Inflation Comes in Scorching Hot, Sub-$80 Crude Soon, Rally Now?

Well, I was wrong. The CPI came in much hotter than expected. Cleveland Fed way way off on their forecast, missing by 30 percent. Surging inflation collapsed equity and bond prices before the market open. Barring some kind of technical reversal, markets are in trouble. That said, it's always darkest before dawn. The Federal Reserve is probably going to blow up the world in two weeks. That seems likely here barring the world blowing itself up in the next two weeks. If the world doesn't blow up...rally.

There's not much to say for the economy or markets. The U.S. is led by a President suffering from severe dementia. He is possibly a pedophile. There are photos of a naked Joe Biden with a naked female, age unknown but she's small enough in stature that she could be underage, from Hunter's phone or laptop. The picture at the link is edited. It is on Twetch (sign up link), was screenshot from 4chan. Most sites will probably delete it and while the photo is "safe for work" thanks to editing, I hesitate to post it for fear of political censorship. It is undeleteable on the blockchain though. Biden is also potentially corrupted by dirty deals with Ukrainian and Chinese companies.

In all, Hunter Biden made more than $30 million from entities affiliated with China's communist government. Hunter Biden's biggest deal with China involved a Chinese investment fund called Bohai Harvest RST or BHR. In December of 2013, Hunter Biden and Joe Biden flew to Beijing. It was a government trip on a government plane and that's when Hunter introduced his father to a BHR executive. Again, that's a flat-out violation of law. You can't take Air Force Two to China to lobby on behalf of the Chinese government, your own father. Full on time. The Bidens denied it, but Hunter eventually took a 10% stake in that company, a stake worth about $20 million.

Then a Chinese company called Harvest Global wired another $5 million to another company controlled by Hunter Biden, this one called Burnham Asset Management. He's got more companies than your average Mafia's done. According to the Washington Free Beacon, Hunter Biden, "reached out directly to the firm's chairman" and said the investment and we're quoting "would be important to the Biden family." Biden family, including his dad, the vice president, United States.

So, what's in it for Harvest Global? Well, per the Free Beacon, "Biden put together a financial proposal for Burnham to pitch to Harvest that promised 'Washington, D.C., access’ for investors." They're selling influence, selling influence with the U.S. government. Again, not to Belgium, not to Swaziland, to China, the country that has the United States in its sights.

None of this is surprising to most readers here, but if that's news to you, start reading some other sources because the media has a 100 percent blackout on the Truth, and the Truth has a way of eventually coming out. The 1973-1974 market collapse came in the context of the Nixon impeachment hearings. I expect extreme political volatility in Washington, D.C. and it will destabilize the financial markets and economy. Hunter's laptop and iPhone are the rough equivalent of Nixon's tapes. If the GOP Congress doesn't cuck with excuses of "this is so bad it shouldn't be made public," then Biden will fall simply by this information being made public in Congressional hearings. It's that bad.

As for the market, there is nothing except local lows holding up the market. Below 3750 and it's on to test the lows and probably new lows. On the flip side, the "local" worst-case scenario is in. CPI is much hotter than expected, guaranteeing no Fed pivot in two weeks, but the economy and inflation are already in freefall, all but guaranteeing a Federal Reserve "overshoots" as deflationary forces kick in.

Deflationary collapse is the big threat now. Long-bonds should rally from here as the yield curve inverts like it hasn't in 40 years.

Speaking to chart damage, here's my SMH play getting smashed with an island reversal. That is a very ugly chart if the downside continues.

Market is moving very fast such that island closed as I'm composing the post:

Aaaannd I've taken too long in composing this post...SMH is now green on the day.

Watch gold and gold miners. They are green this morning. It is meaningless within the trend and support isn't that close, but a turn here could come via macro forces. Gold-copper is threatening a new high.

My take: I took a hit this AM on the SMH and TLT positions, USO is stable. I was wrong on my timing, but the thesis for a rally is intact. Or at least, the thesis for collapsing oil and soaring long bonds is strengthened by the CPI because it is backward looking. The Federal Reserve has trapped itself in its own web of stupidity and lies. Inflation is falling. The economy is in recession. Inflation will drop if they do nothing. Yet the high CPI has much of the market looking for more Fed tightening. There will be more deflation, ceteris paribus, than there would have been had CPI been on target.

Nasdaq is now leading ES again despite the news being horrible for the Nasdaq relatively speaking. A rally needs to clear the 0.76 ratio (green line) of QQQ to SPY.