Ponder the inflationary macro with me, if you will

Stare at the chart of inflation expectations (RINF)…

Gold went down during the 2012-2016 Goldilocks phase (officially ended in 2020 with the final tanking and reversal of inflation expectations), as did commodities and the Silver/Gold ratio. US stocks AKA the Good Ship Lollipop sailed on as the world was pulled in a disinflationary grip after USD bottomed and bulled in 2014. But since the deflationary low in early 2020 it’s been quite a different story.

Quick interpretations of this chart:

Gold rose against fading inflation expectations as the new bull market began in 2016 and was confirmed with a break above 1378 in 2019 (ref. the monthly chart in this post). It also remained firmer during the pandemic and led the way out to the coming inflation.

CRB did what CRB does. It declined pretty much in lockstep with inflation expectations and later followed gold upward when inflation expectations finally became obvious to even the dimmest of the herd. That remains the play to this day as cyclical inflation continues.

Industrial Metals (GYX): see directly above.

S&P 500, ah you good ship, you. Have your cake and eat it too, during Goldilocks and now during cyclical inflation. “I’ll get you my pretty”… some day. But that day is not indicated to be today.

Silver/Gold ratio tends to roughly do what inflation expectations do, which is why its lagging condition is curious. It’s either a negative divergence to the inflationary macro or it’s going to play some catch up, most likely with a furious rally in silver.

This picture of the macro brought to you by one of the…

…probably a little too often.

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