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Send your questions to: [email protected]

Cognitive Dissonance—Please Don’t Confuse Me with the Truth

December 14, 2021

“I can tell you what will worry the markets, and that’s capital losses. If you’ve watched the market over the last two weeks, one of the most fascinating aspects of behavior is how radical the swings are. We’ve got crude oil up 8% this last week. We’ve got it down 10% the week before. I mean, we’re seeing massive swings that suggest that we are at the end of a cycle, and you’ve got major players trying to decide how they’re going to position for this.” — David McAlvany

Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany. 

Dave, just a quick reminder for our listeners. We are taking questions right now for the end of the year question and answer program. We’ll probably be doing that going into the first of the year. Send those questions to [email protected].

David: Make sure and take a quick minute and jot down a question or two for the end of the year Q&A; session. And if you can get those to us this week, we will begin thinking, researching, writing, talking amongst ourselves, and then include them on a program for your benefit as we get to the end of the year. Just send those to [email protected].

Kevin: We’re preparing for the holidays. There’s not only Christmas parties, but we have birthdays in December, not to mention your own. And it’s interesting when you go out and shop for balloons, I was so surprised at how much the price of balloons went up. So what I did was I went ahead and called Powell, Jerome Powell, and I was like, “The price of balloons, are you measuring that?” And of course I called the White House and I got somebody, they said they were Joe. And I said, “Did you see how much balloons are going up?” And I got the same answer— From Yellen I got the same answer. Over and over and over. They basically said, “We’re not surprised. There’s always inflation in that business.” Balloons. Inflation. Okay. All right. I’m sorry.

David: That’s like a dad— You are getting ready for the holidays and family coming home. And that’s a classic dad joke right there.

Kevin: Well, it is, it is. And actually we have our receptionist here, puts a joke up on the board every day. And today that was the joke. And it’s like, you know what? This is going to make the Commentary. All joking aside though, I mean, we are preparing for the holidays and I was telling you, we went and bought meat. 20% from last year to this year. It’s better than 20% increase in meat. We talked about farmers, the chemicals that they’re putting on their crops and the things that they use to actually function, over a hundred percent increase in prices.

David: The Department of Justice is being called in to make sure that those fertilizer companies are being fair. And it’s like, well, how does this work? Prices go up and they smell a rat here. The department smells a rat.

Kevin: Oh, I’ve got to find somebody to blame. Yeah. Yeah. Well maybe the clowns are the problem with the balloon inflation then. Maybe they’re just buying too many. All I know is you’ve got to find someone to blame when you’ve created a problem, whether it’s the Federal Reserve or— 

We’re being told now, and I want to talk about this today, Dave. Is this gigantic package that they’re trying to pass, is it going to be anti-inflationary? Is it going to deflate the balloon or is it going to continue to create inflation? 

But before we talk about that, because we know what creates inflation in the long run, it’s yeah, it’s printing of money, but actually it starts with debt. Debt, what you do is you start borrowing money and you have to figure ...