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Sometimes it’s worth taking a step back and looking at things with unbiased eyes.

The bears keep telling us that the stock market is in a massive bubble and that it’s about to crash and burn… but the reality is that the macro setup today indicates risk assets are much more likely to experience a melt UP than a melt-down.

Consider the following…

• The economy is growing at an annualized rate at ~4%.
• The consumer as a whole (mostly the top 10%) is out and spending: the Redbook Index which tracks same-store sales on a year-over-year basis is clocking in at over 7%.
• The Trump administration is running a deficit equal to 5% of GDP… DESPITE taking in much higher revenues via tariffs. Put another way, the Trump administration is all in on a “run it hot” framework as far as the economy is concerned.
• The Fed is cutting rates, has just ended QT and will soon be introducing QE.
• The Fed will soon be run by a new Fed Chair who will be handpicked by President Trump who is famously obsessed with stocks going up.
• By June, the Fed voting board will be largely comprised of Trump-appointed officials.

In the above context, it’s VERY difficult to be bearish risk assets. Doing so means you are effectively betting against the Fed AND the White House. Given that those two entities control money printing and the government’s purse strings that’s QUITE a contrarian bet!

Sure… a deflationary bust could happen down the road… but right now, an inflationary melt up is much more likely. And the markets know it!

Gold and Silver are breaking out the upside.

The Russell 2000 (IWM), which is the riskiest market index, is breaking out of a five-year consolidation period to the upside.

And the USD is about to break a 15-year bull market trendline.

All of these SCREAM “melt up” NOT bear market/ crash.

Those investors who are correctly positioned for this could generate life-changing returns. We’re talking about hundreds of billions if not TRILLIONS of dollars in capital moving out of paper assets (bonds) and into hard assets like gold as the USD drops like a brick.

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