For the week commencing March 2nd, there are some important economic data and central bank announcements, as seen in the table below. The interest rate decision of the European central bank on Thursday is undoubtedly the key announcement this week. Friday is an important day because of the unemployment report and nonfarm payrolls for the month of February. Our expectation is that the events on Thursday and Friday have the potential to create volatility in COMEX gold and silver, hence influence the gold and silver price. The PMI report in the U.S. and Europe, CPI in Europe, and Yellen’s speech at Citizens Budget Commission’s Annual Awards Dinner are not likely to cause volatility in the metals market.
Exchanging some of your “paper promises” (currency) for the physical financial reality of gold and silver on a regular basis makes more than just good business sense. It helps make sure that come what may in your financial life, your “financial insurance policy” will be there to help you out, when, not if, the chickens from so many years of unsound government policies come home to roost. Look toward Argentina, Venezuela, Russia and others as harbingers. Even now, the U.S. inflation rate is arguably several percent higher than the “official” figure. You would do well to pay attention and plan accordingly.
We do not know what the future entails when our existing monetary and financial systems break down, but we are convinced that gold and silver will offer security (at least) in the transition period. If we look at the gold purchases by the East, it also reveals how emerging markets have set their minds on gold. This further supports our conviction that a form of gold standard might regain a prominent status and take over once again. However, the prevailing monetary experiment called “fiat currency” is likely to persist for some time to come.
Wars will continue but may not be decisively won or lost. Debt and currency in circulation will rise exponentially. Consumer prices will continue increasing.
Gold, silver, crude oil, gasoline and food will become much more expensive. Voters will continue voting for politicians and wars even though both cause prices to rise. The number of Americans on food stamps (SNAP) will continue rising. Unemployment statistics will fall in election years but the actual number of Americans working full-time jobs will decline.
Although today’s Fed announcement didn’t really change anything, the financial markets continued to anticipate higher U.S. rates. The first chart shows the 5-Year Treasury Note Yield climbing close to its yearly high. The 10-Year T-Note yield also bounced. The widening spread between U.S. and foreign yields continues to support the dollar. The second chart shows the Dollar Index hitting a new recovery high. That pushed most commodity prices lower. The orange bars in the second chart shows the Gold Trust falling to a new low.
Expect more spending, debt, wars, and price inflation. Expect higher food and energy costs, a devalued dollar, and less confidence in governments and paper currencies. Expect more stock market crashes, corrections, booms, and blow-offs. Expect more “happy-talk” from politicians and financial TV while most of the US, Europe and Japan suffers through what appears to be an on-going depression. Expect long-term economic safety with gold and silver, perhaps ONLY with gold and silver.
As I started writing in these pages in 2014, inflation is becoming a real problem in America. Years ago, I started writing about how all this money the Federal Reserve is creating out of thin air would become inflationary. That’s exactly what is starting to happen now. I have said it many times before: inflation in the U.S. economy is going to be a major problem. Gold is the best hedge against inflation. That’s why it’s an important part of any investment portfolio.
Inflation to any degree is not an act of God. Neither are currency nor stock market crashes. Central bankers create these calamities and then ride off into the sunset, earning six-figure speaking fees and multimillion-dollar book deals. The positive reinforcement they receive ensures they’ll repeat the same mistakes over and over again. Warnings must be issued constantly. Bad things are going to happen to the finances of individuals who aren’t prepared.
Expect more debt and higher prices for stocks, energy, gold and silver. Expect more volatility as prices adjust for the latest shock, insolvency, war, and announcement from the Federal Reserve or supposedly important politician. The powers-that-be know the game is “Inflate or Die” and while they might not be all-powerful, a century of increasing prices indicates they will probably get what they want.
The conclusion is inescapable: One must buy gold and silver now, before the masses rush in. The upcoming inflationary storm will encompass most of the globe, so the amount of demand could push prices far higher than many think. Your neighbors will soon be buying. We suggest beating them to the punch. Gold speaks every language, is highly liquid anywhere in the world, and is a proven store of wealth over thousands of years.
The Incrementum Inflation Signal started showing rising inflationary momentum after a period of 19 month of disinflation. Is Inflation making a comeback just as the consensus worries about deflation risk? That was the subject of Incrementum’s first Advisory Board in which much respected names have a seat.