Burry's Back, Inflation and the Fed, Lumber Points the Way

16 jun 2021

Considering that the overwhelming majority of leading analysts are on the payroll of certain investment companies, their position reflects not so much their own opinion as their corporate one. It means that you cannot count on objectivity. As a result, we read about oil at 200, then about bitcoin at 500K, then about the death of the dollar, etc.

In such conditions, an unbiased opinion is worth a lot. That is why we are frankly pleased with Michael Burry's return to Twitter. He returned with a reminder that we are now seeing the king of all bubbles and the bubble of everything. It seems that Burry knows something about the results of today's FOMC meeting. Because the timing can be perfect. The Fed is talking about the beginning of monetary tightening and bubbles are starting to burst. And Burry, like more than 10 years ago, can get the role of the protagonist of the next book by Michael Lewis.

Moreover, yesterday's data on manufacturing inflation in the United States (the maximum growth in the entire history of observations) is no longer a red rag, into a powerful red spotlight in the eyes of the Central Bank.

So selling in the US stock market and buying the dollar seem like promising trading ideas to us. Moreover, Buffett's favorite indicator on a global scale (capitalization of the world stock market to global GDP) has reached 133%. Naturally, this is a record value.

And if it seems to someone that there is nothing to be afraid of and that growth will continue forever, we suggest looking at the timber price chart. For another month, the raw materials seemed invulnerable and renewed new highs every day. But today it is quoted 40% (!) lower, and for some reason no one is in a hurry to buy it.