The Fed Just Released Its Blueprint For How to Handle The Coming Inflationary Storm

Over the last few articles, we’ve outlined the following:

1)    Inflation first appeared in the financial system in August 2020 and has since accelerated.

2)    This has hurt Tech stocks in a big way, which is why they have collapsed. 

3)    The last two times inflation appeared in the financial system (2010-2011 and the 1970s, respectively), the Fed was forced to either engage in stealth tapering or outright monetary tightening. 

4)    Those Fed actions resulted in the broader stock market as represented by the S&P 500, falling 20% and 50% respectively. 

In light of all of this, what is going to happen to stocks this time around? Will inflation force the Fed to do a stealth taper… or will the Fed get aggressive?

Right now, the answer is truly astonishing… it’s NEITHER.

Indeed, going by recent Fed statements, the Fed is not interested in tightening monetary…at all.

In February, Mary Daly, President of the San Francisco Fed said earlier this week that inflationary pressures are now “downward,” meaning inflation is disappearing. She also added it’s “not time to worry about inflation risks right now.” And that doing so would cost the economy jobs.

That same month, Boston Fed President Eric Rosengren commented that inflation is not likely to hit the Fed’s target until 2022. He was followed by NY Fed President John Williams who told CNBC that rising prices are due to “optimism” about the growing economy.

Bear in mind, inflation was well above 3% in February already.

It’s tempting to simply argue that Fed officials are ignorant of the economic realities facing most Americans because they live in a bubble surrounded by other policymakers and bank officials from the top 0.1% of society.

However, we can put that view to rest since the Fed’s Beige Book, which serves as its primary source for what the real economy is doing, had the following statement in its March report, “businesses in most sectors expect fairly widespread increases in the prices they pay in the months ahead…

That was followed up in April Beige Book with: “Prices accelerated slightly since the last report, with many Districts reporting moderate price increases and some saying prices rose more robustly. Input costs rose across the board, but especially in the manufacturing, construction, retail, and transportation sectors—specifically, metals, lumber, food, and fuel prices.”

So… for the Fed to claim it doesn’t see inflation, would mean it is either willfully ignorant… or simply doesn’t even bother reading its own economic reports. 

Since those Beige Books were published time, one by one Fed officials have taken up the theme that inflation is indeed appearing, but it is “transitory.”

What the Fed means by this is that they don’t need to do anything because the inflation will disappear naturally as the U.S. economy continues to reopen.

A reopening economy means even greater demand being placed on the same supply chain issues/ rising commodity prices. Moreover, even if the economy remains weak, it’s not as though inflation will disappear by itself either (the stagflation of the 1970s proved that you can have both a recession AND high inflation simultaneously).

I cannot claim to read Fed officials’ minds, so I have no idea if they actually believe this nonsense. All I can say is that the Fed is embracing the narrative that inflation has arrived, but it’s too soon to act because said inflation is “transitory” and will disappear by itself. 

Indeed, most recently I’ve seen several Fed Presidents claim that inflation if rises above the Fed’s target of 2% (say to 2.75% or even 3%), it’s not a big deal.

Bear in mind, inflation is already well over 3% now.

So, what does this mean?

The Fed will continue to keep interest rates at zero, while printing $125 billion per month all while ignoring the countless signals that inflation is already spiraling out of control.

Which means… inflation is going to rage and rage.

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


Posted in Inflation | Comments Off on The Fed Just Released Its Blueprint For How to Handle The Coming Inflationary Storm

The Inflationary Storm Has Finally Hit… Are You Ready?

I’ve been warning for weeks and weeks now that inflation was going to be a major problem for the financial system.

Yesterday we finally got a taste of it. The official inflation measure for the U.S., the Consumer Price Index (CPI), skyrocketed to 4.2% year over year. Core CPI, which is the most essential component, recorded a year over year jump of 3%.

That doesn’t sound much, but you need to consider the ENTIRE reason that CPI exists is so the government can DOWN-play inflation. There are endless gimmicks used to massage this number as low as possible.

For instance, the CPI…

  • Doesn’t include food or energy inflation, despite the fact those are two of the most necessary goods for consumers to survive.
  • Weighs the cost of goods and services geometrically instead of by their actual price.
  • Uses substitution or replaces items that it measures if they become too expensive.

