Bond Yields Say Enough is Enough
Okay, FED, I think we all understand by now that you’re serious about squashing inflation. Are you similarly serious about finding out why inflation persists, even though you’ve raised it to a point that America’s housing industry is frozen?
The answer, simply put, is that we are living in an inflationary period.
There, I said it. FED or no FED, inflation we shall have. By the way, Biden’s Inflation Increasement Act—I know it’s called the Reduction Act, but it basically incentivizes the opposite conditions in the short-term—is an entirely anti-globalist blueprint on how to bring industry and jobs back to American soil and take advantage of the closing wage arbitrage with China (Trump supporters… don’t go nuts). Yes, Biden can also draft anti-China/anti-globalist economic reforms.
Just don’t call it the Inflation Reduction Act and deceive the public, when what it guarantees is lots of materials, goods, labor and other forms of inflation, I guess…
Because the FED is a bank, a lending institution with a balance sheet, it can help to offset harmful inflation, but it can never really change the natural trajectory of it.
For 31 years, the world has enjoyed the wholesale liquidation of the Soviet Union’s riches for pennies on the dollar, the mass industrialization of China at labor costs that are akin to slave wages and the birth of the Internet, all contributing to deflation.
Now these forces, which served to do one thing, are going the other way. Russia’s riches will be sold restrictively and not for cheap; China’s labor base is also shrinking and not for cheap. What’s more, 52 countries have favorable salaries (lower than Chinese ones), and the Internet’s miraculous trains can’t counteract these bigger trends.
So I won’t leave you hanging anymore; we have a problem, and here it is:
Courtesy: Zerohedge.com, Bloomberg
93% Of Investors Generate Annual Returns, Which Barely Beat Inflation.
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This past Sunday, I said that I’d explain on Tuesday what I think is key when it comes to the best way to think about the price of silver and gold, but since Tuesday’s publication focused on the potential end of the world, today is when I’ll address gold and its price.
When I think of my gold/silver physical holdings, I think of them in terms of purchasing power.
If, in 2022, one’s holdings were comprised entirely of precious metals, he’d be able to buy WAY MORE shares of the world’s best businesses today, so 2022 was a genius time to be in metals.
Don’t think of gold’s and silver’s nominal prices so much as their nominal price, compared to other classes.
When you do that, you see in the glorious chart above that the last two times we were here, 2000, 2008 (and to a degree late 2015), metal prices bottomed and began outperforming.
We are here again, where things break and the unbreakable (gold and silver) remain intact and shine greater than all other copycats.
Hi Ho Silver!
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