Doctor Copper’s scrip: “The economy is starting to gear down due to the reduction of the very cyclical inflationary forces that had stimulated the patient previously. If you feel a sudden loss of balance, as if a carpet were being pulled out from under your feet that will be the inflation trades you’ve stood resolutely upon continuing from a normal correction to an erosion of uptrends.”
The copper price (futures) are stabbing the lowest level yet of this long dirge that has been our chronicling of the situation.
The Copper/Gold ratio (CGR) is even more important in signaling a failure of the 2020 inflationary operations. That is not to say that the inflation will not resume, but it is to say that we are now in a decidedly counter-cyclical, economically corrosive phase of it (enter the Stag). The other alternative is a complete failure of the inflation on the near to intermediate-term into a liquidity crisis.
The big picture chart advises that the S&P 500 got a head start on the proceedings by entering a bear market as CGR was merely consolidating with its bearish bias, while commodities – driven by the last inflated man standing, Energy, continued apace. If Copper/Gold fails badly the last inflated man is not likely to withstand it.
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