Every chart describes a story.
Inflation can be tracked using producer-prices and consumer-prices.
Equities are affected by consumer inflation, while commodities by producer inflation.
Many of the worlds largest companies are selling services, not commodities.
The ratio of the two on the chart above, shows that long-term production cost of commodities is gradually reducing. It also shows periods when production inflation is much more pronounced than consumer one. There is an inherent lag between producers and consumers.
First producers take a short the beating...
...then consumers feel the pain. An eye for an eye.
Investors have limited options. There is energy to invest in, commodities, crypto, bonds, equities and money markets. There are probably many more options, but these are some of the most well-known ones. The method to invest in them may be via a mutual fund or a direct investment.
Let's rate these investment options for their viability.
Gold has proven problematic time and time again.
How high can Gold even get for demand to sustain? With production cost increasing, an investment in Gold becomes a dilemma. Approximate Gold profits, described by the Gold/PPIACO ratio, seems like a hard win.
Crude Oil on the other hand may need some time before it shows its true strength.
On the Crypto world, the big boy Bitcoin may dominate.
Crypto also seems to progress against Bonds.
Bitcoin has survived excellently the rate-hike schedule, keeping it afloat against Bonds.
Similarly in the Equity world, the big guys may overperform.
The Industrial part of DOW seems like it will show strength against the others.
For an investor, few are the viable choices.
Bonds don't go well with increasing rates.
Gold fails proving as an inflation hedge.
Instead, crypto shapes into an equity pillow.
Source: @SpyMasterTrades
When equities underperform, Bitcoin stays put.
Once again, we have reached the same conclusion. The equity market is forced to grow.
This chart is a perspective on how (SPX vs Inflation = actual profits) may overperform (Gold vs Commodity Production Cost = actual profits). This shows that equity-profits-after-inflation may be more than any other type of investment. Equities may in fact completely ignore inflation for some years to come.
Many of my charts, like this one, have taken me back to 1994, in the pre-.com bubble world. A massive equity bubble may be brewing as we speak.
Nothing else besides equities is viable as an option now.
Except perhaps money markets. The massive forgotten one. Dollar.
Money strength has been low for too long. Perhaps the dollar hasn't spoken its last word.
This proves once again that crypto may remain strong. Crypto is currency after all.
Tread lightly, for this is hallowed ground.
-Father Grigori
Inflation can be tracked using producer-prices and consumer-prices.
Many of the worlds largest companies are selling services, not commodities.
The ratio of the two on the chart above, shows that long-term production cost of commodities is gradually reducing. It also shows periods when production inflation is much more pronounced than consumer one. There is an inherent lag between producers and consumers.
First producers take a short the beating...
Investors have limited options. There is energy to invest in, commodities, crypto, bonds, equities and money markets. There are probably many more options, but these are some of the most well-known ones. The method to invest in them may be via a mutual fund or a direct investment.
Let's rate these investment options for their viability.
Gold has proven problematic time and time again.
Crude Oil on the other hand may need some time before it shows its true strength.
On the Crypto world, the big boy Bitcoin may dominate.
Similarly in the Equity world, the big guys may overperform.
For an investor, few are the viable choices.
Bonds don't go well with increasing rates.
Gold fails proving as an inflation hedge.
Instead, crypto shapes into an equity pillow.
When equities underperform, Bitcoin stays put.
Once again, we have reached the same conclusion. The equity market is forced to grow.
Many of my charts, like this one, have taken me back to 1994, in the pre-.com bubble world. A massive equity bubble may be brewing as we speak.
Nothing else besides equities is viable as an option now.
Except perhaps money markets. The massive forgotten one. Dollar.
This proves once again that crypto may remain strong. Crypto is currency after all.
Tread lightly, for this is hallowed ground.
-Father Grigori
Comment:
I guess Putin won.
If the Russian payment system will not accept any NATO clients (just like NATO has banned Russians), how expensive can their markets become purely from scarcity?
Comment:
What did you buy in '09? And what did you buy now?
Sure, you can go more complex in your analysis.
In the end, profitable inflation is probable. But for who?