Great piece as always. One key difference that enabled in great part the lowflation of the 2010s and the printing press policy by extension was the implosion of the real economy coming off of the China Urbanization/Industrialization led boom and Shale. This left excess capacity in pretty much anything you wanted and most importantly commodity and energy prices that were rock bottom for a decade plus. We now face a much more resource constrained economy globally; ask any business owner and people, cost of money, energy, and pretty much any input but office rent is a problem.
The end of China's construction boom may give some relief to industrial commodities, but energy is no longer cheap; the days of $30-40 bbl of oil are gone. So are the days of cheap and abundant Nat Gas.
I am not a secular inflacionista, but also have a hard time seeing we go back to 2% stable inflation, 0% rates, and QE. The fiscal trajectory is also concerning. Crossing my fingers that we don't see the day the Fed has to chose between rates and the USD/inflation due to the fiscal largesse at hand.
Got you .. though it's not hard for me to imagine oil back to 55/70 range and that would be disinflationary if it happened. NG is basically on the lows. I feel like the energy shortage is overstated after two wars there still seems to be plenty of energy to go around. Plus inflation adjusted oil is about same price as 2006 now ... I suppose it depends on China again as you say. They seem to be in balance sheet recession but copper doesnt' look too worried ! ha
That's the crowd theory, that energy and commodities are at the lows, but I see it quite differently. Natural gas and Oil production in the US are at all-time-highs, which calls for (and has delivered) lower prices, and it's not by chance that OPEC has cut time and time again with no significant effect on crude prices.
Global demand is low too (crazy low gasoline demand in the US) and China is exporting deflation, so 2024 could bring especially low prices in Oil, even if $30-40 bbl is not reached.
great one-liners in here, especially: „The market always thinks too much is priced in and yet rarely is too much priced in ever, in any cycle.“ Love it!
Nice piece Brent! The chart on buying gold at highs was super interesting. Also, I received my copy of the 2024 Trader Handbook and Almanac this week and really like it. I'll be putting it to good use! Thanks!
Great write-up Brent. One of the better Speed Runs I have read recently. I particularly enjoyed the 2019 comparison chart. I think the difference in the yields and your comment ('rather high relative to econ conditions') could have a big impact next year. How fast we got there and how fast we come down (along with why we come down) could put a damper on all the soft landing talk but we shall see. It would be a fun exercise to add a 2024 'prediction' column to that table and then see how that plays out this time next year. I'm old school so I still write down a lot of notes while I'm trading (and eventually transfer to my computer) so I'm looking forward to trying out the handbook/almanac this year. I think you should make the next edition 'rocketbook' style though, love those reusable pages! One last note, my gold and silver futures say 'thank you' for am/FX! Cheers to that and cheers to a good weekend!
Hey Chris! thanks so much .. you know maybe I'll run a survey using that grid and send to everyone and see where consensus lies and how the data is distributed ! good idea thanks
great w/e ! (ill check out rocketbook i'm not familiar)
Great piece as always. One key difference that enabled in great part the lowflation of the 2010s and the printing press policy by extension was the implosion of the real economy coming off of the China Urbanization/Industrialization led boom and Shale. This left excess capacity in pretty much anything you wanted and most importantly commodity and energy prices that were rock bottom for a decade plus. We now face a much more resource constrained economy globally; ask any business owner and people, cost of money, energy, and pretty much any input but office rent is a problem.
The end of China's construction boom may give some relief to industrial commodities, but energy is no longer cheap; the days of $30-40 bbl of oil are gone. So are the days of cheap and abundant Nat Gas.
I am not a secular inflacionista, but also have a hard time seeing we go back to 2% stable inflation, 0% rates, and QE. The fiscal trajectory is also concerning. Crossing my fingers that we don't see the day the Fed has to chose between rates and the USD/inflation due to the fiscal largesse at hand.
Got you .. though it's not hard for me to imagine oil back to 55/70 range and that would be disinflationary if it happened. NG is basically on the lows. I feel like the energy shortage is overstated after two wars there still seems to be plenty of energy to go around. Plus inflation adjusted oil is about same price as 2006 now ... I suppose it depends on China again as you say. They seem to be in balance sheet recession but copper doesnt' look too worried ! ha
have a great w/e !
That's the crowd theory, that energy and commodities are at the lows, but I see it quite differently. Natural gas and Oil production in the US are at all-time-highs, which calls for (and has delivered) lower prices, and it's not by chance that OPEC has cut time and time again with no significant effect on crude prices.
Global demand is low too (crazy low gasoline demand in the US) and China is exporting deflation, so 2024 could bring especially low prices in Oil, even if $30-40 bbl is not reached.
Thanks Brent! You have a rare talent for writing succinct, valuabel and entertaining pieces.
Thanks Jason. Mucho appreciated.
great one-liners in here, especially: „The market always thinks too much is priced in and yet rarely is too much priced in ever, in any cycle.“ Love it!
"Europe experts (Jens, Alf, and George, for example)": Who's George?
George Saravelos of DB
Hi Brent, can you ship the Almanac to an oversea address?
Hi yes if you punch in your address it will give you the shipping charge. Most places outside USA it's 14.95
order placed.
ive been using Jeff Hirsch's version. looking forward to some new perspectives.
Keep up the good work, astounding writing style
Thank you !
Nice piece Brent! The chart on buying gold at highs was super interesting. Also, I received my copy of the 2024 Trader Handbook and Almanac this week and really like it. I'll be putting it to good use! Thanks!
Yeah baby! Great stuff as usual. Go Brent Go.
Thanks Bruce ! have an awesome weekend !
Great write-up Brent. One of the better Speed Runs I have read recently. I particularly enjoyed the 2019 comparison chart. I think the difference in the yields and your comment ('rather high relative to econ conditions') could have a big impact next year. How fast we got there and how fast we come down (along with why we come down) could put a damper on all the soft landing talk but we shall see. It would be a fun exercise to add a 2024 'prediction' column to that table and then see how that plays out this time next year. I'm old school so I still write down a lot of notes while I'm trading (and eventually transfer to my computer) so I'm looking forward to trying out the handbook/almanac this year. I think you should make the next edition 'rocketbook' style though, love those reusable pages! One last note, my gold and silver futures say 'thank you' for am/FX! Cheers to that and cheers to a good weekend!
Hey Chris! thanks so much .. you know maybe I'll run a survey using that grid and send to everyone and see where consensus lies and how the data is distributed ! good idea thanks
great w/e ! (ill check out rocketbook i'm not familiar)