year-to-date: everything has fallen except the dollar

The COVID and inflation pandemics share unfortunate relations - a causal connection and capacity for societal angst. 1970s inflation fears and that of an even more grim policy response unleashed portfolio deleveraging with nowhere to hide.

In walking the talk, our Federal Reserve led the global reply with higher borrowing costs in stages. This clobbered investments which slowed the economy and strengthened the dollar.

This dollar strength is costly and untenable for foreign nations and global corporates. Highly indebted nations, as our own, are clearly insolvent at even modest rates of interest.

Thinly acknowledged in their most recent communiques, the Fed is under pressure. Domestically by the facts, and abroad, by possibly more influential peers, their globalist partners in G20 central banks.

inflation and the Fed may relent sooner than feared

We expect inflation and the Fed’s hawkish resolve will fade sooner than expected. if our expectation materialized, outsized returns may accrue to newly placed investments - and not only at the bottom. moreover, objective measures of household inflation are firmly in retreat.

surplus income and cash should be diversely and programmatically invested – where suitable and appropriate – continuing to spotlight precious metals and cryptos for exceptional appeal at these levels.  

We expect the inflationary plague fades into endemic retreat. Lower asset prices and higher pessimism today provides adequate cover for the recession to come.

Year-to-date: the fed funds rate is up +4%, stocks are down -20%, bonds down -20%, real estate is down -30%, gold, our tallest troll, is down -10%; the dollar is up +20% versus a basket of currencies.