Good Thursday morning. Our October-phobia "wall of worry" is quickly being constructed, as fear levels rise. Mini-capitulation events have already kicked in, which are now reverberating throughout the commodity space. Oil joined the “deflationary" sell-off yesterday, one that has previously featured sharp moves lower in gold, silver, copper, plus 80-90% of agricultural commodities.

This is not what you would see in an inflationary environment…this what you see in a deflationary environment. Remember, this is “exactly” what the Fed wanted to see take place. Their primary goal was to stab inflation through the heart…to end it, once and for all. Our leading indicators and discounting mechanisms are telling us the job looks to be done.

Next up; bond yields should soon begin to follow inflation lower. If the Fed is smart (always debatable) their biggest concern today should be putting the patient (US/global economy) into a comma. In yesterdays letter I said "we’re closer to the next r...