Greetings everyone and happy new year. Well, it was an eventful turn of the year. The government shutdown did end, and here we are. We're catching up with economic statistics. I'm going to be doing something a little different this time instead of the normal drill, because I'd like to give you a preview of a letter that we're going to be putting out, at least show you some of the charts, and really go through the line of thinking that we have been processing over the last year, actually over the last three years, and then talk a little bit more about the future and how importantly the inflation call is here. So with that, I will start with the rolling recession. We've been talking about the rolling recession. Now why am I bringing that up again today? Well, we have had a GDP report since the last time I did this webinar, and it showed real GDP growth at more than 4% at an annual rate during the third quarter. That does not sound like a recession at all. And in fact, the GDP now statistics out of the Atlanta Fed are suggesting the fourth quarter, when it's reported, could be as strong as 5% at an annual rate. So I have to go back and we need to process what we mean by rolling recession. Underneath all of those GDP growth rates, and they've been for the most part positive for the last three years, have been some very negative developments, and I know most people know about them because most of us either own a home or are looking for a home or are looking for a cheaper rent. So housing is top of mind, and here you can see what has happened over the last few years since interest rates took off, that 22-fold jump in the Fed funds rate from 0.25% to 5.5%. And you can see it has really crushed the housing market. I remember when I started in the business, I was in college, it was the late 70s and interest rates were soaring back then, and I remember the housing market being this low somewhere in the four to five million unit range. Now the interesting thing is the population back then was somewhere in the 215 or 220 million range in the United States. And today we're at 340 million people in the United States. And here we are back at certainly recession levels, almost as bad as the housing crisis itself in 08-09 and as low as housing was in the late 70s. Now I think what's going to happen here, and you'll notice that President Trump has been focused on housing in the last few days. He has said he's going to do a lot about housing affordability in the next year or so. And I think that's in response to the elections in New York, New Jersey, and Virginia, which were all about affordability. And so last night, the president announced that he would get his representatives to buy $200 billion of mortgage bonds, which increasing the demand for mortgage bonds should drive the interest rate down, or at least that's what he thinks. Now, $200 billion is a very low number relative to the amount of mortgage debt out there in the trillions and trillions of dollars. But nonetheless, that's his first attempt and we'll see what happens. It hasn't had much of an impact on long-term interest rates today, but let's see what happens. We do believe that housing is getting set up for a significant rebound. And I do believe interest rates are going to be one of the biggest reasons for that rebound, as well as price cuts, and we'll get into that in a moment. Another rolling recession example here is in the manufacturing sector. This is US manufacturing. Anything below 50 is a contraction in manufacturing. 50 is the demarcation point between expansion and contraction. And as you can see, for nearly three years, we have seen nothing but contraction here in the US when it comes to manufacturing. So this has been part of the rolling recession to be sure, and it's very unusual for manufacturing to contract for this long a period of time. Usually short and sharp both ways, but not so this time around. So we do believe the rubber band is stretching for manufacturing to rebound as well during the next year. Here is a leading indicator. Now you can see this is capital spending as measured by non-defense capital goods orders. The top line there, the purple line, is with technology. The green line is without technology. And you can see that the top line, I found this very interesting. Since 2000, we've been in a basing range, it seems, for the top part of the chart here, and whenever we hit that $70 billion mark, we tended to go back down. Well, we've broken out of that, importantly I think because of AI and the ChatGPT moment. But you can see before that moment, the non-AI part of this chart on the bottom there was really putting a drag on the total, and only recently has turned back up. We think it's important and significant that this purple line has broken out to all-time highs and is probably going to go a lot higher if our view on capital spending related to AI, including power, is correct. So this has been a leading indicator. It's starting to come out. We're just getting to old highs and we do think we're going to see a breakout here which could be quite significant. So the last chart I'll show in terms of illustrating the rolling recession, and I could show a lot more. Anything having to do with small business has had a very tough time over the last three years. The last