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‘ Inflation – Pop ’ Lift-Off! – T-Minus 3 Months & Counting…

by WaveTrack International| January 7, 2020 | No Comments

‘ Inflation – Pop ’ Lift-Off! – T-Minus 3 Months & Counting…

Part I of our Annual 2020 Elliott Wave forecasts has been published, outlining Stock Index trends for the coming year and beyond.

This year’s major theme is a resumption of the ‘Inflation-Pop’ cycle.

Following a 2-year pause in inflationary pressures that resumed in early-2016, i.e. lows for developed stock indices, emerging markets, and commodities, trends are about to change direction once again. This time, US10yr Inflation-TIPS are ending their two-year corrections. And are now set to surge higher from around the end of Q1 2020 onwards. Various commodities that have been engaged in two-year corrective downswings are also approaching major lows, timed into the late-March/April period. Take a look a Copper prices and you’ll see what I mean!

This year’s expectation of U.S. GDP remaining around current levels of 2.0% or 2.25% per cent is an underwhelming forecast but the consensus majority. From an Elliott Wave perspective, the US$ dollar is forecast significantly lower, timed to its declining 7.8-year cycle. And this, in turn, is set to ignite various asset prices significantly higher.

Gail Fosler’s Forecast

But this outlook is not just a perspective drawn from our Elliott Wave analysis. It’s corroborated by one of the U.S.’s most prominent economists, Gail Fosler. The Wall Street Journal twice named Fosler America’s most accurate economic forecaster.

In Gail’s latest research note, she highlights several distinct aspects evolving in the Global and U.S. economy – two of which point towards rising inflationary pressures and a weakening US$ dollar – see fig’s #1 & #2.

GFG - The Gail Fosler Group - Inflation Pressures

GFG – The Gail Fosler Group – Inflation Pressures are beginning to emerge

With inflationary pressures beginning to emerge, she highlights (fig #1):

  • With a tight labor market, wages are up a full percentage point since late 2017, twice the rate of core CPI
  • Without a recession, price pressures would rise even further
  • Inflation will keep a cap on real spending power
  • GFG - The Gail Fosler Group - Inflation - Emerging Markets have delayed Dollar Weakness

    GFG – The Gail Fosler Group – Emerging Markets have delayed Dollar Weakness

    And in terms of the US$ dollar cycle, she notes (fig #2):

  • In our view, our advisor Peter Goodburn’s multi decade model of the U.S. dollar cycle is reshaped by rising importance of EM currencies
  • GFG revisions point to a long term dollar peak in late 2019 to early 2020
  • Past long dollar cycles show that peak to trough dollar declines can be 30 percent or more
  • There’s a real danger of dollar declines unfolding over the coming years, helping to ignite inflationary pressures once again. This remains the theme from both WaveTrack’s annual forecasts and Gail Fosler Group’s analysis.

    If you’re an institutional investor and want to learn more, just get in touch – or click on these links for further information:

    Gail Fosler Group www.gailfosler.com


    Gail D. Fosler
    Gail D. Fosler is president, The GailFosler Group LLC, a strategic advisory service for global business leaders and public policymakers. The GailFosler Group provides in-depth analysis of economic, financial and public policy issues and creates new concepts and frameworks for business and government leaders to support successful decision-making. Learn more

    Financial Stability & Dynamics – Nowhere But Down for The Dollar – By Gail D. Fosler, Edward Logan

    WaveTrack’s STOCK INDEX Video Outlook 2020


    About WTI

    WaveTrack International is a financial price forecasting company dedicated to the Elliott Wave principle and work of the R.N. Elliott. Clients include Investment Banks, Pension Funds, Total/Absolute-Return/Hedge Funds, Sovereign Wealth Funds, Corporate and Market-Making/Trading institutions and informed individuals -- & just about anyone who is affected by directional price change.

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