I remember the first time I took a SUP lesson. The SUP is a standup paddleboard, which people love doing when the seas are calm. You get the ocean vibe, plus work on your stamina, posture, balance, and core while checking out the views.

Driving towards the shore, I saw that there were no waves. Looking in my app, I confirmed that the sea was quiet and nice, but when I was strapped to the leash and was told to head out and pass those first few waves, it was a real feat.

The ocean was flat as a sushi board, but near the beach, waves were pounding us.

I felt like I made a huge mistake, and worst of all, I brought a friend along and he was miserable for those first few minutes.

It kind of reminded me of the movie “Cast Away,” from the year 2000 with Tom Hanks, where he is trying to build a raft that would allow him to escape the island, and his biggest challenge is those first few waves that are formed as a result of the ascending sand line on the bottom of the sea and the rocks that protect the coral reef.

If you can surmount those, it’s easy street from thereon.

In other words, the joy begins after those first few waves are behind you, but some can’t stand the journey.

What the SUP instructor kept telling me is that these waves don’t represent the true state of the waters that day, so I knew that what I was going through in that first minute had nothing to do with how the other 95% of the day would look and feel like.

It was a transitory phase.

If you annualize the Consumer Price Index through the first five months of 2021, you get a CPI increase of over 6%.

In the movie “Cast Away,” Tom Hanks and Wilson, his volleyball, which becomes his best friend, are attempting to reach the open ocean but fail at building the raft that can withstand those first few waves. It’s a good thing they didn’t give up because they were in calm seas after the waves.

We believe the same is true with SUP surfers and the U.S. economy. Don’t base your entire thesis on today’s data, but don’t think the last wave is behind you yet since “transitory” is an open-ended term and it’s extremely vague.

We also don’t have much clarity yet on what the FED means by full employment when it says that it won’t raise rates before the economy fully comes back with an inclusive jobs market.

My instinct as to where interest rates are headed signals to me that interest rates, under this particular dollar-backed system, will never go up meaningfully.

The world can only operate with low rates. It’s game over for that, and unless there’s a storm brewing at the heart of the ocean, we’ll probably see normal inflation again after these waves pass… You know, the kind that has already sent gold from $250/ounce to $2,000/ounce in 20 years.

I like the sound of that!