Month: April 2021

As I’ve been outlining for the last few weeks, the Fed and other central banks have finally succeeded in unleashing inflation.

The Fed and its ilk are trying to downplay this by saying the inflation is “transitory,” but who are you going to believe… your own eyes or the words of a Fed official who is literally paid to say things that downplay systemic risks?

Year to date, the price of copper, gasoline, corn and soybeans are all up double digits.

The last two (corn and soybeans) are the most concerning as the Fed’s own research shows that food inflation is the single best predictor of future inflation.

And unfortunately, things are about to get a whole lot worse.

You see, inflation arrives in stages. It’s not as though it enters the financial system and POOF suddenly the cost of everything rises.

Instead, inflation slowly works its way into the financial system in phases.

The first stage occurs in the manufacturing/ production segment of the economy when you see producers suddenly paying more for the raw goods and commodities they use to manufacture/ produce finished goods.

You can see this development in the chart above. The prices of things like copper, gasoline and corn are all spiking higher.

Now, one or two months of higher commodities or raw goods is no big deal, but once you’re talking 6-8 months of steadily rising prices it’s significant. At that point manufacturers/ producers have to start raising the prices of finished goods or face shrinking profit margins

At that point you move into the second stage of inflation: when the prices of ordinary objects begin to increase.

We are now entering that phase as the below headlines show.

• Coca-Cola CEO says company will raise prices to offset higher commodity costs
• Procter & Gamble to raises prices on baby care, feminine care and adult incontinence products
• Kimberly-Clark raises prices on Scott toilet paper, diapers in U.S. and Canada
• Another furniture maker raises prices to cope with rising costs

This is where things start to get nasty. Once you start seeing price hikes appear in the broader economy, inflation has become systemic. At that point the only thing that will stop it is if the Fed begins to tighten monetary policy (raise rates, taper QE, etc.).

Bad news here too… the Fed has explicitly stated it has no interest in raising rates or tapering QE for another TWO YEARS.

Which means… inflation is going to rage and rage. And the damage done will be measured in trillions of dollars with a (trillions with a “t”).

Those who are properly prepared, however, will make literal fortunes.

On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We are making just 100 copies available to the public.

To pick up yours, swing by:

https://phoenixcapitalmarketing.com/inflationstorm.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

So far this week I’ve outlined:

1. Why you should BUY stocks when they start bubbling.
2. That bubbles typically last months if not years once they start.
3. Selling at the first signs of weakness means missing out on gains.
4. How to time market collapses using my Bear Market Signal.

I bring all of this up because the markets are clearly bubbling up. And in this particular case, the bubble is in EVERYTHING, truly an Everything Bubble, driven by central bank liquidity.

Consider the following:

1. Use car prices just hit an all-time high.
2. Over the last 12 months, Lumber is up 265%, Crude Oil is up 210%, Gasoline is up 182%, Corn is up 84%, etc.
3. Dogecoin, a crypto currency that was invented as a joke, has risen 18,000% in the last year.
4. Stocks staged the fastest 30% crash in history only to roar to new all-time highs in the span of six to eight months.

All of this is the product of the Fed and other Central Banks pumping trillions of dollars’ worth of money into the financial system. The Fed has printed so much money and bought so many things that it now owns more than $2 TRILLION worth of mortgages and nearly 20% of ALL Treasuries!

And the craziest thing of all?

The Fed has shown ZERO signs of stopping. If anything, multiple Fed officials, including Fed Chair Jerome Powell have stated that they expect to continue the Fed’s $150 BILLION per month Quantitative Easing (QE) program for at least 24 more months.

Again, we are in a bubble. It is truly THE Everything Bubble: a bubble in every asset class, including gimmicks. Heck a guy just sold a Non-Fungible Toke (NFT) of a fart!

Put simply, we are clearly in the bubble UP phase. But we all know what is coming…

On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.Paragraph

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

We are making just 100 copies available to the public.

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Stocks will start the week slightly down.

However, in the intermediate term, it is now clear that the markets are bubbling up. We are seeing clear signals of market mania everywhere.

1)    Dogecoin, a crypto currency that was started as a joke, rose 520% last week.

2)    A man recently sold a Non-Fungible Toke (NFT) of a fart for $85.

