Tag: inflation

The Fed’s Quest for Higher Inflation: What Could Go Wrong?

| October 8, 2020 | Category: Economy
The Fed’s Quest for Higher Inflation: What Could Go Wrong?

The Federal Reserve is warning investors in no uncertain terms that higher rates of inflation are coming. Yet markets, for the most part, have disregarded that warning. Bond yields, for example, remain well below 2% across the entire duration range. Stock market valuations continue to reflect a sanguine outlook for inflation. And crude oil futures suggest limited upside pressure on prices. It seems the Fed has a credibility problem. In August, Fed Chairman Jerome Powell announced that the central bank would begin targeting an inflation “average” of 2%. By the Fed’s measures, inflation has been running below 2% in recent years. So getting to a 2% average in the years […]

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Beware of These Faulty “Inflation Protected” Investments

| September 21, 2020 | Articles: Experts Talk
Beware of These Faulty “Inflation Protected” Investments

The Federal Reserve last week reiterated its commitment to an unprecedented inflation-raising campaign. Specifically, the Fed aims to push the inflation rate above 2% for an extended period. The risk for investors is that central bankers succeed in their mission to depreciate the currency more rapidly – perhaps even more rapidly than intended or acknowledged in the official (understated) inflation data. Inflation is a corrosive force that eats away at the real value of savings and investments. It is perhaps the biggest threat looming on the horizon for millions of retirees who have been steered into assets marketed as “conservative” – such as dollar-denominated money market accounts, bonds, and fixed […]

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Billionaire Hedge Fund Manager Warns of 10% Inflation

| September 11, 2020 | Category: Economy
Billionaire Hedge Fund Manager Warns of 10% Inflation

Over the past month, gold has traded in a range with support around $1,900. Bulls have made a couple unsuccessful attempts to retake and hold above the $2,000 level following the sharp plunge below it on August 11th. But we are likely to see a more decisive move in the gold market one way or the other in the days ahead. The near-term outlook for precious metals markets may be determined by where the U.S. Dollar Index heads next. It has been basing out since August after trending lower earlier in the summer. The Federal Reserve Note appreciated modestly against foreign currencies ahead of the European Central Bank’s policy meeting […]

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Rising Inflation Fears Transform Precious Metals Demand

Rising Inflation Fears Transform Precious Metals Demand

As Joe Biden announced his VP pick, Wall Street’s hopes for a V-shaped economic recovery were revived by falling jobless claims and the S&P 500 inching closer to an all-time high. Precious metals markets, meanwhile, were hit with a big V for Volatility. This past Tuesday, gold prices plunged by more than $100 in one of the biggest down moves ever for the precious metal in terms of nominal dollars. Of course, that move came off an historically high level of more than $2,000 an ounce. As gold prices rise over time – and we see nothing to suggest that they have topped out here long-term – we can expect […]

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Inflation Threat Looms in 2020 as Fiscal and Monetary Stimulus Ramp Up

| December 18, 2019 | Category: Economy
Inflation Threat Looms in 2020 as Fiscal and Monetary Stimulus Ramp Up

The Federal Reserve left its benchmark interest rate unchanged as expected last week. However, Fed Chairman Jerome Powell made news with some of his most dovish remarks to date – stating flatly that he won’t hike rates again until inflation moves up significantly. “In order to move rates up, I would want to see inflation that’s persistent and that’s significant,” Powell said at a news conference following the Fed’s announcement. He would be anticipating “a significant move up in inflation that’s also persistent before raising rates to address inflation concerns.” He could get his wish in the months ahead as monetary policy, fiscal policy, and the economy all seem to […]

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Time for Investors to Reset Their Portfolios for Inflation

| November 5, 2019 | Articles: Insights
Time for Investors to Reset Their Portfolios for Inflation

As investors reset their clocks to accord with the end of Daylight Savings Time, they may also need to reset their expectations for future returns. A strong body of research suggests that artificially changing the time twice a year – forward, then backward an hour – does more harm than good.  It leads to sleep disruptions, heightened stress, missed appointments, wasted time (ironically), and a diminishment of productivity around these biannual time changes. As reported in HeadlineHealth, “Circadian biologists believe ill health effects from daylight saving time result from a mismatch among the sun ‘clock,’ our social clock – work and school schedules – and the body’s internal 24-hour body clock.” […]

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Effects of Inflation on Gold and Precious Metals

Inflation is characterized as a general increase in prices and fall in the purchasing value of money. But the question we want to answer is “How does this affect gold and precious metals?” We’ll get there in a moment. When the price levels rise, each unit of currency will buy you less goods and services, therefore, Inflation reduces the purchasing power per unit of money. This can affect the economy in various ways, like increase the opportunity cost of holding money, reduce the burden of private and public debt, change in the prices and demand for Gold and precious metals and so many more. Inflation and interest rates also have […]

