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Let’s take a look at the real-world experience people are having with inflation.

CBS News has found a handful of California gas stations charging $7.25 a gallon, more that the federal minimum hourly wage.  

The Wall Street Journal reports that US households are now paying an annual rate of $4,800 for gasoline compared to $2,800 a year ago. 

Something in the budget of an American household must give to accommodate $2,000 more a year for gas.  A survey by OnePoll finds that skyrocketing gas prices and inflation have more than half of the people, 56 percent, “extremely” or “noticeably” more stressed.

Never mind that.  The President says that high gas prices are part of our “incredible transition” away from fossil fuels:

  “[When] it comes to the gas prices, we’re going through an incredible transition that is taking place that, God willing, when it’s over, we’ll be stronger, and the world will be stronger and less reliant on fossil fuels when this is over.”

Now does that sound like an everyday American who pumps his own gas and is left stunned at the sticker shock? 

It was only a couple of months ago that House Speaker Nancy Pelosi said that government spending was not contributing to inflation and was “reducing the national debt.”   It was apparently from that peculiar economic vantage point that this week she offered up that, “In terms of inflation, so much is being done by this president, we have to make sure that public sentiment understands that.”

Speaking of the everyday American, what has inflation done to the price of a hamburger?  Take a look!

Along the same line, we caught a Yahoo Finance story that reports for the first time in decades the frozen food category is outgrowing the fresh food category.  It says that so far this year, frozen food outgrew fresh by 230 percent.  And so, the American standard of living continues to deteriorate at the hands of central bank inflationists.

Changing consumer spending patterns can also be seen in huge excess inventories that caught major retailers by surprise, and by the subsequent sharp sell-off of retailer shares including Amazon, Wal-Mart, Costco, and Target.

By the way, the OnePoll survey referred to earlier reports that on average those polled believe it will take them 38 years to pay off their credit card debt.  

We can’t do anything about the price of gas and hamburgers, but we can help you preserve your wealth and even profit in this age of inflation.  Contact us at Republic Monetary Exchange.  We have knowledgeable gold and silver professionals standing by to help you.

Another real-life indicator of our inflation calamity!

Gasoline prices are now over $4 everywhere in the country.  But California gets the award for being the first state to cross over $6 a gallon. 

Why are gas prices so high?  In a nutshell, it is because your US dollars don’t buy as much as they did.   

When people say this is the highest inflation in forty years, they are really saying that the dollar is losing purchasing power at the fastest rate in forty years.

There are other reasons, of course, for today’s sky-high oil prices, including a growth-killing Washington, DC war on oil. 

We have been through energy crises like this before.  In the early 1970s, when Nixon suddenly cut the last ties of the dollar to gold, foreign oil producers wondered why they should keep selling us their oil at the old prices.  After all, the oil they sold was produced at the cost of real capital.  It demanded costly exploration, expensive drilling and pumping operations, refining, and transportation. But the dollars they sold it for could be created in any denomination – just add a zero – at the cost of nothing more than paper and ink.  Indeed, these days it is all created digitally without even the expense of paper and the messy trouble of big printing operations.  

So, the OPEC producing nations warned repeatedly in the Stagflation Decade that if the dollar kept losing value, the oil price would have to move sharply higher.  And it did. The oil price shocks of the 1970s had a repressive effect on the US economy.

Today energy costs are just another burden on the slowing US economy, depleting the wealth and lowering the savings and discretionary spending of the American people.

Of course, the government could do something about that. It could get out of our own way in energy production.   It would quit trying to prolong the needless war in Ukraine and let Russia sell its oil to the people of the world at lower costs.   

Here is a chart of oil prices (West Texas Intermediate Crude) since Biden’s election on November 3, 2020.  Perhaps you will remember that on Inauguration Day, in January 2021, President Biden canceled the federal permit for the construction of the Keystone XL oil pipeline.  Keystone was expected to deliver 800,000 barrels per day from Canada to the US.  

Returning the US to a stable and honest monetary system would help tremendously, too.  That would require a return to honest money that cannot simply be rolled off a printing press somewhere.

In the meantime, for real wealth protection in an age of monetary, financial, and resource confusion, speak with the gold and silver professionals at Republic Monetary Exchange.

How bad has it been? Pretty bad!

Fed Chairman Jerome Powell says that restoring price stability is “nonnegotiable.”

