After running the biggest December budget deficit in history, the US government followed up with another massive budget shortfall in January.
According to the Monthly Treasury Statement, the January deficit came in at $162.83 billion. That’s nearly five times bigger than the January 2020 shortfall.
Last week, Federal Reserve Chairman Jerome Powell said he wasn’t worried at all about inflation. But there are signs that inflation is heating up everywhere, from surging commodity prices to rising bond yields. In his podcast Friday (Feb 12) Peter Schiff talked about increasing inflation and the unreasonable expectations Wall Street has when it comes to the Fed’s willingness or ability to do anything about it.
In the Friday Gold Wrap podcast this morning, I talked about the minimum wage. Making a point about how raising prices lowers demand, I pointed out that McDonald’s wouldn’t sell many $15 hamburgers. But you know, there is a way Micky-Ds could make that work. Wrap those burgers in gold.
With Joe Biden in the White House and Democrats controlling both houses of Congress, it seems pretty certain we’re going to get a federal $15 an hour minimum wage. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey discusses the economic ramifications of minimum wage laws. Hint — they are not good. He also talks about Fed Chair Jerome Powell’s comments this week and why they should make you even more bullish on gold.
Last month, we reported on signs of revival in the Indian gold market. Gold imports hit a 19-month high in December.
That revival has continued into 2021. Gold imports in January were up 72% year-on-year, and some shifts in government policy could give demand another shot in the arm.
On Wednesday, Federal Reserve Chairman Jerome Powell called for a “society-wide” commitment to reaching full employment, calling for “contributions from across government and the private sector.” He said getting people back to work would require “continued support from both near-term policy and longer-run investments.” He also dismissed concerns about debt saying the focus needs to be on the economy’s immediate needs. As Peter Schiff put it in his podcast, Powell handed the US Treasury a blank check.
Silver got a brief boost when the Reddit Raiders turned their attention to the white metal. The online investors weren’t able to pull off a short-squeeze in the silver market, but we’ve said all along that there are fundamental reasons to be bullish on silver, the attention of Reddit Raiders notwithstanding.
New demand projections for silver in 2021 bear this out. Silver demand is expected to rise 11% this year and reach 1.025 billion ounces, according to the Silver Institute’s forecast.
So, what’s wrong with stimulus, money printing, trade deficits, and the minimum wage? Peter Schiff appeared on Meet Kevin to tackle these questions and more.
In a podcast, Peter Schiff said it smells like stagflation is on the horizon. Inflationary pressures are becoming more and more apparent. Labor costs, commodity prices and bond yields are all pushing upward – clear signs of inflationary pressure. And of course, defined correctly – as an increase in the money supply – there is no denying inflation is rampant. We saw a record increase in the money supply last year. The only time that even comes close was the stagflationary period of the 1970s.
But what does this really mean for you and me?
We ended last week with some weaker than expected economic data – particularly the jobs numbers, but the stock market continues to go up. These days, the mainstream reacts to everything as good news. No matter what the data suggests, everybody seems to think things will come up smelling roses because of stimulus. But in a recent podcast, Peter said all of this smells more like stagflation.