one I'll show is consumer confidence for three income categories: high income, middle income, and low income. So this is as measured by the University of Michigan. This index or survey started in the 70s, so I've been watching it my entire career. Something has changed recently and that is the way they collect the survey data. It used to be person-to-person or on the phone. Now it is online, and it does seem that there has been a tilting of the survey results towards more Democrats than Republicans. It used to be 50/50. Now I believe it's 70% Democrats and 30% Republicans. So there's a little more bias in this, and I wanted to make sure that everyone understood it. It's not completely apples to apples throughout history here. Nonetheless, you can see how low confidence is. It's as bad now for the lower income categories as, I mean it's worse than 08-09. And you have to go back to 1980 when we were at double-digit inflation and interest rates to see sentiment this poor. So the consumer is not in a good mood. And in fact, the most recent numbers show that the consumer still expects elevated inflation, and in fact it ticked up a bit in the last couple of months, expectations into the 3 to 4% range. Now, this is a very important call on our part. We do not believe that's going to be the case, and that consumer sentiment will turn around as more and more prices that are important to consumers start coming down. And one of those, well before I go on to the prices coming down, let me illustrate a few other reasons that the consumer is unhappy. The unemployment rate, the total unemployment rate looks fairly low if you look at the lowest line there which is the total, it looks low by historical standards and it is, but if you look at the black line at the top, you'll see unemployment in the younger generation. Now I used to refer to this as new college graduates. That was a mistake. And it's really 16 to 24 year olds. That's the black line. And you can see that unemployment rate has been going up for the last three years. It is at 12%, which is double-digit. And so therefore, while the overall unemployment rate looks fairly tame, the brunt of the recent increase has been borne by the younger generation. And as I have said before, the younger generation is AI native. We don't even say digital native anymore, AI native. So I'm saying go for it. You see a business that could solve a problem that you see out there. Work with ChatGPT or Grok to start your business. I remember when I started my business, I was starting from zero. I had forgotten how to do PowerPoint and everything, and I had to start all over. Now, ChatGPT can help you design a business plan, a marketing plan, a sales plan. You just have to have the good idea. So one of the reasons I'm saying that is, and I'll go back to this chart, I'm saying that is because the duration of unemployment is 24 weeks on average. The median duration is about 12 weeks. During that time, by all means, if you're not finding that job, go out and look and make those appointments, but also try and start a business on the side. It's very exciting to start your own business. I did it at the age of 57, and I can say now that I wish I had done it 20, 30 years before then. So I think we have all kinds of tools now to help with new businesses. So we'll get back to inflation in a moment, but I'd like to talk about the policy backdrop as I usually do towards the beginning of this webinar. Here you can see the budget deficit as a percent of GDP, how out of control it was during COVID. 17% of GDP. Crazy. Now we're down close to 5% of GDP. Still not good. I remember in the early 80s, Ronald Reagan was being taken to task for a deficit larger than 5% of GDP. That was unprecedented. And as you can see, he did help turn things around. So much so that we moved into a surplus situation under the Clinton administration. But all the stars were aligned as Reagan and Clinton together developed policies to drive a surplus. I think we're moving back in that direction. We shall see. Treasury Secretary Bessent's objective is to get the deficit down to 3% of GDP by the end of 2018. We think he and this administration will be very successful in doing that, and I'll go into that in a moment. But this is a deficit, and there is another deficit out there, the so-called twin deficit, the trade deficit. Here you can see the trade deficit. This is not as a share of GDP. This is in absolute terms. Now I'm very surprised that it has improved so dramatically. This is one of the reasons real GDP growth is accelerating here into the 4 and 5% range. So our exports are increasing, our imports are decreasing. The rest of the world is really taking the brunt of this adjustment, and it's helping our GDP. Now, if we're right and real GDP growth in the US continues to grow faster than the rest of the world, the impact of the tariffs, and this is where you're seeing the impact, imports collapsing. In fact, they were down in just one month 3.2%. That's nearly a 40% at an annualized rate. So that's pretty dramatic, while exports were up 2.6% in just one month. We think this has been tariff related, and the negotiations with other countries has caused a lot of this improvement. If we're right that the US continues to grow at a faster rate than the rest of