No One is Coming to Save Us...

[] September’s producer price index (PPI) exceeded expectations. Markets remain under the critical 3,600 level heading into Thursday, the worst day of the year. [View in browser]( [View in browser]( [] [Godesburg's Haven Investment Letter]( [] [Godesburg's Haven Investment Letter]( [] No One’s Coming to Save Us… [Garrett Pic] Market momentum is Red. However, a short-term squeeze happened Thursday, pushing energy stocks higher and speculation into financials ahead of earnings season. The SPDR S&P 500 ETF (SPY) bounced off the 350 support level and turned around in an epic amount of short covering. Manic… even. I remain in cash ahead of earnings and will look to trade momentum patiently on Friday. Dear Investor, The trip comes to a close. I’ve been in Delray, Florida, for two weeks following our move out of storm-damaged Lee County. They’ve removed the mold damage - only to discover that the pipes in my home were banned for sale in 1996. They all must be replaced. When it rains, it pours… literally and figuratively. I’ve had a year. A tough one on top of MANY big moves in this market - although I’ve never taken a significant loss on the chin this year and have won more than I’ve gained. It has been a battle… and I’ll discuss how we must navigate it all in a moment. But first… Two Paths… Neither Are Desirable On my last day in Del Ray, I’m looking over a pond in this Airbnb apartment complex. Unfortunately, I’m not sure this place will be in business much longer based on the direction of this economy. I know it. You know it. The Fed certainly knows it. Something is about to break. What will break? Some people think it’s the bond market… the pension system… or maybe a series of overleveraged hedge funds imploding. Or perhaps redemptions from funds force mass liquidation of sizeable positions from ETFs… Names like Apple (AAPL), Tesla (TSLA), or another leg down in Microsoft (MSFT). But what if it’s bigger? What if it’s the Federal Reserve itself… All of its monetary policy theory. All of the structural debt. Think about this for a moment. The Fed has trillions in assets on its balance sheet. The government is sitting on $31 trillion in debt. Consider this number from Adventures in Capitalism, a brilliant four-part series over the last few months. “During 2021, the Federal government paid $392 billion in interest on $21.7 trillion of average debt outstanding—or an average interest rate of 1.8%. Now imagine if Fed Funds actually got to the terminal rate and stayed there for any period of time. What would paying an average rate of 4.6% on year-end 2021 debt do to the interest expense? Well, it rises by $636 billion to $1.028 trillion or the more than the cost of our entire military spending of $801 billion in 2021.” What do we do here? Cut the federal budget? Engage in austerity? We don’t have a government that wants to increase oil supplies, cut red tape to allow more home construction, create conditions for us to produce more fertilizer, or bring more products and services to the market. No. They’re making us miserable… and we’re about to get shellacked with even more inflation. The real interest rate in this economy is NEGATIVE 5.2%. The Fed funds rate is 3%. The CPI is 8.3%. We’ve never brought inflation down without getting the Funds rate above CPI. Negative real rates drive more consumer consumption - as they know their money will be worth less in the future. But as the author above notes: If the Fed funds rate moves higher, the cost of U.S. debt explodes to levels that swallow the Federal budget. Do you think a bunch of people with no economic background will engage in austerity and bite the bullet for all of their reckless spending? Absolutely… not. Nope - we’ll likely raise interest rates while we pivot to some level of balance sheet increases or a new form of debt monetization that will stabilize this insanity only to make it worse five years from now. In the process, the dollar must weaken against global currencies (unless we’re just going to swallow other economies whole), thus driving real assets like gold, silver, food, oil, natural gas, and other commodities higher. That is the most likely outcome in the end - because the cost of austerity is chaos in social spending. In the meantime, the Fed will likely continue raising rates and strengthening the dollar. At the same time, the wealth destruction in the equities market will remain strong. It’s time to start thinking longer-term in the commodities markets. I’ll give you some of my preferred names tomorrow. Finally As I noted, in a tough year for the markets, my health, my family’s health, the recent Hurricane and the house, and much more, I still rely on writing to you and others who take great interest in my commentary on the markets. I’m humbled by your time. I wanted to share something with you. This computer is my tool - it is where I do my analysis. It’s where I write each day. On the front is a sticker of Jeff Daniels - the actor - dressed as Joshua Chamberlain, a union officer in the Civil War. If you’ve ever seen the film Gettysburg - there is a critical scene of Chamberlain’s regiment holding the high ground at Little Round Top. They were outnumbered on a flank - holding territory. If the Confederate troops had cut through them or around them, it was possible that the battle of Gettysburg would have ended much differently. Chamberlain’s men faced several charges by the 15th Alabama Infantry Regiment. Finally, running low on ammunition, Chamberlain decided to mount a “Bayonet charge” on the attacking army - downhill. It stunned the attacking regiment, leading to capture and maneuvering that fueled the final day of battle and Union Victory. I look at this picture… every single day. That is how you have to handle these markets and these challenges - head on, always charging - never retreating… and always aware that better things lie ahead. Enjoy your day, [Garrett signature] Garrett {NAME} Chief Analyst, American