Here Comes a $150 TRILLION Green Energy Slush Fund

Hey There Income Hunters,

 

You are going to love this one ….

 

The 26th UN Climate Change Conference has released its Net Zero greenhouse gas plan.

 

Before we get into the details, here are a few of the headlines …

      • “Fed Is Taking The Right Course On Monitoring Climate Change”
      • “Fed Should Consider Climate-Change Risk To Financial System”
      • “Treasury To Study Impact Of Climate On Households, Communities”
      • “Treasury Launches Effort On Climate-Related Financial Risks”

 

So now, the Fed and Treasury are going to tackle climate change because they have done such a great job balancing their budget? Give me a global warming break!

 

I’ll tell you what this is about: the $150 trillion of unfunded liabilities to future generations of Americans …

 

This is serious, and I know exactly what they are doing. This can’t get passed soon enough … 

 

You think it’s easy to make money now? Just wait …

 

Today, I’ll give you an update on this week’s inflation data and what this insane crusade means for inflating our trading profits …

 

Inflation Update 

 

Some pretty incredible headlines this week:

      • Thermal coal futures in China hit all-time highs, and hit their daily limit three times this week. Look to buy Arch Coal (Ticker: ARCH) next week. They are trading at $95, and could be on their way to $120.
      • Also, on the move: Copper +1.7%, Zinc +3.7% Cotton +3.7%, Wheat +1.3%, Corn +1.0%. I took profits on United States Copper Fund (Ticker: CPER) and Freeport-McMoRan (Ticker: FCX) this week, for +98% and 78% respectively. 
      • Earlier this week, China’s Producer Price Index (PPI) rose at 10.7% in September, the highest reading ever.
      • U.S. PPI is at +8.6%, the highest reading in over a decade.
      • German wholesale prices for September came in at 13.2%, the highest level since 1974.

And that is not even the real market-moving news …

 

The important news this week, which was confirmed by the Fed, is the “shelter” component of Consumer Price Index (CPI). Shelter CPI year-over-year increase was 3.24%, which is a new high.

 

Now, the Dallas Fed put out a report this week stating that they expect this number to DOUBLE in the year ahead … and remember, shelter carries a CPI weighting of 33%! 

 

Investor psychology is beginning to shift towards sustainable and permanent inflation that will cause demand destruction. This means the high natural resource prices destroy demand, and slow the economy …

 

This is an important concept to understand, because if the Fed tapers, a slowdown is naturally happening, due to inflation destroying demand, which in turn gives us higher inflation and lower interest rates.

 

Higher inflation/lower interest rates is the ultra-bullish condition for gold.

 

Start Buying Gold on Dips 

 

I had an excellent week trading SPDR Gold Shares (Ticker: GLD) and Van EckVector Gold Miners ETF (Ticker: GDX) for an average gain of nearly 70%!

 

I reset a bit of my long GLD position near the close on Friday, by purchasing five GLD Oct. 29 167/167.5-strike call spreads for $0.16.

 

I want to keep playing for quick hits with GLD until bullish seasonal trends kick in on October 22.

 

The chart below shows the average seasonal pattern for gold and silver from 2002 to 2019:

 

 

Notice that starting at the end of next week, the seasonals turn very bullish into the middle of December, and this year may even bring in more technical buying than usual.

 

The Basel III mandate demanding paper gold positions for British banks be backed by physical reserves, or they pay a substantial margin requirement, goes into effect at the end of 2021.

 

I’ll have more on that next week.

 

Bring It Home

 

There are more cross-currents of data, flow, and news than I can remember.

 

The world is becoming fragmented, as each country is trying to survive in a world of ever-rising prices and supply chain disasters … 

 

The best thing to do is stay in a lane that benefits from the inflation and energy crisis we are in the early stages of … 

 

Soon we’ll also be discussing the timing of a possible extended downtrade in stocks once the “demand destruction” narrative kicks in.

 

Until then, have a great weekend and as always …

 

Live and Trade With Passion, 

Griff 

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