Very informative; Your conclusion Buy, Sell or Hold . .
I see it more of a Commodity push higher across many different commodities including, Lumber, Copper, Silver, oil and Ag products Wheat, Corn and Soy Beans. Fertilizer prices starting to move higher too.
Many times commodities start to run higher from a cycle low w/ an improving economy, then peaks when the economy stabilizes w/ little growth.
The other reason is that higher commodities reflect emerging inflation and then exponentially accelerate if we enter hyperinflation. In the past this was due to a significant increase in the money supply (by the Fed) but those tools were used to kick start the economy.
Now it is much different because of the Covid event. Two huge things have contributed to an exponential increase in the money supply (1) an increase in the Fed's balance sheet by over $8 Trillion w/ the QE 1.0, 2.0 and maybe 3.0 (could be announced by Powell Thursday) and (2) over $3.5 Trillion in Stimulus over two different programs in Q4 2020 and now Q1 2021.
These actions have combined to increase the money supply the most ever I can remember by a multiple factor when viewed as a percentage of the GDP. This creates inflation and there is/continues a move to Buy/Own fixed assets.
Low interest rates have caused Home sales to increase the most ever at the highest prices. Most all other fixed assets continue to move higher; Ag land, metals, equities w/ real tangible assets.
I just do not seeing this end well because $US will fall (perhaps as much as 50%) so why would you want to own $US and have your money in cash?
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The only EXIT Strategy I see is a move back to asset backed $US w/ gold/silver and/or real tangible US assets. You would fold the Fed into the US Treasury, create a new US digital currency backed by real tangible assets (some speculate this may be the Quantum Financial System (QFS). FWIW, The National Quantum Initiative Act was signed into law on December 21, 2018. So, this may/could be what has been called the Global 'Reset'.
This type of spending is not sustainable w/o a new Financial System (ie Petro Dollar is gone).
That's my long answer/thought why Lumber is at record prices.
Good Investing |
