This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher speaking with Jack Bouroudjian, chief economist and co-founder at UCX, and chairman of the Global Smart Commodity Group.
The Fed is attempting to force-feed at least a modest level of inflation into the economy, says Bouroudjian, and so far it’s clearly been beneficial for stocks, commodities, and other assets like housing prices and cryptocurrencies. Worrying though is what if the Fed;s project doesn’t work as planned - either the next great inflation will be upon us, or we’ll become like Japan, where deflationary conditions have persisted for decades (the Nikkei only on Monday reclaimed 30K for the first time since 1990).
One gets the sense that Bouroudjian is leaning towards the Japan scenario. Be wary he says: The idea that monetary and fiscal stimulus combined with widespread vaccinations will lead to big economic growth and sooner-than-forecast Fed tightening has become a crowded trade. For now, he’s keeping his eye on the dollar (USDOLLAR) - should the greenback’s decline accelerate, it would mean the inflation scenario has taken hold, but dollar strength (and it has risen modestly so far in 2021) might mean the Fed will find itself in a deflationary pickle.
Of the current stock market action, Bouroudjian is getting a vibe similar to the late-1990s, when what started as a wholesome bull market moved into bubble territory. That doesn’t mean he’s short stocks, but he is hedging his longs via the use of inverse ETFs.
There’s plenty more including Brououdjian’s take on the Reddit craze (Preview: “Not everyone can be a zillionaire”), and why’s he long hemp for industrial uses and the cannabis names for medicinal uses.
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