The 3 charts below of the financial system strongly suggest that we are in for an inflationary shock in 2018 that is going to ignite a HUGE rally in commodities and other inflation hedges.
The original article by Graham Summers has been edited for length (…) and clarity ([ ]) by munKNEE.com to provide a fast & easy read. For all the latest – and best – financial articles sign up (in the top right corner) for your free bi-weekly Market Intelligence Report newsletter (see sample here) or visit our Facebook page.
The single best means of measuring inflation vs. deflationary forces in the U.S. financial system is the TIP to Long-Treasury (TLT) ratio.
- When this ratio rallies the system is predicting inflation.
- When it falls, the system is fearing deflation.
Running back to 2010, we’ve been in a long-term deflationary downtrend on this ratio.
This deflationary pull has dragged down the entire commodity complex over the same time period but this is about to end.
In the short- term, the TIP:TLT ratio has MASSIVE support at current levels and, given the clear descending wedge pattern it’s formed, the odds are favoring a sharp breakout to the upside sometime in early 2018. This is going to ignite a HUGE rally in commodities and other inflation hedges.
Our big theme for 2018 is INFLATION.
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Don’t be afraid of inflation. It is already here and there is nothing we can do about it. The effects will soon be obvious to all. Just make sure you are among those who are protected and prepared to profit.