Treasury Secretary Admits She Was Wrong About Inflation: Treasury Secretary Janet Yellen said many times last year that inflation would be both mild and transitory. Now she’s admitting she got it wrong. And some observers say she continues to get it wrong.
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According to the Bureau of Labor Statistics, the CPI increased 1.0 percent in May, after rising 0.3 percent in April. This is a huge increase, especially since we are talking here about changes from month to month. The core CPI, which excludes energy and food prices, rose 0.6%, the same increase as in April.
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The Japanese yen is down to 135 yen to the dollar from 127 earlier this month as the Yen is starting to crack. Against the US dollar, this is the weakest yen in 24 years. The Japanese central bank issued currency tumbled along with Japanese bonds and their stock market yesterday.
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Senator Elizabeth Warren and President Joe Biden claim that inflation[i] is caused by greedy corporations. And they propose to solve this problem by making the corporations pay. Whether it’s extracting a “windfall profits” tax, crushing them under even more regulation, or attacking them with antitrust enforcement, the idea is the same.
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Friday’s Consumer Price Index Report sent shockwaves through financial markets. The 8.6% annual reading was yet another new multi-decade high – dealing a body blow to analysts who believed inflation pressures had peaked.
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Unless you live under a rock you will have seen the US CPI print on Friday night was a whopping 8.6%. That was higher than expected and a new 40 year high. Watching gold react live and thereafter was an interesting journey of market cognitive dissonance.
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There isn’t any doubt, when inflation accelerates like it is right now, the lower income class has their financial worlds turned upside down. After all, that’s what happens when most of the food that we eat and fuel we use every single day suddenly becomes 10% – 43% more expensive.
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The signs this tangled web of stagflationary high and increasingly sticky looking inflation, tumbling growth, and hawkish (tightening) central banks is fast approaching a second big capitulation in shares and property are growing.
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Experts from the World Bank finally admitted that the risk of stagflation is getting bigger and more real. For gold, however, that’s pretty good news. Better Late Than Never – First they ignore you, then they laugh at you, then they fight you, and finally you win.
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Six million British households are set to experience power cuts as the Government plans electricity rationing this winter. Government modelling of a ‘reasonable’ worst case scenario where Russia cuts off all gas supplies would see gas-fired power stations limited.
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As state legislatures clear out and head home for the summer, one reality has emerged: Sound money is a winning issue in the states. At a time of record-high inflation and geopolitical uncertainty across the globe, states are wisely taking steps to better enable citizens to acquire, sell, and/or use gold and silver.
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Old news now but let’s talk about the implications of that surprise 50bps RBA rate increase yesterday. That it happened on the same day the World Bank dramatically downgraded global growth and openly conceded stagflation, is a reality that cannot be ignored.
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The wave of investors buying physical gold and silver over the past two years has certainly impacted the markets. Retail demand for coins, rounds, and bars is now multiples of what it was prior to the COVID outbreak and the 2020 presidential election…
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The recipe for happiness is to see the bright side of even negative situations. Positive interest rates are rather bad news for gold. Here’s why. This is a huge change, perhaps a game-changer! What do I mean?
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We’ve suggested many times that an economic “storm could be brewing” so that you could start or continue preparing for it. Well, if Jamie Dimon (CEO of JP Morgan) is correct, it looks like we might have underestimated how bad things could get.
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Its Monday morning so lets keep the words to a minimum and check out some compelling charts for gold and silver. First, that cup & handle formation we keep banging on about just gets better and better…
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Census Report: High Inflation Challenging American Households. How bad is inflation, really? Pretty bad, says a Census Bureau survey. More than 1/3 of Americans are suffering. Learn more here.
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The macro case for inflation being around at a higher rate for longer and contributing to a further bear market in financial assets is based first and foremost on structural commodity supply shortages today. There has been a multi-year declining investment trend in capital expenditures…
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For as much as we struggle to compare present day to any point in U.S. history, the 1970s to early 1980s are an almost eerily accurate parallel. People on the street didn’t have a smartphone in their hands, and mail took a bit longer to arrive. But the economic conditions are all here.
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Even if nominal GDP were to grow a full 20% over the next two years, not out of reason in today’s historically high inflationary environment, there is the potential for a further 78% decline in stock prices from current levels to settle at the low multiples of the last stagflationary era.
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Talk of “peak inflation” is helping to drive investor inflows back into stock and bond markets. As the narrative goes, inflation readings have hit their highs for the year. The Federal Reserve will hike rates until monetary policy “normalizes,” then declare victory over the very problem its policies unleashed.
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There are conflicting views amongst experts around where this unprecedented economic setup ends. Much of the market is sitting on its hands unsure as to what to. Ray Dalio last week reminded us that ‘cash is trash’ so where does one invest now?
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Inflation, and now possible recession, are damaging more than prices, but spending less and working harder may not be enough to overcome lower wages, savings & living standards. More than one-third of U.S. households said they had trouble paying bills from April 27 through May 9.
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Retirees are struggling to make ends meet due to falling Social Security payments and rising prices. In the following Touchpoint video I’m going to delve into the details. Odds are stacked against retirees: Social Security purchasing power is down 40% & we need to fight inflation!
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Criticism continues to mount on the Reserve Bank of Australia for acting with too little too late in containing inflation in Australia. Having lifted rates for the first time in a decade to just 0.35% earlier this month, most other central banks are aggressively hiking.
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Two of the world’s best-known economists say it’s we may be headed toward a painful combination of high inflation and economic downturn that we call stagflation. Noted economists Mohamed El- Air E Yawn and Stephen Roach recently sounded the stagflation alarm…
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Last night saw even more poor economic data and Fed minutes confirming they have no intention of backing off at least for 3 more rounds of 50bps hikes. Clearly fuel for more share market falls one would think… However the market seemed to somehow latch on to the hope the Fed will stop in September?
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It turns out that quality growth stocks do not always outperform; that the Federal Reserve will not always step in to protect your wealth… and that the prices of the growth stocks in your portfolio have long been more a function of loose monetary policy than the priceless nature of innovative thinking.
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