And more!

Bottomline, the CPI is designed to HIDE inflation. And despite all of the gimmicks and games played by the government, the official inflation number still clocked in at 3%.

This is the highest core CPI since 1982.

To put that into perspective, at that time interest rates were at 19% as the Fed was desperately trying to control inflation.

This time around, the Fed has rates at ZERO while printing $125 billion in new money per month.

To make things even worse, the Fed is in complete denial that inflation even exists. Various Fed officials surfaced yesterday to argue that the spike in inflation is transitory i.e. the Fed doesn’t need to do anything about it.

The White House is also in denial about this problem, claiming that if “base effects” were removed, CPI would only be 2.1%. Bear in mind… as I stated a few paragraphs above, CPI has got dozens of gimmicks built into it to HIDE the real inflation levels.

So, we’ve got both the Fed and the White House in complete denial about this problem. Which means…

Inflation is going to rage and rage.

What does this mean for stocks?

I’ll explain all of that in tomorrow’s article.

In the meantime, 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

Posted in Inflation | Comments Off on The Inflationary Storm Has Finally Hit… Are You Ready?

The Last Two Times This Hit, Stocks Dropped 20% and 50%, Respectively

Yesterday, I outlined how the rise in inflation has slammed Tech stocks lower.

By way of a quick review, Tech, as represented by the NASDAQ is highly sensitive to inflation on an inverse relationship: when inflation rises, Tech stocks collapse and when inflation falls, Tech stocks erupt higher.

The reason for this is that much of Tech investing is based on growth rates. And if bond yields rise as a result of inflation, bonds become more attractive as an investment, taking away from the appeal of Tech.

As I noted yesterday. as inflation entered the financial system in 2020 and began to accelerate in 2021, Tech stocks have struggled. You can see this in the chart below (red rectangle).

So, we know that Tech is going to struggle going forward as inflation heats up. But what about the broader market like the S&P 500? Will it collapse too?

To figure that out, let’s take a look at the last two inflationary scares in the U.S.

The most recent scare occurred in 2010-2011. At that time, the Fed was pretty quick on the uptake and decided to allow its QE 2 program (the cause of the inflationary spike) to end.

The Fed then waited several months before introducing any new monetary programs. And when it did introduce one, it didn’t involve money printing (instead the Fed used the proceeds from Treasury sales to buy long-date Treasuries through a process called Operation Twist). This was a kind of stealth tightening.

Stocks didn’t like this, collapsing nearly 20%.

 Bear in mind, that was a relatively minor inflationary scare. During the last legitimate inflationary storm in the 1970s-1980s.

During that mess, the Fed was forced to be MUCH more aggressive with its tightening, embarking on two aggressive tightening schedules. It’s worth noting that this triggered two SEVERE recessions (shaded areas).

This IMPLODED the stock market, resulting in a roughly 50% decline over the course of 18 months.

So, what will it be this time? Will the Fed engage in a stealth taper as was the case in 2011… or will it tighten monetary policy aggressively as it did in the 1970s and 1980s?

We’ll address that in our next article.

in the meantime, 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

Posted in Inflation | Comments Off on The Last Two Times This Hit, Stocks Dropped 20% and 50%, Respectively

Is Tech the Canary in the Coal-Mine For the Coming Inflationary Crisis?


The Tech Boom appears to be over.

From the March 2020 lows, Tech was a major leader in the markets. This makes a lot of sense as Tech was one of the few areas of the economy that continued to operate on a relatively normal basis during the COVID-19 shutdowns.

From the March 23, 2020 bottom until August, Tech, as represented by the NASDAQ index outperformed the broader S&P 500 by a wide margin.

However, since that time, Tech has struggled, moving roughly in line with the S&P 500 with the occasional bout of underperformance. This situation has worsened in 2021 with the S&P 500 taking the lead, leaving the NASDAQ in the dust.

What’s going on? 

What’s going on is that Tech is HIGHLY sensitive to inflation. And starting in August/ September 2020, inflation began to appear in the financial system courtesy of the Fed printing over $3 trillion while the U.S. government spent over $3 trillion in stimulus.

