I’ve said it before, but it bears repeating: Today’s world is unlike anything we’ve seen.

One reason is that for the first time, our country’s two longstanding sources of power, our military and our dollar, can’t get us what we want.

We still have the world’s largest military. But that counts for less than before, because today some of our adversaries, including China, have militaries whose technological capabilities surpass ours in significant ways. They’ve spent less, but they’ve spent more efficiently.

Sanctions Have Backfired

With our military less able to impose our will on the world, we’ve turned to relying more on the power of the dollar. The dollar’s status as the world’s chief reserve currency has made it a powerful weapon in the U.S. arsenal.

However, the Ukraine war has exposed its limits as well. Dollar sanctions on Russia, the most extensive ever imposed, have largely boomeranged. Rather than bringing down Russia, they are hurting the U.S. and, even more, our European allies and Japan.

The U.S. has long assumed that money can solve any problem. But the Ukraine war has exposed a caveat: Money can buy only what’s for sale. The U.S. and our Western allies are in a tightening bind because we’re not self-sufficient in the most critical resources, i.e., food and energy. And these are getting harder to buy.

You might think that for the U.S., food, at least, wouldn’t be a problem. After all, we’re the world’s biggest exporter of grains and other food products. But we’re also one of the biggest importers of fertilizers, which are critical to our food production. Thus, we aren’t completely self reliant.

Fracking Not the Panacea

As for energy, we made an effort to gain energy independence by printing money to allow fracking to grow as fast as we could produce rigs. It resulted in a few successful companies but on balance an industry that over the past decade lost about half a trillion dollars.

Fracking continues, but its days of generating the kind of growth that would make us energy-independent are long gone. In the past several months, we’ve used up a significant portion of our massive rainy-day strategic reserves (while our top rival, China, was adding to its oil reserves).

Then there are other resources, less fundamental than food and energy but still essential to any developed industrial economy and to advanced technologies. They range from copper and zinc to less familiar names like tantalum, gallium, and rare earths.

Dependent on Other Countries for Critical Materials

The Southern/Eastern part of the world has far and away the greatest endowment. Of the 84 industrial metals followed by the USGS, the U.S. depends on other countries for more than 50% of our needs in 67 of them, or about 75%. This sorry state reflects our past wastefulness along with our failure to keep up with the modern supply chains necessary for advanced technologies.

But this is just the start. Our allies’ relative weakness has sent the dollar soaring. When anyone talks about dollar strength, it’s in relation to an index known as DXY, which compares the dollar primarily to Europe and secondarily to Japan and Great Britain.

Weakness in European economies, which not so incidentally has repercussions for political stability, has been the catalyst for the dollar’s strength. What makes it a vicious circle is that the weak euro makes imports, including critical commodities, more expensive for Europeans, leading to further weakness.

If this sounds grim, don’t shoot the messenger. To determine the best investment strategy requires seeing things as they are. The best outcome would be if countries realize the only way forward is through global cooperation, ultimately leading to a self-sustaining world. After all, while the West may be short on basic resources, it’s still top of the heap in many critical technologies.

But whatever the geopolitical outcome, the major message is that commodities will become more important than ever in interactions among countries. They should play an equally important role in your own portfolios.

Editor’s Note: As Dr. Stephen Leeb just made clear in the above article, we face a new world of investing risks and opportunities.

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