The Fed wants us to believe everything is under control. The economy is improving. Inflation is transitory. Good times are ahead. But behind the scenes, central bankers and government officials are scrambling to keep all the economic props in place. As they intervene in one area of the economy, they create problems in another. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about some of these interventions along with gold’s recent rally above $1,900.
It’s dawning on many investors that our post-Covid financial problems may not be as easily solved as Washington claims.
The latest clue that trouble is brewing has come from the sudden and dramatic arrival of inflation. On May 12, it was revealed that the Consumer Price Index (CPI) had risen 4.2% year-over-year, the fastest pace since 2008.
Some tried to downplay concern by pointing out that the gains resulted from the “base effect” of comparing current prices with the artificially depressed “Covid lockdown” prices of March and April of last year. But that ignores the more alarming trend of near-term price acceleration.
Over the last several months, gold and silver have faced strong tailwinds due to market expectations that the Fed would tighten monetary policy sooner rather than later to fight price inflation. But after April’s hotter than expected CPI, that sentiment seems to have shifted and the markets are acting the way you would expect in an inflationary environment. Gold and silver have rallied and the dollar has shown weakness. In fact, gold pushed above the $1,900 an ounce level.
In this Gold Videocast, Peter Schiff explains why he thinks this is just the lull before the real storm and now is the time to buy gold and silver.
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.
In many ways, it appears the economy is beginning to recover from the shocks of the coronavirus pandemic. GDP growth is way up. The stock market is soaring. A lot of people are optimistic. But during an appearance on the Ben Shapiro Show, Peter Schiff said this isn’t a real recovery, and he explains how all of the government “help” is actually wrecking the economy, distorting the job market and destroying the dollar.
The economy is actually sicker now than it was before COVID. And what’s really been hurting it was not the disease but the government’s cure.”
Inflation came in hot in April. Initially gold sold off on the news. But over the following week, there appears to have been something of a pivot in the market. Gold and the dollar both started behaving as one would expect in an inflationary environment. Peter Schiff said it looks like investors are starting to worry the Fed won’t fight inflation after all.
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.
The Consumer Price Index came in much hotter than expected last week. The mainstream chalks rising prices to supply chain and production issues caused by the pandemic. But in a recent interview on NTD News, Peter Schiff says there’s more to it than that. Prices are rising because a surplus of printed dollars is bidding up prices.
The unemployment rate ticked up to 6.1% in April despite businesses all over the country struggling to hire workers. But as Peter Schiff pointed out, you don’t need a job to spend printed money handed out by the government.
The Federal Reserve is supposedly stimulating the economy as it prints trillions of dollars out of thin air and the U.S. government hands it out for people to spend. But Ryan McMaken at the Mises Institute argues that it’s really doing the exact opposite.
The economy is booming again – or so we’re told. Trillions in stimulus have juiced consumption and created the illusion of prosperity. But in truth, Americans are simply spending printed money on stuff they didn’t produce. Peter Schiff recently said America’s consumption economy is really a bubble
The problem is, economies can’t run on consumption. A vibrant, healthy economy needs production. Stimulus does nothing to boost production. In fact, it completely warps the production structure
