Finally, Inflation Shows Up

Its been nearly twelve years exactly since the market bottom of March 9th, 2009.

At that time gold tracking fund GLD, was trading around 90.

Today, it’s at 167, a gain of about 85%.

Gold futures for April ’21, closed this past Friday at 1,777.4

Either way, it’s a far cry from the $10,000/oz. that has been bandied about for what seems like forever.

Prices for energy and food are rising because of reasons not discussed in the financial media.

That media is certainly not going to educate the public.

In turn, that public has shown there’re certainly not going to educate themselves. If they were awake, news channel ratings (in the link) would be at zero.

Unfortunately, this time around, the game’s up.

The ongoing collapse will decimate those who refuse to wake up and will probably take some of those who are, with them.

Which brings us to the so called inflation, at hand.

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.

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Peabody Energy (BTU) Reversal

Way below the media radar, coal prices are reversing off a four-year low.  Peabody Energy (BTU) is reversing as well.

iStock-166215263-CoalWhy 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.

No. 1

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.

No. 2

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.

2020-08-28_12-05-35-BTU-Daily-4-bar-landscape-notes

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.