Summary: Dollar bounce gives opportunity to gold buyers<br> BIS expresses concern about record equity valuations<br> Election focus just changed radically to RBG replacement<br> <br> <br> The McAlvany Weekly Commentary<br> with David McAlvany and Kevin Orrick<br> Bullard: “Inflation could run hotter than expected…” Ya Think?<br> September 23, 2020<br> “The markets are going to be on edge with November fast approaching. But there are real, tangible implications, if you’re talking about tax policy, which would shift with that president, impacting corporate profits and thus impacting prices. So you know, regardless of what the Fed does to suspend the sun, moon and stars, they’re going to have a lot more heavy lifting to do, given a certain outcome.”<br> – David McAlvany<br> Kevin: Well, a lot of things can change in a week, Dave, but I want to start with you talking a little bit about your 1st 100-mile ride. You’ve done a lot of endurance types of sports, but you’re training for this full iron man, and you told me about the 100-mile ride and what you were doing the last 20-25 miles? I think you were just white-lining.<br> David: Yes, it’s sobering when you think, “I’ve got to get off the bike at 112 miles and then run a marathon.” I did run two or three miles afterwards, and the first couple were downhill and felt great. And then it just flattened out and I thought I was going to die. So there was a point at which I was just staring at the white line, and just listening to the sound of the wheel as I was going down the road.<br> Kevin: We’ve talked about long rides. You have to sometimes just focus on making circles. You just make circles, because otherwise you’re just going to want to quit. With the run, you and I have talked about doing a little bit of an inventory of your body, and with the swim, what’s your form like? If you can turn your brain to focus on the simple things, especially when things get really, really painful. I think that’s really the key, isn’t it?<br> David: Yes, I think one of the ways that you manage volatility, whether it’s your own emotional volatility in something like this race I’m training for, or even in a portfolio as an individual investor, if you’re looking at technique and rules and guidelines, as opposed to focusing and fixating on a goal, you can create your own volatility by fixating on the goal. One day it seems to be moving away from you, and then the next day it’s moving back toward you, and you can drive yourself crazy that way.<br> Kevin: Look at the dollar. The dollar has been rallying, and gold and the stock market, some of these other assets that have been rising are going down. But really, if we look beyond that, if we’re looking at the longer term, we have to say, has anything changed? We have inflation expectations. Look at what Bullard had to say about inflation. Even the Fed is preparing us for higher inflation.<br> David: I thought his comments were edifying. There’s a good chance of an economic boom following the Covid-19 pandemic. That was one of his observations, which, of course, off of a very low base of economic activity that’s not difficult to predict. But his inflation comment that inflation would run hotter than expected is directly to my point in recent weeks. You adjust that inflation target. That’s a new policy regime. You put it to higher levels to allow for what is, in essence, a wider credibility band.<br> Kevin: Sometimes in politics we look for the October surprise. Everybody is holding their breath for the October surprise. But beyond that are we looking for an inflation surprise?<br> David: I think there is an inflation surprise coming, and I think we had the quote from the Goldman Sachs commodity man last week, Jeffrey Currie, basically saying the same thing. You’ve got the political temptation to alleviate the debt burdens which are being created today. So right now it’s about balance sheet expansion,
