Gold has its merits. It has been valuable for thousands of years, and has some industrial applications as well.
But holding a kilo of gold in your hand, all you can really do is admire it, and appreciate that it is a great store of wealth.
Holding a kilo of uranium, you have in your hand a resource that has enough energy to supply a day’s power to 30,000 people.
That’s not just impressive; it’s transformative in a world being run by absolute buffoons.
Politicians, in their infinite wisdom, continue to plunge the US into deeper debt, racking up trillions in deficits year after year.
And when global credit rating agencies like Fitch sound the alarm on their fiscal irresponsibility, these politicians don’t just turn a deaf ear; they outright reject and ridicule the warnings. They gaslight the public and say: No! There is absolutely nothing wrong with borrowing trillions and trillions and racking up debt worth 120% of GDP. Fitch is the crazy one, not us!
Then they dump all this borrowed money into things like the “Inflation Reduction Act.” Shockingly, turns out that had nothing to do with inflation. It was a thinly veiled attempt to appease climate fanatics.
Don’t misunderstand me. I’m all for clean air and a pristine environment. But I also believe in making informed decisions. The hard truth is that wind and solar energy are not efficient nor cost-effective.
But fanaticism blinds people to facts and data.
We witnessed this during the pandemic, with decision-makers adopting a “whatever it takes” approach, sidelining critical data in favor of emotional reactions. And emotional decisions are usually bad decisions.
The climate fanatics dream of a world powered solely by wind and solar.
But that’s delusional.
Just consider that the largest solar field in the world requires nearly FOUR HUNDRED square kilometers, and produces about 11,400 GWh of electricity per year.
The Kori nuclear plant in South Korea, on the other hand, has a footprint of just a few dozen acres, yet it produces 4x as much electricity.
Converting the world to solar would require hundreds of thousands of square kilometers full of solar panels and wind farms. Just imagine how expensive that land would be. Or how much cobalt, silicon, lithium, etc. would need to be mined and produced.
To transition fully to wind and solar, the world would need billions and billions of pounds of extra materials that are simply not available.
Or you could use one little rock of uranium to provide the daily energy needs of 30,000 people.
Sure, the up-front capital costs are much higher for nuclear. But over the life cycle of a modern plant, the average cost per kWh of electricity is comparable (or less) than solar.
And finally, after being abandoned and ignored for years, policymakers are starting to turn back to nuclear. This isn’t just wishful thinking. It’s happening… if not in the US, then around the world.
There are around 415 reactors currently supplying nuclear energy to the world. There are 59 new ones under construction, and 111 in early stage development. Another 300+ have been proposed. The vast majority are in Russia, India, and China.
(The US has just one under construction. Germany removed all theirs and now has 0. Sweden has 0. France has 1. The “developed” countries are way, way behind.)
Yet even with just 415 active nuclear plants, uranium is already in short supply.
In 2021, for example, nuclear plants used 73,698 metric tons of uranium to produce electricity. Yet total uranium mine output that year was just 56,377 metric tons.
In other words, mines aren’t producing enough uranium… and they haven’t been for most of the last decade. Nuclear plants have had to draw down on their previous stockpiles.
(My colleague Adam Rozencwajg of Goehring & Rozencwajg recently published some great research on the topic, showing uranium stockpiles to be at their lowest levels in nearly 20 years.)
Think about it— if uranium is already in short supply today, just imagine how undersupplied the market will be in the future when these new reactors come online.
Most likley this would result in a major price surge in uranium.
We’ve talked recently about how gold could double, triple, or even more in price over the coming years.
Uranium essentially has similar upside as gold, but with the additional benefit of being a transformative fuel that can provide a cheap and abundant source of energy.