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Commodity producers are screaming scarcity while long-term inflation expectations remain remarkably calm.
That divergence is the story.
But @TaviCosta 's chart doesn't prove that a breakout is imminent.
Commodity producers have surged while 5y5y breakevens remain subdued.
That divergence can mean markets are complacent about inflationâbut it can also reflect equity-specific factors, supply constraints, geopolitics and commodity scarcity that do not automatically translate into persistent economy-wide inflation.
The important point is the gap:
Real-asset stress is rising faster than long-term inflation expectations. If that gap closes through higher breakevens rather than weaker commodity prices, the macro consequences get much more serious.
If markets are underpricing the inflationary consequences of todayâs energy, fiscal and geopolitical imbalances, breakevens have a lot of catching up to do.
#Inflation #Commodities #Energy #Markets #Breakevens #Macro #Oil #FiscalPolicy #Geopolitics
Inflation expectations are on the verge of a major breakout.
Markets underestimate how strongly todayâs macro imbalances will push policymakers toward more inflation.
This will define the next decade and write a new chapter in monetary history.
tavicosta.substack.com/p/a-nâŚ
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The Woke Era could have been entirely averted if Americans had formed hunting parties like this to eliminate communists
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NEW: Trump's full speech on Communism in America. Worth watching the full five minutes.
"Communism is destroying our country. I would be the best communist in history. I would just promise everything would be free. Free rent, free food, everyone would vote for me. The problem is after two years the country fails. They always do. It's so easy to sell. That first year is great but then you start living in squalor. There'll be no housing, there'll be no law and order, there'll be nothing. Everyone will suffer and die. It's been happening for 1000s of years.
Assassinations are a big deal for them. They can get followers because they make promises that they cant keep. The Democrats aren't fighting back. They're afraid to fight them. They've turned left. The Communists hate people. They hate the Democrat party. This isn't stopping. It's too easy to get elected. You'll soon have nothing left. The Democrats are allowing them to go their own way and they're afraid to say anything bad because they don't want to lose elections.
This is happening before your eyes. If the Democrats fought them the way they fight me or Republicans they'd win, but they don't have the courage, so they're turning socialist themselves. Communists are Godless. They don't believe in God.
This is the biggest threat to our country since its existence 250 years ago. We should be celebrating Christ and freedom and victories and instead we're speaking about communism. These guys will attack all religions but in particularly Christianity. It's part of their deal."
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Russell Crowe on Gladiator 2:
âThey failed, and they failed because they didnât understand what made the first film so successful: it had a moral core. Hereâs the thing, most people want that. On the surface, they might go for entertainment, but if theyâre going to love something and keep it with them forever, like that movie? âŚThe love for that thing is because of its moral core. All guys want to be that man who can stay that strong, and all women want a man who can love them in that way.â
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One of the big reasons for the current lack of patriotism and pride in our nationâs history is that about 40 years ago our most prominent storytellers in Hollywood just basically stopped telling stories about American history altogether, unless it has something to do with WW2, civil rights, or slavery. I mean they just released a movie about the meteorologist who did the weather report for D-Day. Theyâll give WW2 weathermen their own movies before they tell a story from any other era of American history.
The Right has attempted to counteract this a little bit, but âconservativeâ attempts at American history films and TV shows are invariably hokey and kid friendly, the kind of thing you can watch with your grandmother and your 5 year old, and youâll all be equally informed and bored by the experience.
We need R-rated adult-oriented American history stories. Daniel Boone should have his own series. It would be gritty and violent and not for children, but it would also be phenomenally entertaining and put an American legend back on the cultural map, so to speak. The fact that Daniel Boone hasnât been depicted on screen at all since like the 60s is a travesty. Throw a dart at that guyâs Wikipedia page and youâll land on something that could be its own feature length trilogy.
Thatâs just one example. How is there not a great R-rated movie or series about Antietam? Or Kit Carson? Or the Panama Canal? How does Theodore Roosevelt not have like 10 movies about different periods of his life?
You could go much farther back to pre-American history. A movie about Cortesâs conquest of Tenochtitlan would be tremendous and horrifying and fascinating, and it would introduce into the public consciousness one of the worldâs most incredible stories that most Americans know next to nothing about. And on and on.
The possibilities are literally endless. All of these movies, if theyâre executed to even a B+ level, could make hundreds of millions of dollars and transform the culture in a way that a million podcast monologues never could. If the Right actually wants to reclaim the culture, this is the place to start.
