The Fed claims inflation isn’t a concern. The central bankers don’t want us to worry about it. In fact, they would just as soon keep the whole inflation issue a secret. But Americans are worried. Searches for the word “inflation” hit an all-time high on Google trends in May.
In fact, inflation is the worst-kept secret out there.
With some positive economic data coming out this week, investors suddenly went bullish on the economy again and decided that the Fed is surely going to deal with inflation now. Will it though? In this Friday Gold Wrap Podcast episode, host Mike Maharrey speculates about the Fed’s next move. He also looks ahead and talks about the long-term future of the dollar. Can we assume it will always be the reserve currency?
President Joe Biden released his 2022 budget this week. The $6 trillion spending plan offers a glimpse into Biden’s long-term fiscal strategy – borrow and spend to infinity and beyond.
The Biden budget would take the US to its highest sustained spending levels since World War II.
And here you thought the pandemic emergency was winding down and spending would go back to normal. Well apparently, this is the new normal.
If you’ve been to the grocery store, or the gas station, or the building supply store, you know we have an inflation problem. Last month’s hotter than expected CPI confirmed what we already intuitively know. But the folks over at the Federal Reserve continue to tell us there’s nothing to worry about. They insist inflation is transitory.
Their reassurances notwithstanding, people are worried. Searches for the word “inflation” hit an all-time high on Google trends in May.
Last month, Tennessee Gov. Bill Lee signed a bill into law that creates a commission to study the feasibility of creating a gold bullion depository in the Volunteer State.
A state bullion depository would not only create a safe place to store precious metals; it would increase the state’s financial independence. It could also facilitate the everyday use of gold and silver in financial transactions in Tennessee and set the stage to undermine the Federal Reserve’s monopoly on money.
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.
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.
The US government continues to run massive budget deficits. That means it has to sell bonds to finance the debt. So, who’s buying all these Treasuries?
The Federal Reserve is buying a lot of them as it continues to monetize the ever-growing federal debt. Between March 2020 and March 2021, the central bank monetized more than half of the massive pandemic debt.