the world, even than China, then we're probably going to start importing again once the tariff adjustment has passed through. So this is a huge adjustment. It is a very big boost to GDP, and it is very important, and we should be celebrating it in a sense. But what I think President Trump gets wrong in this notion that we shouldn't run a trade deficit is that if we are growing faster than the rest of the world, that's a good thing. And we should be importing and relying on the comparative advantage of other countries to produce some goods and services less expensively than we can. A trade deficit we do not believe is necessarily bad. And in fact, as we're running a trade deficit, we're running a capital surplus, meaning other countries are investing those dollars back into our country in some way, shape, or form. So the twin deficits, both of them are improving, and that's a very good thing. Now, to have the budget deficit improving means that fiscal stimulus net is going down. And many people say, "Oh, that's going to hurt growth." Well, not the way this administration is accomplishing it. So it's doing much more with spending cuts. And as I've said many times, spending is another word for taxation. We're going to be taxed for that spending in some way, whether through outright taxes now, outright taxes in the future, or inflation, which is a tax. And we think that this administration's cutbacks in spending, given how egregious the deficit had become, is the right way to go. It means lower taxes. And here's one good example. I know I've presented this many times, but effective corporate tax rate is down to 10%, which is the lowest in the developed world and lower than many emerging markets as well. And so we believe that there will be more foreign direct investment in the United States attracted by this effective corporate tax rate, and as I've mentioned before, the depreciation schedules that were put in place with OB3, the one big beautiful bill in July and retroactive to January, mean that depreciation schedules will move from 30 to 40 years for manufacturing facilities to one year, which means the first year a manufacturing facility is put into service, the depreciation will take place fully in year one, not over 40 years. And that means those companies will get huge tax refunds which they can turn around and reinvest in the business or take to the bottom line or increase wages or cut prices, become more competitive with the rest of the world. And so this is very positive, very positive. Here you can see the tax refunds for consumers. As you can see, without tax relief, nominal DPI would be 4%. With tax relief, it'll be 10% at an annual rate in the first quarter. In other words, consumers are going to get huge refunds, especially if their income is in the form of tips or overtime or social security. And in real terms, real disposable personal income will increase 8% at an annualized rate. That's a huge burst of income in the first quarter. And it will be very helpful because as you can see on this slide, the saving rate has been dropping. We think because of financial difficulty. It has been difficult to make ends meet with the affordability problem caused by high prices and high interest rates. And you're seeing it in the saving rate. Now, why did the saving rate go down throughout the 80s? The saving rate went down through the 80s, we think because interest rates were coming down. So the opportunity cost of saving was going down and optimism was picking up throughout the 80s and the 90s into the 2000s. It hasn't been the same this time around. This we believe is because of financial difficulty. And here's another example. Auto loan delinquencies. You can see it is as bad now as in COVID and in the aftermath of 08-09. So the green is 90 days late, and the purple is subprime. So those are the lower income. And so those delinquencies up at 5%, quite high by historical standards. In fact, we never saw delinquencies this high until the recession of 08-09. And so again, another example of affordability problems. Well, here we go on pricing. The dotted line you see is at zero. This is the year-over-year percent change in oil prices. And as you can see, they're down in the 15 to 20% range on a year-over-year basis. And what's also interesting here, so I say we could go down 20 to 25%. What's happened in Venezuela recently could tip us. So in Venezuela, at its peak, Venezuela produced, I think, three and a half to 3.75 million barrels per day. Now they're below a million, and I think they export much of that to China. Well, that dynamic is changing, and I think that more of that oil will come to the United States. So West Texas Intermediate oil prices could depart from Brent oil prices in a significant way, which would get the year-over-year price decline to something more than 25%. This is in effect a tax cut, another tax cut for the consumer, and we think will be passed along into gasoline prices. We know in many parts of the country they're down below $3 a gallon. I think I've even heard of one part of the country down below $2 a gallon. We think that is going to continue. In other words, the price decline in gasoline. And in the midterm election year, that we think will become a very important gauge of affordability. We're surprised that