Here Comes The Deflation

We have been warning about this. While everyone was talking about inflation, the real peril is the whipsaw to deflation. This might be starting.

In this video we discuss how we use forward looking indicators like inventory to forecast what is going to happen. Since we started this in Decemeber, we came across many of the retailed announcing huge spikes in inventory on their last quaterly call (told you so?). For the past few months we highlighted some of the weakness in the commodities markets. We saw copper break down from its highs. Today, the markets are off big with gold, something else we mentioned, breaking out of its channel...to the low side.

All of this is shaping up to be an extreme warning for deflation. Of course, Powell and the Fed is going to keep raising since they are only looking at the Phillip's Curve as their sign of what is taking place.