The weird weather has been on everyone’s radar lately, and it has been weird. But why? The narrative creators will tell you it is AGW climate change, because no matter what it is, it is caused by man-made global warming. But like everything else, the answer is more benign, but far more scary. It is the sun; and we have data that shows what happens when the sun does its thing. I will talk about the big macro in another post, but for today I want to talk about three aligning shorter term cycles.
+ The ENSO (El Nino/La Nina) 3-5 year cycle
+ The Atlantic Decadal Oscillator
+ The Pacific Multi-Decade Oscillator
All three of these have aligned into their cool phase, and this phase will be persistent for at least 15 years with every three years moderated by a weak El Nino’s.
What this means is Generally cooler and wetter weather in the U.S. Northeast/Western Europe, and generally colder and drier weather in the Continental regions of the U.S. Canada, North Africa, and Russia. India’s monsoons will be erratic, as well as Australia’s climate. It is generally expected to be drier and cooler for both of their grain regions. China may get a double whammy, cooler and wetter in their grain belt, and drier in their rice belt. Cool and wetter for grains in spring and fall is not good, coupled with summer drought, and it is very bad. The U.S. Midwest can expect the same.
But the most insidious events are these polar vortexes that are now happening due to the solar minimums. These are brief periods of very cold air that dumps south and north and will come when planting and harvesting are in season. This is and will devastate the grain belts, and will cause hard freezes in the citrus belts.
The big misconception around global cooling is not necessarily the overall temperature, but the wild swings in temp and precip. I will discuss this more on my next post on this subject. In the meantime take a core position in JJG/DBA. We have seen the lows in food for a long. long time.
Food will kill the Fed’s printing gambits, drive the dollar higher, and destroy the world’s economies that will weaken against our dollar. Stay tuned.