it hasn't gotten into expectations for inflation in the University of Michigan survey, but we think it will the more months it continues to decline. Here you can see real estate prices, existing home price inflation in the green line and new home price inflation in the purple line. You can see new home price inflation has been negative. So prices have been falling for the last three years. I think they're down 7% from their peak. Existing home prices not so. But the inflation rate has dropped from, well during COVID it went to crazy levels, 20 to 25%. But recently it was in the 5% range, has come down to roughly one and a half percent, and we think it may continue to come down, maybe even entering negative territory. One of the reasons for that is this inventory chart. This is the inventory of new one-family homes for sale that haven't been sold. And you can see that this inventory is reaching towards levels hit before the 08-09 crisis. Now the reason I'm featuring this chart again is I heard one of the commentators on the business news channels today saying there are no houses for sale. That's not true. That's not true. This tells you there are a lot of new homes for sale, and builders are carrying them on their balance sheets. Now they're starting to cut prices. KB Home in its third quarter report reported a 7% average home price decline. Lennar, I think, was down 7 to 8% as well, and DR Horton was down 3%. So they are now going beyond what was called buy-downs, meaning they'd subsidize the mortgage rate. Now they're actually cutting prices. And we think that's going to get into not only the new home price, but also the existing home price because this is competition of course. So now the reason I'm focused on oil and housing is you take those two in the CPI, shelter and oil, and you're up to nearly 50% of the CPI, all of shelter including energy, and then oil and gasoline by themselves. So we do think inflation is going to surprise on the low side of expectations, especially because so many people expect inflation to remain in the 3-ish% range. Here's another reason we expect prices to come down. So this is unit labor costs, and there again you can see zero. We are at 1.4% on a year-over-year basis for non-farm unit labor costs. Now the reason this one is so important is there are some Fed economists who remember the 70s and cost-push inflation. That was inflation caused by labor costs. Consumers were going to their employers saying I can't make ends meet, and so wages started pushing up. So wages compensation per man-hour were up about 3%, so roughly in line with inflation. But productivity is up 4.9% on a year-over-year. Oh no, this is not year-over-year. 4.9% quarter-to-quarter. And compensation is 3% quarter-to-quarter. Those are at annualized rates. So quarter-to-quarter unit labor costs are roughly 1.9%. Year-over-year they've dropped to 1.2%. Now this looks nothing like the 60s and 70s when cost-push inflation was the problem. And in fact, if we're right and productivity continues to accelerate, unit labor costs could move into negative territory in the absence of a recession. And so you can see here, not since the early 60s have we seen a sustained period with unit labor cost growth below zero. We would not be surprised to see that during the next few years. And the other thing to note is labor is 70% of total cost on average, not necessarily for a tech company but for most companies. And so this is also a very important gauge of inflation. Here's true inflation, Trueflation. This is real time, tens of thousands of prices measured in real time. And you can see after the tariff pushed this metric to roughly 2.5%, it has now come back below 2% in the 1.8 to 1.9% range, and we would expect that to continue falling as well. Now what's the last metric in terms of inflation deflation? China is very important. Now what you're seeing here is not a measure of inflation or deflation, but investment as a percent of GDP. It's China in the purple line and the US in the green line. This is total investment, so it includes property residential and non-residential, and you can see the excesses here in China. China's investment as a share of GDP went to more than twice that of the United States and is still roughly that. Now the extended lines you see here in different colors, those are IMF projections. We think that the investment line for China will continue to come down. But what this excess in investment suggests is the buildout of production capacity and the exporting of more and more deflation. I'm sure a lot of you have heard stories about BYD entering Europe and the Middle East, and its car prices are in the $25,000 range for a very nice car. Our tariffs are so high on them, I think they might be almost 200%, that we don't see that much in the United States. But China is exporting deflation to the point where President Xi Jinping has told its own companies, China's own companies, hey, cut it out. Not only are we exporting deflation and hurting companies in the rest of the world, you're killing each other. So let's get a little more rational. That's why we think this investment line might continue down during the next few years. In the US, with AI and power, both those buildouts, especially power being neglected for so long as opposed