Great news! The inflation war is over and we won! At least that’s how Paul Krugman sees it. But he’s playing tricks with the data and making assumptions that are meaningless in the real world. In this episode of the Friday Gold Wrap, host Mike Maharrey dissects Krugman’s claims in light of the September CPI data. He also talks about market reaction to the CPI and shares some interesting gold news from Zimbabwe.
“Hotter than expected.”
This seems to be a recurring theme when it comes to price inflation.
The September CPI data gave us another variation on that tune. And it should once again remind us that the Federal Reserve is nowhere near its 2% target.
The Reserve Bank of Zimbabwe (RBZ) has launched a digital payment system backed by physical gold.
The RBZ rolled out its digital gold-backed token in April after successfully implementing a program to produce physical gold coins in 2022. On Oct. 5, the central bank announced that these gold-backed digital tokens could be used as a method of payment for domestic transactions.
War broke out in the Middle East over the weekend after Hamas attacked Israel. In his podcast, Peter broke down the possible economic ramifications here in the United States. He said the US can’t afford peace, much less war.
The sell-off in precious metals continued as bond yields continued to rise and a strong dollar persisted. In early trade in Europe this morning, gold was $1822, down another $26, unchanged on the year. Silver traded at $21, down $1.17. Comex volumes in both metals declined from good levels, indicating that selling pressure is declining.
The mainstream wasn’t just wrong about inflation in 2020. It was wildly wrong. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey dissects a 2020 video produced by CNBC to show just how wrong they were. He explains why they were wrong and teaches some economics along the way. He also discusses the carnage in the bond market and tells you who is buying gold.
I recently ran across a video produced by CNBC back in July 2020. It is titled “Why Printing Trillions of Dollars May Not Cause Inflation.”
That aged poorly, didn’t it?
And people wonder why I keep saying you should be skeptical of mainstream narratives.
Price inflation has been even worse than advertised.
Of course, you know that because you’ve lived it. But it is nice when the data crunchers swerve a little closer to reality.
The Bureau of Economic Analysis did just that, revising its Personal Consumption Expenditure (PCE) data higher for the entirety of this inflation cycle.
We keep hearing about a “soft landing.” According to government officials, central bankers, and mainstream financial media pundits, the US economy has dodged a recession.
So why are recession warning signs still flashing?
The markets seem to think that everything is fine. They believe the Fed has effectively beat price inflation and it can mop it up without crashing the economy. In his podcast, Peter Schiff said in reality the Fed is at a fork in the road, and there is an imminent disaster waiting no matter which way it goes. He also warned that the biggest crisis is the one nobody sees coming.
