Weekly Briefing 11/22/20 - The Forecast

Weekly Briefing 11/22/20

Weekly Briefing 11/22/20

Inflation is coming in the first half of  2021.  Soybeans are an early indicator of inflationary pressure.

The CRB commodity index put in a violent 4 year low.  Expect the opposite reaction to the upside over the next four years. Every action in the market has an equal, opposite reaction.

The price of paper goods is rocketing in stores and it will not stop anytime soon.

Silver should test its 2011 high by the first half of 2021, $49 per ounce. Nothing moves with inflation more than silver.
Some will blame inflation on weather patterns affecting crops. Others will blame supply shortages from the Covid crisis.  These are both correct, but the main culprit is the amount of money being inject directly into the money supply. Everyone remembers the run in commodity prices from 2008-2011, compliments of the Fed’s easy money policy. However, what is distinctly different this time is the fact the Fed is not directing money into the coffers of the Fed banks with programs like TARP.  Instead, the money is being injected directly into the mainstream economy. This method is both good and bad.  The good side is that people on main street get the help that they need during this economic downturn from forced lockdowns. The bad is that this will cause mass amounts of price inflation across the board. All quantitive easing is not created equally. Our normal inflationary readings if determined in a similar fashion to the 1980’s formula would put inflation at well over 5%-7%. The Fed learned an important lesson from the inflationary run of 1978-1980 when interest rates and mortgage rates to purchase real estate and other assets approached 17%. Those of you who were old enough can remember the lines for gasoline at the pumps in the 70’s. Bottom line, when the general public sniffs out inflation, we witness mass hoarding and panic, magnifying the problem. The easy fix was to change how we calculate inflation by tweaking the formula. This direct QE to main street from March 2020 to March 2022 will most likely equal the same amount ($9 trillion) of QE the Fed pumped into the markets quietly from 2008-2016 through member banks.  Expect to see the largest inflationary run since the Great Depression over the next four years into 2024.  Silver will be the trade of the decade.
The Forecast

Important Disclaimers Regarding Our Services and the Information we Provide:
The Forecast offers information, research, educational content, articles, alerts, bulletins, newsletter items and other conveyances of information that constitute the Services. The Forecast is a publication that is available to the general public via subscriptions. The Forecast provides market commentary, market analysis, and insights, as well as general investment education, and identifies particular trades that it believes will result in gains in value, but it does not provide investment advice, whether customized or otherwise.  The Forecast does not owe a fiduciary duty to you, and is not aware of your financial situation, risk appetite or other investment preferences or parameters. The only information about you that The Forecast is aware of is your name, email address, date of birth and other basic information needed to purchase a subscription.  
The Forecast is a publisher, and as such relies upon the publisher’s exclusion from the definition of investment adviser as provided under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. By using our Services, you acknowledge and agree to the foregoing and that any actions or forbearance from taking action based on the information we provide and the use of our Services is entirely at your own risk, for which The Forecast and its Affiliates shall have no liability. You understand and acknowledge that trading in securities, by its nature, involves risk of significant loss.
The Forecast is not registered as a broker-dealer, investment company or investment advisor with the United States Securities and Exchange Commission or with any state securities authority. We offer access to our Site on a subscription basis only, as described further below.
  • You understand that no Content published on this Site constitutes a recommendation that any particular investment, security, sector, portfolio of securities, tax strategy, transaction or investment strategy is suitable for any specific person.
  • You further understand that no one in the employ of The Forecast is advising you personally concerning the nature, potential, value or suitability of any particular investment, security, portfolio of securities, transaction, investment strategy, tax advice or strategy, retirement advice or strategy, or other matter. To the extent any of the Content published on the Site may be deemed to be investment advice, such published information is impersonal, general in nature, and not tailored to the investment needs of any specific person or entity.
  • You understand that the views and opinions expressed on the Site are the opinions of our contracted analysts and of our users. The analysts may differ from time to time in their opinions about the same securities.
  • You understand that the owners, officers, directors, contracted analysts and employees of The Forecast have or may have personal positions in the instruments (or similar instruments) mentioned on the Site. They agree contractually not to trade in securities in any way that is inconsistent or advantageous from a timing perspective with regard to their posts on The Forecast, nor to receive compensation from or insider information on companies whose equity or fixed income securities, or company prospects or information, that they discuss on the Site.
  • You understand that the risk of loss in trading securities (including, without limitation, stocks, ETFs, options and index futures) can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. You bear responsibility for your own investment research and decisions and as noted above, should seek the advice of a qualified securities professional before making any investment.
  • You understand that markets are fluid, dynamic, nonlinear systems. In order to trade such systems with a good prospect of success, one should endeavor to develop the knowledge and experience necessary to navigate its complexities. Therefore, we strongly suggest that any individual who seeks to trade in these markets takes the time to learn about finance, trading, market behavior, and related topics.  We sometimes provide trade set-ups and alerts on the Site. These are provided for educational and hypothetical purposes only and are not trade recommendations. The prices quoted in the alerts are based on real-time market prices as of the time stated in the alert, and not actual fills by the analyst. Prices can change in real time, and actual trading could affect trading prices. We also sometimes track the performance of these set-ups and alerts. Performance table returns don’t include commission and other execution and trading costs, including taxes, that would be incurred if these were actual portfolios. Past performance is no guarantee of future results.