New CPI Numbers Reveal Investment Window for Gold

The Bureau of Labor released its Consumer Price Index report last Friday, which showed an increase in all consumer items by 0.2 %. The CPI measures the change in price Americans pay for all goods and services. According to the Wall Street Journal, the latest numbers indicate that the “effects of low energy prices and a strong dollar are fading.”

In short, prices are continuing to rise because of the ultra-low interest rates and quantitative easing. This is not only bad news for consumers, it’s worse news for the nation’s economy in general. That’s because the reported CPI is only a small peek into the actual effects of the Fed’s monetary policies. As Peter Schiff has said many times:

The methodology for computing the CPI has deliberately been designed to hide the effects inflation has on consumer prices.”

What’s hidden within the government-created CPI reports is the fact that most Americans are feeling the pinch. Gas price stabilization is also beginning to affect the overall increase.

Even though inflationary pressures might prompt the Fed to raise interest rates, the chances are good they still won’t. Raising rates means US debt becomes even more impossible to pay off as more and more borrowing is needed to service debt interest. The Fed has gotten itself into a quandary by keeping interest rates artificially low. Such a cycle of borrowing to pay debt will inevitably end in default and devaluation of the dollar, the world’s currency standard.

Peter recently explained his predictions on the economic fallout from the Fed’s actions to Accuracy in Media:

The Fed’s policy does not work and has not solved our problems, it has simply exacerbated our problems, and … we’re gonna have a currency crisis, we’re gonna have a sovereign debt crisis and it’ll make the financial crisis of ’08 really look like the Sunday school picnic.”

Another motivation for disavowing the actual interest rate is the presidential election. Janet Yellen and company need to keep a lid on the severity of the economic problems until after the election when they can seriously start thinking about raising rates.

All of this is bullish for gold, as investors are moving to stocks post-Brexit. According to Bloomberg, “Money has poured into global equities in the past three weeks as speculation grew that policy makers will do more to limit the fallout from the UK’s vote to leave the European Union.”

With promises to prop up the British pound, speculation has moved from retaining wealth through precious metals to stocks and bonds. The investor pivot has temporarily lowered the price, providing a window for investment.

Todd Gordon of TradingAnalysis.com believes the metal is more likely to rise than fall from current levels. In a recent CNBC interview, Gordon stated:

The gold market trades at an inverse relationship to the S&P 500. So what’s happening is the S&P 500 is breaking out to new highs as gold moves down into support. I think it’s a good time to buy gold at support as the S&P is getting a little overbought.”

Source: Boomberg. Gold’s YOY performance

Recently, bullion has hit a two-year high and “is up 26 % this year on expectations that US interest rates will remain low, making assets that don’t pay interest more attractive,” according to Bloomberg.

Overall, gold’s on the rise. Now’s a great opportunity to start buying gold and silver and retain your wealth today.

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