The Fed published the H.6 money stock figures today. After hitting a low of 3.2% on week 27 (July 5th), the printing presses have rebounded steadily. Our last four readings have been 4.94%, 5.51%, 7.76%, and now 8.0%.
2021 is the dark blue line. You can see that we’ve only had two years that have had a higher print than this year and one of those years was 2020. I feel this is safe territory for the general market as we are well above the average for this time of the year. It is actually pretty stunning. We are seeing some extremely powerful money growth and it can easily translate into a powerful upside to the stock market and price inflation.
Something to keep in mind is the market’s reaction to Fed Chair J Powell’s speech this week. The Fed intends to begin reducing their balance sheet expansion. They have been hinting at a taper for some time now. However, the market throwing a taper tantrum is possible.
Some occasional bumpiness could happen moving forward but it looks like we are in for a strong stock market to finish out the year. I am going to begin loading back up on SOG (silver, oil, and gold).
Another boost to the market will be the massive packages Congress is looking to pass. These will be financed by the Fed through Treasury purchases. Nancy Pelosi is already positioning to get it passed. She has adjusted the rules and is using everything in her bag of tricks to get passage by any means necessary. Since I published a commentary on the passage of these behemoth spending packages, timelines have updated quickly. It looks like the House is set to get this passed and they want to move at a fast pace. I want to be positioned in SOG and the general market before the pass of this. I believe that sometimes its important to trade the rumor and sell the news but in this case, we are looking at a massive amount of money needed to fund these projects. This will need all hands on deck from the Treasury and the Fed. It will be a big boost to the already high money supply figures.