Idaho Democrat Leader Brain Malfunction: “We Can’t Say Gold Is Going to Protect Us from Inflation When [It has Risen from] $27 an Ounce to $1,218 an Ounce”
The Dunning-Kruger effect is the idea that low-ability people tend to suffer from illusory superiority. The phenomenon, first studied by David Dunning and Justin Kruger, says that people who know the least tend to overvalue their own competence, and tend to believe that they are experiencing some sort of upper-echelon level of thinking. While the original study was conducted in 1999, we witnessed what appeared to be the Dunning-Kruger effect in action this past Tuesday on the floor of the Idaho House of Representatives. And while it’s only March, but we also have identified the front-runner for our “Aurophobe of the Year” award. (Aurophobia is the irrational fear of gold.) During the March 14th floor debate […]
Those who hoped President Trump would tone down his protectionist rhetoric will be unnerved six weeks into his tenure. From his meeting with business CEOs, Trump has put trade “front and center.” So far, all is going well for the president. Markets are inching higher, and inflationary forces have picked up. However, bringing back jobs and reducing the trade deficit will be a tougher task. (although jobs have set historic gains already) A Victim of His Own Success Trump’s election unleashed the “animal spirits” that have been absent post-financial crisis. On the surface, this is good for the economy. The US is currently the only major country raising interest rates and enjoying […]
BY HARD ASSETS ALLIANCE It’s no secret that people don’t like uncertainty. By nature, humans are generally creatures of habit—preferring stability and safe outcomes. This is especially true when it comes to financial matters. However, financial markets are almost always facing some type of uncertainty, be it corporate earnings, interest rates, or geopolitical events. The issues are often benign and the outcomes are non-events, but as we know, there are always surprises causing markets to react. The volatility index, commonly referred to as the VIX, is a measure of investor uncertainty and fear of the unknown. The VIX can go months at a time meandering along without much direction and […]
We are currently witnessing one of the greatest experiments in human history. History teaches us: Neither mainstream economics nor central bankers are aware of how to control the specifics of inflationary dynamics. The pitiable attempts to regulate the level of inflation like a thermostat are testament to the hubris of monetary policymakers. Waves of price inflation happen unexpectedly and in very compressed time periods. As the following chart shows, this is confirmed by numerous historical episodes.
The inflation camp shares the conviction with deflationists that there is too much debt in the system. But they differ on the outcome. Harry Dent and those in his deflation camp figure that central banks and governments will ultimately be powerless to stop default. They think the purchasing power of the dollar will rise against everything else, including gold. We expect default to occur primarily through inflation, with debts stealthily repudiated through repayment in less valuable dollars.
In exactly one week, the 2015 edition of the “In Gold We Trust” report will be launched. It is the 9th edition. With a global reach of some 1 million readers, it is probably the most read gold report worldwide. Although the gold report will be published in one week, GoldSilverWorlds had the privilige to “take a look into the kitchen” of precious metals expert Stoeferle. This article highlights 10 interesting charts from the upcoming report.
Depending on the magnitude of additional “money printing” that the world’s central banks will unleash upon the global financial community, we could see hyperinflation in several countries within a few years. Why? Central banks will try everything to avoid or reverse a deflationary collapse in paper asset markets because a deflationary collapse is “game over” for their credibility, governments, and politicians. They will print and print more and continue to fuel the inflationary boom, and … the bigger the boom, the larger the distortions, and the deeper the collapse.
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.