Commodity bulls are running rampant. It’s “inflation all the way, Baby!” and everybody knows this. There are jingles and promotions aplenty out there, of everything from the latest alt. coin as protection from government to admonishments to protect yourself from the coming stock market crash by yup, buying commodities.
Not so. If the stock market tops & goes bear, so too will commodities. Both are cyclical and benefiting from inflation. Counter-cyclical gold is the only 'commodity' that will withstand it. All you have to do is look at how CRB pancaked in '08 when the inflation finally expired.
— Gary Tanashian (@NFTRHgt) April 29, 2021
I’ll say again…
- a year ago we (NFTRH) became bullish on the macro inflation view and
- today everyone is bullish on the macro inflation view.
The truth of the matter (which could change, I grant you) is that the copper/gold ratio (an indicator of inflation-induced reflation if ever there was one) has not yet even made a higher high on the big picture monthly chart.
Another truth is that as of now the great new commodity cycle, as deflated by counter-cyclical, less inflation-sensitive gold is nowhere. Absolutely nowhere.
So at the very least it might be a mentally healthy exercise to recall how dead and buried the inflation view was a year ago and how pervasive it is now.
Disclosure: long the inflation trades and not short a bloody thing. But it’s a contrary sentiment disaster waiting to happen if things don’t proceed uninterrupted according to the inflationary script.
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