You can see this in the below chart. As soon as inflation began to accelerate in 2021, the yield on the 30-Year Treasury began to spike higher. And that’s when Tech started to tumble (red rectangle).

I wish that was the worst news, but it’s not. Yields continue to rise on Treasuries as inflation gets stronger in the financial system. By the look of things, the yield on the 30-year Treasury is about to break out to new highs in the next few weeks.

This is going to put a LOT of pressure on Tech, particularly high-beta momentum stocks like Tesla (TSLA), Shopify (SHOP), Square (SQ), and the like.

But what about the broader market? Will it collapse too? I’ll answer that in tomorrow’s article.

In the meantime, we

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


Posted in Inflation | Comments Off on Is Tech the Canary in the Coal-Mine For the Coming Inflationary Crisis?

How Will the Fed Deal With This Latest Bout of Inflation?

Yesterday I pointed out how inflation has become deeply embedded in our financial system.

As a quick recap, inflation arrives in stages. It’s not as though it appears overnight and suddenly the cost of everything rises.

Instead, inflation slowly works its way into the financial system in price hikes in the following prices.

  1. Phase 1: The price of raw materials (what producers/ manufactures pay for supplies)
  2. Phase 2: Factory gate prices (what producers charge distributors/retailers).
  3. Phase 3: Retail prices (what consumers pay).

As I noted yesterday, we now have all three of these in place. This tells us that inflation is now deeply embedded in our financial system.

Historically, the only thing that has stopped inflation is for the Fed to tighten monetary policy by either hiking interest rates or tapering its Quantitative Easing (QE) programs.

During the last inflationary scare in 2010-2011, the Fed allowed its QE 2 program to end. It then waited several months before introducing any new monetary programs. And when it did introduce one, it didn’t involve money printing (instead the Fed used the proceeds from Treasury sales to buy long-date Treasuries through a process called Operation Twist). This was a kind of stealth tightening.

Bear in mind, that was a relatively minor inflationary scare. During the last legitimate inflationary storm in the 1970s-1980s, the Fed was forced to be MUCH more aggressive with its tightening, raising interest rates from 4.5% to over 19%! It’s worth noting that this triggered two SEVERE recessions (shaded areas).

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So, which will it be this time? A kind of stealth tapering like we saw in 2011… or aggressive tightening like we saw in the late 1970s?

The answer may surprise you… it’s NEITHER.

That’s correct. The Fed doesn’t believe the U.S. is experiencing real inflation yet. According to Fed Chair Jerome Powell the inflation we’re experiencing is “transitory” meaning it won’t last so the Fed doesn’t have to do anything.

Powell is not alone. Fed officials across the board have referred to inflation as “transitory” stating that even if inflation rises above the Fed’s target of 2% (say to 2.75% or even 3%), it’s not a big deal.

Bear in mind, inflation is already well over 3% now.

So, what does this mean?

The Fed will continue to keep interest rates at zero, while printing $125 billion per month all while ignoring the countless signals that inflation is already spiraling out of control. Yes, the Fed will eventually be forced to act once inflation becomes a political issue, but until then the Fed will have its “blinders” on.

Which means… inflation is going to rage and rage.

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

Posted in Inflation | Comments Off on How Will the Fed Deal With This Latest Bout of Inflation?

Inflation Watch: We Are Entering the Final and Most Critical Phase

It’s official, inflation is now deeply embedded in the financial system.

You see, inflation arrives in stages. It’s not as though it appears overnight and suddenly the cost of everything rises.

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

  1. Phase 1: Raw materials
  2. Phase 2: Factory gate prices
  3. Phase 3: Retail prices

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.

We first hit this stage several months ago as the below chart illustrates. The price of raw materials such as copper, lumber and even gasoline are all up triple digits in the last 12 months.

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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 are forced to start raising the prices of finished goods or face shrinking profit margins.

This is when you see the next phase of price hikes, in factory gate prices.

You see, in today’s economy the company that makes something is rarely the one that sells it to the public. Instead, producers/ manufactures first sell their goods to retailers/distributors, who then sell the goods to the public.

The prices that producers/ manufactures charge retailers/distributors are called “factory gate prices” (the prices the goods cost as they leave the factory). And according to the Chicago Business Barometer, factory gate prices just hit a 41-year high.

