The market is having a big sale on all my favorite commodities. Uranium, silver, gold, oil, natural gas, and their associated miners and producers are all on a fire sale.
David, over at LiveBetterNow, has it pegged. He succinctly put it this way:
The general trading class believes the Fed’s incremental rate hikes are going to make a difference. They believe the Fed’s story that price inflationary is transitory.
The Fed members are beginning to become concerned about inflation. They are making statements about the taper and raising interest rates. This is why we saw such a shift into the dollar this morning. We haven’t seen either the taper or raising of interest rates happen yet. Will the be able to get out in front of the tsunami of inflation that is coming? No, inflation is already here and all they are doing is talking. Will they have the testicular fortitude to raise interest rates high enough to choke out the inflation immediately? Doubtful. That’s why today is an ideal day to buy.
We’ll see days like today because the investing crowd hasn’t caught on that the Fed is losing control. The herd’s mentality will take some time to come around. We’ve had 40 years of inflation control by the Fed. That’s 40 years of interest rates going down. That is a whole career for many in the investment banking business. These people won’t be quick to change their minds about this, but the cracks are starting to show. Days like this are why I’m always happy to have some dry powder ready to go. Soon these days of fire sales will disappear and we’ll wish we had more.