Today one of the greats said “fighting this lunacy is a losing proposition.”

On Fire
July 22 (King World News) – Bill Fleckenstein:  The Nasdaq led the indices to the upside early on, as it gained about 0.75% through midday, with anything chip-related on fire. The proximate cause for the upside explosion was Goldman Sachs upgrading Micron on the hilarious premise that recent small capex spending cuts showed so much discipline, the memory market must be in good shape. Therefore, memory prices were going to start higher, so Micron should be bought…

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Fond (of) Memories
Using the same logic, another Goldman analyst said that capital equipment stocks should be bought as well. All of that is ludicrous, but that doesn’t matter in today’s environment. Thus, chip stocks were a free-for-all. I only had one chip short, that being a tiny Micron position, and I covered it early on but kept my longer-dated MU puts. My plan is to revisit this idea closer to the FOMC meeting or perhaps during earnings season, because for right now, fighting lunacy is a losing proposition, whether it be in chip land or anywhere else.

In the afternoon, the market drifted sideways with only the Nasdaq gaining any real ground. Away from stocks, green paper was a little higher, as was fixed income. Silver led the metals once again, as it gained a percent, with just a fractional gain in gold. The miners were mostly slightly higher.

Hitting the Inflation Bull’s-Eye
For those of you (like me) who save absurd articles for future reference, today’s Financial Times had a howler headlined, “Powell seeks a cure for ‘disease’ of low inflation.” In the article two Fed heads were quoted discussing how important it was that the Fed “defend” its 2% inflation target. I know I have talked about this a lot lately, but the mantra of 2% inflation is a perfect example of the old saw, if a million people say something stupid, it’s still stupid. The corollary to that in this case is that 2% has become an entrenched goal for the Fed when it has never been part of its remit in the past. As I’ve noted many times, it is the height of lunacy to think that creating inflation will generate real growth and higher real wages, but that is where we are.

King World News
Friday, I spoke with Eric King about the trend shift in the metals and the importance of not “fighting the last war.” For those who are interested, the interview is now live.

Prepare For Large Scale Intervention
READ THIS NEXT! Prepare For Large Scale Intervention To Push US Dollar Lower, Plus A Remarkable Look At Gold & Silver And What Will End In Tears CLICK HERE TO READ

More articles to follow…

In the meantime, other important releases…

Greyerz Just Issued A Dire Forecast As We Approach Panic In Global Markets CLICK HERE TO READ

China’s Central Bank Makes Big Bet As Defaults Begin, Global Bond Bubble, Plus The Big Squeeze CLICK HERE TO READ

Bill Fleckenstein Interview – Don’t Get Left Behind In This Gold & Silver Bull Market CLICK HERE TO READ

Gold & Silver War Heats Up: Despite Pullback, This Is Truly Remarkable CLICK HERE TO READ

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