Put another way, the last time producers were forced to charge this much was in 1980… and that was during one of the worst inflationary storms in history when the Fed was forced to raise rates to over 15%.

Retailers and distributors can stomach these prices increases for a time, but eventually they are forced to raise the prices they charge consumers or go broke.

As the Financial noted over the weekend, are now officially there:

Nestlé, Procter & Gamble and Unilever are among the global groups to have set out plans for price rises in their latest market updates following commodity price jumps and a spike in transport and packaging costs.

            Source: Financial Times

These are not isolated instances either as the below headlines reveal. Everyone from Coca-Cola to Costco is being forced to hike prices.

Coca-Cola CEO says company will raise prices to offset higher commodity costs

Kimberly-Clark raises prices on Scott toilet paper, diapers in U.S. and Canada

How Costco Is Masking A 14% Price Jump With Shrinkflation

That last term is key. Companies don’t always simply hike raise prices. Sometimes they engage in “shrinkflation” of the policy of selling less of a product for the same price. You’ve probably noticed when you open a food container than between 30% and 50% of the container is empty.

That’s shrinkflation: less of a good for the same price, means higher prices per unit.

Bottomline: inflation is DEPLY embedded in our financial system. Will the Fed act to stop it, or are we entering a true inflationary storm in which prices spiral out of control?

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

Posted in It's a Bull Market | Comments Off on Inflation Watch: We Are Entering the Final and Most Critical Phase

What Happens to Stocks When HOT Inflation Hits?

We’ve been outlining how the Fed and other central banks have unleashed an inflationary bubble in all assets… truly an Everything Bubble.

We’ve already assessed the impact this is having on commodities, bonds and other asset classes. Today I want to assess the impact this will have on stocks.

To do that, we need to look at emerging markets.

Inflation is a common occurrence for emerging markets, primarily because more often than not they devalue their currencies, whether by choice or because the markets lose faith in their ability to pay off their debts.

Because of this, emerging markets can provide a glimpse into how inflation affects stocks. So, let’s dig in.

Here is a chart of South Africa’s stock market since 2003. As you can see, the stock market rallied significantly until 2010, but has effectively gone nowhere ever since then.

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The reason this chart looks so lackluster is because it is priced in U.S. dollars. The $USD has been strengthening against the South African currency (the Rand) since 2010.

Watch what happens we price the South Africa stock market in its domestic currency (blue line). Suddenly, this stock market has been ROARING, rising some 750% since 2003. That means average annual gains of 41%!!!

Chart

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Let’s use another example.

Below is a chart of the Mexican stock market priced in $USD. Once again, we see a stock market that has done nothing of note for years.

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Now let’s price it in pesos (actually the exchange rate of pesos to $USD, but close enough).

Chart

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You get the general idea. So if hot inflation is in the U.S. financial system, it would make perfect sense for stocks (denominated in the $USD which is losing value due to inflation) to ERUPT higher.

Something like… I don’t know… what’s happened since mid-2020?

Chart, line chart

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Look, we all know what’s going on here. The stock market is erupting higher as inflation rips into the financial system based on Fed NUCLEAR money printing. And we all know what comes when this bubble bursts.

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

Posted in It's a Bull Market | Comments Off on What Happens to Stocks When HOT Inflation Hits?

The Inflationary Everything Bubble is Now Entering Its Final and WORST Stage


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

Posted in It's a Bull Market | Comments Off on The Inflationary Everything Bubble is Now Entering Its Final and WORST Stage

The Everything Bubble is Back and It’s Bigger Than Ever

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

Posted in It's a Bull Market | Comments Off on The Everything Bubble is Back and It’s Bigger Than Ever

Yes, It is a Bubble… and Yes, a Crash Comes Next

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

Posted in It's a Bull Market | Comments Off on Yes, It is a Bubble… and Yes, a Crash Comes Next

You Better Position Yourself For This Now, Because It’s Coming Soon!


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

Posted in It's a Bull Market | Comments Off on You Better Position Yourself For This Now, Because It’s Coming Soon!

Inflation Watch: The U.S. Has Spent $10 TRILLION in the Last 12 Months


Here’s a jaw dropping statistic for you…

If the Biden Administration’s Infrastructure Program is signed into law, the U.S. will have spent nearly $10 TRILLION in a single year.

