For most of the last forty years, the global economy has been built on an extraordinary assumption: that the physical world could be made cheap, flexible and almost invisible.
Energy would be available when needed. Metals would arrive on time. Fertilizer would be produced, shipped and applied. Food would move across oceans. Shipping lanes would remain open. Capital would flow freely. Supply chains would stretch across continents, optimized for efficiency rather than resilience.
This was the world of globalization.
It was a world in which software could eat the world because the physical world was assumed to function in the background. The real economy became a platform on top of which financial assets, technology companies, venture capital, private equity, artificial intelligence, crypto, IPOs and capital-light business models could flourish.
That world may now be ending.
The next decade may not be defined by who owns the best app, the most fashionable AI model, or the most hyped IPO. It may be defined by who controls the physical inputs without which civilization cannot function:
Energy.
Metals.
Minerals.
Fertilizer.
Food.
These are not just sectors. They are the base layer of the entire system.
Everything else sits on top.
The End of the Law of One Price
For decades, commodity markets were governed by what economists call the Law of One Price.
The idea is simple: the same commodity should trade at roughly the same price everywhere in the world, adjusted for transportation costs, taxes and small local differences.
A ton of copper in Chile was essentially the same as a ton of copper in China, Germany or the United States. A barrel of oil was a barrel of oil. A cargo of LNG was a cargo of LNG. Wheat, corn, potash, uranium, aluminum and coal all moved through a global system where price differences were supposed to be temporary. If one market became too expensive relative to another, traders, shipping firms and arbitrageurs would close the gap.
That system worked because the world was relatively open.
Shipping lanes were secure.
Capital moved freely.
Sanctions were limited.
Tariffs were low.
Global trade was expanding.
Governments generally allowed markets to allocate resources.
Companies optimized for lowest cost.
But Brent Johnson’s framework suggests this era is now breaking down.
In a deglobalizing world, a commodity is no longer just a commodity. Its location, ownership, jurisdiction and political alignment matter.
A ton of copper inside the United States is not the same as a ton of copper in a politically unstable region. A pound of uranium from Canada is not the same as a pound of uranium from a country vulnerable to sanctions. A cargo of LNG that can reach Europe is not the same as gas stranded in a pipeline system somewhere else.
The molecule may be the same.
The metal may be the same.
The mineral may be the same.
But the strategic value is different.
This is the crucial shift.
In the old world, the question was:
“How do I buy this commodity at the lowest possible price?”
In the new world, the question becomes:
“Can I get this commodity when I need it, from a supplier I trust, through a supply chain that will still function in a crisis?”
That is a completely different question.
Geography Becomes Part of the Commodity
The old globalization model treated commodities as interchangeable. The new model may not.
Imagine two identical tons of copper.
One is mined, refined and stored in a friendly jurisdiction with reliable infrastructure, strong legal protections and secure access to Western defense and industrial markets.
The other is mined in a politically unstable country, refined in a rival power’s industrial system, and shipped through vulnerable maritime chokepoints.
In a textbook, they are the same commodity.
In the real world, they are not.
The first ton may be strategically valuable. The second may be theoretically available but practically unreliable.
This means geography becomes part of the commodity.
Political alignment becomes part of the commodity.
Supply-chain security becomes part of the commodity.
Military relevance becomes part of the commodity.
Jurisdiction becomes part of the commodity.
This is why commodity pricing may become far more fragmented than investors are used to.
The world may still have enough copper, uranium, aluminum, coal, oil, gas, potash or phosphate in aggregate. But that does not mean every country has secure access to enough of it at the right time, in the right place, under the right conditions.
This is scarcity without depletion.
The world does not have to run out of commodities for shortages to appear. It only has to lose the ability to move them freely, cheaply and reliably.
Natural Gas Was the Warning
Natural gas already showed us what this world looks like.
For years, many investors thought about natural gas as if it were becoming a global commodity. Then Europe’s energy crisis revealed the truth.
The same molecule traded at dramatically different prices depending on geography.
US natural gas could be cheap while European gas became extraordinarily expensive. The world had not run out of gas. The problem was that Europe had lost access to enough gas in the right place, at the right time, through the right infrastructure.
That distinction is everything.
The shortage was not purely geological. It was logistical, political and geographic.
This is likely to become a recurring pattern across the commodity complex.
