Profit from the Coming Era of Inflation!
Pay Attention to This Chart . . .
Inflation Isn't Coming . . . It's Already HERE!
I called your attention in a recent post to the fact that Commodity prices were at Historic low levels; a level from which they have also historically usually risen sharply with inflation.
For Those Who Missed That Chart . . . Here It Is Again
The first chart showing how much the money supply has been expanded for the US DOLLAR, whispers many stories about what' to come.
History Repeats. Learn History's Patterns and Be Positioned to Benefit from it's Repetition!
So inflation will have the greatest benefit for Commodity-based Economies like Australia and the United States. To be more specific, producers of commodities will be first in line to benefit, while, consumers, at the far end of the retail line will suffer from higher prices at the stores on basic foods and goods.
The Stock Market is another vehicle for parking decreasing value Dollars into an asset that has a potential for Growth to offset inflation.
This is why the Stock Market is surprising so many with it's constant rising; Inflation is driving the Market higher as the richest corporations are recycling their newfound profits gained from the pandemic back into the Stock Market creating the 'Bull' Market we're seeing.
As you can see in the S&P 500 Stock Index Chart above, money that was created in 2020 which went to the elite corps at the top quickly found it's way into the Stock Market driving prices higher and higher all year long.
As the US Dollar (like all fiat currencies) goes more and more out of control, I foresee an interesting effect on the crypto-currency market, and, with BITCOIN in particular.
As dollars become easier to obtain by those at the top of the high-tech foodchain, in order to lock in their present value (which will be decreasing with each passing day), these dollars will be seeking out more stable forms of value, like Commodities, Real Estate and Bitcoin.
Did I just dare to call 'Bitcoin' a more stable environment? Am I crazy? Is there a more volatile market out there? What gives?
Yes, I did.
Am I crazy? Is there a more volatile market out there? What gives?
No, I'm not crazy, and, let me explain my thought process a bit.
This would also be a good time to state that the word 'stable' will shortly take on an entirely relative meaning in the years ahead as Volatility in prices everywhere kick up seriously. Pullbacks like we see in Bitcoin, may become more common and mirrored in other markets due to the sheer number of Dollars flowing into and out of markets looking for an 'edge'.
Now, on to more comments on BITCOIN . . .
Unlike the US DOLLAR, which is now showing that there's no limit to many will be created to meet demand, BITCOIN is strictly limited to a FIXED NUMBER of total Bitcoin. That number can never change, therefore, the value of Bitcoin in US DOLLARS will, (as long as inflationary policies continue), only go up and up over time as more and more decreasing valued dollars rush to find a more stable place to hide and retain their value.
This hidden background inflation goes a long way towards explaining Bitcoin's price behavior of late.
Techniques like our 'Levitas Principle', are crucial to detecting these important trading Cycles EARLY.
Regardless of the technique you use, you first have to be aware of where you are in TIME relative to any Market or Commodity. Just 'where' in it's Natural Cycle are prices presently?
Think in terms of the Seasons. Is your market of interest in the SPRING, SUMMER, FALL or WINTER of it's price movements? Answer this first by looking at the long history of the Stock, Commodity or Index. This is a relative assessment. You don't have to be precise, just close.
Once you assess the 'Season' for your Market, then, you'll have an idea of what to watch for; Uptrends (coming out of a 'Winter' Season for example) or Downtrends (with 'Summer' over and a decline therefore expected).
With an 'inside' chart such as that shown at the top of the article for the US Dollar Money Supply, the assessment is that Inflation must enter the markets. The markets most vulnerable reflecting inflation via higher prices are the Commodity & Stock Markets.
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