to in China, China's building 28 nuclear plants, big ones, as we speak. We're building zero. We think that's going to change, so our line will probably start going up to some extent here. What I'm trying to illustrate is interest rates track nominal GDP growth. So nominal GDP growth is in the green there. You see the surge because of fiscal and monetary stimulus during COVID and the deceleration thereafter. And you saw the interest rates going up, not nearly as high as that GDP growth rate. This is a year-over-year GDP growth rate, but if we're right, GDP growth is going to stay in the sub-5% range for the next year. And we do expect interest rates to continue falling, mostly because the inflation surprise is likely to be on the low side of expectations. As I mentioned, oil, housing, and unit labor costs. We do believe by the end of the year, though, around the time of the midterm elections, that it will be pretty clear we're in a productivity-driven, perhaps boom in activity. If we get the cyclical whips from housing and autos perhaps, and the continued momentum in capital spending, we could see some very strong real GDP growth rates, maybe accompanied by lower or negative inflation. That would be the real outlier in terms of expectations, and we would not be surprised to see it happen. So on to the next chart. So let's take a look at inflation from another angle, monetary policy. So if you look at M2 in the purple line here, we've gotten back to 5%. If you trace that back in time, that's really at the lower end of where M2 has been over time. And one of the things we've mentioned on this webinar before is, you know, if M2 growth stabilizes in this 5% range and velocity starts to fall, then we're going to see nominal GDP growth will be sub-5%. So if we're right on the real growth acceleration, this could support that negative inflation outlook. The green line here is CPI. Tariffs have interrupted what was a down cycle. We got to 9% and then into the twos. We retraced a bit in here, but we think that inflation will turn down as real GDP growth is accelerating. And many people think that makes no sense because they think growth causes inflation. Nothing could be further from the truth. Growth does not cause inflation. In fact, productivity-driven growth is associated with falling inflation. And that's what we expect to happen. Here you can see how tight is monetary policy still. This is the yield curve. It's the 2-year Treasury yield less the 3-month Treasury yield. And anything below zero, which this is, would suggest monetary policy is on the tighter side of normal. And you can see going back in time, whenever we've seen a yield curve here below zero, we've typically been either in a recession or in the mid-90s we were in a soft landing. So it has been surprising that we didn't end up in an official recession, but I hope in showing you the charts that I did, you do understand that this caused a rolling recession. And so we'll see what happens with monetary policy. Are they going to ease enough to move this back into positive territory? Typically when the Fed is gunning for monetary stimulus, we will get into that one to two percent range in terms of a positive slope in the yield curve. We shall see. We would not be surprised to see it limited to one or less. And one of the reasons for that is informed by this chart. The 10-year Treasury yield minus the 2-year Treasury yield. This yield curve, as you can see, has been trending down since the global financial crisis, and we are in positive territory now. So no more negative yield curve or inverted yield curve on this basis. And the question is, is this going to continue in a downtrend there? Meaning it will peak fairly soon and reverse because of the deflationary undertow associated with oil and housing prices, unit labor costs, and technologically enabled disruptive innovation, which is deflationary inherently. Good deflation. You cut prices, you get more unit growth. We think that could be the case, but stay tuned. We will continue to monitor this one. Now I'd like to talk about a big disconnect given everything I've just said about inflation between a lot of inflation indicators and the gold market. Gold prices have more than doubled in the last two years. And here you can see what an extreme they have reached on this basis. So this is the gold market cap as a percent of US M2. US being the world's reserve currency. And you can see that we have surpassed the gold to M2 ratio in the late 70s, early 80s when inflation was raging at a double-digit rate and interest rates were into the double digits as well. So that's interesting. There's only one other time that this ratio has been higher, and it was during the Great Depression during the 30s when the gold price was fixed in the low $20 range and money supply was collapsing. So those two things are not true this time around. The gold price has been going up and the money supply has been going up. And so we're trying to figure out what this means. One suggestion is that gold has entered, I hate to say irrational exuberance territory, but that's the prevailing phrase. Maybe gold is nearly done with this bull run. And then we have to ask ourselves, because Bitcoin is considered digital gold, has Bitcoin, is it done for a cycle? And as everybody