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Michael Pento: Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts

Michael Pento: Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts

Your browser does not support the podcast player element. DOWNLOAD MP3 Mike Gleason: It is my privilege now to welcome back Michael Pento, president and founder of Pento Portfolio Strategies and author of the book, The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market. Michael is a well-known money manager and a fantastic market commentator, and over the past few years, has been a wonderful guest and one of our favorites here on the Money Metals Podcast. We always love getting his highly-studied Austrian economist viewpoint. Michael, welcome back, and thanks for joining us again. Michael Pento: Thanks for having me back on, Mike. […]

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The Relationship of Oil and Precious Metals

The Relationship of Oil and Precious Metals

Precious Metals and Oil have a History Precious metals, especially gold, have long been known for their incredible value and powerful purchasing power all over the globe. They are considered the standard of value for any currency that is used anywhere in the world. They are often referred to as crisis commodity as people flock into them especially in times of economic and geopolitical turmoil as they serve as inflationary and deflationary protection. Over the years, studies between the correlation of precious metals and other commodities such as oil have been a hot topic, which has been further ignited with recent global developments. Currently, the financial markets have become extremely […]

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Inflation and its Effects on Cash Holdings and Investments

Inflation is a sustained rise in overall prices. A moderate rise in inflation means economic growth while high inflation results in an overheated economy. There are certain factors that affect inflation and a couple of theories that are tied to it. So before we proceed it’s very important to know some of the standing factors that influence inflation and how it affects cash holdings and investment. Inflation can be caused by a number of factors, rising commodities, high-interest rates… etc. Here are some principles and theories you need to know before we continue.  Fraction- Reserve Banking The world currently uses this type of banking system. When someone deposits $1000 in […]

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The Impact of the U.S. Economy on the Prices of Precious Metals

The price of precious metals, especially gold, reveals the true economic state of U.S. If today’s gold price is soaring high, it means that the economy is not healthy. It is because investors see gold as a safe haven on the verge of economic crisis. On the other hand, when the price of gold drops down, it signifies that the economy is healthy. Everything appears to be interdependent in modern complex economies, but it cannot be concluded that everything effects everything, including the value of gold. According to Fed Chairman Jerome Powell, in his first speech on the economic outlook since assuming the helm at the U.S. central bank on […]

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Gerald Celente Exclusive: “If rates go up too high, the economy goes down, end of story”

| March 12, 2018 | Category: Economy
Gerald Celente Exclusive: “If rates go up too high, the economy goes down, end of story”

Your browser does not support the podcast player element. DOWNLOAD MP3 Mike Gleason: It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente is perhaps the most well-known trends forecaster in the world and it’s always great to have him on with us. Mr. Celente, thanks again for the time today and welcome back. Gerald Celente: Oh, it’s always great being on. Thank you. Mike Gleason: Well, Gerald, it’s never a dull moment in Washington, D.C., these days. President Trump always keeps it lively. We have the never-ending Russia controversy, of course, the war of words with North Korea, and the intervention […]

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5 Big Drivers of Higher Inflation Rates Ahead

| February 22, 2018 | Category: Economy
5 Big Drivers of Higher Inflation Rates Ahead

Investors got lulled into a state of inflation complacency. Persistently low official inflation rates in recent years depressed bond yields along with risk premiums on all financial assets. That’s changing in 2018. Five drivers of higher inflation rates are now starting to kick in. Inflation Driver #1: Rising CPI The Consumer Price Index (CPI) is a notoriously flawed measure of inflation. It tends to understate real-world price increases. Nevertheless, CPI is the most widely followed measure of inflation. When it moves up, so do inflation expectations by investors. On February 13th, the Labor Department released stronger than expected CPI numbers. Prices rose a robust 0.5% in January, with headline CPI […]

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Raising the Debt Ceiling Means Jacking Up Future Inflation

| August 2, 2017 | Category: Economy
Raising the Debt Ceiling Means Jacking Up Future Inflation

The dramatic failure of the U.S. Senate’s last-ditch Obamacare repeal effort leaves Republicans so far without a major legislative win since Donald Trump took office. No healthcare reform. No tax reform. No monetary reform. No budgetary reform. The more things change in Washington… the more they stay the same. Despite an unconventional outsider in the White House, it’s business as usual for entrenched incumbents of both parties. The next major order of business for the bipartisan establishment is to raise the debt ceiling above $20 trillion. Since March, the Treasury Department has been relying on “extraordinary measures” to pay the government’s bills without breaching the statutory debt limit. By October, […]

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