Rose-Colored-Glasses

The rose-colored-glasses crowd were smacked up side the head very hard on Friday when David Stockman’s view about future Fed policy proved to ring true. Other people who have a good sense that the Fed will be tough in the future, at least with their rhetoric like Danielle DiMartino Booth, were also proven correct, based on the speech given by Chairman Powell on Friday in Jackson Hole, Wyoming.

Equities were hit hard this week with the S&P losing 4.04% and Walmart (-4.08%). Housing stocks lost 3.88%, as did Real Estate Investment Trusts (-3.55%). And the monetary metals were down, with silver giving up 1.31% and gold 0.71%.

But there were winners this week as well. TLT representing 20-yr. to 30-yr. U.S. Treasuries gained 0.42% as proceeds from stock sales went to that safe haven. The oil heavy Rogers Fund gained 1.91% and Oil was up 3.11%. The China ETF used in my IDW gained 4.80% and my India ETF gained 0.29%. So overall, while financial assets were smacked down, tangibles other than the monetary metals were winners. As such, my IDW fell only marginally from 187.38 last week to 187.27 this week.

Which brings me to the views of Kyle Bass, expressed in Adam Taggart’s interview with him this week, in which Kyle Bass expressed his view that we will be in for a very prolonged stagflationary environment. He envisions that massive shortages in materials that are required to electrify the U.S. economy will require much higher prices for those commodities and the most important of all will be energy. I’m in agreement with that view, which is why I’m excited about energy stocks as well as base metal stocks.

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.