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Stop, Look, and Listen 8/16/23

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Lots of talk about the 70s and the „70s playbook“.

Will not happen that way.

Why? Cause the 70s didn‘t know that they will become „the 70s“. Got it? Folks in the 70s thought that it will be like the 30s, or maybe like 1946-1949… Didn‘t happen that way.

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it depends

If we would have a boom then it would be 70ties. Why? we didn't have real unemployment, real crisis in real economy (not talking about kre etf or bonds). Its still ok almost everywhere, exepct maybe China.

 

So if we would have soft landing than there is no spare capacity. Which means we are going to hit 3-5% cpi. Remember about secondary effects? like unions? a lot of new salaries will start from 2024, includind new minimum wage based on past cpi.

 

So we really have a chance to follow 70ties unless.... we would have a proper crash and crisis in economy. And i think thata a Fed playbook. Higher for longer.

 

Keep in mind that most loans and refinancing will not kick in till H22024. One more year! One more year!!!

Consumer is paying lowest interest rate on mortgages, same for corporations. Only Small business is feeling a small pain.

Thats why market is not panicking.

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I meant that folks take 70s charts and think that it will play out the exact same way. That will mot happen.

Who knows what will happen. I don‘t know. We will see.

NOBODY thought in early 2000 that we would go more or less straight down for 3 years.

NOBODY thought in 2009 that we would go more or less straight up for 10 plus years.

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you are right. Nobody knows the future.

Im just tellin you argument why higher inflation is possible. Same guys advise to buy XLE, energy and offshore oil gas sector. thats why we have this jump in energy for the past 1-2 months. becasue this narrative is getting traction and its getting more common. becasue if we would have soft landing then... we would have inflation again.

Thats why gold is tanking because gold loves deflation, not inflation. This is btw one of the biggest lie that i came across. very popular among bears, preppers and Russian Zero Hedge lovers.

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