Earlier this month, the Federal Reserve launched its first salvo against inflation, raising interest rates by a quarter-percent. It was a pretty weak shot given 7.9% CPI, but Jerome Powell and other Fed presidents ratcheted up the tough rhetoric last week. Powell raised the possibility of 50 basis-point rate hikes at future meetings and San Francisco Fed President Mary Daly, “With the labor market so strong, inflation, inflation, inflation is top of everyone’s mind.”
The big action in silver occurred early in the month, making March a pretty large outlier. First, it continues the recent trend of increasing deliveries. Second, deliveries were 8.7% of the max open interest for the month. This is the highest percentage since July 2020 when prices took off. There are still 24 open interest contracts remaining.
The Fed threw a pretty weak first punch at inflation with a quarter-point interest rate hike last week. But Fed Chair Jerome Powell followed up with some tough talk this week. The question is what will he do when the economy punches him in the face? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about Powell’s attempt to bully inflation and if it might backfire.
Suddenly, Fed chair Jerome Powell is a tough guy.
Is he though?
Earlier this week, Powell delivered what Reuters called “his most muscular speech to date” on the battle against inflation.
Peter Schiff recently appeared on Kitco News with David Lin to talk about inflation and the Fed’s attempt to get it under control. Peter said there is no getting inflation under control. It’s already worse than anybody thinks. And it’s only going to get higher.
No doubt, money supply growth is decelerating but is still far from contractionary.
According to the seasonally adjusted data, M2 expanded by $83billion in February. January was revised down from $245 billion to $176 billion.
Data coming from the COMEX could indicate growing pressure for a breakout in gold and silver.
COMEX data has shown large deviations for several months. Most of this occurred before Russia invaded Ukraine and these deviations have grown larger since. The invasion seems to have accelerated trends that were already in place.
Despite rising interest rates and more hawkish talk from Federal Reserve Chairman Jerome Powell, the stock markets keep pushing upward. Everybody seems to think the Fed has things under control and everything will be just fine. In his podcast, Peter explained why this “everything is great” attitude will have to come to an end.
The Consumer Price Index hit a 40-year-high of 7.9% in February. Of course, it’s even worse than that. The official government numbers are rigged to understate rising prices.
But inflation doesn’t just hit us with rising prices. In some cases, we pay more, but we get less. This is known as shrinkflation.
Retail sales have gone up to start the year as Americans keep spending. But what are they buying?
Inflation.
American consumers are spending hand-over-fist in an effort to keep up with surging prices.
