One Accident Away From the Top
A theme I picked up on in my editorial posted May 7 on Substack: I mentioned the anti-fragile nature of inflation. It is multi-headed, and it seems like every time you have one aspect of inflation under control, three additional bottlenecks pop up that continue to drive inflation higher or accelerate it.
By contrast, the stock market is fragile at this point. It is only going to take one accident to change the way the market reacts, and that response will come from the interest rate markets. A seemingly unrelated event is going to set off the sequence of events propelling intangibles into the bear market we have been forecasting.
Many people refer to these accidents as “grey swans,” and the doomsayers refer to them as “black swan” events. I have always referred to them this way: the train you do not see is the one likely to kill you.
What makes the market fragile is that any analysis of the markets, both tangible and intangible, hinges today on rates and Federal Reserve policy impacting those interest rates. Gold goes down because rates went up. The correlation studies show that.
The crowd is looking for a well-advertised catalyst, some big news story or event that is going to make the front page of your local paper or The Wall Street Journal.
To the contrary, we think it will be an unexpected coincidence or accident. History tells us exactly how this plays out.
Founding members already know the calendar dates. With the details on how accidents have a fingerprint and when they’re more prone to occur.
