Peter Goodburn: Inflation is Coming Back With a Vengeance
Tom welcomes back Peter Goodburn from Elliot Wave International to the show. Peter explains that a super cycle refers to a long-term pattern in commodity prices, which can last for decades. Goodburn presents a quarterly chart of the Bloomberg Commodity Index, showing a typical Elliott wave, five-wave pattern that progressed from the Great Depression lows in 1933 to the late 2000s. Each wave represents a distinct phase of the cycle, with wave one lasting until the 1960s, wave two extending into the late 1970s and early 1980s, wave three leading to gold's initial all-time high, and wave four ending in the late 1990s. Wave five reached its peak just before the financial crisis in 2008. He cautions against using the term "commodity super cycle" for more recent periods and explains that the current phase is actually a counter-trend phase within a larger long-term pattern. Goodburn predicts significant upside in commodities, particularly in oil and copper, over the next two to three years. He advises investors to have a methodology, such as Elliott Wave, to determine market lows and to approach investing with a cautious mindset. Peter also covers the relationship between commodity prices, inflation, and interest rates. He believes that there will be bouts of inflation in the coming years, leading to a rise in commodity prices. He predicts that interest rates will rise again, contributing to another surge in inflation. However, he cautions that a sudden surge in interest rates could have negative consequences for commodities and trigger a significant drop in stock markets. Lastly, Peter touches on the relationship between the dollar and precious metals. Goodburn expects the dollar to weaken this year and recommends investing in precious metals as a hedge against de-dollarization. He provides some targets for gold and feels that silver and platinum will also outperform. Gold miners may offer strong upside potential, but Peter also recommends physical precious metals as a means to mitigate counterparty risk. Time Stamp References:0:00 - Introduction0:48 - Commodity Cycle Theory15:45 - Equities & Risks20:20 - Inputs & Inflation27:06 - Fed Control Vs. Markets31:44 - A Global Phenomena36:23 - Dollar Short-Term Outlook42:39 - Elections & Confidence45:18 - Precious Metals & Dollar50:30 - Timing & The Metals55:50 - Slowdowns & Base Metals1:01:25 - Wrap Up Talking Points From This Episode * Peter explains the concept of commodity super cycles and predicts significant upside in commodities, particularly in oil and copper, over the next few years. * Goodburn believes that bouts of inflation and a rise in commodity prices will occur, fueled by rising interest rates. * Goodburn expects the dollar to weaken this year, recommending investment in precious metals as a hedge. Guest Links:Twitter: https://twitter.com/ElliottWave_WTIWebsite: https://wavetrack.com Peter Goodburn is the founding partner of WaveTrack International. His trading experience spans back to the late 1970s working then in the commodities business for exchange members and their clients. In those earlier years of his career, he created the first OTC (over-the-counter) copper option product based upon the Comex (New York) contract around the mid-eighties, and in the same period, devised Opval, an option-evaluation software program that is currently used in many of the major market-making institutions of today. His fascination with price activity and how that related to the news flow within the markets captured his imagination early o...