Postcards: The Groundhog Lies Again

Who are you going to believe when it comes to inflation? Your pocketbook? Or a Nobel Laureate who has weaponized economics?

Dear Fellow Trader,

At Republic Risk Letter this morning, we introduced the Negative Momentum Alligator. He fell off his surfboard after the positive wave of momentum crashed over his head following an abysmal U.S. bond auction that showed weak demand for U.S. debt.

With our signals turning negative at the end of the day, we’ve avoided today’s selloff - and moved ourselves back into a “Wait and See” approach.

“You will short the market… and like it!”

But there’s another animal more dangerous than this guy above.

The Economic Groundhog.

“Punxsutawney Paul” Krugman - a person who has shamelessly turned economics into a partisan subject. He keeps saying the same things repeatedly - yet no one thinks of him as a forecaster anymore… You’ll recall Krugman recently called for the Fed to abandon its inflation target and simply declare victory.

It seems that Krugman is getting impatient. He wants to claim victory…

He needs to.

So, yesterday, Krugman - a Nobel Laureate who should know better - tried …