Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Inflation/Deflation Debate Wears On

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Our 30 year Treasury yield ‘Continuum’ chart indicates that deflation is the dominant trend, but…

Steve Saville has written a post that got me thinking about carts and horses and more precisely, which comes before which. Is the inflationary horse pulling the deflationary cart up hill or is the deflationary cart leading the horse to drink from the shrinking liquidity pool periodically?

See The Crisis-Monetisation Cycle

In conclusion to this short post Steve asserts…

“The crisis-monetisation cycle doesn’t end in deflation. The merest whiff of deflation just encourages central bankers and politicians to do more to boost prices. In fact, the occasional deflation scare is necessary to keep the cycle going. The cycle only ends when most voters see “inflation” as the biggest threat to their personal economic prospects.”

And over the course of decades now that is exactly the case. Every damn time that the public becomes terrified of declining asset (especially equity) prices the Fed springs into action.

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Stock Market Risk Not Yet Realized

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Stock market is at high risk, but…

The ‘but’ is the old saying “markets can remain [seemingly] irrational longer than you can remain solvent” if you fight a trend that is intact at any given point. Since March, 2020 that trend has been up.

Structurally Over-bullish

Below is a chart showing the 10 week exponential moving average of the Equity Put/Call ratio (CPCE) that we review periodically in NFTRH for a view of the structural over-bullish situation in stocks. I write structural because it has extended much longer than extremes in the CPCE have done at previous ‘bull killer’ danger points, after which risk was realized in the form of moderate to severe corrections.

The trend began logically enough at a ‘bear killer’ reading in the midst of max pandemic fear. We noted at the time that market participants were not just bearish, not just risk averse, but absolutely terrified. So the recipe is this: take 1 lump of terrified investors, add a heaping helping of the Fed’s money printing and voila, enjoy the taste of a slingshot rally that is very filling despite its inflationary odor.

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“Liquidity Alarm”

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Market liquidity is draining from different vantage points

On Wednesday I made a post that showed the “metallic credit spread” (as coined by Bob Hoye) known as the Gold/Silver ratio (GSR) flipped on its head (to Silver/Gold) to indicate a dangerous situation for the S&P 500, if past is prologue. Here is that post and here is the Tweet that followed…

You can see the tweet and expand the chart here.

tweet
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Near-Term Inflationary Plan

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The 30yr Treasury yield has made its right side shoulder

Of course there is inflation.

We see it everywhere; the Fed’s printed (funny) munny and the government’s cost-pushing into the economy. Everybody knows that inflation is here and everybody has known since March when the last guy, still sitting on his couch playing lockdown era video games, figured it out.

And then ZeroHedge called the top with an assist from Larry…

larry
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