If price stability is so important, why did the Fed blow up the stock and bond markets in the first place?  Did they really not realize that the creation of $8 trillion dollars over the last 14 years (shown below) would lead to price instability?

If the Fed has been willing to negotiate away price stability with banana republic-style money printing in the past, why are we being asked to believe that the future of price stability is now nonnegotiable?

We predict that “nonnegotiable” will come back to haunt the Fed the same way “transitory,” its prognosis for inflation has haunted it for over a year.

Can Mr. Powell envision no event, crisis, political uproar, or market calamity that would induce him or his successors at the Fed to once again eagerly sacrifice price stability with printing press money?  

We can imagine many such developments.  Here’s a shortlist based on the Fed’s history: War, recession, a political or electoral outcome Fed officials desire, stagflation, a pandemic, or a depression.  And blood flowing on Wall Street.  After all, it was Wall Street money power that created the Fed in the first place to serve their interests.

Already with the blood flowing on Wall Street over the last couple of weeks, we trust the phone lines and text messages from the influential are flying to Washington and to Fed officials screaming the outrage of the Fed’s cronies.

And that’s before this sell-off has even gotten serious.

We’ll just share some news snippets we have collected recently about how bloody it has been:

Yahoo Finance:  The S&P 500 slid by 4% on its worst day since June 2020, closing at 3,923.68. The Nasdaq Composite dropped 4.7% to settle at 11,418.15, while the Dow fell by more than 1,100 points or 3.6%….

Ryan Detrick, LPL Financial Chief Market Strategist, told Yahoo Finance Live on Tuesday… that the S&P 500 has fallen for six consecutive weeks heading into this week. “It hasn’t been down seven weeks in a row for 20 years…

Wall Street Journal:  Dow Drops More Than 1,100 Points on Recession Fears.  Blue chips have the worst day since 2020 as S&P, and Nasdaq loses over 4%.

Wolf Street:  Housing Bubble Getting Ready to Pop: Mortgage Applications Plunge amid Holy-Moly Mortgage Rates, Croaking Stocks…

And then there is this list of percentage market losses of well-known stocks from their highs provided by David Stockman.  Please note that this list is from May 13 when there was still much more bloodletting ahead:

• Carvana: -90%
• Vroom: -98%
• Rivian: -85%
• Snap: -70%
• Pinterest: -76%
• Netflix: -73%
• Wayfair: -84%
• Chewy: -78%
• Shopify: -77%
• Teladoc: -89%
• Lyft: -77%
• Zoom: -79%
• Palantir: -81%
• GameStop: -80%
• AMC: -84%
• Coinbase: -83%
• Zillow: -81%
• Redfin: -88%
• Compass: -75%
• Opendoor: -82%
• MicroStrategy: -85%
• Robinhood: -87%
• Moderna: -72%
• Beyond Meat: -87%
• Peloton: -90%
• DoorDash: -72%

We recommend you avoid any further risk on Wall Street and move to the safe haven of gold before it gets any worse.

Speak to a Republic Monetary Exchange gold and silver professional today!

Things are Even Worse in the Phoenix Area!

Two headlines on the same financial news site at the same time:  

1. … inflation decelerates slightly.
2. … Inflation comes in hotter than expected.

Maybe that’s why President Biden is so confused.  He doesn’t know how to sort things out.

As it happened the latest Consumer Price Index came in slightly lower than last month but higher than the consensus forecast.  For the 12 months through April, the CPI rose 8.3 percent.

Food prices climbed 9.4 percent.

Once again, prices are rising faster in the Phoenix metro area than the national average.  For the 12 months through April, the Phoenix-Mesa-Scottdale consumer price index is up 11 percent.

That the fastest in the nation.

Bidenflation that is…

With the news that consumer prices were up 8.3 percent for the 12 months ending in April (and food prices up 9.4 percent), President Biden issued a statement claiming that bringing inflation down is his “top economic priority.

But he certainly did not claim any ownership of the inflation calamity.  Nor did he take any responsibility for Producer Prices (wholesale prices) rising at an 11 percent yearly rate.

But as evidenced by his comments on the recent report that the US economy is shrinking, it is not clear that Biden really knows what is going on.

It can be hard enough for most people to sort these things out.  

We have heard more than one president wail that “it’s not his fault.”  Gerald Ford bumped his head on the helicopter door on the White House lawn a time or two.  “It’s not my fault,” he complained.  As we recall, the White House staff put the scene of the incidents off-limits to photographers.

