With 2021 now in the rear-view mirror, I believe that future financial historians may regard it as the year of peak speculation.
While the history of American markets is littered with periods of irrational exuberance, none of those episodes can really match the current market for outright delusion and the blatant disregard for basic investment discipline.
December gave us another big jump in consumer prices. But despite a lot of talk about an inflation war, accommodative monetary policy remains in play. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey breaks down the CPI data, Jerome Powell’s Senate testimony, and Joe Biden’s plan to fix rising meat prices. That story has a fun plot twist.
The CPI for December was 0.5% month over month, with a non-seasonally adjusted annual rate of 7.0%.
As the chart below shows, the December data reinforced a downward trend we’ve seen since a .95% reading in October. But is the recent omicron COVID spike hiding much higher inflation?
December Consumer Price Index data came out on Wednesday (Jan. 12). Month-on-month, it was again even hotter than expected. Peter called it an inflationary freight train that the Fed’s “field of dreams” monetary policy will not stop.
“Transitory” inflation has now been running hot for a full year.
Inflation in the US is at historically high levels.
So, why hasn’t gold taken off?
We hear this question over and over again. In this video, Peter Schiff answers this question and explains why the markets will eventually wake up to their misperception.
Ireland has added more gold to its reserves as inflation worries mount.
According to the latest data, the Central Bank of Ireland purchased $88 million ($78 million euros) in gold in November, adding to the two tons it added to its holdings in previous months. With the latest purchases, the Irish central bank has boosted its gold reserves by over three tons in a three-month period.
We talk a lot about how the Fed keeps its big fat thumb on the Treasury market. But it also has its big fat thumb on the housing market. And if the Fed really does follow through with its taper and its plans to shrink its balance sheet, it will have a big effect on the housing market.
If you’ve ever held something under tension down with your thumb and suddenly release it, you know what happens.
Pop!
The Fed FOMC minutes came out last week, signaling tighter monetary policy. Peter Schiff talked about the minutes in his podcast, arguing that the Fed can’t do what it says it’s going to do. If it does, it will crash the markets and the economy. And it won’t lower inflation.
The Federal Reserve released the minutes from the December FOMC meeting this week. They were even more hawkish than expected. That sparked a big taper tantrum in the markets. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey gives an overview of the minutes and then asks seven poignant questions they raise that aren’t being asked by the mainstream.
The Fed has a difficult choice to make.
Will it crash the economy? Or will it crash the dollar?
Whichever way this coin flip turns out — you lose.
