For decades, the Federal Reserve got away with increasing the money supply to juice the economy. But, it was reliant on an undeniable fact: during this entire period, money velocity was in decline, excluding pauses or very brief minuscule rises. The factors responsible for the decline in money velocity are less important. Investors need to […]
Tag: the Fed
Ghana Chooses Gold, Not Dollars in Fight to Survive
Ghana wants to use its gold to pay for oil and other essentials the country needs to function. And it is hard to blame them. However, by converting the Ghanaian Cedi‘s local currency into U.S. Dollars and then buying what they need, the country’s foreign currency reserves are being depleted. Furthermore, U.S. dollar strength or […]
A Method To The Fed’s Madness
We know whom inflation hurts the most: the elderly, people on a fixed income, and those living paycheque to paycheque — which in Canada and the US means most of the population. So, who can inflation benefit? Experienced debtors. The richest among us often have mountains of debt. Banks practically beg them to take more […]
Can the Fed Really Raise Rates?
Inflation was the inevitable end… Anyone with an appreciation for history knew it. Trillions of dollars in deficit spending will never be paid back in real terms. And, while the Fed grapples with slaying the inflation dragon at all costs, we can’t help but wonder: who will pay the price? Could the largest benefactor of […]
Double-Digit Inflation Arrives?
Tomorrow the Bureau of Labor Statistics will release the CPI or consumer price index for March. Buckle up. It is going to be a doozy. While top forecasters predict it will top February’s 7.9% inflation print (a 40-year high) – I think it may touch double digits, but will be above 9%. Here is why. […]
Two Reasons the Fed Can’t Raise Interest Rates
The Fed Chair Jerome Powell was re-appointed to another four years of service on Monday. Yet, for some reason, gold and many inflation assets are tanking. Gold was off 1.5% today to $1,782 per ounce, while silver was down a whopping 3.75% to $23.33 per ounce. So why is the man whose policies took inflation […]
The Inflation Option
Inflation remains out of control both in Canada and the United States — forcing many to question whether (and when) our respective central banks will act. And, despite veiled threats and bold statements in the face of the inflation boom, we don’t expect the first rate hike anytime soon. For a moment, look beyond the […]
Bitcoin to Hit $2 Million Within 5 Years?
Gold is back above $1,800, and Bitcoin is holding firm above $60,000. The US Dollar index is down huge today, falling 0.44% to 93.39. Lawrence Lepard talks all things Bitcoin and gold at the 2021 New Orleans Investment Conference. Lepard opens his talk with some basic principles and facts: “Sound money allows people to plan.” […]
Why Can’t the Fed Fix the Velocity of Money?
With Tesla’s market cap clearing $1 trillion and US stocks hitting fresh record highs, I have proof that the majority of the middle and lower class are largely missing out on the current recovery. The answer is in the ever-declining velocity of money. Money Velocity Continues to Crater Despite Fed’s Best Efforts I’ve personally written […]
The Inflation Sensation Takes Over 2021
With June inflation numbers crushing estimates, the confident proclamation of recent spikes in inflation being ‘transitory’ is fast becoming a joke. Instead, the monthly increase in the CPI hit a whopping 0.9% (5.4% year over year), the biggest increase since 2008. More shocking is perhaps the core CPI, which advanced 4.5% from June 2020, the […]