NFTRH+; post-CPI

CPI came. CPI laid another big inflated egg. CPI left.

Costs and wages are still rising but real wages declined again. That is another way of saying Stagflation.

Stagflation is another way of saying inflation that starts to work against the economy, especially the consumerist economy of the US, if its citizens start pulling back on spending. Think about all those payrolls reports and all those services driving the bus.

Reference Going Stag from May 2021.

Reference May Payrolls and in particular the services sectors leading in job growth.

  • Broad US indexes (ES & NQ) are clinging to short-term support levels in pre-market.
  • Gold and silver got walloped (of course they did) but are putting tails on their candles by bouncing back a bit (gold should eventually benefit from an economy weakening stagflation, after all).
  • Bitcoin hammered.
  • Commodities generally down.
  • Gold’s ratios to commodities like (incl. copper) are firm to up.
  • The Gold/Silver ratio is firm.
  • And of course the US dollar is up, breaking back above long-term resistance and looking to make a new high with the hawkish Fed and its coming .5% rate hike on tap.

It’s a process. The macro is not going to transition over night. But eventually, unhealthy economic inputs like inflation are going to eat away at the economy (as they already are). Right now, my goal is to continue holding the thing that commodity and gold bulls hate, the US dollar (and equiv.). The dollar is an intrinsically valueless tool that has a lot of value as just that, a tool. It’s the tool to be used to buy certain assets at certain times.

As of now it is also a way station. Well, my way station anyway, as I did not short the market. Patience with the macro is required. Fed is on deck. It’s going to be a interesting – and if we get this right – rewarding summer.