Copper can be plentiful globally but scarce inside a specific industrial bloc.
Uranium can exist in the ground but be unavailable to utilities that need politically secure supply.
Fertilizer can be produced somewhere but not delivered in time for planting season.
Oil can exist in reserves but fail to reach refineries quickly enough.
Food can be grown globally but become unavailable locally because of trade restrictions, shipping disruptions or export bans.
The market often prices commodities as if global supply is the only variable.
But in a fragmented world, accessibility matters as much as supply.
The Physical World Cannot Be Printed
This is where Colonel Douglas Macgregor’s framework overlaps with Brent Johnson’s.
Johnson emphasizes the fragmentation of commodity pricing. Macgregor emphasizes the strategic importance of the physical inputs themselves.
His argument is blunt: energy, metals, minerals, fertilizer and food are the businesses to be in because they are the foundation of everything else.
That view may sound extreme, but the logic is simple.
You cannot print oil.
You cannot print copper.
You cannot print uranium.
You cannot print potash.
You cannot print wheat.
You cannot print diesel.
You cannot print refining capacity.
You cannot print shipping routes.
You cannot print time.
Financial assets can be repriced instantly. Physical systems cannot.
A stock can fall 30% in a day. A currency can move violently. An IPO can double. A crypto token can collapse. An AI company can be marked up or down by billions of dollars based on sentiment.
But a refinery takes years to build.
A mine takes years, often decades, to permit and develop.
A nuclear plant takes years to construct.
A power grid takes enormous capital, engineering and political will.
A fertilizer supply chain cannot be rebuilt overnight.
A depleted strategic petroleum reserve cannot be restored by a press release.
This is the difference between financial time and physical time.
Markets move in milliseconds.
Civilization moves in tons, barrels, ships, pipelines, railcars, harvest cycles and megawatts.
The danger is that investors have become so accustomed to financial time that they underestimate physical time.
Energy Disruption Detonates Everything
Energy is not just another commodity. It is the master commodity.
Every sector depends on it.
Energy powers transportation.
Energy powers industry.
Energy powers mining.
Energy powers agriculture.
Energy powers data centers.
Energy powers military systems.
Energy powers the production of fertilizer.
Energy determines the cost of moving goods around the world.
When energy becomes scarce, expensive or unreliable, the effects spread everywhere.
Higher energy prices raise the cost of food.
Higher diesel prices raise the cost of trucking and farming.
Higher natural gas prices raise the cost of fertilizer.
Higher electricity prices raise the cost of metals refining.
Higher fuel costs raise shipping costs.
Higher inflation pressures bond markets.
Higher bond yields pressure fiscal deficits.
Higher deficits increase the temptation for financial repression.
This is why energy disruption can detonate financial markets.
It is not because oil is merely a large sector in the equity index. It is because energy is embedded in every cash flow, every supply chain and every inflation forecast.
A world with cheap and abundant energy can support long-duration financial assets, high valuations, leveraged business models and speculative growth stories.
A world with expensive and unreliable energy is very different.
In that world, the discount rate rises, margins are squeezed, governments intervene, and physical assets regain importance.
The AI Paradox
Artificial intelligence is usually presented as a digital revolution.
But AI is also a massive physical infrastructure story.
Data centers require land, electricity, copper, cooling systems, natural gas, uranium, grid connections, transformers, steel, cement, semiconductors, water and backup power.
The more ambitious the AI buildout becomes, the more it collides with the physical world.
This creates a paradox.
AI may be a financial bubble in terms of valuations, expectations and capital-market enthusiasm. But the infrastructure buildout behind AI may still create very real demand for commodities.
The stock market can overprice AI companies while underpricing the physical bottlenecks that AI creates.
That is the interesting part.
Even if AI equity valuations prove excessive, the physical demand may still be real. Data centers still require power. Power requires generation. Generation requires fuel, uranium, turbines, gas infrastructure, transmission lines and metals. Grid expansion requires copper and aluminum. Backup systems require diesel, batteries or gas turbines.
The bubble may be in the financial claims.
The opportunity may be in the physical constraints.
This is not unique to AI. SpaceX, defense technology, semiconductor reshoring, electrification and industrial policy all share the same feature: they are marketed as technology stories but depend on physical inputs.
The narrative is digital.
The bottleneck is physical.
