No-one in the inflation camp wants to hear that … it’s uncomfortable to face the potential of being so wrong.
Albeit wrong in the short term but probably right later … after it’s too late. More on that farther down.
Just like the lazy (and complicit, we might add) financial journalist publishing the standard (speck blaming) propaganda for the day, so too are the hyper-inflationists, jumping on the most popular bandwagon in town.
Not even considering the potential for a retrace; admittedly, which could be short and sharp but significant nonetheless.
This site has presented several times, we’re in a situation similar to that of Genesis 41. It’s the corn and grain first … then gold and silver.
Just to back that up a bit before getting to the charts, we have the following:
What can be said? We can call it lies, misinformation, propaganda but none of those really get to the root.
Input prices are rising not from inflation, but from supply constriction and disruption.
For example, the corporate (big-Ag) food supply chain as reported on many times, is intentionally being destroyed. The result of course, prices go higher.
We’re also in a quiet sun-cycle period that only serves to help with (cold) weather extremes. The only discussion from the media concerning the weather is that’s it’s getting warmer, right? Opposite of reality.
So we’re taking that ‘opposite of reality’ as a contrary indicator.
Whatever inflation we’ve got after nearly twelve years, is probably at or near a peak … ready to head lower.
That includes the market as well. The likely outcome:
Market down, bonds up.
The daily close of long bond TLT, has it in a support zone. One attempt has already been made to position long via TMF (not advice, not a recommendation) as detailed in this report.
Once again this past Friday, another TMF entry.
Both bonds and the markets (i.e. S&P 500) are at opposite extremes. The risk of loss in bonds may have reached its nadir.
Way below the media radar, coal prices are reversing off a four-year low. Peabody Energy (BTU) is reversing as well.
Why would coal, a supposed dead product be reversing now?
The list could be endless depending on one’s level of awareness.
Here are a couple of potential reasons.
Were entering a 400-year solar minimum with decreased sun-spot activity and colder (much colder) earth temperatures.
The natural result of such activity is a decreased earth magnetosphere and increased cosmic ray activity.
Go outside during a sunny day … the sun’s rays are not warm anymore, there hot! They feel like burning, searing energy on the skin. The magnetosphere is weak, letting more radiation come in.
Under such conditions (more cosmic rays) volcanic activity picks up big time. Scientists (those still honest) have not been able to figure this one out. It just is.
So, we’re one major eruption away from the entire earth being covered with an ash cloud. Bye, bye solar … instantly.
Natural gas prices are rising dramatically. Remember the Winter of Discontent update? That update was spot-on. It also included the level UNG could retrace (which it did) as a test, before moving higher.
UNG is up over 44%, from those levels. One of many (now false) ideas for natural gas, was that it’s cheap. Not any more.
Just two potential reasons for a coal reversal at this point. Those with advance knowledge may be taking positions. We see it in the price action.
As always, anything can happen and coal could resume a downward trajectory. However, if BTU is able to hold above the 2.50-level, it may have already seen its all-time lows.
Keep in mind with BTU, we’re dealing with an equity in serious trouble. It’s not hyperbole to say, the only thing that could save this company is a major reversal in coal prices.