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Archive : Author

POSTED ON July 15, 2021  - POSTED IN Original Analysis

Despite mounting evidence to the contrary, Federal Reserve Chairman Jerome Powell stuck to his “transitory” inflation narrative during testimony before the House Financial Services Committee. That’s his story and he’s sticking to it!

POSTED ON July 14, 2021  - POSTED IN Key Gold Headlines

For the sixth month in a row, Consumer Price Index (CPI) data came in much higher than expected. But the question remains: how long will the Fed keep up the “transitory” inflation narrative? And when they do abandon this storyline and acknowledge inflation, what can the central bankers really do about it?

The CPI surged 0.9% month-on-month in June. It was the biggest monthly price increase of the year, blowing away expectations of a 0.5% increase. Stop and think about that number. Prices rose nearly 1% in a single month.

POSTED ON July 2, 2021  - POSTED IN Original Analysis

I haven’t heard; are we allowed to celebrate the Fourth of July or nah?

You may recall that after Joe Biden was elected, he said if we were good little citizens and wore our masks, we might be able to celebrate with our friends and families on the Fourth of July. But I never have heard if the president gave us our permission slip or not.

By the way — this doesn’t seem to keep with the spirit of the holiday as I remember it.

POSTED ON June 29, 2021  - POSTED IN Original Analysis

The markets have obsessed over what the Fed is saying while almost completely ignoring what it’s actually doing.

After the June FOMC meeting, markets reacted to the hint that the Fed might start raising interest rates in 2023 instead of 2024. But of course, it didn’t move rates up from zero. And while the Fed apparently talked about talking about tapering its quantitative easing bond-buying program, it continues to expand its balance sheet at a torrid pace.

POSTED ON June 22, 2021  - POSTED IN Key Gold Headlines

The US government continues to borrow money at a frenetic pace in order to cover its massive spending spree. It runs huge deficits month after month and there is more spending coming down the pike. The national debt is over $28 trillion and it is about to begin surging upward again. But with the exception of a few contrarians, most people don’t worry about the national debt. The conventional wisdom seems to be that since none of the doomsday predictions about skyrocketing debt haven’t come to pass, there’s nothing to worry about.

Of course, nothing is a problem until it is. And even if the borrowing and spending don’t ultimately precipitate a crisis, it is undermining the economy. The bottom line is more debt means less growth.

POSTED ON June 18, 2021  - POSTED IN Fun on Friday

A guy made a comment about my article highlighting Chipotle’s recent decision to raise menu prices in order to cover some of the cost of higher wages, pointing out that the CEO made some $38 million last year, noting “I doubt he needs it.”

The first thought that popped into my head was, ‘how exactly do you know what Brian Niccol needs?’ My second thought was, ‘what does that have to do with anything?’ And my third thought was ‘dude, you don’t have a clue how business works.’

POSTED ON June 16, 2021  - POSTED IN Original Analysis

The federal government has already run a $2.06 trillion budget deficit in fiscal 2021 with four months left to go. But somewhat surprisingly, over the last few months, the national debt hasn’t increased at nearly the pace you would expect considering the budget shortfalls. Given the level of spending, borrowing should be much higher. How has the federal government maintained its spending pace without borrowing at a much higher rate?

The US Treasury has been drawing down the balance in its Treasury General Account (TGA) at the Federal Reserve. But that maneuver is about to come to an end, so you can expect Treasury bond sales to spike in the coming months.

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