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Inflation or Deflation

Since May, I have posted my insights as to why I am deflation minded for many of the commodity futures markets (physicals) as in comparison to paper assets that Americans are totally invested and have their ‘Nest Eggs’ tied to. Here’s why:

Consider 2008 and the time’s financial crises. There were three (3) rounds of Quantitative Easing (QE) deployed to stimulate the economy. Yet, money supply growth shriveled, and commodity prices fell! At that time, post five years y/y, The Fed first bought long term Treasury’s in March 2009 and between then and December 2013, loan growth averaged 0.8% y/y. Post taper, loan growth sped to 5.8%. Until COVID shortened the expansion!

Though broad money supply figures are very flawed, today’s figures tell that US money supply grew at the SLOWEST clip on record during QE!!! Stripping out last year’s brief pop tied to COVID aid, lending slowed to 2.5% above February 2020.

Inflation? Today? No Way! Inflation comes from too much money chasing too few goods. Discouraging lending, as QE does means ‘Less Money’, decreasing inflation!!!! Hence, QE is disflationary. Most so-called ‘experts’ can’t see this.

To win, to gain wealth—-you have to go contrary to the crowds! Sheep and pigs do get slaughtered! And the crowd is headed to the slaughter house.

The Prophet Pro

Commodity futures and options trading entail risks. There are no guarantees

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