You are already seeing bankruptcy. Some shale producers in the US have declared bankruptcy, and some drilling companies. So it is happening. But last night was an aberration. I do not think you will see another one like that. The June contract is over $20. In Europe, oil is over $20. So I do not think oil is going to stay at zero. It was only one night for one special reason.
When commodities crack, it is nothing else but pricing power shifts from commodity producer to commodity consumer. Are we looking at a new order in the world where the total wealth effect will shift away let us say from oil producing nations like Russia, Saudi Arabia, Kuwait, Nigeria, Venezuela to consuming nations like India and China?
This is great. You are very preceptive. This is good for China. It is good for India, good for Germany, good for Japan. It is good for Korea. It is good for oil-consuming nations. Oil producers are suffering now. And many other companies in those countries as well. So for the world, yes, it is good. There will be bankruptcies, but you go out and drive to Mumbai. You will have fun.
You have been making a point from last couple of years that central banks will continue to print more money and that will ensure liquidity, which will take commodity prices higher. Would you still argue that it is a matter of time commodity prices will start going higher?
Yes. See what happened to gold. Gold is making eight, nine-year highs. So some commodities have already started being affected. Oil is collapsing for special reasons, which we have discussed, it’s the oil and gas price war between Russia and Saudi Arabia and America’s shale producers. But some things are already starting to go up.
When I spoke to you five years ago, you said if you want to get rich, you need to stack up some sugar in your pocket, get a silver spoon and start eating rice with that. So in the post Covid world, if somebody has to make money or get rich, what should one do?
You can go buy sugar, I hope you stock up. I hope you purchase yourself some sugar, buy yourself some rice. Agriculture products will be going higher, especially things we eat. Because this is having a knock-on effect with farmers everywhere. But also make sure, you have some gold. Most of the Indians have some gold. Most Indians love gold. If you do not have some gold, be sure you have some of it, because before this is over, gold is going to go much higher. I prefer silver at the moment. In fact, I am buying silver as we speak, both will do well.
Would you be tempted to take a relook at equities, because you have not liked equities in a long time? After the recent fall and given that things will change in the short term, would you be looking at buying equities?
I bought a shipping company yesterday and a Chinese wine…