I’ve lost trading silver several times in my career. It has been nearly impossible to trade the last few years. It’s been chopping sideways. I’ve been watching silver not to just trade it, but because of its use in technology. Your iPhone simply won’t work as well as it does without silver.

Back in January I tweeted my thoughts on it:

The other day I was surprised to see the investor Chamath Palihapitiya talk about his entry into precious metals and rare Earths. I thought guys like him were only interested in tech? It turns out the times are changing. And they can change fast. He tweeted the following:

I think Chamath has the right idea and his tweets are on point. Rare Earths will be needed to power the country and continue the advancement of technology. However, I think he is missing something important. It’s bigger than green energy.

Most people have overlooked how fortunate we’ve been to have technology as cheap as it’s been in return for the speed and computing it gives us. Computers, smartphones, and servers are absurdly inexpensive when you factor in what you’re paying for in terms of daily processing power and digital tools. To an extent, they’ve become so cheap that many have forgotten that these devices don’t just appear out of nowhere. They are not made from thin air. Raw materials go into them. Precious metals and rare Earths are needed to conduct electricity and create computing speed.

So here’s a question: what happens to tech if the price of the rare Earths and precious metals continue to go up? One outcome might be that the end technology, the servers, chips, smartphones, and computers all become more expensive and more difficult to manufacture. Upgrade cycles would get jammed by the cost of goods needed to create them. What I’m trying to say is, precious metals could potentially squeeze the tech sector in a viscous way if this rally in the underlying price of metals continues.

If you’ve been around markets long enough, you know how many times people have made fun of gold or silver bugs. I’m starting to wonder if those precious metal investors are about to have their moment. For all the proliferation of tech the last 10 years, the networking, speed, and the data, it turns out that whoever controls the precious metals that devices depend on holds the keys to the entire cycle.

I will be watching product manufacturers closely from Apple to Tesla and more. This could get really interesting. At the moment I am still in my core positions and taking it easy the rest of the summer. I want to enjoy the weather the best I can.