Defense Spending Changes the Price Mechanism
The rise of defense spending is another major force behind this shift.
For decades, commercial buyers dominated many commodity markets, and lowest cost often won. If one supplier was cheaper, companies bought from that supplier. Efficiency was the goal.
Defense ministries think differently.
A military does not optimize for lowest cost. It optimizes for certainty of supply.
A defense contractor cannot build missiles, aircraft, drones, submarines, satellites or radar systems if critical components depend on hostile or unreliable suppliers.
This changes the price mechanism.
A government may prefer expensive domestic supply over cheaper foreign supply. It may fund uneconomic mines. It may subsidize refining. It may stockpile strategic materials. It may force companies to source from friendly jurisdictions. It may impose export controls. It may restrict foreign ownership of critical assets.
Once national security enters the commodity market, price is no longer the only variable.
This creates a premium for secure supply.
A pound of uranium in Canada may command a different strategic value than uranium elsewhere. Rare earth processing in an allied country may be worth more than cheaper processing in a rival country. Copper, titanium, aluminum, graphite, nickel and lithium may all trade with political premiums depending on their supply chains.
The market is slow to price this because most investors still think in terms of cost curves.
But the next cycle may reward not just low-cost producers, but strategically located producers.
The winners may be companies with assets in the right jurisdictions, serving the right governments, connected to the right supply chains.
Fertilizer and Food: The Overlooked Chokepoint
Food is often treated as a separate category from energy and metals, but that is a mistake.
Modern agriculture is an energy system.
Fertilizer depends heavily on natural gas, sulfur, phosphate, potash, ammonia, nitrogen and global logistics. Farming depends on diesel, machinery, credit, chemicals, irrigation, spare parts and transport.
A disruption in energy can become a disruption in fertilizer.
A disruption in fertilizer can become a disruption in crop yields.
A disruption in crop yields can become a food inflation shock.
A food inflation shock can become a political crisis.
This is why agriculture may become one of the most important second-order effects of geopolitical disruption.
Markets often react immediately to oil headlines. But food and fertilizer effects take time. They show up through planting seasons, crop yields, inventories, import demand and government policy.
A missed shipment of fertilizer does not necessarily move markets the same day. It may matter months later when yields disappoint.
This delayed effect is important.
Commodity markets are not always synchronized with financial markets. The stock market may celebrate a ceasefire or peace agreement immediately, while the physical consequences of prior disruptions continue moving through the system.
The water first moves out. Then the wave arrives.
That is the tsunami analogy.
The initial market reaction may be relief. The later impact may be inflation.
Strategic Reserves Are Not Infinite
Another underappreciated issue is the role of strategic reserves.
Governments can temporarily smooth disruptions by drawing down reserves. This can suppress prices and create the appearance of stability.
But reserves are finite.
Using reserves to cap prices may buy time, but it does not solve the underlying problem. In fact, it may increase future demand because those reserves eventually need to be rebuilt.
This applies not only to oil, but to many strategic materials.
If countries conclude that supply chains are fragile, they will want larger inventories of everything important:
Oil.
Diesel.
LNG.
Coal.
Uranium.
Copper.
Aluminum.
Fertilizer.
Grain.
Rare earths.
Medical supplies.
Military inputs.
The shift from just-in-time to just-in-case inventory is structurally bullish for physical commodities.
In the old system, inventories were a cost to be minimized. In the new system, inventories become insurance.
That means more demand for storage, more demand for reserves, and more competition for physical supply.
The irony is that the more governments fear shortages, the more they stockpile. The more they stockpile, the tighter the market becomes.
The Return of Resource Nationalism
A fragmented commodity world almost inevitably leads to resource nationalism.
If energy, metals, minerals, fertilizer and food become strategic, governments will not simply allow them to flow freely to the highest bidder.
They will intervene.
Export bans may become more common.
Windfall taxes may rise.
Domestic reservation policies may appear.
Foreign ownership restrictions may tighten.
National champions may receive subsidies.
Critical mineral projects may receive state support.
Trade blocs may form around resource security.
This creates a very different investment environment.
Investors will need to understand not only geology and cost curves, but politics.
Where is the asset located?
Who controls the government?
Is the country aligned with the US, China, Europe, Russia, India or another bloc?
Could exports be restricted?
Could taxes rise?
Could production be nationalized?
