Inflation Shockwave As Crack Spread Hit Record High | David Jensen
Liberty and Finance Sep 5, 2026
Summary
Surging diesel prices reveal a structural shortfall: 80% of US/Canadian industrial activity depends on diesel, and inventories are drawing down.
Long-end Treasury yields are moving independently of the Fed, which Jensen reads as fractured trust in central banks.
Physical demand is pulling silver eastward — Shanghai premiums have run ~12% over Western prices for roughly six months.
Gold and silver price trends have re-coupled with long-end Treasury yields since 2018/2020, reversing a multi-decade decoupling.
Palladium supply remains concentrated (~80% from Russia and South Africa), and a 14-year supply deficit is meeting rising hybrid-car demand.
Clive Thompson's takeaways
- Top takeaway Jensen notes Thompson had been flagging the Dutch Central Bank's gold repatriation from New York to London, framing it as part of a wider trend of countries taking direct custody of their reserves
David Jensen's takeaways
- Top takeaway Diesel is 'telling the story' on inflation: US retail diesel near $5.80/gallon (~$243/barrel) against ~$92 NYMEX crude as of early September 2026, with 80% of industrial activity (mining, farming, freight) dependent on diesel and stockpiles already drawn down
- Argues bond market trust in central banks has been 'fractured'; the 10- and 30-year yields are now leading the Fed rather than being steered by it, which he calls a sea change in the rate market
- Frames gold and silver's bull trend as a return to the 1970s 'sell bonds, buy metals' regime, with turning points in 2018 (gold) and 2020 (silver) and the run higher set to intensify
- Highlights physical-vs-paper stress: Shanghai silver premium running 10-14% (around 12%) drawing metal west-to-east into China, plus Comex palladium registered inventory of ~198,000 ounces with September deliveries standing for about one-eighth of registered vault stock
- Warns of a reallocation risk from roughly $300 trillion in financial assets into a few trillion of real goods if rates keep rising, calling this 'currency inflation' the larger threat over near-term price inflation