Commodity Trade Mantra

Posts Tagged ‘Consumer Price Index’

The Stability Regarding Purchasing Power of Gold is Unprecedented

An often-perceived analysis in the gold community is that gold is the constant in our global economy. While there is no exact constant in economics, the stability of gold’s purchasing power is unprecedented. Not only on a gold standard the metal shows it’s constant nature, but also off the gold standard gold’s purchasing power is remarkably constant, albeit more volatile in the short term.

Can the Price of Silver (the Year's Top Performer) Continue to Rally?

With the price of silver up nearly 40% year-to-date, investors are wondering whether it can continue. Experts say it may have more room to run, particularly as global interest rates continue to stay negative. It wouldn’t be inconceivable to see a silver supply shortage if there was heightened demand, & in that case, a silver to gold ratio of 20 to 1 (or lesser) is not an impossibility.

Believe it or Not - It’s Way Too Early to Take Profits in Gold and Silver

If another asset appears better positioned to deliver capital preservation or if the risks to capital fade, it will be time to sell some of your physical gold and silver. For now, the risks are extreme, and most other options look awful. Here are a few signs which would signal it is time to lighten up on gold and silver. Simply hold on tightly to your precious metals till then.

Why One Analyst Believes Gold Prices Could Hit $3,000 an Ounce

We are likely entering a new gold bull market since the previous one concluded in September 2011. Since 1970, we’ve seen five gold bull markets, each one lasting an average 63 months and returning an average 385%, according to the WGC. Dr. Diego Parrilla stated that “a perfect storm for gold is brewing” & predicts gold could rise to $3,000 within the next three years.

Why the Fall in Oil Prices is a Problem for Everyone

The increase of oil prices during the ‘70s caused inflation and recession in Europe & the US while oil producers were building a trade surplus & currency reserves. On the other end, in the late ‘80s & all of the ‘90s, the collapse of commodity prices contributed to a long period of economic growth in industrialized countries & caused serious problems for some oil producers.

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.

Negative Interest Rates Make Gold And Silver More Important Than Ever

You should soon expect to start paying interest for the “privilege” of lending your savings to a bank! Central planners will soon move from zero interest rate policy to the launch of negative interest rates. Look for investor demand to rise dramatically in the coming years in spite of the bias against gold and silver from Wall Street.

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.

What's Next For Oil And Gold: Thoughts From Eric Sprott, Rick Rule & Marc Faber

Weak economies around the world offer weak demand for commodities and for capital. The effect is to keep interest rates extremely low and to push commodity prices down. We can therefore view the oil price as a symptom of poor global economic growth, which is a long-term problem & not just as a consequence of a slight oversupply.

Central Banks Have Failed Because They Can't Push Wages Higher

Lowering interest rates to zero and issuing unlimited free money for financiers to generate asset bubbles has had a negative effect on wages and household income. This is not accidental or bad luck – Central bank money-printing cannot possibly have any positive impact on wages. “Bad” inflation is prices rising while wages stagnate.

Why the Dollar’s Reserve Currency Status is America’s “Achilles Heel”

Without the belief of the U.S. dollar as an acceptable world reserve currency, the U.S. is a bankrupt nation. The reserve currency is that country’s Achilles heel, and the stock and bond markets are not prepared for the consequences of the U.S. dollar, that’s backed by nothing other than faith, no longer being a reserve currency.

Price of Gold Will Rise - Greenspan

It’s not because former Fed Chair Alan Greenspan said he thinks the price of gold will rise – I don’t need his investment advice; it’s that he shed light on how the Fed works in ways no other former Fed Chair has ever dared to articulate. All investors should pay attention to this.

Inflation's Not the Only Way Easy Money Destroys Wealth

One of the major negative factors that undermine the real wealth generation is loose monetary policy of the central bank, which boosts demand without the prior production of wealth. The longer the Fed’s loose policy stays in force the harder it is for wealth generators to generate real wealth & prevent the pool of real wealth from shrinking.

A Win-Win Scenario for Gold Investors

It is unclear if the world will tip into inflation or deflation, but one or the other is almost certain. The good news for gold investors is that gold goes up in either case as shown in the 1930s period of extreme deflation and extreme inflation in 1970s. Investors can meanwhile use setbacks to acquire gold at more attractive prices.

Diversification and Discipline Are Key to Investing in Gold

When gold prices plunge as they did in 2013, it’s instinctive for our so-called reptilian brains to hijack our better judgment. Our primordial fight-or-flight response kicks in & too often we choose to fly, only to regret our decision later. Like training for a marathon, investing in gold isn’t for the apathetic. It requires strong-willed discipline.

The Ongoing Rot in the Economy

However hard the Central Planners try, they will soon realize that no amount of money printing can cleanse the rot of the US economy. Here we investigate the U.S. consumer & show that for a large portion of the population, things are not anywhere close to being better, in fact they are worse than before the recession.

Which way is Inflation Blowing? Watch Commodities

Rapid growth of the money supply usually fuels higher rates of inflation. It’s the narrative about low inflation & weak Gold prices that enables the endless printing of money by central banks. Bubbles in the European and US bond & stock markets can be sustained in the stratosphere, only as long as inflation is “SAID” to be running near-zero.

3 Developing Gold Market Situations to Monitor for the rest of 2014

It has been a good year for gold thus far, but what about the rest of 2014? We are monitoring 3 developing situations that could have a profound impact on gold demand during the remainder of the year — driving forces that could provide impetus for a classic gold run that could begin with a summer surprise.

Is It Time to Admit that Gold Peaked in 2011?

Some argue that the 2011 peak of $1,921 is the equivalent of the 1970s mania peak of $850 in Jan of 1980. Today’s volatile world is exactly the kind of circumstance gold is best for. Regardless of the measure, gold has not matched its 1980 peak. And the reasons to own it have not faded. Indeed, they have grown.

The Bear's Lair: Where's the link to Inflation broken?

Monetary economists around 2009-10 were sure that the Fed’s unprecedented creation of “narrow money” in the form of bank reserves would show up fairly quickly in a burst of inflation. The Fed has increased monetary base by $3 trillion, or 319%, since Sep 2008. Yet inflation remains very subdued – Why?

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