“Equity markets are not priced for the vicious stagflationary environment that we envision. Overall, stocks are behaving as if we were still in a secular disinflationary environment which allows the Fed to loosen monetary conditions without causing inflationary pressure. As prices for goods and services continue to increase at historically elevated levels, so will the cost of capital. That is not a positive scenario for growth stocks, particularly relative to value companies. The Russell Growth vs. Value index spread still is near the peak levels reached in the Tech Bubble of 2000. This further supports our view that the decline in the overall equity markets is just the beginning
USAGOLD note: A less than optimistic stock market assessment from Crescat Capital posted the day before Friday’s big sell-off…… The bear is on the loose.