What You Need To Know: Inflation, Reflation and a Confirmed Trend

Energy, Bitcoin, Crypto, Small Caps and More...

I hope everyone had a great holiday. Easter actually fell on my anniversary.

Im half the man I am without her. It has been a pleasure to have all this time with her. My partner, fiancé and my best friend. The one who helped me keep going whenever things got too heavy. Love you Beth.

The commodity report had a ton of great info in it last week. If you did not get a chance to check that out (subscribers) please do.

”It does not matter how slowly you go as long as you do not stop.” Confucius

It is important to understand that money talks and wealth whispers. I can’t remember who told me this as a kid but when I was eating ramen for dinner and I thought that an apple was a healthy meal… I thought they were fucking crazy.

I learned what wealth looked like from my great great uncle and Salvador Dali. No I have never met Dali. However his quote “There are some days when I think I'm going to die from an overdose of satisfaction.” Tells you everything you need about wealth.

Wealth is not a matter of money. People also say health is wealth… I don’t believe that either. Yes you want to be healthy and that is important but I would not call it wealth. Wealth when I was younger had nothing to do with money. I put everything on the line day after day to be the best, I could possibly be. Doing things that have never been done before made me feel like I could die of satisfaction. I am sure we have all had times in our lives when we were completely happy. When we were not thinking about responsibilities and we were living in the moment. So first of all, live in the moment. Wake up everyday and love what you do and if you do not love what you are doing try to find some way of working towards that. Work towards freedom. Trading is insanity. Everyone who trades is a little crazy and they love what they do. It will happen, never give up, never give in!

Then there is my uncle and there is something to be said about people who are just born “different". My uncle would have been diagnosed with Autism if he was not born in the early 1900s. Back then his family thought he was slow and put him out of the house at an early age. He was self taught. Driven. Brilliant. I could go on... My point is that he never gave up.

His biggest buy every 5 years was a Buick with the lowest amount of miles on it as he could find. He hated buying new cars because of the devaluation after it is driven off of a lot. My point is, he was not flashy. He was completely himself every single day and lived in the moment. His goal was never to make money. His goal was to take care of the other end of his family that did not give up on him. My grandmothers father died when she was young. His first investment which was not an investment at the time was an apartment building to put them all up in. Our goals have to be clear above all else.

When someone whispers I also always think of patience. You are not always trying to be heard first or over speaking others. You are just saying what you need to say and whoever listens closely enough will hear it. Patience is the key to greatness. It is absolutely the key to trading.

”Patience is bitter, but its fruit is sweet.”

Jean-Jacques Rousseau

Kevin Green and I put out a great one on the reflation trade today. https://youtube.com/live/GSqsi04NAiE?feature=share

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PCE Bloomberg chart and it is all over twitter-The main thing I want to talk about today is the fact that inflation continues to show signs of a bottom and has since started moving higher. We have been talking about this all year long. Many recent data points are pointing to the fact that inflation could be re accelerating.

In the post-pandemic/stimulus era, analysts have employed varying data intervals to analyze inflation. This chart depicts a 3-month annualized metric. The rationale behind examining different timeframes is to eliminate arbitrary year-over-year fluctuations and obtain a more realistic assessment of current conditions. However, this approach can sometimes be biased, as it may selectively choose timeframes to bolster a narrative of either higher or lower inflation than reality.

For instance, economists who initially forecasted minimal or temporary inflation continued to selectively use data to minimize the extent of inflation as it unfolded.

My analysis of this topic is informed by cyclical research into inflationary periods and their primary drivers, complemented by a cyclical framework that adapts to present realities.

In March, energy and food prices surged due to disruptions in the supply chain caused by conflict, exacerbating the effects of monetary inflation already underway.

The dollar is starting to rear it’s ugly head. This is a headwind that we will continue to monitor.

Energy continues to lead the way. I know that I sound crazy at times when I see these terrible sectors showing relative strength and lop sided positioning but I can tell you that most of the time it ends in a nice move. This is why having a methodology will help you outperform the market.