Could the company become a strategic supplier?
Could the asset receive subsidies?
The commodity investor of the next decade may need to think more like a geopolitical analyst than a traditional sector analyst.
The West’s Vulnerability
One of the more uncomfortable implications of Macgregor’s argument is that the West may no longer be able to assume cheap, privileged access to the world’s resources.
For decades, the US-led system provided relative security for global trade. Western companies could source globally, finance globally and sell globally. The military, financial and trade architecture supported this arrangement.
But if that security architecture weakens, the West faces a problem.
Much of its manufacturing base has been hollowed out.
Many critical mineral supply chains are controlled elsewhere.
Refining capacity is constrained.
Energy infrastructure is politically contested.
Agriculture is under regulatory pressure.
Industrial capacity takes years to rebuild.
The West may still be rich financially, but parts of its physical base are weaker than commonly assumed.
This is why the commodity thesis is not just about emerging-market demand. It is also about Western reindustrialization.
If the US and Europe want energy security, defense capacity, AI infrastructure, semiconductor production and resilient supply chains, they need to rebuild parts of the physical economy.
That means more demand for steel, copper, aluminum, cement, energy, skilled labor, machinery and capital equipment.
It also means higher costs.
Resilience is not free.
Why Inflation May Be More Structural Than Cyclical
Many investors still think of inflation as a cyclical problem caused by temporary shocks, excessive stimulus or central-bank mistakes.
But if the world is moving from efficiency to resilience, inflation may be more structural.
Deglobalization is inflationary.
Reshoring is inflationary.
Defense spending is inflationary.
Energy insecurity is inflationary.
Commodity fragmentation is inflationary.
Stockpiling is inflationary.
Tariffs are inflationary.
Supply-chain redundancy is inflationary.
This does not mean inflation rises in a straight line. There will be recessions, corrections, demand destruction and deflationary shocks.
But the underlying structure may have changed.
The globalization era suppressed inflation by allowing companies to source from the cheapest location, use cheap labor, minimize inventories and rely on stable shipping. The deglobalization era reverses many of those forces.
If that is correct, the 2020s and 2030s may look less like the 2010s and more like earlier periods when commodities, wages, defense spending and fiscal deficits mattered more.
In such a world, hard assets may no longer be fringe portfolio allocations. They may become central.
Gold and the Monetary Layer
If energy, metals, minerals, fertilizer and food represent the physical layer, gold represents the monetary layer of the same thesis.
Gold tends to become more important when confidence in financial claims declines.
It is not someone else’s liability.
It cannot be printed.
It has no board of directors.
It has no earnings guidance.
It has no counterparty risk in the traditional sense.
It is politically neutral in a way fiat currencies are not.
Central banks have already been increasing gold purchases in recent years, partly because the weaponization of reserves changed the perceived risk of holding fiat assets.
This does not mean the dollar disappears overnight. The dollar system remains enormous, deeply liquid and structurally embedded in global finance.
But the direction of travel matters.
If the world becomes more fragmented, countries may want reserves that cannot easily be sanctioned, frozen or debased. Gold fits that role.
This is why gold belongs in the same discussion as oil, copper, uranium and food. It is not consumed like energy or fertilizer, but it is a hard asset in a world questioning financial abstractions.
The more unstable the geopolitical and monetary system becomes, the more gold looks like the reserve asset of last resort.
Bitcoin and the Transactional Alternative
Bitcoin enters the discussion differently.
Gold is the reserve asset. Bitcoin may be the transactional alternative for certain users.
It is portable, digital and outside the traditional banking system. In a world where capital controls, sanctions and currency debasement become more common, Bitcoin may serve as a parallel financial rail.
But Bitcoin is also volatile and still highly financialized. It may behave like a risk asset during liquidity contractions and like a monetary escape valve during periods of currency distrust.
The key point is not that Bitcoin replaces gold or the dollar immediately. The key point is that alternative monetary systems become more attractive when trust in the existing system declines.
Gold is the ancient answer.
Bitcoin is the modern answer.
The dollar is still the incumbent system.
All three may coexist, but the relative balance may shift.
Why This Is Not Just a Commodity Supercycle
The phrase “commodity supercycle” is useful, but it may not fully capture what is happening.
A traditional commodity supercycle is usually driven by demand growth overwhelming supply. China’s industrialization in the 2000s is the classic example.
