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How Supply Shocks Create Stagflation (and Why We’re Headed That Way)

By: Justice Clark Litle

Aug 07, 2020 | Educational

Inflation is a funny thing. It comes in different varieties and can show up in different places. As such there is no “one size fits all” version of inflation. The classification really matters. Take the difference between asset price inflation and wage inflation, for example. It is often the case that one exists without the other. Equity and real estate…

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Gold, Bonds, and Equities are All Saying the Same Thing

By: Justice Clark Litle

Aug 06, 2020 | Educational

There is a narrative that says the market has lost its mind, and that divergent market signals no longer make sense. The market is broadcasting multiple messages, and the messages are in deep conflict. Through this interpretation, three areas in particular — gold, bonds, and equities — are in direct conflict, and seem to be at odds with each other….

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Ugly Goldilocks is Turning into Mutant Goldilocks

By: Justice Clark Litle

Aug 05, 2020 | Educational

A number of years ago, long before Jerome “Jay” Powell became Chairman of the Federal Reserve, your editor proposed something called the Ugly Goldilocks scenario. You likely know the children’s story of “Goldilocks and the Three Bears.” Goldilocks didn’t want the porridge that was too hot, or the porridge that was too cold. Instead she ate the porridge that was…

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The U.S. Dollar Just Had its Worst Month in a Decade

By: Justice Clark Litle

Aug 04, 2020 | News

In the month of June, we sent a report to TradeSmith Decoder subscribers titled “The Best Time to Buy Gold Stocks in 90 Years.” The report emphasized the precious metals stocks we liked best — many of which were purchased for the TradeSmith Decoder model portfolio — and noted the likelihood of accelerated currency decline. In the following month, July…

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Big Tech is the Zero-Coupon U.S. Treasury Substitute

By: Justice Clark Litle

Aug 03, 2020 | Educational

As U.S. Treasury yields fall toward zero, and the Federal Reserve deliberately erodes the value of U.S. debt, investors will be forced to seek new safe havens. A broken and dysfunctional U.S. Treasury market, no longer appealing in terms of yield income or downside protection, will create a bond-sized hole in a great many investor portfolios. That hole will have…

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The 60-40 Portfolio is On Its Last Legs

By: Justice Clark Litle

Jul 31, 2020 | Investing Strategies

The 60-40 portfolio has been a cornerstone of retirement strategy for decades. Around the United States and the world, hundreds of millions of retirees have had, or still have currently, some version of a 60-40 portfolio.  For American retirees, though, a serious problem looms. The 60-40 portfolio is on its last legs. It is simply going to stop working as…

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How the Gold Price Could Go Parabolic in a “Reverse Bank Run”

By: Justice Clark Litle

Jul 30, 2020 | Educational

If you think the recent moves in gold and silver are wild, buckle up. There is a realistic scenario where the gold price goes full-on parabolic, and it could happen at any time. If this scenario takes hold, we could see the gold price blast through the $2,500 level, or even the $3,000 level, within a timeframe of weeks or…

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The Robinhood Retail Mania Has Now Gone Global

By: Justice Clark Litle

Jul 29, 2020 | News

On July 13 we explained how Silicon Valley engineered a retail trading mania. As it turns out, the mania has gone global. “India’s retail investors are leaving their mark on a risky corner of the nation’s $1.9 trillion share market: penny stocks,” Bloomberg reports. “A custom index of 800 stocks that quote below 5 rupees (7 U.S. cents) has trounced…

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On Gold’s Relationship to Quantitative Easing

By: Justice Clark Litle

Jul 28, 2020 | Educational

For a whole host of reasons, the gold price is hitting new all-time highs this week. This is happening in “nominal” terms, meaning not adjusted for inflation. To reach a new inflation-adjusted high, and break the 1980 ceiling once and for all, gold will have to challenge the $2,500 per ounce level. At the rate things are going, that could…

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The Market is Moving On From Intel

By: Justice Clark Litle

Jul 27, 2020 | Educational

With all of the top-down influences on markets these days — from central bank policy to COVID-19 realities to smartphone trading apps — it’s nice to remember that fundamentals still matter sometimes. Then, too, there isn’t really a monolithic “market,” per se. Different areas of the market are behaving quite differently and showing wide divergences in performance. The tech juggernauts…

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