Yes, Trillion with a “T”

This is:

1)    Equal to the GDPs of Japan, Germany and the U.K. combined.

2)    More than the U.S. has spent during the last FIVE recessions combined.

3)    More than the combined annual wages of all Americans.

That last one really gets me. If you add up all the money earned via wages by Americans in the 12 months, the U.S. Government has spent more money than that!  

And finally, the ultimate jaw dropper…

The U.S. government will have spent an amount roughly equal to 50% of its GDP… in a single year. 

And it’s going to unleash an inflationary storm.

Gold figured this out first, roaring to new all-time highs.

Then copper broke out.

And now it’s oil’s turn.

Indeed, the entire commodity complex has just ended a 15 years bear market.

The writing is clearly on the wall. Big Inflation is coming. And the Fed is not going to do anything to stop it.

In fact, the Fed has already stated explicitly that it has no plans to raise rates or taper its QE program until 2023!

Which means, inflation will rage out of control…

Many investors will get taken to the cleaners.

But some will rake in ENORMOUS potentially life-changing profits.

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

Posted in It's a Bull Market | Comments Off on Inflation Watch: The U.S. Has Spent $10 TRILLION in the Last 12 Months

How to Play the Coming Inflationary Blow Off Top


As I mentioned last week, the bears fumbled miserably in March. The door was there to slam stocks and they weren’t able to get the job done. 

With that in mind, stocks roared higher over the weekend breaking through the all-important 4,000 level on the S&P 500. 

Just as importantly, momentum is catching a bid with the two companies I’ve been monitoring (Tesla and Square) ripping higher to test overhead resistance.

If they can break above these lines, we will have confirmation that the tech massacre is over. At that point, hot money would begin to flow back into tech stocks. And with Tech comprising ~30% of the S&P 500, this would ignite a major rally higher.

This would lead to the eventual blow off top in inflationary assets I’ve been forecasting for the last few months. Remember, stocks LOVE inflation at first, but that love turns to hate.

During the last bout of hot inflation in the 1970s, stocks initially bubbled up before CRASHING nearly 50% in the span of two years, wiping out ALL of their initial gains and then some.

As I keep warning, inflation is going to ANNIHILATE investors’ portfolios.

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

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


Posted in It's a Bull Market | Comments Off on How to Play the Coming Inflationary Blow Off Top

The Bulls Fumbled the Ball Last Week, It’s About to Get UGLY


The trend has ended for stocks. We can now expect a lot of chop.

The bulls really fumbled last week. They not only had the Fed behind them (the Fed printed over $100 billion that week), it was also options expiration week, which is Wall Street’s favorite time to manipulate the markets to insure as many options expire worthless as possible.

Despite this, stocks closed DOWN for the week. The S&P 500’s chart was truly pathetic.

Even the Dow Jones industrials, which has been a clear market leader, failed to end the week up. You can see how this index failed took out support (red line) and then failed to reclaim it. In technical analysis terms, this means former support is now resistance. And it is very bearish.

The onus is now on the bulls. They need to step in right here, right now and push the market up in a big way. If they don’t the trend is dead and we’re in for a correction down to the 3,700s.

You’ve been warned.

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

Posted in It's a Bull Market | Comments Off on The Bulls Fumbled the Ball Last Week, It’s About to Get UGLY

Warning: The Fed is About to Blow Up the Bond Market


Inflation expectations continue to soar.

The US 5-year Breakeven Rate just hit 2.6%. Granted I’m not a genius Fed official, but what does this image look like to you?

Remember, the Fed believes inflation won’t hit even 2% for three more years.

And then there’s the yield on the 10-Year US Treasury which is about to break its multi-decade downtrend for the second time since 1982.

By the way, the first break occurred when the Fed attempted to normalize monetary policy by raising rates and shrinking its balance sheet. THIS breakout is occurring while interest rates are at ZERO and the Fed is running a $125 billion per month QE program!

Those who believe that all this money printing and subsequent inflation it will unleash means stocks will forever go up need to brush up on their history.

Stocks love inflation at first, but that love quickly turns to hate. During the last bout of hot inflation in the 1970s, stocks initially bubbled up before CRASHING nearly 50% in the span of two years, wiping out ALL of their initial gains and then some.

