Most Popular
1. Dow Max Drawdown Bear Stock Market 2022 - Accumulating Deviations from the Highs - 21st Feb 22
2.Putin Starts WW3 in Ukraine, Will Use Tactical Nuclear Weapons, China Prepares Taiwan Blitzkrieg - 28th Feb 22
3.World War 3 Phase 1 - Putin WINS Ukraine War! - 25th Feb 22
4.INVESTORS SEDUCED by CNBC and the STOCK CHARTS COMPLETELY MISS the BIG PICTURE! - 10th Feb 22
5.Will There Be A 2024 US Presidential Election? - 3rd Mar 22
6.Gold and SIlver, Precious Metals Sector Is at a Terrific Buy Spot - 6th Feb 22
7.Why Putin Wants the WHOLE of Ukraine - World War 3 Untended Consequences - 6th Feb 22
8.Dow Stock Market Expected Max Drawdown 2022 - 19th Feb 22
9.Stock Market Calm In the Eye of the Inflation Storm - 4th Mar 22
10.M = F - Everything is Waving! Stock Market Forward Guidance - 7th Mar 22
Last 7 days
Why Ray Dalio is WRONG About China - Principles for Dealing with the Changing World Order - 24th May 22
Globalists Convene to Plan Central Bank Digital Currencies - 24th May 22
After Recent Highs, What’s Next for the Gold Junior Miners? - 24th May 22
Why APPLE Could CRASH the Stock Market! - 21st May 22
Why Is Crude Oil Ignoring US Inventories? - 21st May 22
Here is Why I’m Still Bullish on Gold Mining Stocks - 21st May 22
THE INFLATION MEGA-TREND QE4EVER! - 20th May 22
US Real Estate Investors – Is There An End In Sight? - 20th May 22
How Technology Affected the Gaming Industry - 20th May 22
How To Set And Achieve Reasonable Goals For Your Company - 20th May 22
How Low Could the Amazon (AMZN) Stock Price Fall? - 19th May 22
Bitten by FANG? Clocked by Cryptos? -- 'Air Pockets' Everywhere - 19th May 22
Northern General Hospital Orthopedics Fractures and and Ankle Clinic Consultations Real Patient Experience - 19th May 22
Cathie Wood Goes All in on Teladoc, ARKK INSANE Noob Investing Strategy! - 17th May 22
This is Anything but Positive for US Housing Market - 17th May 22
What Should We Do If There Is No Fed Monetary Policy Pivot? - 17th May 22
All Possible Ways to Earn Free Litecoin - 17th May 22
How low Could the Amazon Stock Price Fall? - 16th May 22
Cathy Wood ARKK INSANITY There is NO Coming Back! - 16th May 22
NASDAQ 100 Stock Market LOWER LOWS & LOWER HIGH - 16th May 22
Sanctions, trade wars worsen US inflation - 16th May 22
AI Tech Stocks Earnings BloodBath Buying Opportunity - 14th May 22
Futures Contract – Trading Crude Oil With USO - 14th May 22
How to Get Kaspersky Internet Security for 80% Discount! Do not Pay Renewal Price! - 14th May 22
Sagittarius A* Super Massive Black Hole Monster at Centre of Our Galaxy REVEALED! - 14th May 22
UK Public Debt Smoking Inflation Gun - 13th May 22
What Happens When the Stock Market Dip Keeps Dipping? - 13th May 22
Biden Seeks Inflation Scapegoats; Gold Advocate Wins GOP Primary - 13th May 22
Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - 12th May 22
The War on Gold Ensures the Dollar’s Downfall - 12th May 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Biden Seeks Inflation Scapegoats; Gold Advocate Wins GOP Primary

Politics / Government Spending May 13, 2022 - 05:04 PM GMT

By: MoneyMetals

Politics

Elevated inflation readings and stock market turmoil continue to inflict pain on investors. Some are hoping for a quick turnaround. Others are just looking for a place to hide.

Unfortunately, there have been virtually no safe havens from the broad-based carnage outside of the energy sector and gold.

Gold has been one of the best performing assets this year by virtue of holding up better than stocks, bonds, and cryptos. But the yellow metal came under some heavy selling pressure in futures markets this week.

