Hoye’s Post-Bubble Contraction

Below is a short excerpt from NFTRH 726 on the post-bubble contraction, as coined by Bob Hoye. My critique of Bob’s timing does not compare to my admiration of his rare and right minded fundamental views of the gold sector. Indeed, you can click this graphic for a PDF file of Bob discussing the sector. I was made aware of this shortly after posting #726 on Sunday.

Hoye’s Post-Bubble Contraction

I like Bob Hoye for his macro fundamental views, but do not track his timing or his wider market calls because I have found them to be wanting. For example, “post-bubble contraction” has been in play from Bob’s POV for years and years. Yet at the beginning of 2022 there the ‘everything bubble’ still was.

On this phase I give better odds of the Bob Squirrel finally finding his economic contraction nut. Why? Refer to the ‘Continuum’ chart near the top of the report. The reason this should be of concern to all of those who plan to operate going forward as they have over the last few decades (while using all the same assumptions of the past) is that the chart indicates that the Fed has lost an important tool in its market manipulating tool box. Regardless of whether or not there is a heavy pullback in yields from or around the [next target, omitted for public post] area, the big picture continuum has changed. That, in my opinion, means that the Fed’s ability to ward off oncoming busts with a simple flip of the inflation switch may be gone.

Could we finally have a real economic cycle? One that would need to clear of its own market-driven forces rather than a centralized agency full of academic eggheads schooled in Keynesian macro manipulation? Yes, I think it is very possible and if we finally go full frontal Hoye after many false alarms, the gold stock sector could actually put on more than just the ill fated mega rallies like it had in 2008-2010 and to a lesser degree 2018-2020.

If the Fed is having its manipulative power taken away or severely compromised by the market, the game sure could change. Open minds for an extended period (years probably) on this and other aspects of the markets.

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2 thoughts on “Hoye’s Post-Bubble Contraction

  1. Yes Bernanke received the Nobel prize for economics. Unbelievable. One day we will look back and say…

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