Good morning: |
I'm back from Kentucky. I didn't get to sleep in my own bed though. My daughter caught a virus and took over the Big Bed so she could watch movies. Life… |
With the markets now facing a Fed meeting on Monday and Tuesday - all while geopolitical tensions rise - it's important to take a step back and look at the markets. |
Let's take a look at 10 charts that tell the full story… |
Chart 1: The Debasement Protection Trade |
We've been riding this commodity wave since the liquidity cycle bottomed in late 2022 and early 2023, and it's been a beautiful thing to watch unfold. |
 | Tavi Costa, Bloomberg |
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While everyone was panicking about rate hikes, we were loading up on metals and hard assets. Why? Because when central banks hoard gold like squirrels before winter, they're telling you everything you need to know about their own currencies. |
Commodities up 17% isn't just a number. |
It's the market's report card on fiat debasement. |
And unlike the paper pushers at the Fed, gold can't be printed, diluted, or "transitored" away. It just sits there, doing what it's done for 5,000 years: protecting wealth from politicians and their printing presses. |
Chart 2: Trump Tariffs and the Insider Playbook |
With capital expanding, markets snapping back isn't surprising. |
What IS surprising is how many people miss the real trade here. |
 | Source: ZeroHedge and Bloomberg |
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The real winners in Trump 2.0 trade chaos? Executive insiders who bought at the bottom when the policy shift came. |
I've outlined this pattern before on Market Masters, it's the CRISIS trade that's delivered huge gains at least once a year since 2022. |
Watch the insider filings, not the headlines. |
When CEOs start backing up the truck during "uncertainty," that's your signal. |
The tariff theater is just noise. |
The insider buying? That's the music you want to dance to. |
Chart 3: Leveraged Flows = Peak Financialization |
THIS is the financialization I talk about constantly. |
According to Finviz, there are 5,400 stocks to trade. But now? Over 4,100 ETFs. |
 | Source: Bank of America |
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Think about that. |
We have almost as many ways to trade stocks as we have actual stocks. |
This isn't investing, it's money looking to play short moves without engaging in the real economy at all. |
$21 billion in leveraged flows is what happens when bad incentives meet infinite liquidity. In a world dominated by financialization, everyone's a trader and nobody's an owner. |
When this unwinds, remember: the exit door is a lot smaller than the entrance. |
That's why you have to follow my exit signals. |
Chart 4: Why Traditional Valuation Is Dead |
I don't look at P/E ratios anymore because we live in a different world than pre-1993, 2008, and 2020. If you're comparing companies, use EV/EBIT. |
 | Source: Listed in Chart |
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But understand that continued expansion of credit and capital distorts ALL valuations. |
This reminds me of what surfing taught me about markets. |
You don't fight the wave… you ride it. |
And right now, the liquidity wave is still pushing asset prices higher, regardless of what traditional metrics say. |
22x P/E in a world of infinite money isn't expensive, it's just the new normal. Until it isn't. |
Chart 5: The Reversal Will Be Epic |
At some point, this is going to reverse, and it will be VERY painful. But here's the good news: I'm an expert on avoiding significant drawdowns. |
 | Source: Global Markets Investor |
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Don't move until the negative signal appears in our readings. Watch the S&P 500 on its 20- and 50-day EMAs, the FNGD, and the performance of AIG stock. I'll explain more this week as the Fed meeting moves markets. |
When 70% becomes 50%, it won't be a correction, it'll be a global rebalancing that makes 2008 look like a warmup. But until those signals flash red, the trend is your friend. Even if that friend is wearing a "Everything Bubble" t-shirt. |
Chart 6: The Debasement Paradox |
The dollar dropping 8% in 2025 and erasing a year of gains? |
That's not a correction, that's a vote of no confidence. |
"Foreigners bringing money back home" is a polite way of saying "getting the hell out of Dodge." |
All roads point toward more dollar debasement. Multiple banks said at year-end that the U.S. dollar was 20% overvalued against other major currencies. |
But here's the paradox nobody talks about: if the U.S. has to engage in future QE, that will actually drive the dollar HIGHER. |
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QE has a history of sucking global assets back into America as investors chase higher returns fueled by more capital injected into the system. |
So we're in this bizarre situation where printing more dollars makes dollars more valuable, temporarily. It's like being the cleanest dirty shirt in the laundry. Eventually, someone notices you still stink. |
Chart 7 and 8: The Metal Nobody's Watching |
While everyone's obsessing over gold and Bitcoin, palladium's quietly staging a breakout like it's 2001 and catalytic converters are the new iPhones. |
This is the trade hiding in plain sight. Industrial metals don't lie, they just tell you what's actually happening in the real economy while financial assets play make-believe. |
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When palladium breaks out, it's telling you something about supply chains, auto production, and global trade that the S&P 500 won't admit for another six months. |
I love the way that the PALL chart is lining up on the monthly flow… Pay very close attention to the long-term moves here. |
A move back to the $120 range is my expectation. |
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This will be one of the first things that we discuss on Monday when we are live at 8:45 ET. |
Chart 9: Stagflation's Smirking Comeback |
Rate cut expectations tumbling faster than a drunk freshman at homecoming. The market's finally waking up to what some of us have been screaming: you can't cut your way out of supply-side inflation. |
This chart is basically the Fed's credibility going up in smoke. They promised cuts, the market believed them, and now reality's crashing the party with a stagflation costume nobody wants to see. |
2026 expectations still hanging on to hope like it's a life raft. Good luck with that. |
Chart 10: The Middle Finger to Fiat |
Gold is now 20% of global reserves, overtaking the Euro. |
This isn't just a portfolio adjustment, it's central banks admitting the quiet part out loud. |
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When the people who PRINT the money start hoarding rocks instead, what does that tell you? |
It tells you they know something about their own product that they're not sharing with the class. |
The Euro getting demoted to third place is just the cherry on top. |
Even central bankers know to buy the stuff you can't print. |
I'll be back on Monday… so be sure to check out the show… |
8:45 am ET… right here. |
Stay positive, |
Garrett Baldwin |
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