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All posts under ‘Inflation’

What Role May Trumps' Policies Play in Creating Inflation

Among the main drivers of higher inflation expectations, one is the idea that a larger fiscal deficit will inevitably lead to higher inflation. The Trump program calls for higher defense expenditures and increased infrastructure spending. The perception in the financial markets is that fiscal spending and tax cuts add up to higher deficits, which would almost certainly imply higher inflation.

As Inflation Expectations rise, Gold looks more Attractive to Investors

It just might be that inflation expectations are suddenly on the rise, as financial markets get a grip on the Trump administration’s economic and trade policies. As inflation expectations rise, the real rate of interest moves lower and lower – making gold look increasingly more attractive. And this, along with technical factors and market psychology, is pushing gold prices higher.

Inflation, US Dollar, Gold & the Interest Rate Action by the Fed

The evidence of inflation is starting to emerge. When will the markets begin to see that the Fed is not serious about nipping inflation in the bud? We don’t know the answer but any rate increase could be the one that looks too timid and too late compared to the inflation data. As the markets begin to take note, the dollar will weaken and gold will once again behave like an inflation hedge.

Yellen Succeeds in bringing Asset Price Inflation - Result of this Success to be Feared

Yellen, like notorious previous Fed chiefs including Strong, Martin & Greenspan, can now claim success in having prolonged & strengthened an asset price inflation which otherwise may well have been about to enter its severe end phase. If history is any guide, the result of that success is to be feared. Asset price inflation goes through a mid-late phase where speculative temperatures move sharply.

Gold Investment is now Insurance for Long-Term Protection against Inflation

Inflation just got another jolt, rising as much as 2.5% YoY in Jan. Significant increases in inflation will ultimately increase the price of gold. Investment in gold now is insurance for long-term protection. Major stock indices continued to hit fresh all-time highs & it’s important to temper the exuberance with a little prudence, making gold’s investment case even more attractive.

Gold Fundamentals Strengthen With Inflation Running Hot

With negative real interest rates in place and the gold stocks trading well above their rising 400-day moving averages while showing relative strength against Gold, it is quite clear the gold stocks are in the early stages of a new bull market. The technical setup is potentially in place for the sector to make an explosive move higher over the next 9 to 18 months.

Hyperinflation In The US — A Real Or Imagined Threat?

After seeing the latest string of events unfold right before our eyes, many are pondering whether we may see hyperinflation hit the US shores. When monetary supply goes unchecked, the price of basic goods goes up & the currency loses its value. Rather than ponder Trump’s latest executive orders or over the top pronouncements, let us first look at what hyperinflation is & how it works.

Don't Ignore What Surging Inflation Indicates: Go Buy Some Gold

Changes in headline inflation measures suggest a gentle firming in prices. However, underneath the surface there is evidence that inflation may continue to rise past the steady 2% nirvana that central banks prefer. Finally, should inflation expectations rise faster than nominal rates, gold is likely to continue to merit a place in most portfolios.

Silver Prices to Soar 75% on Inflation? It’s Possible

Investors must pay attention to inflation to see where silver could go next. You see, silver prices have a very strong relationship with inflation. As inflation increases, silver prices move higher as well, in multiples. In the United States, inflation—and inflation expectations—are moving up very quickly. Silver miners could be the best place to be when silver prices soar.

Gold, Investor Optimism & Price Inflation Outlook for 2017

The effect of price inflation is not, as commonly supposed, to drive up prices. Instead, it drives down the purchasing power of expanding government-issued currency. Awareness that money is losing purchasing power only dawns on the public late in the price inflation process. Gold is therefore a far better measure of currencies’ loss of purchasing power than government inflation measures.

Is Inflation Caused by Rises in Commodity Prices or by a Deliberate Act of Currency Debasement?

If inflation is just a general rise in prices as the popular thinking has it, then why is it regarded as bad news? What kind of damage does it do? To ascertain what inflation is all about we have to establish its definition. Now to establish the definition of inflation we have to establish how this phenomenon emerged. We have to trace it back to its historical origin.

Global Economy Poised on a Knife-Edge Between Inflation & Deflation

The global economy is poised on a knife-edge between inflation and deflation. The inflationary vector could dominate quickly, based on a combination of Trump deficits & Fed accommodation. Conversely, the deflationary vector could dominate based on fundamental factors such as a strong dollar, deleveraging, demographics & technology combined with premature Fed tightening.

Run to Gold as the Inflation Beast Rattles Its Cage

Portfolio-destroying inflation is around the corner because of reckless government spending and unsustainable debt, so stock up the bomb shelter and buy gold. The latest data suggests that the inflation beast is stirring from its long slumber, which means that the classic inflation hedge of gold is on the verge of a sustained rally.

Brace for Inflation - The Next Big Trigger for Gold Prices

Based on the 10-year TIPS market, inflation expectations recently hit 1.75%, the highest level since the summer of 2015. To the extent that rates are being driven by changing perceptions of inflation & not real rates, higher interest rates may not be an impediment for gold. Gold is potentially the more leveraged play under a scenario where inflation expectations rise faster than nominal rates.

The Fed's Measure of Inflation is Furthest from American Reality

Ben Bernanke first set an official inflation target in January 2012, aiming at 2%. Has it been achieved? Well, it depends on how you measure inflation. There are many to choose from. The Fed has chosen the one that is most suppressed and furthest from the experience of most American households. So the Fed can pretend that inflation is “too low,” whatever that means.

Inflation - Difficult to Move, But Once Moving, Hard to Control

Three key measures of inflation have recently lurched across the Fed’s threshold of 2%. The recent pickup in gas prices is set to have an even sharper upward impact on the consumer price inflation basket. Inflation can really spin out of control very quickly. If it happens, it would happen very quickly. Inflation is like a supertanker: Hard to get moving. But once moving, hard to stop.

Rising Inflation & Sagging Confidence in Central Banks will Catapult Gold Prices Higher

Inflation may surprise to the upside. Consumer prices are set to rise as oil rebounds, while low or negative interest rates and bond buying by central banks have failed to boost economies. Interest rate hikes are incredibly positive for gold prices, because of the existence of the huge QE “money ball” that sits at the Fed & other central banks. Gold prices need another rate hike from Janet to move higher.

Hike Gold Price To Get Inflation When All Else Fails

Raising the price of gold is the easiest way to get inflation. A higher dollar price for gold is practically the definition of inflation. Governments can do this in a heartbeat. The Fed would just declare the price of gold to be, say, $5,000 an ounce & make the price stick using the gold in Fort Knox & their printing press to maintain a two-way market. If you don’t believe this can happen, just check the history books.

Sticky Price Inflation at Highest Level since 2009 - What it Means for Gold

The common man has little idea of what the price of gold is because he does not fear inflation. Right now, gold is only an investment hedge for institutional players & still trending up since December. If inflation starts to become obvious though & the sticky CPI suggests that this might soon happen, any upside revaluation in the price of gold is likely to be quick & intense.

Double Digit Inflation And The Rise of Gold

Inflation can really spin out of control very quickly. So is double-digit inflation rate within the next five years in the future? It’s possible. We would see a struggle from two to three, and then jump to six, and then jump to nine or ten. This is another reason why having a gold allocation now is of value. Because if and when these types of development begin happening, gold will be inaccessible.

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