In the medium term, Washington is likely to support, fund, and back initiatives to develop both domestic and some foreign (in nearby friendly countries) mining operations. “Investment and development of traditional mining opportunities is a necessary strategy to employ if the U.S. wants to, at the very least, keep up with overseas rivals,” says Nicholas Beardsley from the Silk Bridges Group, a mining company.

Where there’s really an opportunity to build supply quickly and effectively is in recycling scrap [metal] and reprocessing minerals that come about as byproducts from mineral processing. After all, there’s an abundance of both globally. With the available supply and recent advancements in reprocessing methods and technology, this can be both more time- and cost-effective—and in an environmentally-friendly manner—than traditional mining and ore processing. This is being done in Kazakhstan and Turkey via my employer. There’s no reason it couldn't be done in the United States.

A second question is what happens when commodity traders assume the same importance as major banks—systemically important financial institutions (i.e., “too big to fail”)—but without the same regulatory oversight? Blas and Farchy note near the end of their book that the traders are increasingly “acting as links to international financial markets, channeling dollars from pension funds and other investors into far-flung countries,” ultimately resulting in “the ability to finance entire nations – and to help others into being.” Chad, for example, turned to Glencore in 2013 as a lender of last resort, in exchange for future oil supplies. When Chad couldn’t pay back the loans (due to falling oil prices) in 2016, Glencore was able to push for “punishing austerity” in the country. Even now, “when the [International Monetary Fund] publishes reviews of the country’s economy, [Glencore] merits its own mention in the analysis of the African government’s finances.” Similarly, in Kazakhstan, the government (also suffering from a lack of revenue due to falling oil prices) turned to Vitol, which, starting in 2016, “channeled a total more than $6 billion in loans to [state oil company] KMG in exchange for future oil supplies.”

This sheer amount of power and influence means that if some commodity traders were to go down, entire countries might very well go down with them. Just this past March, the European Federation of Energy Traders—essentially, the lobby for energy trading houses—put out a four-page letter calling on central banks to provide emergency financial liquidity to support commodity markets, which are in trouble due to the Russo-Ukrainian War. As the Financial Times explains using the gas markets as an example,

Big commodity traders use derivatives to hedge contracts against price swings and lock-in margins. … As gas prices in Europe and Asia have soared, the losses on these contracts have increased, requiring … traders to make margin payments to brokers and exchanges. These losses from profitable positions will be offset once the commodities are sold, but in the intervening period margin calls can place strain on commodity traders, which are dependent on short-term credit lines from banks to fund their activities. “This cash flow mismatch can cause major liquidity problems,” said Craig Pirrong, a finance professor at the University of Houston. “And banks, for various reasons … may not be willing to extend credit sufficient to meet these liquidity needs…”

In short, major commodity traders are currently short on cash due to massive financial market requirements. If one or more firms suffer a 2008 Lehman Brothers-like moment—the bank failed due to lacking enough liquidity to meet its operating costs—the results could be catastrophic. Blas himself, in a Bloomberg column, is skeptical but notes that significant caution is warranted:

I have long argued that commodity traders don’t matter to the global economy in the same way that Lehman Brothers did: the collapse of one won’t trigger a global recession. And yet, they remain too big to be ignored — and a possible source of big trouble if left unattended.

It is evident that major structural reform by governments may be needed to curtail the risks posed by commodity traders’ sheer financial heft. After all, the last time national central banks were called on to provide a safety net for financial firms engaging in highly-speculative and overleveraged activity was in 2008. No one wants a repeat of that, both in terms of the crisis and the aftermath—political, geopolitical, social, economic, etc.—that followed.

Finally, The World for Sale poses a third and rather uncomfortable question: can geographic and resource inequalities really ever be overcome?

The answer, which appears to be a heavy “no,” carries broad implications for the international order. While the United States occupied its place in the sun, and the globalized economic system worked fine, this could be ignored. But with the Russo-Ukrainian War, reality is revealing that the West has fallen into a state of wohlstandsverwahrlosung—affluent neglect from having it too easy for far too long—opening the door for dramatic political reactions to changing material circumstances. Coming months will likely show the consequences of this. After all, Russia alone supplies around one-sixth of global commodities. It produces around 40 percent of the world’s palladium and is a top exporter of coal, steel, aluminum, nickel, and so forth. Can entire economies, including and especially nearby European economies, continue functioning as normal without these necessary inputs? It is a doubtful prospect.

And then there is the food issue: Russia and Ukraine—the former sanctioned, the latter now a war zone—together account for nearly 30 percent of world wheat exports, 15 percent of world trade in rapeseed oil, and 75 percent of all sunflower oil exports. Ukraine alone ships 15 percent of all exported corn. Compounding the situation is the fact that Russia, Ukraine, and Belarus make up a significant share of fertilizer production and export. All three countries account for 36.7 percent of global production and 39.6 percent of global exports of potash. Likewise, all three make up 22.9 percent of global ammonia exports. These are all essential for modern agriculture, and a cut in supply—with a corresponding spike in prices—has farmers around the world worried.

Over the next year, food prices everywhere will probably shoot up, setting the stage for a repeat of what happened after the Great Grain Robbery. Experts whisper about a repeat of the Arab Spring, which was partially set off due to high food prices. Elections between now and 2024 could potentially bring down sitting governments, including the Biden administration in the United States, should conditions deteriorate significantly. What happens “elsewhere” will once again show that not all countries are created equal, and the result may very well be a populist political push—improbable as it may be—towards a state thought long vanquished from the dictionary of polite, cosmopolitan, and globalized society: autarky.

ULTIMATELY, THE World for Sale is, in its own way, an open invitation to discuss these issues. It is essential reading for all participants in contemporary global affairs and geopolitics.

As for the commodity traders themselves, as Blas and Farchy assert, the world’s natural resources “still need to be bought and sold. And commodities are still a sure-fire path to money and power.” Even now, commodity prices are spiking from the Russo-Ukrainian War, creating unique opportunities for the adventurous and bold. Russian oil is being sold at a discount of 20 percent or more, while exploding grain prices will mean a mad rush to secure supplies in the Middle East and further abroad. Despite liquidity risks, fortunes are being made overnight, only further empowering the invisible kingmakers who can affect the fates of nations and entire populations. It may be winter for the markets, governments, and ordinary people, but as far as the commodity traders are concerned, they, like snow, always land on top.

Carlos Roa is the Managing Editor of The National Interest.

Image: Reuters.