When you get it wrong, you get it wrong… or do you?
The strength in equity markets surprises me to no end. I don't have exposure to these markets, so it's not costing me directly. But what was just a few companies bolstering value has expanded to other companies, and therefore, the current strength is coming from a much broader number of sectors.
Some are saying this is a lot more substantial, and it bodes well for the future, which, if true, can only be a good thing for everyone.
Recent increases in the US GDP are also supportive, so perhaps it's right to let these markets do what they are doing to do and for me to stop being a Grinch!
So let me be a bit positive.
Last week, I wrote about my interest in energy and talked about increases in oil prices, which have performed reasonably well over the past week or so.
Going forward, we will need a lot of energy from various sources because long-term growth will be unsustainable without it. I am not happy about solar and wind power due to the subsidies and because so much of the profits from these sources end up in the pockets of the Chinese Communist Party. But we all need more energy, and nothing illustrates this more than my wife's face when the Electricity Bill arrives.
As a natural sceptic, I am not buying into the UN's new “Global Boiling” mantra, any more than I bought into Greta Thunberg throwing her dummy out of the pram and asking us, "How Dare you!" We dare because if we do not, she will be living in a cave by the time she retires!
Energy, food, and shelter are life's basics, and we need a lot more of these things going forward. If I believe the planet is boiling, then this must mean I will be running my air-conditioners for longer, and my staple food supplies will dwindle.
Don't get me wrong; with Milk, Cocoa, and Sugar prices all very strong, I've cut down on my chocolate-chip cookie consumption and am returning to my old svelte self. But the money I save on luxuries disappears as soon as I buy some pasta or a loaf of bread.
Core inflation is still rampant, and as it seems at the moment, the days of seeing 2% inflation seem like a dream, and as for central banks taking us back there, that sounds more like a pipe dream.
When it comes to Central Bankers, be it Powell or Le Guarde, it goes without saying that I have complete trust in them and everything they say! (At least I trust them more than Joe Biden trusts Devon Archer.)
Look, we in the financial markets, with the billions floating around, working with the most innovative people on the planet, are seeing many things happening around us about which we can be highly positive. Crypto is still alive and looking positive, the blockchain is moving into more areas of society and bringing significant advantages, and of course, we have all these AI programs that are going to be a massively positive disrupter in our lives (unless we do jobs that do not require much thinking!).
However, at the end of the day, people need more than government handouts and cabbage soup, and to provide that, we need growth, and that growth has to be sustainable.
Too many people are being damaged by inflation, especially those at the lower-income end of society. As that group becomes poorer and more reliant on the government, governments will continue to demand more money from the rest of us. Make no mistake, CBDC is not being rolled out because it will make you or me wealthier or more independent, no matter what central bankers tell me.
But one thing Jerome Powell said about the Fed, which I totally agree with, is that "we are not looking too far forward."
Early last year, as stated in numerous reports, I diversified my portfolio in assets that I hoped were beyond the grasping hands of the government. I won't go through it all again, but it included physical gold and agricultural land.
More recently, I put much of my liquid capital into energy production (Whitehill Green Hydrogen) and have allocated some of my funds to more speculative fractionalized programs offered by SGT on their trademakers platform because I am not in a position to trade the markets regularly, so I entrusted more active traders to do it for me.
I am enjoying looking at these markets from a distance, and over the coming weeks, I will take advantage of this newfound freedom, sitting on a beach and drinking a Bud Light while listening to Jason Aldean.
Yep, I am as confused as everyone else.
Enjoy your summer.
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