Commodity Trade Mantra

All posts under ‘Inflation’

Deflation Scares Central Bankers - Can Gold Be Their Biggest Ally?

Every Central Banker dreads deflation. They’re doing everything they can to generate a 2% annual rate of inflation, but can’t get it. Well, the last thing you want to see is the gold price going down. If prices continue to drop, they fall to a point where they start to impact jobs. Drilling rigs & mines shut down. So in-fact, they want gold and silver prices, copper & oil prices to go higher.

Bull Market in Commodities - Central Bankers to be Blessed with Inflation Soon

Commodities are now nearing bull-market territory after rebounding from the lowest level in at least 25 years. Investors have poured more than $17 billion into exchange-traded products linked to commodities since the start of the year. Sharply rising commodity prices since the beginning of the year are a warning sign that perhaps the inflationary times have begun.

Push Gold Prices Higher to Unleash Inflation - The Elite’s Master Plan

Yesterday, I explained how the monetary elites are looking to engineer higher gold prices to generate inflation since nothing else has worked. That’s the first answer. Today, I show you the second part of their plan, which may already be underway. The plan now is to have much larger budget deficits. When the government spends & deficit finances it, it will eventually produce inflation.

Higher Gold Prices can Produce the Inflation the Elites Seek

There are three ways out of debt. One is default, which is not a good option. One is growth, but it’s not happening. The third way is inflation. The government has to have inflation. If it doesn’t, there’s going to be a crack-up in the national debt. But we’re not getting inflation from monetary policy. There’s another option & that’s to bid up the price of gold.

Inflation: A Semantic Change Worth Noting

The concepts of inflation & deflation have been completely misconceived by the public and economists alike. The semantic revolution has changed the traditional connotation of these terms. What people call inflation or deflation is no longer the increase or decrease in the supply of money, but its inexorable consequences, the tendency toward a rise or a fall in commodity prices & wage rates.

The Gold Price Has Been Captured By The Modern Banking System

The dynamics behind the gold market are however different now from the early seventies. This time, the gold price is likely to be driven by physical shortages in the old world, as American and European investors wake up to stagflation, their central bank’s interest rate dilemma, and the loss of physical liquidity from their vaults.

Inflation Expectations, Fears, are Rising and Markets are Responding

When I ask if inflation is about to make a comeback, what I’m really wondering is if the value of the dollar is about to fall. I prefer these measures not because they are more accurate – although I think they generally are – but because they are more timely. Prices will follow the value of the dollar eventually but the impact on investments is much quicker.

Inflation - The Fed's Nightmare Scenario Is Becoming Reality

Higher inflation is not a dream come true. It is the Fed’s worst possible nightmare. It will expose the error of their 8-year stimulus experiment & the Fed’s impotence in restoring health to an economy that it has turned into a walking zombie addicted to cheap money. If inflation catches fire now, with growth close to zero, the Fed will be completely incapable of controlling it.

Helicopter Money - The Recipe For Inflation Gathers Momentum

Where will inflation come from? With helicopter money, Congress spends the money. It covers its deficit with more borrowing & the Fed prints the money to cover the borrowing. It’s essentially monetizing the debt. The difference is that in the case of QE, there’s no extra spending. In the case of helicopter money, there is because Congress spends all the money. – Your recipe for inflation.

The Inevitability Of A Very Dramatic Inflation

Since deflation is the problem that’s staring us in the face now, governments are doing everything they can to reverse it & return to inflation, as they benefit from inflation. People can only be taxed so much before they rebel, but inflation acts as a hidden tax & most people don’t recognise it. Trouble is, hyperinflation, when it comes, comes very fast and is uncontrollable.

How Inflation Could Be Caused in 15 Minutes

So-called “money printing” is seen as a certain path to inflation. The Fed has printed almost $4 trillion since 2008. Yet inflation (at least as measured by official statistics) is barely noticeable. With so much money around, where’s the inflation? Increased money supply alone does not cause inflation. The money must be borrowed and spent.

Beating Inflation Could Get Even Harder

Financial repression basically means ensuring savers can’t beat inflation. When savers lose out, debtors win. And our government is one of the biggest debtors around. The classic tools of financial repression include encouraging positive inflation, holding interest rates down below that level & limiting the options for savers looking to maintain their standard of living.

Crashing Inflation Expectations Suggest Imminent Launch Of QE4

Summarizing it all: The last three times inflation expectations tumbled this low, the Fed was about to launch QE1, QE2, Operation Twist and QE3. And the Fed is now expected to hike rates in less than a month even as inflation expectations are the lowest since Lehman? The Fed is damned if it hikes rates & its credibility is damned if it launches QE4. Good luck.

Asset Price Inflation Enters Its Dangerous Late Phase

A progression of the asset price inflation disease into its final stage (general speculative bust and recession) would mean the end of monetary inflation and also inflation in goods and services markets. What could bring about this transition? Most plausibly it will be a splintering of rose-colored spectacles worn by investors. What could cause the splinter? Read here.

How Much Is Gold Really Worth?

Is gold reasonably priced? Too high? Too low? Who knows? But we wouldn’t worry about it. Either the price of gold is too high… or too low. How’s that for a helpful analysis? It depends on how you adjust for inflation, which is far from an exact science. But had gold prices kept up with UAW hourly wages, it would be priced at about $2,485 today.

I Sure Am Glad (To Just Hear) There's No Inflation

Cost of things: Consumer price index is up 38%, college costs are only up by about 100%, State & local government taxes are up 75% & urban-area rents are up 56% – all since 2000. Despite all these widely known examples of rampant inflation, every month we’re told – Inflation is near-zero. The Fed is terribly worried that this deflation will wipe out humanity without a healthy dose of inflation.

An Austrian take on Inflation

Success of monetary policy in achieving its inflation target will itself trigger a crisis. The dynamics of the situation suggest that as soon as the consensus view moves away from expectations of deflation, progression to the collapse of affected currencies could be rapid & the rise in the currency price of gold will be sudden & spectacular.

The Fed Waited Too Long: Here Comes Inflation

This inflation surge is going to be led by wage inflation. By the time the Fed realize that the labor market is so tight that employers are voluntarily raising wages across the board it is far too late, you are officially behind the curve as the surge in wage inflation is signaling loud and clear. The Fed will have no choice but to raise rates fast.

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