Editor's Note: Below is a brief summary of our thesis from Hedgeye CEO Keith McCullough. We will have an additional update in this weekend's edition of Investing Ideas.
Once the government decides to actually allow the developing TREND of +1.5-2.0% inflation into its reported numbers, we'll see a commensurate drop in Real GDP. Don't forget that in Q1 of 2016, US GDP would have been negative (sequentially) if the US used a Deflator of 1.6% instead of understating inflation (in the Deflator) at 0.7%.
This idea is a lower-volatility way to play "reflation." Long Gold would be a higher volatility one. I like both, from a price (low-ends of their respective risk ranges).
You're getting TIP (Treasury Inflation Protection) on sale today because US Treasury Bond Yields are up on "no Brexit" speculation. US Treasury Yields "up" is just a TRADE, not a TREND. The intermediate-term TREND there remains down, obviously, as real (trending) economic growth continues to slow.
