This morning: Forget fears of rising interest rates – the big threat is how the global economy will cope with supply chain bottlenecks and the coming commodities supercycle. These will create all kinds of friction. The West is particularly vulnerable to microchip supply instability – which could take years to resolve.  

Interesting moment for markets yesterday as former fed-head, Janet Yellen, misspoke and revealed the truth we all know is coming: interest rates will rise as the economy overheats. No! Surely Not! …. We all know higher real rates will trigger untold market misery – crashing stock markets, closing down millions of zombie junk companies, house prices to tumble and cause the very stars to fall from heaven… Well.. maybe. Its gonna happen…

Yellen directly contradicted current fed head Jerome Powell’s promise rates aren’t rising till pandemic recovery is complete in a few years. She later back-walked her comments, but it reminded everyone what is coming when rates do eventually rise – stocks, especially Tech, took a bath.

Yellen’s comments are best summed up by one of my key market mantras; “no point worrying today about stuff you are going to have to worry about tomorrow.” Interest rates fall into that category. They are going to normalise and rise. Get used to it.

Instead, this morning, let me try to connect some dots on global supply chains, particularly microchips, and the current on-trend market buzz – the new commodities “supercycle” that is apparently upon us…

The Microchip “D’oh” Moment…….   Click for more