Could there be any doubt in the bowels of the Fed building that price inflation is actually not ‘transitory’ but deeply entrenched and getting deeper as energy prices (and also metals and ags) surge?
Category: Follow My Trades
Regular readers will know that we have been riding these majestic waves ever higher in commodities – from crude oil to coffee to soybeans and more – from the lows almost exactly two years ago. And now the long-anticipated invasion of Ukraine by Mr Putin has occurred – and my question is this: have we reached the terminus of the Putin commodity train.
Bears are highly evolved social animals with intelligence comparable to that of the great apes. Bears often share friendship, resources and security. So is that why the Russian bear and the Wall Street bear have joined forces to do battle with the all-conquering Wall Street bull ( for security)?
Thursday’s heavily-anticipated US Consumer price report came in on the high side – and stocks plunged. Note that the Fed has been trying to convince everyone for months that the price rises we are all seeing was ‘transitory’. Lesson: Don’t trust the Fed.
As a ‘child’ of the sixties, I watched a very popular and lively TV show (in glorious B&W) called That Was The Week That Was. It was the first of a succession of satirical political programmes that kicked off the transition from the age of deference (doffing our caps to our ‘betters’) to the current age of outspoken condemnation (and worse) of our so-called leaders (aka the ‘elite’).
Stock indexes are now in full-blown retreat, as I intimated from last week’s blog caption ‘It drops slowly – then all at once’. Last week the Dow lost almost 2,000 pts. See what I mean? Markets usually fall a lot faster than they rise as is encapsulated in the aphorism You fall out of the window faster than you climb the stairs.
The last holdout of the Great Asset Mania – the Dow and S&P – made their final highs just this month. The other major indexes, such as the Russell 2000, Nasdaq and especially China, have already topped (the Nasdaq and Russell 2000 in November). China topped a year ago and is off by a whopping 30%.
I believe last week will go down in history as the week that stock indexes rolled over into long term bear markets. That marks the end of the Great Asset Mania. The world is entering a much more conservative phase where rampant speculation will no longer be rewarded. And savings accounts will be treasured, rather than shunned as they are today.
Because I was side-tracked by ideology (a really bad habit), I missed a few fabulous trades last year including the incredible stock index markets along with surging Tesla (and Bitcoin). On the plus side, I nailed the huge rallies in many commodities including Crude Oil, NatGas, Coffee, Soybeans, Corn, Wheat, Cotton and a few others. The gains there have been massive and helps ease the pain of my misses.
