They claim this is "science" but it is anything but. After all, at the outbreak of the pandemic in March, the much lauded Canadian pandemic protocols (globally viewed as industry leading) were thrown out the window and WHO directives took their place (Keeping air travel unimpeded, denying that masks work, banning off-label treatments of the virus even if they were proven to work, denying there was a pandemic, and not preparing for the eventuality of mass hospitalization). Some of these mistakes have not been recognized, let alone rectified. Notwithstanding such blatant incompetence, the situation has crested and is improving.
My point is to predict that this house of covid fear which was built on shaky ground is going to tumble. As the weather gets warmer, as more people are vaccinated, as the number of hospitalized decreases and as the demonstrations grow (they are, not that you would know it from the MSM), the Orwellian narrative is going to fall apart. The dam will break, and people will reject irrational, overreaching authority. Corporations are starting to draw the red line in terms of getting back to work. Yes, commuting. Yes, returning to the big glass buildings. Yes, sitting in the same office as other humans beings. It's coming. A trickle, then a stream, turning into a raging river and culminating in a tsunami.
I know politicians. I have socialized and worked with many of them over the years. They are the ultimate passive aggressive bullies. They are political animals to a T. Just like teenage girls. They gossip, they backstab, they pivot quickly and with cold, uncaring precision. The minute they get the sense that the tide has turned, you will see just about every one of them flip their narrative.
There will be hiccups along the way. Those who choose not to get vaccinated will be vilified by those who have been, some unions will keep pushing their luck trying to squeeze out more benefits using the pandemic as an excuse, and political gridlock may provide temporary fear on issues such as passing the next stimulus package or infrastructure bill. But overall, the re-opening momentum will overshadow all such "bad" news and will ignore the rantings of all those behind such bad news.
We just need to be a little patient as the momentum builds and until we start to see that upward inflection on the exponential demand curve. I believe in this so much that over the last few weeks I have resorted to selling some of my physical bullion to put into commodity stocks.
As the sun starts shining stronger and people catch the whiff of their neighbour's BBQs, they will be reminded why life is worth living and they won't allow anyone to prevent them from getting back to doing so. No politician, no TV quack, no union head, no senile speaker of the house or part time drama teacher Prime Minister is going to force people to stop living, spending and burning hydrocarbons.