Commodity Trade Mantra

Posts Tagged ‘Asset Inflation’

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.

Rising Commodity Prices Signal Inflation - Purchasing Power Collapse

Asset inflation is increasingly spilling over into commodities, the feedstock for final goods. Unless commodity prices start falling soon, they are certain to drive up record price inflation, despite the lack of economic activity in the advanced economies. The official line, that there is almost no price inflation, is misleading everyone. Monetary inflation withdraws purchasing power from the masses.

Has The S&P 500 Topped At Exactly The Same Price As Gold?

Interesting facts: Spot gold has topped at exactly same levels as S&P500 top to date, on a closing basis. When gold peaked at $1,895.00 in Sep 2011, S&P500 was at a major intermediate bottom at 1200. Spot gold made a double bottom below $1,200 in Dec 2013 while S&P500 hit all time highs at 1890.90 a week ago.

Welcome To The Currency Wars, China's Yuan Devalues Most In 20 Years

Yuan possesses the very two qualities of a carry trade currency: High onshore interest rates & a gradual but steady appreciation trend. PBoC is capable of altering the second condition & it seems that it’s doing exactly so by reversing the appreciation trend & pushing up the volatility of the yuan.

If You Believe In Math, Buy Gold To Protect Yourself

A lot of the fear caused by tapering has been subdued. QE will go on much longer than previously thought, equities can go higher, but eventually, there will be another 2008-style crash and there will be a crisis in bonds and currency. We will see the true power of gold then.

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