The headline numbers from December’s CPI report give the impression that price inflation is continuing to cool. Markets are giddy at the prospect. But in this episode of the Friday Gold Wrap podcast, host Mike Maharrey argues that “cooling” price inflation is most likely transitory and the markets still don’t really understand the Fed’s position. He also gives an overview of gold’s performance in 2022.
Based on the headline numbers, price inflation cooled again in December, boosting market optimism that the Federal Reserve will continue to ease off the pedal on its monetary tightening. But this could be setting the stage for more price inflation down the road.
And a deeper look at the data reveals that a lot of inflationary pressure remains despite the optimistic headlines.
A bill introduced in the Alaska House would exempt gold and silver bullion from local sales tax and make them both legal tender in the state. Ending the sales tax would relieve some of the tax burden on investors, and take a step toward treating precious metal bullion as money instead of a commodity.
Business school professor Greg Harmon says investors should consider gold and silver as portfolio diversifiers in 2023.
Gold and silver were among the best-performing assets in 2022. As Wall Street suffered through its worst year since 2008, gold eked out a small gain on the year.
Last year was a tough one for investors. In fact, it was the worst year for Wall Street since 2008. The Dow was down about 8.8%. The S&P 500 fell by 19.4%, dropping more than 20% from its high. The Nasdaq took the worst hit, tumbling by 33.1%. Meanwhile, the bond market tanked, bitcoin collapsed, and the air started coming out of the real estate bubble.
Peter Schiff recently did an interview with the Epoch Times. He predicted more pain in 2023, primarily driven by inflation and the Federal Reserve.
Rising consumer debts colliding with rising interest rates is a ticking time bomb.
Over the last several months, consumer debt has climbed at a steep, steady pace as Americans struggle with rising prices. November was no different, with consumers piling on another $27.9 billion in debt.
Despite market headwinds, gold managed to post a small gain in 2022 thanks to a strong rally in December.
Gold gained 3% in the final month of the year, driving the price of the yellow metal to $1,814 an ounce to close out 2022. This represented a 0.4% gain on the year.
During the pandemic, we got trillions of dollars in stimulus. The Federal Reserve alone pumped nearly $5 trillion into the economy. People gobbled up those stimulus checks, but there is no such thing as a free lunch. Now we’re paying for those stimmy checks with rampant inflation that is morphing into stagflation.
As Peter Schiff has said, “Every dollar that the government spends must be paid for by the public, one way or another.”
Central banks globally added another net 50 tons of gold to their reserves in November, driven in part by the first official purchase by China since 2019.
The US government has once again run up against the debt ceiling. Meanwhile, interest payments on the debt keep growing.
The Treasury only added $6B of debt in December, allowing short-term debt to mature and replacing it with longer-term debt. This makes sense as long-term rates are below short-term rates with the inverted yield curve.