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Find a life partner who trusts your words as much as oil markets trust Trumpâs words on #Iran
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âHe just took a huge bite of food. Good. Now have the waitress immediately ask him if he needs anythingâ
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Negativity sells, and while I have my own issues with the Trump administration, every day they deliver. Most people compare whatever Trump is doing today, to some utopian fantasy, rather than the hellhole Kamala Harris was turning the U.S. into.
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Father Chad Ripperger: "How is taxing a man more than what God wants not defrauding a worker of his wage?"
"Where did the goverment get the idea that it is entitled to more than 10%? God doesn't even want more than 10%. Where do they think they are better than God?
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đ¨ WOW. Border Czar Tom Homan just gave the PERFECT response to Pope Leo
"I'm a lifelong Catholic. I wish they'd STAY OUT of immigration, they don't know what they're talking about."
"Because if they wore my shoes for 40 years, and talked to a 9-year-old girl that got r*ped multiple times, or stood in the back of a tractor trailer with 19 dead aliens at my feet, including a 5-year-old boy that baked to death, if they understood the atrocities that happened on the open border, I think their opinion would change!"
"And I welcome discussion with any of them, because they don't understand illegal immigration is not a victimless crime."
"Where President Trump had the most secure border in the lifetime of this nation, right now, lives are being saved. He's saving thousands of lives a year because he has a secure border!"
"Human traffickers are out of business, right? The cartels are going bankrupt because of that secure border. I wish they'd understand that."
"Because if they did, I think they'd have a different opinion."
Mic drop.
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You hit the nail on the head. Iraq doesnât even have a national shipping line like Bahri; they sell most of their oil on an FOB basis.
Itâs non-Iraqi tankers that actually move the oil, so literally nothing is going to change. Even at this very moment, drones are being launched at Iraqi oil fields.
No captain or shipowner whoâs terrified of a physical attack is suddenly going to jump at the chance to carry Iraqi barrels.
You have to read between the lines hereâitâs pure political propaganda. Iran has been constantly pushing the GCC countries to ditch the US and Israel.
Their message is: "See? If you abandon the US like we said, your oil can flow." Itâs a performance for the GCC public and the international community.
Iran knows full well the UAE, Qatar, Saudi, and Bahrain canât just flip like that. But for them itâs all about the narrative and the optics.
Plus considering Iraq has the largest Shia population in the GCC and many militias under the PMF are tightly aligned with Iran, Tehran needs to send a conciliatory message to them as well.
I donât think we should read too much into it, but the market might think otherwiseâitâs a place full of wishful thinking just bc a few ships passed through a strait that used to move ~20mb/d.
Of course they never mention the vessel types, whether itâs bulk or liquid, or the absolute volume. Thatâs just how they play the game.
#oott #iran
ImportantđŽđś: Two key points on #Iraqâs oil exports in light of the Hormuz âexemptionâ offered by #Iran today:
⢠Iraq sells its crude on a FOB** basis, meaning cargoes are delivered at Basra ports, with Asian buyers covering shipping and insurance costs.
⢠Iraq does not have a national crude tanker fleet like other Mideast gulf countries. All exports rely on foreign vessels, while its limited domestic fleet is used mainly to transport fuel oil.
Hence why one would question the usefulness of the exemption, and whether shipping companies are willing to risk entering the strait to collect cargoes.
** FOB means Iraq sells the oil at the port. Everything after that becomes the buyerâs problem. #oott
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Political economy of the energy crisis
In a food or fuel crisis, it is often sauve qui peut â every man (or country) for himself.
Closure of the Strait of Hormuz is creating a worldwide shortage of oil and gas, triggering a scramble to protect fuel supplies by households, businesses and governments, especially in Asia.
But the metastasising web of price controls, subsidies, export restrictions and hoarding, while understandable, threaten to make the shortages worse especially for the worldâs poorest people.
Most government interventions attempt to mitigate the impact of energy shortages on low income households and essential businesses by shifting some of the burden onto other groups.
Export bans, price controls, rationing, subsidies, taxation, borrowing and debt all attempt to shift the distribution of costs and benefits from the one that would prevail under pure market forces.
But while the distribution may change the total amount of demand restraint or destruction to meet reduced supply remains the same.
In practice, government interventions are most likely to shift the burden from higher-income countries that can afford to subsidise fuel use to poorer countries that cannot.
Governments in North America, Europe, Japan and even China may be able to shield their citizens from the full impact of rising prices â but at the expense of more demand destruction in poor countries in South and Southeast Asia ...
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Wow, about the Citrini's article:
"the authorship attribution on a report attributed to market-moving was changed after publication, and the co-author is the managing partner of a $262 million SEC-registered hedge fund who confirmed short positions in the companies the report named."