You’ll be pleased to hear that today’s note is heavy on pictures and light on dribble/rant words.

On the back of the recent US Fed inflation modelling “confusion” (going one way then the other) it’s high time to let the pictures be provocateur!

The “pictures” are a little global focused so we’ll quickly join the dots back to OZ for you and your money before said charts.

Firstly, if inflation was referred to as “cost of living” people may pay more attention to the farce of the numbers. But it’s not.

To understand post-GFC economics all you need to know is:

  1. If inflation rises, take out the culprits, like accommodation, power, veggies, fruit and health care.
  2. If inflation falls, select the ones to put back in.
  3. If the market worries about too much domestic money printing then get someone else to do it.
  4. Think and be thankful for The US Fed, Euro Central Bank and the one that owns more than 50% of all its own domestic equity ETF’s and its entire bond market, the central bank of Japan.
  5. If all major economies are doing this, then funding for Australian banks and therefore Aussie property, continues at low rates.
  6. Rinse and repeat until next blow up.
  7. Then print more.

With this in mind, one of the main reasons we’ve topped up our (selective) Platinum Asset Management funds and the like to encourage those who did the same with their BHP and TLS (despite some bearish outlooks, management did the right thing) recently is that some quality companies are looking more diversified and stable than governments!

Also, relative to absolute risk contained elsewhere in Aussie top 10 stocks, the dividends are nice too! As always, you’re welcome to give us a call for more in depth commentary on these or other positions you hold.

Again, we remind you it’s normally what happens in international markets that determines the larger moves domestically.

So, here we go.

US equities….. most expensive, ever!

Though there are signs that “stuff” maybe hitting fans – even if stocks don’t really show it… USA default/devaluation risk is now twice that of Germany…

But don’t worry – THE US FED’S DUDLEY SAYS ASSET PRICES CONSISTENT WITH ECONOMY’S PERFORMANCE…

“My own view is that — I’m not particularly concerned about where our asset prices are today for a couple of reasons. The main one is that I think that the asset prices are pretty consistent with what we’re seeing in terms of the actual performance of the economy.”

Which of course, is a “fake news”:

This probably means nothing- who doesn’t need to borrow money for share investment?

The industrial commodity/economic disconnect is little weird.

CMC market strategist Michael Hewson expressed his amazement at what is taking place in the industrial metals sector, and pointing out that something strange is going on, Hewson said:

“I’m looking at the prospect for the global economy and looking at the price of metals and there seems to be a significant disconnect between the two.”

or, Equities v Commodities… A Major reversal at hand?

Just thought we’d throw in this chart below to say that we’re seriously considering what cryptocurrency mean as an asset class. Those that follow it will notice that the bitcoin price is substantially higher than from the day of this screenshot!!
It now has a 4 in front of its price.

More on Crypto later, in the meantime

Stocks expensive, Gold Cheap! Long term Buy signal triggered!

We Love this “more money than sense” index!

And not much to like in this usually irrelevant, proved to be false “Hindenburg Omen”!

Lest we forget the lack of reform from GFC!!

Finally, Let it rip?? Don’t worry, you know these analogue charts mean nothing, just interesting to look at!!

As usual, more questions than answers so, “Full faith and credit”, thanks to the law of no physics!