There is a huge opportunity in this policy shift

Dear Reader,

This is the most important story you're not hearing right now.

The Environmental Protection Agency (EPA) has put forth new carbon pollution standards for fossil fuel power plants. This proposal aims to combat climate change and safeguard public health.

Why is this significant? The EPA's objective here is to phase out coal power plants that fail to meet the new emission standards by December 2031, ultimately reducing emissions by 2040.

At the same time, a Supreme Court case is revisiting the "Chevron defense," which previously granted the executive branch the authority to create regulations. This situation arises because, thanks to gridlock and theatrics, Congress has failed to pass laws on economic and policy matters as it should.

If the Supreme Court changes its stance, the power to enact rules will shift back to Congress. This shift could have an impact on the upcoming elections.

I'm not taking sides here, just taking a look at what could happen. If the Supreme Court strikes down the EPA's proposal, we can expect climate change and social issues to dominate the next year's elections, overshadowing concerns about the economy and inflation.

Although this scenario may be frustrating for those dealing with a 5% inflation rate, it's important to remember that we cannot control these events. We can only control personal aspects such as our health and wealth, and strive to maintain a sense of calm.

Besides, if such a situation does occur, there is significant money to be made!

Mr. Powell Save Us With Your Printer

Now, let's talk about how the Federal Reserve factors into the equation. They've recently made a change to their balance sheet. Jerome Powell, the Chairman of the Fed, stated that they don't want to include climate change in their official responsibilities. However, they do plan to become more active in addressing this issue. This shift would give the Fed an opportunity to print more money, expand their balance sheet and debt, and invest in emerging technologies.

Although coal and natural gas play a significant role in our energy supply, both face threats. It may not make sense to eliminate natural gas entirely, but coal can be targeted due to its emissions and market factors. But transitioning away from coal will require substantial investments.

So, let's look at this from two angles. The first angle involves fiscal and monetary policies. I predict that policymakers will leverage the urgency of climate change to bolster the Fed's balance sheet and increase spending. They will promise to create green jobs, focusing on the macroeconomic perspective. They may not be concerned about what gets affected in the process; instead, their focus will be on generating green jobs, even if it involves some questionable practices. This move will expand the money supply, debt, and potentially lead to increased inflation.

Now, let's talk about the real money-making potential: metals. To achieve their goals, we will need to significantly increase production of metals like copper, lithium, and cobalt. We have never witnessed such a rapid increase in output for a single industrial metal over a decade. As a result, the cost of these metals will rise. Currently, copper is priced at around $3.70, but it has been pulling back from around $4.

The smart long-term investment lies in these industrial metals. If we experience an economic recovery, increased money printing, and a demand for these metals to build a new power grid, there won't be enough supply to meet the demand. What do you think will happen to copper? It could potentially reach $6, or even $10.

Now, here's the choice we face: either we can make money by riding trends like those in Washington, or we can complain about it. I choose not to complain. I prefer to play the game.

Looking at this from a long-term perspective, I am closely monitoring interest rate cuts, economic recovery, expansion of the money supply, and incentives from fiscal policies. My focus is on copper, specifically on companies like FCX and Southern Copper. Over time, we'll build positions in these companies in our Flashpoint Trader long-term portfolio, looking at an 18 to 36-month timeframe. Even if I am wrong about this market, I will still own the stuff that matters and that will be crucial when we find solutions for these challenges.

If you want to capitalize on the biggest trend in commodities over the next few weeks - check out this special presentation.

Today's Momentum Reading


Broad Market: Red
S&P 500: Red

Recap: The World's Biggest Indicator (Momentum) is Red...

Stocks initially opened higher on Friday but relinquished those gains following the release of consumer sentiment data from the University of Michigan, which indicated an uptick in consumer inflation expectations. Presently, there is a notable trend of capital outflow from prominent tech companies such as Apple and Tesla. However, given the relatively low trading volume, it might be worth anticipating a potential afternoon reversion around the 409.50 level for the S&P 500 ETF (SPY). (join me in flashpoint trader to trade daily reversions)

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Have a nice weekend,


The post There is a huge opportunity in this policy shift appeared first on Midday Momentum.

About the Author

Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.

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