This cycle may be different.
It may be driven by five forces at once:
First, underinvestment in physical supply after years of poor returns.
Second, rising demand from AI infrastructure, electrification, defense spending and industrial policy.
Third, geopolitical fragmentation that reduces effective supply.
Fourth, stockpiling and strategic reserves that increase demand for inventories.
Fifth, monetary instability that raises demand for hard assets.
This is not just a demand story.
It is a system-repricing story.
The market may need to reprice the entire physical foundation of the economy after decades of treating it as cheap, abundant and politically neutral.
The Fragility of Financial Narratives
The contrast with financial bubbles is important.
AI may be transformative, but AI equities can still be a bubble.
SpaceX may be an extraordinary company, but its valuation can still be excessive.
Technology can be real while financial claims on that technology become overvalued.
This has happened many times before.
Railroads were real.
The internet was real.
Fiber optics were real.
Electric vehicles were real.
Crypto rails may be real.
AI may be real.
But real technologies often produce bubbles when capital markets extrapolate too aggressively.
The difference is that the physical inputs are not optional.
An AI company can miss expectations. A data center still needs power.
A satellite company can be overvalued. Rockets still need metals, energy and supply chains.
A software company can trade at 50 times sales. The grid still needs copper.
A defense technology company can be hyped. Militaries still need steel, uranium, rare earths, explosives, fuel and logistics.
The financial layer may be fugazi.
The physical layer is not.
The Investment Implication
The central investment implication is not simply “buy commodities.”
It is more specific.
Investors may need to prioritize ownership of scarce, strategic, physically necessary assets in secure jurisdictions.
That includes:
Energy producers with durable reserves.
Uranium and nuclear fuel cycle assets.
Copper producers and developers.
Fertilizer producers.
Agricultural assets.
Coal and LNG infrastructure.
Critical mineral projects in friendly jurisdictions.
Defense-related industrial suppliers.
Precious metals and select miners.
Infrastructure linked to power, grids and transportation.
But selectivity matters enormously.
Not all commodity assets are equal.
A low-grade deposit in a hostile jurisdiction may not deserve the same valuation as a strategic asset in a friendly country. A producer with high political risk may not benefit from scarcity if the government captures the upside. A miner without permits may remain stuck for years. A fertilizer company with secure feedstock may be far more valuable than one exposed to unreliable inputs.
The new question is not just:
“Who has the lowest cost?”
It is:
“Who has secure supply, strategic relevance, political support and access to the right markets?”
The Civilization Trade
At its core, this thesis is about the return of the physical world.
The last cycle rewarded abstraction:
Platforms.
Networks.
Software.
Financial engineering.
Global labor arbitrage.
Cheap capital.
Long-duration growth stories.
The next cycle may reward tangibility:
Energy.
Metals.
Minerals.
Food.
Fertilizer.
Infrastructure.
Defense.
Power.
Gold.
This does not mean technology disappears. It means technology must once again be understood as dependent on physical systems.
The cloud is not a cloud. It is buildings, chips, cooling systems, power lines and fuel.
The energy transition is not an app. It is copper, aluminum, steel, uranium, lithium, nickel, graphite, cement and permitting.
National defense is not a budget line. It is factories, shipyards, missiles, fuel, rare earths and industrial capacity.
Food security is not a slogan. It is natural gas, nitrogen, phosphate, potash, diesel, water, soil and logistics.
The physical world was never gone. It was merely underpriced.
Conclusion: The Decade of Hard Assets
The world may be entering a period where the assumptions of globalization no longer hold.
Commodities may no longer trade as if location does not matter. Supply chains may no longer be optimized purely for cost. Governments may no longer allow strategic resources to flow freely. Energy may no longer be cheap enough to ignore. Food and fertilizer may no longer be taken for granted. Defense spending may no longer be discretionary. Gold may no longer be a relic.
The Law of One Price is giving way to the politics of access.
The financial economy is rediscovering the physical economy beneath it.
And if that shift continues, the winners of the next decade may look very different from the winners of the last one.
The last era belonged to capital-light businesses built on cheap energy, cheap money, global trade and geopolitical stability.
The next era may belong to those who control the inputs of civilization itself.
Energy.
Metals.
Minerals.
Fertilizer.
Food.
Everything else depends on them.