Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Peter Schiff: Inflation Is Good for Gold! Duh!

  by    0   1

Inflation is back. So what does this mean for gold?

The consumer price index came in hotter than expected at 2.1%. A CNBC report said the number “pushes the economy toward a potential danger zone for inflation.”

Analysts had expected January inflation to come in at 0.3, after being up by 0.1 the previous month. Instead, the December number was revised up to 0.2 and January came in at 0.5. As Peter Schiff pointed out in his podcast, if you multiply 0.5 by 12 months, it comes to 6% inflation per year.

I think this is a trend. This is a horrible number.”

Gold initially sold off on the news. It fell about $12. Why? Because everybody thinks rising inflation means the Fed will raise interest rates. But as Peter said, so what?

It’s not going to stop inflation. They would have to raise rates aggressively. They would have to move rates up faster than inflation is increasing, and they’re not. Nominal rates are falling.”

Keep in mind, an interest rate is nothing but a price. It’s the price of money. When there is inflation, interest rates go up just like any other price. Contrary to popular belief, this is not bad for gold. Quite the opposite.

 But of course, this is all bullish for gold. Duh! Gold is an inflation hedge. That’s what it’s for!”

As gold began selling off, Peter tweeted the following:

Gold sold off on the much higher than expected #inflation numbers. Traders still don’t get it. Higher inflation is bullish for gold, especially since the Fed can’t contain it with higher rates, as the rate required is higher than what Americas can afford to pay.”

Low and behold, gold rallied. Peter later tweeted:

Gold’s $12 dollar selloff is now a $13 dollar rally. Maybe traders are finally figuring out that inflation is good for gold. Wait until they figure out that no matter how hot inflation gets, the Fed is powerless to put out the fire!”

Gold was up as much as $25 as investors fully digested the inflation news. It ultimately closed up $20 at just over $1,350 per ounce. Peter summed it up on his podcast.

A $12 decline turned into a $25 rally. What is that showing? That as the idiot, morons, robotic sellers, when they see higher than expected inflation sell the dollar, people who use their brains are starting to think and actually come into the market and say, ‘Wait a minute. I don’t care what these algorithms or computer programs say. Inflation is good for gold.’ Especially since the Fed is not going to be able to put out this fire no matter how hot these numbers get.”

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

JP Morgan Chase CEO Worried About Higher Than Expected Inflation

With CPI data once again coming in hotter than expected, it’s getting harder and harder for the mainstream to swallow the “transitory inflation” narrative. And some people are starting to worry. During an earnings call, JPMorgan Chase CEO Jamie Dimon expressed concerns about higher than expected and persistent inflation ahead.

READ MORE →

American Consumers Continue to Run up Credit Card Debt

Consumer borrowing has slowed somewhat from the record level we saw in June, but Americans continue to pile on the debt. Consumer debt grew by $14.4 billion in August to $4.35 trillion, according to the latest data from the Federal Reserve. That represents a 4% increase. This follows on the heels of a 4.8% increase in […]

READ MORE →

Demand for Silver in Electronics Sector Projected to Surge

The demand for silver is expected to expand along with the continued growth in global connectivity. According to a report released by the Silver Institute, silver demand in electronics and electrical applications is projected to rise by 10% by 2025.

READ MORE →

Inflation Bites! Rising Prices Are Eating Up Personal Income Gains

Inflation bites! Personal income rose again in August, but once again rising prices ate up all the gains and then some.

READ MORE →

Central Banks Added Nearly 30 Tons of Gold to Holdings in August

Central banks continue to add gold to their reserves.  Global central bank reserves increased by a net 28.4 tons in August, according to data compiled by the World Gold Council. Gross central bank gold purchases came in at 30 tons.

READ MORE →

Comments are closed.

Call Now