Metals, Miners Treated Meanly

Hey There Income Hunters,

Metals and miners have been treated poorly of late.

Why? 

Because the Fed has been painting a rosy picture of transitory inflation and a stable financial system.

You see, investors have built tremendous confidence in the Fed since it has been providing stimulus for financial asset prices any time the markets have shown weakness over the past decade-plus.

Now, as much as I do not agree with the Fed’s logic or approach, Mr. Market is never wrong …

That’s why I have taken a longer-term view and strategy with my portfolio.

3 Reasons Why

Now, I’ll expand on that a bit. Here are my three reasons for a longer-term strategy:

      • The only transitory situation is the debasement of the dollar so the government can inflate debt away and reset the US economy.
      • The Fed will do everything it can to create an illusion that inflation is under its control.
      • But the Fed is not in control. Holders of US bonds and US dollars will eventually lose confidence in our central bank and they will exchange dollars and bonds for real assets.

When that happens — watch out.

An Example in History

Germany in the 1910s is an ideal model to understand.

The Germans had a very strong currency, and it took time for citizens to lose confidence in their central bank.

When it finally happened, gold and inflation soared

Guess what?

That is the exact path the US dollar is on today.

The Fed’s goal is higher inflation, while keeping interest rates low. That scenario is explosive for commodities, metals and especially miners.

Chart Description automatically generated with medium confidence

So when is the best time to buy miners? I’ll show you the sweet spot tomorrow.

Until then …

Live and Trade with Passion My Friends,

Griff

 

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