One Data Point Closer to a “Terrifying Bull Market”

This morning’s Producer Price Index (PPI) shows that inflation is still with us.

While traders were betting that the Fed would cut interest rates next month, that’s being rethought today. And with a rate cut already priced into markets, prices are trending lower.

Given how far markets have already gone, the prospect of interest rate cuts isn’t bullish for the economy – it’s actually bearish. It’s a sign that the real economy is struggling and needs cheaper access to capital.

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Markets are overpricing economic conditions and could be ready for a big pullback (Source: X/Twitter)

The staggering 0.9% month-over-month increase shows that inflation isn’t going away – and may be about to accelerate.

If so, that could cause conditions for a crack-up boom – or what Mark Jeftovic refers to as a “Terrifying Bull Market” – a stock market that rallies, but because investors are trying to get out of the dollar by any means possible.

Today’s data print isn’t the end of the world – the market isn’t even down that much this morning. But it’s one more nail in the coffin for the value of the dollar.

~ Addison

P.S. Some companies are thriving under the shifting tariff regime — and from other Trump policies that are decidedly pro-growth. But “pro-growth” also means you need lower interest rates. At least in the Trump Great Reset playbook.

The tricky part? Government printing debt out of thin air usually means more inflation. Under normal circumstances, the Federal Reserve would be leaving rates unchanged in September… or even raising them.

Therein lies the pickle we’re in.

You can’t let interest payments on the existing debt swallow the government budget. This means that, in addition to “pro-growth” economic strategies, you need lower interest rates.

But lower interest rates also mean higher consumer prices for necessities like energy, food, housing, health care and tuition.

The bond market doesn’t like deficits or debt, either. Investors demand higher interest rates to lend the government money.

Like we said, it’s a pickle.

We’ll be digging into both sides of that equation — plus our latest research — in this week’s special session of Grey Swan Live! tomorrow, Friday, August 15, 2025… exactly 54 years since Nixon “closed the gold window.” Members will get the sneak peek before anyone else.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

This morning’s Producer Price Index (PPI) shows that inflation is still with us.

While traders were betting that the Fed would cut interest rates next month, that’s being rethought today. And with a rate cut already priced into markets, prices are trending lower.

Turn Your Images On

Markets are overpricing economic conditions and could be ready for a big pullback (Source: X/Twitter)

The staggering 0.9% month-over-month increase shows that inflation isn’t going away – and may be about to accelerate.

Today’s data print isn’t the end of the world – the market isn’t even down that much this morning. But it’s one more nail in the coffin for the value of the dollar.

~ Addison

Therein lies the pickle we’re in.

You can’t let interest payments on the existing debt swallow the government budget. This means that, in addition to “pro-growth” economic strategies, you need lower interest rates.

But lower interest rates also mean higher consumer prices for necessities like energy, food, housing, health care and tuition.

The bond market doesn’t like deficits or debt, either. Investors demand higher interest rates to lend the government money.

Like we said, it’s a pickle.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

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.