As I keep warning, inflation is going to ANNIHILATE investors’ portfolios.

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

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

Posted in It's a Bull Market | Comments Off on Warning: The Fed is About to Blow Up the Bond Market

The Dark Secret the Fed Wants to Keep Hidden


The Fed has already told us what is coming down the pike.

But no one is listening.

The Federal Reserve system employs roughly 20,000 people.  I believe it is the single largest employer of economists in the U.S. And as a result of this, it actually produces a decent amount of high-quality research.

The problem is that NO ONE at the top of the Fed listens to it!

Case in point, in 2001, researchers at the Federal Reserve bank of St Louis discovered that the Fed’s preferred measures of inflation are the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) were in fact useless at predicting future inflation.

At the time they wrote:

We see that past inflation in food prices has been a better forecaster of future inflation than has the popular core measure…Comparing the past year’s inflation in food prices to the prices of other components that comprise the PCEPI (as in Table 1), we find that the food component still ranks the best among them all 

Source: Federal Reserve bank of St Louis

Despite this discovery, the Fed continues to use CPI and PCE as its preferred measures of inflation. Put another way, despite the fact that the Fed’s OWN RESEARCHERS proves that CPI and PCE are garbage, the Fed keeps using them.

And if you think that’s bad, take a look at what the Fed discovered in NOVEMBER 2019 when it comes to printing money to service debt. 

A solution some countries with high levels of unsustainable debt have tried is printing money. In this scenario, the government borrows money by issuing bonds and then orders the central bank to buy those bonds by creating (printing) money. History has taught us, however, that this type of policy leads to extremely high rates of inflation (hyperinflation) and often ends in economic ruin. 

Source: Federal Reserve bank of St Louis

Yes, the Fed’s own research has found that printing money and using it to buy debt results in raging inflation and economic ruin.

Bear in mind, that the Fed has printed $3+ trillion over the last 12 months for this express reason… and intends to print $120 billion per month for the next TWO YEARS (another $2.8 trillion).

Those who believe that all this money printing and subsequent inflation it will unleash  means stocks will forever go up need to brush up on their history.

Stocks love inflation at first, but that love quickly turns to hate. During the last bout of hot inflation in the 1970s, stocks initially bubbled up before CRASHING nearly 50% in the span of two years, wiping out ALL of their initial gains and then some.

As I keep warning, inflation is going to ANNIHILATE investors’ portfolios.

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

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

Posted in Central Bank Insanity | Comments Off on The Dark Secret the Fed Wants to Keep Hidden

Ignore the Bounce, the Stock Market is in SERIOUS Trouble


Stocks are bouncing hard this morning because China stepped in to prop up its stock market.

That’s it. That’s the only reason.

Put another way, the stock market is in very serious trouble. 

The bulls have made multiple attempts to keep the S&P 500 above its 50-day moving average (DMA). Despite all of their efforts, the S&P 500 still closed below the 50-DMA yesterday.

The longer-term picture isn’t much better. The S&P 500 has effectively traded sideways now for three months. Stocks have managed to move a lot without actually going anywhere!

Mind you, this is happening at a time when the Fed is pushing some $120 BILLION into the financial system every month. So, the market has managed to go nowhere despite the Fed putting nearly a quarter of a trillion dollars into the financial system ($120 billion for January and February each).

Now you understand why I say the markets are in serious trouble. It stocks can’t catch a bid despite this much money printing, something is VERY wrong.

That something is inflation.

Stocks love inflation at first, but that love quickly turns to hate. During the last bout of hot inflation in the 1970s, stocks initially bubbled up before CRASHING nearly 50% in the span of two years, wiping out ALL of their initial gains and then some.

As I keep warning, inflation is going to ANNIHILATE investors’ portfolios.

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

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

Posted in stock collapse? | Comments Off on Ignore the Bounce, the Stock Market is in SERIOUS Trouble

These Are the Levels to Watch For Stocks

The bloodbath continues.

I warned for weeks that inflation was going to annihilate investors portfolios. And now it is.

The big question for most investors, is “when does it end?”

No one knows. But the market is offering us some clues.

