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Editor's Note: Below is a chart (and excerpt) from today's Early Look written by Hedgeye CEO Keith McCullough.

CHART OF THE DAY: You're Not Long Treasuries Yet? - zg

If you’re not long Treasuries yet, here’s what you might be thinking:

1.    “Inflation is breaking out to the upside”

2.    Treasury issuance is at “all-time highs”

3.    Something about Trump and “tariffs” 

Whereas what we’ve been thinking is:

1.    We’ve already seen #PeakCycle year-over-year US Growth and Inflation in Q2/Q3

2.    The all-time high issuance in Treasuries was actually in 2010 (and yields got smoked into 2011-2012)

3.    #StrongDollar is trumping all alleged “tariff” inflation (US imports get reported in US Dollars)

We were doing the Institutional Investor rounds in NYC yesterday and slide 44 in our Q4 Macro Themes deck (Chart of The Day) explains the last point I just made on tariffs: 

A) The quarterly average of the Trade Weighted USD was -6.7% year-over-year at the peak of the Global Growth Cycle (Q118)
B) The quarterly average of the Trade Weighted USD could easily be +8.2% year-over-year in Q1 of 2019 during Global Quad4 

I know. All this ROC (rate of change) stuff can drive the mind mad when the math is bouncing around in between political narratives. The goal of the contrarian’s game is to go from politicized ignorance to mathematical awareness. 

CHART OF THE DAY: You're Not Long Treasuries Yet? - ... But What About Tariffs

CHART OF THE DAY: You're Not Long Treasuries Yet? - early look

If you’re not long Treasuries yet, here’s what you might be thinking:

1.    “Inflation is breaking out to the upside”

2.    Treasury issuance is at “all-time highs”

3.    Something about Trump and “tariffs” 

Whereas what we’ve been thinking is:

1.    We’ve already seen #PeakCycle year-over-year US Growth and Inflation in Q2/Q3

2.    The all-time high issuance in Treasuries was actually in 2010 (and yields got smoked into 2011-2012)

3.    #StrongDollar is trumping all alleged “tariff” inflation (US imports get reported in US Dollars)

We were doing the Institutional Investor rounds in NYC yesterday and slide 44 in our Q4 Macro Themes deck (Chart of The Day) explains the last point I just made on tariffs: 

A) The quarterly average of the Trade Weighted USD was -6.7% year-over-year at the peak of the Global Growth Cycle (Q118)
B) The quarterly average of the Trade Weighted USD could easily be +8.2% year-over-year in Q1 of 2019 during Global Quad4 

I know. All this ROC (rate of change) stuff can drive the mind mad when the math is bouncing around in between political narratives. The goal of the contrarian’s game is to go from politicized ignorance to mathematical awareness.