Warning: This is not the popular group think narrative out there.

The global long term trends are weaker $USD, stronger emerging markets, stronger metals and mining, stronger precious metals, stronger commodities in general….which will drive equities globally higher, over the next 9 years, into 2026, when this fifth K wave peaks. Another boom….followed by another bust.

Do not buy the deflationary contraction popular narrative. Big moves up expected in the commodity and metals and mining sectors over coming months and years, as a $USD deep dive gets more traction, drives inflation and takes the stress off the global credit markets, where the majority of debt is denominated in $USD.

Expect precious metals sector to play catch up, as it gets dragged, kicking and screaming, higher; and the PM bears get it in the neck. Silver overdue for a major reversal and move higher, in the wake of the industrial metals boom on the horizon. This will drive the junior explorers and developers. Most are positioned on the wrong side of the trade or sitting on the fence. This will provide the fuel for the next leg up over coming months and years.

Refer current positions in the global macro portfolio: https://spockg.com/ Note the overweight now in emerging markets long, metals and mining long.

Refer to chart below. The commodity fifth K wave, which lasts on average 25 years for each up-leg, started in 2001. It is now starting to get traction again after a half 30 year long commodity cycle correction. $AUDUSD is THE metals and mining proxy, and it has broken the 5 year downtrend, on a weekly basis. This chart is a road-map for the next 10 years and here are the key takeaway points:

1. Metals, mining, commodities, emerging markets should drive equity markets into the end of this decade, before a mid cycle correction 2019 to 2020. Risk is ON until then.

2. After the correction, risk is ON again, from 2020 to 2026, which could see boom conditions as a low $USD, real low interest rate environment fuels a bigger credit boom which drives major infrastructure spend around the globe. Such projects include one belt one road, the new silk road across central Asia, from China into Europe. Plus the Trump infrastructure program planned for the USA. Both of these alone will require huge amounts of metals and other commodities, in an environment of supply destruction. That is, commodities boom.

3. Another correction in 2023, before a major move higher into 2026. Maybe a parabolic move, as the herd finally gets it. They will buy the highs in 2026, as they always do. The fifth K wave should peak around 2026, when an end of cycle bust is expected, over several years.

Any largish draw-downs in markets between now and 2026 are a buying opportunity. Forget about a crash before 2026, apart from a mid-cycle draw-down at the end of this decade, which will be a great buying opportunity, to load up for boom conditions into 2026. And also in 2023 for another correction in the trend.

Bottom line: Bull markets ahead over the next 9 years, in particular gold and silver stocks, as inflation accelerates, real interest rates remain low, and as the $USD continues lower…and the CBs consistently getting it wrong, behind the curve, and hence fueling the boom, as they always do; interrupted by regular mid-cycle corrections, of course.

Its all in the chart below. Just join the dots. A possible trajectory for the $AUDUSD over the next 9 years is shown on the chart. This is my road-map for the coming BOOM.

Spock 🙂