Affordability, Meet Reflation

President Trump was in Detroit yesterday, touting the accomplishments of his second term.

Among the “affordability” measures he mentioned: Fannie Mae buying $200 billion in mortgage bonds to thaw out the housing market, a proposed 10% interest cap on individual credit cards for one year and the criminal probe against Jerome Powell, ostensibly because the Fed will not drop rates fast enough to meet Trump’s economic vision.

Similar market interventions were deployed during the Nixon, Ford and Carter administrations of the 1970s. The result: a stubborn battle to contain inflation.

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Inflation (gold line) continues to closely track the inflation of the 1970s (blue line). (Source: FX)

Today’s chart of inflation reflects an eerily similar path to the 1970s. The last CPI reading (gold line) ticked back up 2.7%. If prices today continue to track those of the 1970s, the next wave of inflation could see prices rise higher and faster than during the 2021/2022 bout.

Yesterday, gold notched another new record high of $4647. Its slimmer, svelte cousin, silver, set a new historic high of $92. Both monetary metals are reflecting the market fear that once inflation gets started, it’s very difficult to contain.

~ Addison

P.S. Tomorrow in Grey Swan Live! we’ll be joined by Shad Marquitz and take a close look at the precious metals market in 2026.

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In a brief discussion last week, Shad let slip his interest in one particular company that has labeled itself a gold and silver miner because of regulations that have restricted their sale of existing copper and antimony (used in drones and other defense tech).

Those restrictions are being lifted this month, along with other regulations that the Trump administration is trimming.

The details of this one company alone are telling for investors interested in capitalizing on the new retail interest in both precious metals and critical minerals. Shad’s an encyclopedia on the entire resource market. Every conversation yields a wealth of new market insights. Tomorrow’s Grey Swan Live! promises the same. Don’t miss it!

President Trump was in Detroit yesterday, touting the accomplishments of his second term.

Similar market interventions were deployed during the Nixon, Ford and Carter administrations of the 1970s. The result: a stubborn battle to contain inflation.

Turn Your Images On

Inflation (gold line) continues to closely track the inflation of the 1970s (blue line). (Source: FX)

~ Addison

P.S. Tomorrow in Grey Swan Live! we’ll be joined by Shad Marquitz and take a close look at the precious metals market in 2026.

Turn Your Images On

Those restrictions are being lifted this month, along with other regulations that the Trump administration is trimming.

Copper and resources are sending us a cleaner market signal than AI stocks.

Channeling Ludwig von Mises, we observe this morning that price is not just a number; it’s information. Price reflects what buyers and sellers collectively believe: demand, scarcity, fear, speculation, disappointment, future expectations and available supply.

When prices rise, and inventories fall at the same time, the message is usually straightforward: buyers need the stuff, and there is not enough of it.

A low VIX does not predict disaster. It measures complacency. A serial skeptic will read it as the calm before a storm. We shook off that feeling this morning and opted to pursue an opportunity instead.

Here goes:

A VIX reading below 15 means the market is not pricing in much near-term trouble, even though there are obvious risks still sitting in the room: Iran, oil prices, memory chip speculation, circular financing, high valuations, epic high concentrations, spiking long-term interest rates, a regime change at the Fed, a meltdown in Japan and a historic deficit and rising national debt.

Money is not flowing in a clean, straight line from outside investors to productive businesses. The firms at the top are investing in and buying from each other.

Microsoft and OpenAI are the easiest examples to follow.

Microsoft says OpenAI has contracted to purchase an additional $250 billion in Azure services, while Microsoft continues to account for $13 billion in funding commitments to OpenAI as an investment.

At this stage, it’s a stock picker’s market.

We expect space, robotics and some more visible tech startups to remain sources of speculation. After weakness in the first half of 2026, we’re also due for a strong rotation of capital into natural resources, precious metals, critical minerals and energy.

Copper and resources are sending us a cleaner market signal than AI stocks.

When prices rise, and inventories fall at the same time, the message is usually straightforward: buyers need the stuff, and there is not enough of it.

Here goes:

Money is not flowing in a clean, straight line from outside investors to productive businesses. The firms at the top are investing in and buying from each other.

Microsoft and OpenAI are the easiest examples to follow.

Microsoft says OpenAI has contracted to purchase an additional $250 billion in Azure services, while Microsoft continues to account for $13 billion in funding commitments to OpenAI as an investment.

At this stage, it’s a stock picker’s market.