3)    Penny stock trading volume has exploded by 2,000%.

4)    Individual investors have begun day trading in ways not seen since the Tech Bubble.

And why are the markets bubbling?

Because the Fed has unleashed inflation. Year to date, the price of copper, gasoline, lumber, heck the entire commodity complex, are up double digits.

Despite this and many other obvious signals that inflation is already running hot, the Fed has commented that it has no interest in raising rates or tapering its ongoing $150 billion per month Quantitative Easing (QE) program anytime within the next 24 months.

It is a little-known fact that stocks LOVE inflation at first. However, that love eventually turns to hate once inflation spirals out of control and begins eating into corporate profits.

You can see this during the last minor bout of inflation in the U.S., from mid-2010 to mid-2011, when the Fed launched its $600 billion QE program at a time when the economy was already rapidly recovering from the 2008 Crisis.

At that time stocks exploded higher by 24% in the span of six months as inflation began to get “hot.” The markets then crashed, losing 20% in the span of a few days once inflation began to get dangerous (this forced the Fed to “pump the brakes.”)

The markets staged an even greater rally and more jarring crash during the early 1970s when the Fed let MAJOR inflation take root. At that time, the market bubbled up 55% over the course of several years before losing ALL of those gains in a horrifying bear market crash.

Put simply, based on historical precedent when inflation hits the financial system, stocks follow a clear pattern: bubble UP, then CRASH DOWN.

As I write this, they are clearly in the bubble UP phase. But we all know what is coming…

On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

We are making just 100 copies available to the public.

To pick up your copy of this report, FREE, swing by:

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

On a day-to-day basis, the market is chopping.

Indeed, the S&P 500 made a large jump over the weekend, but has effectively chopped in a 10 point range ever since.

However, despite the day-to-day gyrations, the BIG PICTURE framework remains the same.

THE FED WANTS INFLATION.

We’ve been tracking the idiotic statements various Fed officials have made concerning inflation in the last few weeks. This week Chicago President Charles Evans made the following jaw-dropping statements.

• It will take some time for price pressures to sustainably hit the central bank’s 2% target.
• The Fed only needs to be concerned if there’s bothersome inflation.
• Inflation up to 2.5% or even 3% would be welcome.

Let’s be clear here, inflation is already well over 2%. I know this. You know this. And I guarantee the Fed knows this.

So, what are these Fed officials yapping about?

The fact is that the Fed is terrified of debt deflation.

You’ve probably heard the word “deflation” mentioned at some point by financial pundits on business TV. Usually, it’s referred to in hushed tones as though it were some kind of unspeakable evil.

This is completely bogus.

Deflation is the process by which something falls in price. It is a perfectly normal development for a healthy economy. In fact, deflation is actually an intrinsic part of technological advancement (for instance, the cell phone you own today is both more sophisticated and cheaper than the original models from a decade ago).

DEBT deflation, on the other hand, is a completely different issue. And it absolutely terrifies Central Bankers like those running the Federal Reserve. 

Debt deflation is when the value of a bond begins to drop aggressively, making it more expensive to service (as bond prices FALL, bond yields RISE, making debt payments greater).

With the U.S. sporting a Debt to GDP ratio north of 130%, and on track to add another $3-$5 trillion in debt this year, debt deflation would trigger a systemic crisis worse than 2008.

So, the Fed needs to look for any excuse to continue intervening in the bond markets. And it is clear based on the statements coming out of the Fed, that it has decided that its “inflation target of 2%” is the excuse.

Basically, the Fed is going to continue printing money and buying bonds non-stop until its arbitrary inflation measures (the CPI, which the Fed KNOWS doesn’t accurately measure inflation) hits 2%. 

Then as soon as it finally hits 2%, the Fed will say it actually wants inflation to be 2.5%. And when it hits 2.5%, the Fed will say it wants inflation at 3%.

You get the general idea.

The Fed is effectively making up some fantasy “goal” that allows it to print money from now on.

This is the BIG PICTURE for the financial system. And it’s going to result in some of the most spectacular investment opportunities we’ve seen in decades.

On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

Today is the last day this report will be available to the public.

To pick up yours, swing by:

https://phoenixcapitalmarketing.com/inflationstorm.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research