knows, the four-year cycle worry is out there. Well, here you can see the Bitcoin to gold ratio in a trend sense since 2020. You can still say, even though we did break the last higher low, in a broader sense you can say maybe this is still in an uptrend. We shall see. But what we have found very interesting is on the next chart. What is the correlation between Bitcoin and various other asset classes? Gold being one of an important one of them. Well, you can see how low the correlation is. So a correlation of one means very highly correlated. A correlation of zero means not correlated at all. A correlation of minus 1.0 means inversely correlated. When one goes up, the other one goes down. This correlation since 2020 is suggesting no correlation. And in fact, if you look across the top line there, the correlation with most other asset classes, Bitcoin versus any other asset class, very low. No correlation with bonds, almost no correlation with gold and REITs, very low correlation with commodities. The highest correlation is with the S&P 500, and even that is a low correlation. And you can look at the correlation between and among the various categories here. Bitcoin's correlations are very low. And what this means is asset allocators have a fiduciary duty to look at Bitcoin and other crypto assets for portfolio diversification because the lower the correlation, the higher when adding one of these low correlated assets to the others, adding means return per unit of risk probably will go up. So we think this is a great illustration of that. The other thing I'd like to say about this period of time, given all of the talk about the dollar being so weak. Well, if we're right, the dollar is stabilizing here after a decline in 2025 and will reverse course, much like it did during the early 80s with Reaganomics. And we think that this administration's policies are turbocharged Reaganomics. Because of those policies, the dollar went up. Why? Because the return on invested capital in the United States went up relative to the returns elsewhere in the world. So we would not be surprised to see a sizable increase in the dollar here, which is completely away from consensus expectations and therefore very interesting to us. Now one thing we do have to think about as we're getting into talking about markets here is valuation. So in the purple you see the PE ratio, trailing 12-month moving average of the PE ratio for the S&P 500 versus inflation. So we're back to this important inflation call. Now if you look carefully, I know this is messy, but if you look at the early 2000s, you can see that because of the monetary and fiscal stimulus around Long-Term Capital Management in 1998, Y2K in 1999, and the tech and telecom bust in 2000, you can see that after inflation bottomed, it moved from roughly 1.5% up to 4.5 to 5%. And the PE ratio went down during the early 2000s. There is an inverse correlation between PE ratios. You saw it highlighted during 08-09 and the PE ratio. So you can see where we are now. I think it was instructive to see how low the valuation went in the purple there after COVID. We dropped to 17, 18 times earnings. Now that was a big correction during COVID. And there was a very rapid expansion in earnings after COVID. So it was interesting to see where this stabilized around that 17-18 range. Now why would that be? Could it be that the market in its wisdom is saying, hey wait a minute, we think inflation, that the next big move inflation will continue to be down maybe. You can see the PE has gone up as inflation stabilized, and I think that surprised a lot of people. Could it be the market is discounting another drop in inflation and that would support valuations? Now I'll quickly add that if we're right on the outlook for earnings and revenue, GDP growth, then we're going to see very rapid growth during the next two and a half to three years. Very rapid growth. And so we believe that we don't have to assume these valuations hold. We think that the revenue growth and earnings acceleration that we're going to see, especially in the innovation space, so consider the source, that's all we do, that they're going to overwhelm the high valuation by historic standards and help us deliver a compound annual rate of return well north of the market during the next five years. So stay tuned. This has been a big tease. That green line representing inflation recently, the recent stabilization slash slight increase has been tariff related. We think that's working through. And we think that the resolution of the green line will be to the downside, probably negative. Now here is a productivity chart. You can see one of the reasons we had such horrible inflation during the 70s is productivity went from very rapid three and a half percent in the 50s and 60s down to 1%, and this is a 5-year moving average. It was negative at times in the late 70s, and you can see in the 80s and 90s it turned up and inflation went down throughout the 80s and 90s. You can see also that we saw deterioration in productivity moving into 08-09, and part of that was a lot of speculation in housing instead of capital spending. So housing is not productive per se. And so we had the fall off there, not only because of that, but because 08-09 scared the heck out of everybody. And we