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.)

Mining stocks amplify everything. First Majestic went from losing money to 45% margins without building anything new. They just held the line on costs while silver did the heavy lifting.

That cuts both ways. If silver drops hard, margins compress just as fast. Same leverage, opposite direction.

The miners with the lowest costs and cleanest balance sheets will hold up best in a pullback and capture the most upside if the deficit keeps grinding.

Economists at Goldman Sachs said this morning they expect core inflation to finish the year around 2% even while GDP rises at a “surprisingly strong” 2.5% clip.

In our view, their inflation forecast is optimistic. Their GDP call? Modest.

The last time we pumped this much liquidity into the system — 2020 through 2022—the result was a manic asset bubble, runaway inflation, and an epic hangover at the Fed.

Goldman’s optimism has triggered a fresh round of bullish bets: cyclical stocks are rallying, “dispersion” in the S&P 500 is spiking, and the Fed is expected to cut interest rates twice before Jerome Powell gets kicked out of Washington at the end of his term on May 15.

Anecdotally, we’re hearing stories of warehouses full of GPUs sitting unused for lack of energy to power them. It’s a natural feature of the heavy capital investment in new machines. The grid has to catch up!

While Trump’s great reset rolls on in 2026, keep an eye on modular nuclear reactors and increased demand for uranium, natural gas and related resources.

These PM producers are literally printing the most ‘hard money’ that they ever have at these metals prices and record margins here at the midway point in Q4.

If there ever was a time for this sector to get overheated and frothy, this would be it… only that isn’t what we’ve seen playing out.

PM producers are still insanely profitable at even at current metals prices and should be far more valuable based on their margins, revenue generating potential, and their resources still in the ground.