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?
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.
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.
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.