still had a lot of speculative investment and reaching for yield in the housing sector until recently. And as you might have heard, the president is going to ban institutional investors from investing in residential housing. Now I'm sure they'll find a way to get around it, because I think the qualification is an investment in 100 or 200 homes at a time. So maybe they'll invest in 99, I don't know. But I do think that the reason productivity growth has turned around is because of the new technologies around which we have centered our research. So we started ARK in 2014, and our hypothesis was that robotics, energy storage, artificial intelligence, blockchain technology, and multi-omic sequencing would lead to a new era in productivity growth. We had COVID interrupting a lot of things, but the supply shock certainly was an interruption. And we certainly should have stayed the course with larger cap cash-rich companies, but we're done with that now. We think that productivity has resumed its increase. As I mentioned earlier, productivity growth in the last quarter that we have, the third quarter, 4.9% at an annualized rate. Now this is a five-year moving average. We'd need to see a lot of those quarters in the 5% plus range. And we think we're going to. So pretty excited by that. And you can see here inflation went up when productivity was horrible. Inflation went down when productivity was improving. Inflation, we had the COVID surge. I think that was more of a supply shock, but now we're coming down again. This is also a three-month moving average. So we're coming down. I think we'll break down into that 0% or less. Fixed mortgage, just featuring this because President Trump is focused on mortgages and buying mortgages to lower interest rates more, or buying mortgage debt to lower interest rates. So stay tuned there. Commodity prices, if we're right on a cyclical turn in the global economy, commodity prices probably should go up over a full market cycle. Over a full market cycle, they'll hopefully be flattish. But we would not be surprised to see them go up. You can see I think we still have to see this metals to gold ratio turn around to confirm that we're in an upturn in the cycle. And it is for me the most interesting chart because you know these two, the long-year Treasury bond yield in green and the metals to gold ratio have been so highly correlated in the past. They've broken apart in recent years. So maybe they'll meet somewhere in the middle during the next few years. Here's copper. Copper is telling us, okay, maybe we're now resuming the cycle. And a lot of the manufacturing facilities, anything going electric demands more and more copper, including transportation. So this is also a secular shift towards copper, which should benefit the price. Here to end are the what we've been monitoring just keeping us on our toes. The S&P to gold ratio still basing, it's at the lower end of a base that's been in place for the last 5 to 10 years. We do not think it's going to end up like it did in the 70s. We think instead that the S&P to oil ratio is leading the way, and that is heading for new peaks. That's very, very bullish. If you look at 1980 through 2000, that's the strongest and longest bull market in history. Sure we had episodic setbacks, but the most powerful. And if we're right that the Trump administration is Reaganomics on steroids, this should break out, and we believe the S&P to gold ratio will follow. Here are long-term interest rates. Interested to see how much of this deflationary undertow long rates will telegraph long term. We wouldn't be surprised to see long rates back into the 3% range in an inverted yield curve environment. And we'll get into this in the letter that I've written, but if you look back at the last time we were in an innovation cycle like this, late 1800s early 1900s, the yield curve was inverted almost all the time on average by about 100 basis points and up to 500 basis points. And that's because short rates were following nominal GDP growth, but long rates were much more focused on the deflationary impact of these new technologies. So I will end up on this. This is the spread between the high yield corporate index and the 10-year Treasury yield. And you can see it's near its lows. Not a worry in the world in the credit markets. Even though we're hearing about first brands and a lot of difficulty in the private credit markets, it's not seeping into this high yield corporate spread, which is quite interesting. So I take some comfort from that. There's nothing systemic going on here. And I do think that we're in for a period, I'm going to say the next three years, of some of the most amazing economic statistics from a positive point of view and low surprises on the inflation front. You can say it's Goldilocks. That was the word used a lot during the 80s and 90s, and I think we're going back there. And to learn more about this, stay tuned for my letter, which should come out within the next week. We're also putting out our Bitcoin and DeFi pieces. Those are quarterly pieces. And then in late January, we're putting out our Big Ideas. And I think it's the best one we've ever done. So stay tuned for that as well. And I will look forward to doing this webinar next month on Employment Friday. Thanks so much.
