Earlier in the week, gold sold off on the announcement that initial trials on a coronavirus vaccine looked promising and on Thursday, gold was selling because, as CNBC put it, the yellow metal was “pressured by hopes of a swift recovery from the coronavirus-driven recession.” During a recent podcast, Peter Schiff said this just goes to show that people don’t understand gold or why its price is generally rising and why they need to buy gold now.
Are negative interest rates in our future?
Jerome Powell says absolutely not. But Jerome Powell also once said balance sheet reduction was on autopilot and that the Federal Reserve wasn’t going to cut interest rates. What the Fed chair says today doesn’t necessarily line up with what the Fed chair does tomorrow.
In fact, the markets are starting to bet on negative rates. They are, after all, the next logical step in the Fed’s trek down the path of extraordinary monetary policy.
The printing presses are running at full speed as the Federal Reserve creates money out of thin air at an unprecedented rate. Peter Schiff recently appeared on Kitco News to talk about the impact of all money-printing, borrowing and government spending. Somebody has to pay for this and we all will. In fact, a lot of people will be wiped out by the inflation tax.
With the economic chaos created by coronavirus economic shutdowns and the Federal Reserve creating trillions of dollars out of thin air, there is suddenly a lot of interest in buying gold, both as a safe haven and an inflation hedge.
But what is the best way to invest in the yellow metal? Should you buy physical gold? Gold ETFs? Gold stocks? What’s the difference? Are there advantages or disadvantages to each of these options?
Silver has finally joined gold at the party.
In the last week, the price of the white metal has moved up from $15.51 to $17.35. (as I type this on Tuesday morning May 19) That’s an 11.9% increase.
With the jump in the price of silver, the silver-gold ratio has dropped from over 113-1 earlier this month to 101-1 today.
The money supply growth rate surged to an all-time high in April as the Federal Reserve created cash at an unprecedented rate through quantitative easing and other money-creating monetary policies.
According to Ryan McMaken at the Mises Institute, the only time the Fed has come close to this level of money creation was in the 1970s – the era of stagflation.
Despite Fed Chair Jerome Powell throwing cold water on the prospect of a quick economic recovery last week, there is still a lot of optimism out there. There is also an appalling lack of concern about all of the debt and money printing going on. In a recent podcast, Peter said nobody expects this to lead to an inflation crisis or a dollar collapse. But what can’t last forever won’t. And it won’t be a crisis — until it becomes one.
I know a lot of you come to Fun on Friday for the advice.
Well, here are your words of wisdom for today – never read the comments.
It will really help your sanity.
Federal Reserve Chairman Jerome Powell dumped cold water on the notion that we’re going to have a quick recovery during a speech this week and begged Congress for more fiscal stimulus. As Friday Gold Wrap host Mike Maharrey put it, Powell and the federal government are the arsonists trying to fight the fire they started. In this episode, Mike talks about Powell’s speech and points out just how clueless he really is. He also covers some of the week’s economic news and its impact on the gold market.
Federal Reserve Chairman Jerome Powell went negative in a webcast speech on Wednesday, May 13.
I’m not talking about negative interest rates, although that could be coming down the pike as well. Powell went negative on the prospects of a quick economic recovery.
He’s right about the prospects for the economy, but he’s wrong about the solution. That’s because he doesn’t even realize it’s Fed policy at the root of the problem to begin with.
