Even if inflation is here to stay, we are not going to see the Fed (or other advanced economies) central banks raise interest rates in the manner of the late 1970s. Why? Because central banks are trapped..
This combination of too many dollars chasing too few goods is a classic formula for inflation, and on a rolling average basis we have indeed experienced the highest rates of inflation this past spring and summer that we have seen in the last forty years.
Milton Friedman was wrong. Inflation is not always and everywhere a monetary phenomenon. Useless ingredients are the unnamed force behind the UK's Energy Crisis.
But I'll remind you again that no uptrend goes to infinity and no downtrend goes to zero. So, EVENTUALLY, the current downtrend in precious metals prices will end and things will turn up again.
With inflation already scorching hot and rising still, it appears our leaders want to do all they can to make shortages worse and push money-printing higher with multi-trillion-dollar..
That’s exactly what happened in the late 1970s, with gold and silver embarking on epic bull markets. The economic, political, and monetary pressures in place today may be leading up to a repeat.
I have explained this in past articles such as this one, but the main point is that sentiment is what drives the market and places the spin on how the public views any of the fundamentals.
According to Bank of America, news emerged that China is planning to further consolidate its rare earth industry, combining the existing six state-owned enterprises to just two, split between northern and southern regions.
Evergrande, the debt-limit civil war, supply chain disruptions. All are conspiring to take the markets lower. We live in an unscripted world. Not like the movies. We discuss.
