Prices are going up. The Federal Reserve is printing money at an unprecedented rate. The US government continues to borrow and spend at a torrid pace. As Peter Schiff put it in a recent podcast, we’re adrift in a sea of inflation. Gold is supposed to be an inflation hedge. So, why isn’t the price of gold climbing right now?
In a nutshell, rising bond yields have created significant headwinds for gold. And the mainstream is reading rising yields and their relationship to gold all wrong.
So, this week was April Fools’ day. I’ve never really been into practical jokes, but I did post something on Facebook to mark the day.
“Taxation is the price we pay for a civilized society.”
Amusingly, a few people actually took me seriously. They don’t know me very well!
We just celebrated St. Patrick Day and that got me thinking about Leprechauns – specifically their pots of gold. I mean, what is a Leprechaun anyway? And how in the heck did they get gold? I’d like to have a pot of gold. Maybe I could get some tips from them.
Now you would think with a name like Maharrey I would be up on my Irish lore. But alas, not so much. Fortunately, we have Google.
On Wednesday, the House gave final approval to coronavirus stimulus bill 3.0. For those keeping score at home, that brings total stimulus spending approved during the pandemic to $5 trillion.
So, what exactly is all of this money going to be spent on? And who is going to pay for it?
We’re told we’re on the road to economic recovery. The $1.9 trillion stimulus is all we need to get us over the hump. But the truth is, Americans started spending like they were over the hump months ago. In fact, American consumers high on stimulus have been on a spending spree since last summer. The Federal Reserve printed money. Uncle Sam handed it out. American consumers spent it on imported goods.
This isn’t the formula for a genuine economy. It’s the formula for a giant bubble.
Do you know what’s pretty ballsy? Stealing from a professional wrestler.
Yeah, I know pro wrestling is fake. (No, really, it is.) But that doesn’t change the fact that pro wrestlers are big, strong athletes.
In fact, before he went into fake wrestling, Kurt Angle was a real wrestler and won an Olympic gold medal in the sport. And that brings us to a WWE fan with sticky fingers and apparently not too much common sense.
Bond yields spiked. The stock market threw a tantrum. Reuters analyst Dhara Ranasinghe called it “a tussle over borrowing costs.”
The Fed won round 1, thanks to a little help from the Aussies. But even the mainstream seems to have noticed that this wrestling match isn’t over and the Fed may be forced to take real action soon. As Ranasinghe put it, “Round Two, and perhaps even Round Three, are inevitable, and they may require policy action rather than just words.”
By policy action, they mean upping quantitative easing – exactly as Peter Schiff has predicted.
On March 1, the US national debt eclipsed $28 trillion with no end to the borrowing and spending in sight.
It was just last fall that the debt surged above $27 trillion for the first time. In less than five months, Uncle Sam added another $1 trillion to its debt load. And there’s barely been a peep from the mainstream media.
When I first started writing professionally, one of my mentors offered me some sage advice – never read the comments.
I’ve not been particularly successful in following that advice much to my sanity’s consternation. Because I’ll tell you what – the comment section can be a brutal place.
A bill introduced in the Kansas House would recognize gold and silver specie as legal tender and repeal all taxes levied on it. The legislation would pave the way for Kansans to use gold and silver in everyday transactions, a foundational step for the people to undermine the Federal Reserve’s monopoly on money.
