The Inflation Resumes
If you remember all the way back to the Fed meeting in mid-June… the investment world was freaking out because Mr. Powell said the Fed just might raise rates in time for my 40th birthday in two years.
Both those hills are a ways away.
The free commentary I gave on the situation at the time was that the Fed meeting didn’t really matter and the trend would still be the same: stocks and commodities resuming their… what’s the word… inflation.
The same inflation I had you prepped and profiting from for the past year while the Fed denied it existed.
The same inflation that was driving crab prices higher in Maryland a year ago. And that continued to drive nearly all commodities higher throughout 2020 and 2021.
The same inflation the Fed was now forced to admit actually exists.
What I’m watching for now is how hot and how long it’s going to run.
Trend for the dollar is still down. Trend for bond yields is still up.
Not to get too deep into the bond side of things, but when Jerome acknowledged inflation a few weeks ago it sent the yield of the two-year treasury higher .
This is a short term event and other metrics — like the dollar, the longer term trend of yields, and stock volatility — remain in their previous trends.
This yield curve movement, coupled with other anomalous events like China selling some strategic copper supply into the market, caused a short-term selloff in commodity prices, and took gold down steeply with it as well.
Again, the long-term trend remains the same, which is why I took the opportunity to position premium readers in new commodity names during the selloff.
And indeed, copper and oil have resumed their inflation and stocks are back at new all-time highs.
These ebbs and flows are hard to see in the day-to-day, but I’ve been using them for the past year to deliver some of the highest returns of my career to premium readers.
I expect that to continue, especially in the energy space as oil hits new short-term highs.
Call it like you see it,
Editor, Daily Profit Cycle
Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Foundational Profits, Family Office Advantage, and Hodge Family Office . He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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