Tesla (TSLA) was one of the hottest momentum stocks on the market going into this meltdown. It has sliced right through its 50-DMA and is now approaching its 200-DMA. Realistically, the 200-DMA is the first place we could see an actual bottom formed.

If the overall market were to follow TSLA, this would mean the S&P 500 dropping to roughly 3,500.

And the NASDAQ falling to 11,600 or so.

I know this is NOT what you wanted to hear. But the reality is that as awful as last week’s selling was, it didn’t induce any major flight to safety in bonds.

Historically, Treasuries are a safe haven, meaning that during times of trouble, capital runs to them for safety. However, last week this didn’t prove to be the case. The long-Treasury ETF (TLT) briefly spiked for a day or so, but then plunged back down to its lows.

Until you see TLT rallying hard, the odds of a market bottom remain extremely low. I wouldn’t get too excited about buying stocks until we see TLT trading near its 50-DMA at 148 or so.

Which means, buckle up, because the market is STILL in serious trouble.

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

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

Posted in stock collapse? | Comments Off on These Are the Levels to Watch For Stocks

Warning: the Bloodbath is Far From Over


The bloodbath continues.

I warned for weeks that inflation was going to annihilate investors portfolios. And now it is.

The big question for most investors, is “when does it end?”

No one knows. But the market is offering us some clues.

Tesla (TSLA) was one of the hottest momentum stocks on the market going into this meltdown. It has sliced right through its 50-DMA and is now approaching its 200-DMA. Realistically, the 200-DMA is the first place we could see an actual bottom formed.

If the overall market were to follow TSLA, this would mean the S&P 500 dropping to roughly 3,500.

And the NASDAQ falling to 11,600 or so.

I know this is NOT what you wanted to hear. But the reality is that as awful as last week’s selling was, it didn’t induce any major flight to safety in bonds.

Historically, Treasuries are a safe haven, meaning that during times of trouble, capital runs to them for safety. However, last week this didn’t prove to be the case. The long-Treasury ETF (TLT) briefly spiked for a day or so, but then plunged back down to its lows.

Until you see TLT rallying hard, the odds of a market bottom remain extremely low. I wouldn’t get too excited about buying stocks until we see TLT trading near its 50-DMA at 148 or so.

Which means, buckle up, because the market is STILL in serious trouble.

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

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


Posted in stock collapse? | Comments Off on Warning: the Bloodbath is Far From Over

Warning: the Bond Market is Starting to Blow Up Again

The markets are at a crossroads.

We’ve had one major rally this week (Monday).

We’ve had one major drop this week (Tuesday).

The issue is which one was the real deal. Monday could easily have been the result of short-covering and “start of the month” buying by financial institutions.

Similarly, Tuesday could have been the markets dropping simply because China issued a warning that it believes U.S. stocks are “in a bubble.”

Honestly, it’s impossible to tell. The market is a bit of a mess. So, the best thing to do is wait and watch today as the markets will finally provide some clarity. One of the greatest trader’s adages is “when in doubt, stay out.” And that certainly rings true for the market this week.

For the S&P 500, the support is at 3,860, 3720, 3,640, and 3,550. If stocks take out this first line (3,850) on a closing basis, it opens a “trapdoor” to a nasty drop to the low 3,700s. This is a BIG reason not to be adding to longs this week.

Chart

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Similarly, if you are a stock market bear, you don’t want to ignore the strong uptrend stocks have established over the four months. We’ve had two “bear traps” during that time in which stocks broke down, violating the trendlines only to reverse and rally hard. I’ve identified those occasions with red circles in the chart below.

If you’re a bear, these are why you don’t want to bet on a big collapse right now: stocks could breakdown only to reverse and take you to the cleaners.

Diagram

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So again, the best strategy this week is to “watch and wait.” Let the market show you what is coming and then take action.

Bear in mind, we’re talking strictly about TODAY, as in right now. In the intermediate term, I remain extremely bearish.

Why?

Because inflation is blowing up the bond market. Bonds bounced a few days ago, but are once again rolling over and falling.

Put another way, the issue that blew up the stock market late last week has not been resolved. If anything, it’s about to get worse.

Which means stocks could very easily be a bloodbath in the coming weeks.

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

Posted in Debt Bomb | Comments Off on Warning: the Bond Market is Starting to Blow Up Again