For months, the markets have responded to inflationary pressures by piling into dollars and selling gold. They’ve taken this counterintuitive approach because they believe the Fed will tighten monetary policy to fight inflation sooner rather than later. But we’re starting to see a shift in sentiment. Traders seem to be realizing that inflation might be here to stay, and that is bullish for gold and bearish for the dollar.
Gold pushed above $1,900 an ounce near the end of the trading day Tuesday (May 25) and closed just below that level. Silver also had a strong day, up about 22 cents, closing just below $28 an ounce. Meanwhile, the dollar index headed in the opposite direction, closing an 89.66. That’s the lowest level for the dollar index since early January. Peter Schiff talked about the rally in gold and how the inflation tax is destroying American’s purchasing power on a recent podcast.
After last week’s hotter than expected CPI data, gold sold off, following a pattern we’ve seen over the last few months. But in the last week, gold has rallied, knocking on the door of $1,900. In fact, there has been a broader pivot in the market that could indicate the mainstream is ready to face the reality of inflation. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about the big pivot. He also discusses some bullish fundamentals in the silver market.
CPI came in much hotter than expected. Fed Vice Chairman Richard Clarida actually said, “We were surprised by higher than expected inflation data.” But should we really be surprised by this? In this episode, Friday Gold Wrap host Mike Maharrey talks about inflation and suggests maybe you shouldn’t be shocked. He also discusses the whacked-out labor market.
What is the government doing to your money? And how can you protect yourself?
These are key questions facing every American today. In this interview, Friday Gold Wrap Podcast host Mike Maharrey tries to dig out some answers with investment veteran and author E.B. Tucker.
Last week, we reported that the Russian National Wealth fund was dumping dollars and turning toward gold. The Russians have engaged in an intentional de-dollarization policy for several years. But it appears this could be part of a broader global move away from the greenback.
The dollar’s share of global currency reserves dropped significantly in the fourth quarter of 2020, falling to its lowest level in 25 years according to recently released IMF data. Globally, the dollar now makes up just 54% of global currency reserves. The last time the greenback’s share was this low was in 1995.
Every time the economy gets into trouble, governments and central banks react the same way. They slash interest rates and loosen monetary policy. This gooses the economy — temporarily. But when the next crisis comes, it takes an even bigger dose of extraordinary monetary policy to revive the economy. The Fed has pushed things into the future several times, but as Friday Gold Wrap host Mike Maharrey explains, at some point you’ve got to pay the piper. In this episode, he also discusses the bond market and the latest Fed talk.
The latest Biden/Democrat stimulus bill is just the beginning. There is more government spending coming down the pike. That means more money printing. But Paul Krugman says not to worry. It didn’t cause a big jump in CPI last time and it won’t this time either. Peter Schiff talked about it in his podcast. He said when Krugman talks – nobody should listen.
Last month, Federal Reserve Chairman Jerome Powell testified before Congress. In his answer to one question, it sure did sound like he doesn’t believe in the basic economic principle of supply and demand. Peter Schiff talks about it in this clip from one of his podcasts.