Craig Hemke – Did We Just See The First Signal Of A Powell Pivot?

Craig Hemke, Founder of TF Metals Report, joins us to discuss the bounce in most markets the last 2 days, after the FOMC press conference and GDP numbers were released.  We start off by reviewing what the forward-looking market participants viewed as the first sign of a “Powel Pivot” when Jerome Powell indicated that the Fed was shifting from fighting inflation at all costs, to being data dependent and considering their rates close to normalized.  That is a big departure from the peak hawkishness we saw after the June meeting, so the markets responded in kind.   Craig outlines that is very similar to the same pattern we saw play out in late 2018 where most of Wall Street was prepared for a much more hawkish Fed for a longer period of time, and then that plan fizzled and the central bank went back to rate cuts to appease the markets.


Next we review the environment of stagflation that we’ve been in with stagnant growth, high inflation, high energy prices, and a weakening health of many labor metrics, despite the picture some took away from the recent strong jobs number.  With a 2nd quarter of negative GDP growth, we ask Craig if this means we are in a recession, and if it even matters.   What is key moving forward is how the Fed will react to their choice regarding fighting inflation versus buoying the economic weakness.



Click here to visit Craig’s site – TF Metals Report

    Jul 28, 2022 28:24 PM

    Nice to see so much green on the screen today, after we saw yet another negative quarter of GDP growth, which dovetails nicely on Jerome Powell’s presser yesterday where he seemed to indicate they were more normalized now and taking their foot off the accelerator (which is BS because 2.25% Fed funds rate is miles away from the 9.1% CPI pricing inflation reading from last month). It is also a strong departure from the we must fight inflation at all costs messaging from just the June meeting, and their plan to at least get the Fed funds rate up to 3.5%. Now they will be “data dependent” and we’ve seen that vague phasing before from the central banksters when they wanted to wiggle room as they are flying by the seat of their pants.

    Anyway, the forward-looking markets liked it, and for the PMs it simply accelerated the move higher in the stocks we’ve been seeing the last 2.5 weeks. Hopefully people didn’t “Sell, Sell, Sell” at the bottom a few weeks back to cower in cash, and instead were doing the opposite and putting cash to work buying mining stocks when they were “low.” 😉

      Jul 28, 2022 28:38 PM

      The economy is in terrible shape, I would caution investors who think this is the right time to buy, to be very vigilante. You don’t want to put yourself into the category of being a wise investor because things look like they will turn around. I have never seen governments make so many mistakes at their decision making that will have huge implications for these markets going forward. All of these problems everywhere in The World are not going away because there is no one anywhere in the financial system that is guiding the economy. We could very well see an equatorial storm in September. I would caution anyone against thinking that you can hold a huge basket of securities and it will be alright as long as your positions are sound and you just need to buy right hold on and weather the coming storm.

      This is the end of an Economic Era, where America is in charge. Industrial production is declining particularly in the West. Debt levels are huge in almost every country including China. Consumers are tapped out they will not be able to make payments on a lot of goods they have ordered. Commodity prices look like they have been artificially priced and nowhere do we see stable prices which includes shopping for food products. Inflation is prevalent everywhere. Huge shipments of gold are going to the orient and Russia because they have the only real economy. There is unrest in foreign countries especially in Europe in response to the false economy. The self generating effect of hard times is upon us as trillions of dollars of currency have disappeared in phony investments in cryptocurrencies. And finally the psychological effect from the exuberance of the money printing by Central Banks The World over is now finished, the party is over and the hangover is in full force. DT

        Jul 28, 2022 28:19 PM

        dt; great post. The Fed just copied the ECB since neither of them are essentially giving guidance going forward. The whole globe is financially struggling except for probably Russia at this time. People better be careful here as regards getting sucked back into the conventional markets. August might be an okay month for PMs and the conventional markets but that could then set us up for an ugly September. Italy is heading for a very important election in September and this time around the establishment (EU) will not prevent the populist right from taking over the government—that’ll set up all kinds of trouble for the EU and the euro. Things are about to get even more interesting in Europe as Germany moves into recession.

          Jul 28, 2022 28:35 PM

          The June inflation rate in Russia was 15.9%.

          It was 9.2% even before the war started.

    Jul 28, 2022 28:02 PM

    Since 2007, we’ve been in “ the silent depression.”

      Jul 28, 2022 28:31 PM

      Marty, very few would agree but you are correct. A small but noteworthy piece of evidence is the fact that bid-ask spreads in gold and silver (real money) have been shrinking ever since. I remember how surprised I was to see silver’s spread go from 15-20 cents to 6-8 cents in the middle of the worst part of the 2008 liquidity crisis while most other bid-ask spreads were blowing out. Platinum for example went from a 10 dollar spread to 100 while its price fell by more than 70% (in other words, it blew out 30x not 10x relative to its price). When that crisis appeared to pass, spreads did not mean-revert as one might expect. No, they kept right on shrinking and silver’s B-A spread today is routinely as low as 4 tenths of one cent (!), about 1 twentieth the previously narrow 6-8 cents. The market is quietly remonetizing real money.
      It’s amazing what the Fed can accomplish by stealing prosperity from savers and future generations. Heck, the counterfeiting has been so aggressive that even current wages are being plundered.

        Jul 28, 2022 28:22 PM

        They are sucking every last penny they can from every corner of the economy before they walk away and try to impose the bill on the people.

      Jul 30, 2022 30:01 AM

      I’ve been very positive on Karora for a while now, and it is one of the heaviest weighted positions in my portfolio.

    Jul 30, 2022 30:02 AM

    I always enjoy listening to Craig!
    He’s awesome.

    Hey Ex, you should invite Jim Willie from The Golden Jackass to your show, but I suspect he’s to “unconventional” for your listeners.
    He’s got some (very) outlandish claims and theories, but he’s is very knowledgeable and very entertaining to say the least.
    Craig use to have him on on a monthly basis.