Metals markets seem to be trading more in line with economic slowdown fears and margin calls on Wall Street than with inflation. That will likely change when the recent spate of panic selling subsidies.


But volatility is sure to persist. In a stagflationary environment, markets can plunge when stagnation fears predominate and just as dramatically snap back due to inflation pressures.

Gasoline prices hit another new high this week while food shortage fears continue to drive higher grocery costs.

Wednesday’s Consumer Price Index report showed the rate of cost increases falling slightly in April from the previous month’s reading. But the CPI still came in at a higher than expected 8.3%.

A CBS News report noted that supply issues will continue to persist even as Federal Reserve rate hikes force consumers and businesses to cut back on spending.

CBS News Anchor: The pace of inflation slightly dropped for the first time in months, the Labor Department says the Consumer Price Index rose 8.3% in April from a year ago, that is actually down 0.2% from March.

CBS News Reporter: But the President blamed the war in Ukraine for tightening grain supplies, driving up global food prices.

President Joe Biden: Putin's war has cut off critical sources of food.

CBS News Reporter: In the grocery store prices for meats, poultry, fish, and eggs are up more than 14% from a year ago. Citrus fruit, almost 19%.

Market Commentator: A lot of this inflation that we're experiencing is rooted on the supply side, rather than the demand side. The Federal Reserve raising interest rates to slow the economy, that'll address the demand side, but it won't fix the supply chain, it won't broker peace in Eastern Europe and it won't open the ports in China.

CBS News Reporter: And until we see some movement on those fronts, the high prices will likely continue. Many economists are now predicting that this high inflation will be with us into next year.

Rising gasoline prices don’t hit the typical family’s budget as hard as higher housing and healthcare costs do. But high gas prices are a huge political liability for the party in power. Joe Biden and the Democrats are scrambling to deflect blame and offer up price relief gimmicks to voters.

The political posturing likely won’t work. Even with the release of strategic reserves, oil will remain under-supplied for months to come. And the Biden administration’s cancellation of new oil and gas drilling leases will suppress domestic output for years to come.

Perhaps the administration sees demand reduction as some sort of solution. Locking down the country again because of a new virus variant would do the trick. It’s also possible that Fed rate hikes will drive the economy into a deep recession that causes demand to plummet.

But it’s hard to imagine either of those scenarios boosting the fortunes of Democrats this fall.

Current polling suggests the political landscape could shift dramatically in favor of Republicans after November’s mid-term elections. That has huge implications for investors in general and possibly for precious metals holders in particular.

On Tuesday, a Republican primary battle in West Virginia pitted two incumbents fighting over a newly redrawn Congressional district. One candidate had the backing of establishment forces, including the state’s Democrat Senator Joe Manchin. The other had the support of Donald Trump and grassroots activists, including sound money proponents.

In the end, West Virginian Republicans delivered an overwhelming victory to the pro-sound money candidate, Alex Mooney. Representative Mooney is one of the leading voices in Congress for auditing the Federal Reserve and restraining its powers.

He has called on Treasury Secretary Janet Yellen to come clean about the government’s ongoing interventions in the gold market. And he has put forth legislation that would repeal discriminatory capital gains taxes on gold and silver bullion as well as require a full audit of U.S. gold reserves.

Congressman Mooney will obviously need a lot more allies in Congress – and ultimately a more freedom-oriented White House – to get these sound money reforms enacted. But with millions of voters angry about inflation, smart politicians will acknowledge the source of the problem and propose real solutions to it.

At the root of the inflation problem is excessive government spending that drives excess currency creation by the Federal Reserve.

Nobody seemed to mind inflation when it got funneled into financial assets and inflated profits on Wall Street. But now that it’s hitting the real economy, it’s a real problem for everyone.

As more seek protection from rising price levels and unstable financial markets, the inflation will eventually be reflected in precious metals markets. The inflation cycle that first hit financial assets and then the real economy won’t be over until sound money as the ultimate solution has its moment to shine.

By Mike Gleason

MoneyMetals.com

Mike Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2022 Mike Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in