Nick Hodge,
Publisher
Oct. 8, 2024
Inflation is back, baby!
This is due mostly to the loose monetary policy now encircling the globe.
According to a Reuters article last week, “Five of the nine central banks overseeing the 10 most heavily traded currencies that held meetings in September lowered benchmarks.”
The punchbowl is back.
It’s bad for people who buy things with money.
That’s because loose policy will continue to translate into a weaker dollar, with the US Dollar Index (DXY) already sliding down from 106 to 101 in the six months preceding the Fed’s widely telegraphed change in policy.
And it’s expected to get looser still, with the market pricing in an 88% chance of a quarter-point cut in November as well as an 81% chance of another quarter-point cut in December.
Wall Street, after all, needs rate cuts in the same way longshoremen need unions.
Be on the lookout for an ironic re-rise of inflation in the coming months.
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And then Jerome could really have egg on his face.
Egg prices are up 57% in the past year.
And there will always be some idiot out there who says, “egg prices are high due to avian flu,” or some other reason they need to tell themselves.
I guess the oil, sugar, sunflower oil — and indeed the entire CRB Commodities index — all have a case of the flu and not inflation as they outpace the record-setting S&P 500 by three- to six-times over the past month.
It’s certainly affecting the -iums.
The -iums
The hive is finally realizing that any semblance of a true clean energy future will be full of -iums. Lithium and uranium.
Cash-strapped Uncle Sam keeps conjuring up billions for related projects.
The first round of Department of Energy funding that came from the $1 trillion (inflation much?) infrastructure bill passed in 2021 included $1.82 billion for 14 battery projects.
Last month, it announced a new round totalling over $3 billion in grants for 25 projects meant to help boost domestic production of batteries and battery materials. Some high-profile announcements have hit the wire recently, with the Feds giving EVgo a $1.05 billion loan guarantee just last week to deploy electric vehicle-charging infrastructure across the country.
And the DoE’s 2025 fiscal year budget request included $1.6 billion for various programs directed by the Office of Nuclear Energy.
This comes at a time when the tech industry has realized it cannot pursue its data center and AI ambitions without nuclear energy. Oracle is now offering data centers that come built with small modular reactors to power them. And of course Microsoft is going to buy all the nuclear power from a 4.82 kilometer island in the Susquehanna.
As such, here are two main ETF proxies for the lithium and uranium industries over the past month — Global X Lithium & Battery Tech ETF (LIT) and the Global X Uranium ETF (URA).
The -iums are not ill.
But the gains have been sick.
See how to profit from this melt-up here.
Call it like you see it,
Nick Hodge
Publisher, Daily Profit Cycle