Markets [] No One’s Coming to Save Us… [Garrett Pic] Market momentum is Red. However, a short-term squeeze happened Thursday, pushing energy stocks higher and speculation into financials ahead of earnings season. The SPDR S&P 500 ETF (SPY) bounced off the 350 support level and turned around in an epic amount of short covering. Manic… even. I remain in cash ahead of earnings and will look to trade momentum patiently on Friday. Dear Investor, The trip comes to a close. I’ve been in Delray, Florida, for two weeks following our move out of storm-damaged Lee County. They’ve removed the mold damage - only to discover that the pipes in my home were banned for sale in 1996. They all must be replaced. When it rains, it pours… literally and figuratively. I’ve had a year. A tough one on top of MANY big moves in this market - although I’ve never taken a significant loss on the chin this year and have won more than I’ve gained. It has been a battle… and I’ll discuss how we must navigate it all in a moment. But first… Two Paths… Neither Are Desirable On my last day in Del Ray, I’m looking over a pond in this Airbnb apartment complex. Unfortunately, I’m not sure this place will be in business much longer based on the direction of this economy. I know it. You know it. The Fed certainly knows it. Something is about to break. What will break? Some people think it’s the bond market… the pension system… or maybe a series of overleveraged hedge funds imploding. Or perhaps redemptions from funds force mass liquidation of sizeable positions from ETFs… Names like Apple (AAPL), Tesla (TSLA), or another leg down in Microsoft (MSFT). But what if it’s bigger? What if it’s the Federal Reserve itself… All of its monetary policy theory. All of the structural debt. Think about this for a moment. The Fed has trillions in assets on its balance sheet. The government is sitting on $31 trillion in debt. Consider this number from Adventures in Capitalism, a brilliant four-part series over the last few months. “During 2021, the Federal government paid $392 billion in interest on $21.7 trillion of average debt outstanding—or an average interest rate of 1.8%. Now imagine if Fed Funds actually got to the terminal rate and stayed there for any period of time. What would paying an average rate of 4.6% on year-end 2021 debt do to the interest expense? Well, it rises by $636 billion to $1.028 trillion or the more than the cost of our entire military spending of $801 billion in 2021.” What do we do here? Cut the federal budget? Engage in austerity? We don’t have a government that wants to increase oil supplies, cut red tape to allow more home construction, create conditions for us to produce more fertilizer, or bring more products and services to the market. No. They’re making us miserable… and we’re about to get shellacked with even more inflation. The real interest rate in this economy is NEGATIVE 5.2%. The Fed funds rate is 3%. The CPI is 8.3%. We’ve never brought inflation down without getting the Funds rate above CPI. Negative real rates drive more consumer consumption - as they know their money will be worth less in the future. But as the author above notes: If the Fed funds rate moves higher, the cost of U.S. debt explodes to levels that swallow the Federal budget. Do you think a bunch of people with no economic background will engage in austerity and bite the bullet for all of their reckless spending? Absolutely… not. Nope - we’ll likely raise interest rates while we pivot to some level of balance sheet increases or a new form of debt monetization that will stabilize this insanity only to make it worse five years from now. In the process, the dollar must weaken against global currencies (unless we’re just going to swallow other economies whole), thus driving real assets like gold, silver, food, oil, natural gas, and other commodities higher. That is the most likely outcome in the end - because the cost of austerity is chaos in social spending. In the meantime, the Fed will likely continue raising rates and strengthening the dollar. At the same time, the wealth destruction in the equities market will remain strong. It’s time to start thinking longer-term in the commodities markets. I’ll give you some of my preferred names tomorrow. Finally As I noted, in a tough year for the markets, my health, my family’s health, the recent Hurricane and the house, and much more, I still rely on writing to you and others who take great interest in my commentary on the markets. I’m humbled by your time. I wanted to share something with you. This computer is my tool - it is where I do my analysis. It’s where I write each day. On the front is a sticker of Jeff Daniels - the actor - dressed as Joshua Chamberlain, a union officer in the Civil War. If you’ve ever seen the film Gettysburg - there is a critical scene of Chamberlain’s regiment holding the high ground at Little Round Top. They were outnumbered on a flank - holding territory. If the Confederate troops had cut through them or around them, it was possible that the battle of Gettysburg would have ended much differently. Chamberlain’s men faced several charges by the 15th Alabama Infantry Regiment. Finally, running low on ammunition, Chamberlain decided to mount a “Bayonet charge” on the attacking army - downhill. It stunned the attacking regiment, leading to capture and maneuvering that fueled the final day of battle and Union Victory. I look at this picture… every single day. That is how you have to handle these markets and these challenges - head on, always charging - never retreating… and always aware that better things lie ahead. Enjoy your day, [Garrett signature] Garrett {NAME} Chief Analyst, American Markets [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information please visit [our disclaimer page here](. [] Sent to: {EMAIL} [UNSUBSCRIBE]( [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information please visit [our disclaimer page here](. 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