Welcome to your Sunday digest…my weekly breakdown of the things we’re thinking about and talking about in the Global Intelligence world.
This week, we start with what economists are calling “The Great Resignation.”
New data from the Department of Labor shows that U.S. workers are quitting their jobs in droves. According to the department, the share of workers leaving their jobs hit 2.7% in April, the highest level in more than two decades.
And this may only be the beginning.
A new Microsoft report on the global workforce found that 41% of workers around the world are considering quitting their jobs. The report is based on surveys of more than 30,000 workers in over 30 countries.
The reasons for this Great Resignation are pretty obvious.
During the pandemic, people valued job security over job satisfaction…meaning they stayed in positions they didn’t particularly enjoy. Now, as the economy reopens, they’re free to move on.
At-home workers also proved highly productive during COVID, often working longer hours than when they had to commute to their cubicles. But the Microsoft survey found employees are now feeling burned out, and are seeking to reprioritize family and hobbies over work.
Of course, not all workers will follow through on this desire to quit. But if the number reaches even 10% or 15%, it will be very bad news for employers, who will face higher turnover costs, business disruptions, and loss of institutional knowledge.
All this disruption, however, is very good news for workers.
There are now a record 9.3 million open jobs in the U.S., Axios reported, meaning there are lots of new jobs to choose from. And higher demand for workers means higher salaries.
So, if you’ve been thinking about changing companies or careers, or even testing the online freelancing market, there’s probably never been a better time. (My preferred freelancing sites, by the way, are Upwork and Fiverr.)
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Next up, big news about China’s metal reserves.
China, as the world’s leading manufacturing economy, maintains large strategic reserves of key industrial metals like copper, aluminum, and zinc. And on Wednesday, it announced plans to dip into its state coffers.
Industrial metals have been on a tear recently. For instance, copper, the key industrial metal, has surged some 67% over the past 12 months. This is part and parcel of the new commodities super-cycle I wrote about in the May issue of the Global Intelligence Letter.
As the global economy reopens, demand for all manner of commodities is spiking higher. This spells trouble for China and its manufacturing-based economy.
As the prices of commodities rise, it becomes more expensive for Chinese manufacturers to make their products. This, in turn, means that they have to either swallow the price increases, which will shrink their already small profit margins. Or they have to pass the price increases on to consumers, which will make their products less competitive.
In selling some of its strategic metal reserves to domestic manufacturers, China hopes to alleviate some of this pain.
However, China doesn’t have enough reserves to prevent long-term growth in global industrial metal prices. While the country doesn’t disclose the size of its stockpiles, analysts have guesstimated that China has stored only about half a million tonnes of copper. To put that in perspective, China consumes about 15 million tonnes of copper a year.
But by releasing some metal, the country is hoping to push the market lower temporarily and buy its manufacturers some breathing room.
Indeed, the fact that China is dipping into its reserves at all shows the commodities super-cycle is now very much a reality.
This augurs well for my recommended investments from the April and May issues of the Global Intelligence Letter.
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Next up…uranium.
Uranium-related stocks plummeted early last week, with some major industry players, like Canadian uranium mining firm Cameco, dropping about 10%.
The reason for this was a CNN report that the U.S. government was studying a potential leak at a Chinese nuclear power plant. Sounds serious…except the leak was not of radiation, but inert gases. As I write this, it seems the leak was simply an operational issue.
To me, the market reaction was seriously over the top. But this is the way it goes with uranium. Investors are hyper-sensitive about it. And honestly, this presents an opportunity.
The reality is that the world needs nuclear power if it has any hope of radically reducing fossil fuel emissions and tackling climate change. Just this week, record high temperatures scorched Western U.S. states. Clean energy technologies like wind and solar are not far enough along to solve this problem. We need bridging tech like nuclear, which means we need uranium.
I’ve been bullish on uranium for years. It has the clearest supply-demand metrics of any commodity. We can calculate exactly how much uranium the world needs based on how many nuclear plants exist and how many are under development. And we can compare that to how much mining happens.
And these figures tell us the imbalance is significant. There’s not enough uranium being produced to meet demand. This means uranium has to go up in price at some point. By a large degree.
I think uranium is a solid investment right now, so I think taking advantage of dips in the notoriously reactive (forgive the pun) uranium market is a good long-term strategy. I’ll be bringing you more on this in the weeks ahead.
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On a closing note, I’ll leave you with some images of Prague.
It’s been a glorious week in the Czech capital, and I’ve taken the opportunity to visit one of my favorite parks in the city…a little-known gem that rarely attracts foreign visitors.
It’s called Havlíčkovy sady in Czech, which I’ve variously seen translated as Havlickovy Park or Havlicek Gardens.
The Italian Renaissance-style park has a beautiful grotto with a statue of Neptune, as well as a gorgeous vineyard on a hill overlooking the city.
Below are a few pictures I took of it this week. If you are ever in Prague, I highly recommend you stop by.
That brings us to the end of this edition of the digest. Many thanks for reading. If you have any feedback or questions, please feel free to contact me through the contact form on the Global Intelligence website here.
I hope you enjoy the rest of your Sunday!