That is how Washington works.  Don’t fix the problem.  Hide it.

Bush the Elder offered up “It’s not my fault” about sub-par US economic growth.  And now its President Biden’s turn. 

“Make no mistake.  Inflation is largely the fault of Putin,” says the president.  Oh, and it’s the fault of big oil companies, too.    

Inflation “is a real tough problem to solve,” says Biden, who is now warning that it could get worse before it gets better.                                                                                                                                                                                                          

And even though the federal debt just keeps on growing, Biden has started cross-dressing as a fiscal conservative.  But the charts paint a different picture.

Here’s the New York Post’s take on Biden’s most recent attempt to duck any responsibility for US inflation:

Inflation, he insisted, is being driven by the pandemic (which largely ended over a year ago) and “Putin’s price hike.” For the record, it was April 14 last year that the White House insisted the already-developing inflation would be “transitory”; Biden & Co. kept that up through November, before switching to blaming it on corporate greed and now Putin.

The prez still refuses to take any responsibility for it himself. Never mind the $1.9 trillion he and his fellow Democrats pumped into an already hot recovery last spring, which is when US inflation took off (and Europe’s didn’t).

It can’t have anything to do with Dems’ spending, he actually argued, because “we brought the deficit down.” Lying liar: It’s down only because Congress has stopped dumping new trillions in the name of COVID relief. And Biden didn’t want it to stop: The Build Back Better bill he spent months trying to pass would’ve kept the spending party going.

But not to worry.  The chairman of the president’s Council of Economic Advisors advises us that the president is “laser-focused” on inflation.  

If we are skeptical, its only because Biden has not demonstrated an ability to be laser-focused on anything. 

And Fed Chairman Powell, who presides over US inflation’s reincarnation, will get another four-year term.

Nobody in Washington knows what is happening to anything other than their own approval ratings, election prospects, and career paths.  Just like you would expect from an empire in decline.

It is a powerful argument for owning gold and silver.  Because when empires decay, their money goes down with them.

The dollar will be no exception. 

It’s an ever-changing yardstick!  Unlike gold!

President Biden said something characteristically confused the other day when news came that the US economy is shrinking, down 1.4 percent in the January-February-March quarter.  

A contracting economy is not good news.  It’s even worse when you realize that consensus economists were expecting quarterly growth of 1.1. percent.  So, the total swing from positive expectations to the negative reality was 2.5 percent.  

Two consecutive quarters of contraction is the official definition these days of a recession.

Biden blurted out that he wasn’t that concerned about a recession.  It’s hard to imagine that millions of American families would be so cavaliere about their future prospects.  

But Biden quickly pivoted to the politically correct formulation.  Actually, he said, “you’re always concerned about a recession… but the GDP, you know, fell to 1.4 percent.” 

Actually, no.  Biden clearly had no idea what was going on.  The GDP did not fall “to” 1.4 percent, as though it had been slightly higher, but its growth had slowed to a mere 1.4 percent growth.

The US economy actually contracted – shrank – shriveled – by 1.4 percent.  

Big difference.

Not to be outdone, at his long-anticipated May 4 press conference, the one in which he would describe how the Fed was going to tame inflation, Federal Reserve Chairman Jerome Powell was asked if the Fed had a credibility problem with the American people.  

No, he answered.   Never mind the Fed’s still shrouded in secrecy insider trading scandal.  Forget a total misdiagnosis of inflation as transitory.   No, he answered, the Fed has no credibility problem.

And with that, Powell was defending himself, the central bank, and the US dollar itself.  

Job not well done.  For the financial press and bubble vision TV may have been full of stories about how “strong” the dollar is.  But the truth was quite different.  Strong?  When it continues to buy less and less?

John Tamny (@johntamny)at Real Clear Markets put it this way:  

The dollar is “strong”? How? Why would money be anything but a constant measure of value?… 

Indeed, while currencies no longer have a gold definition, gold still speaks through the markets. At present the “mighty” dollar is worth 1/1900^th of a gold ounce. When the 21^st century began a dollar purchased roughly 1/300^th of a gold ounce.

The shame, as always, is that this is even being discussed. No one talks about a “strong” inch, foot, or minute. All three are quiet. As constant measures of length and time, they just facilitate the understanding of reality. Money is no different, or should be no different.

John Tamny

The New York Sun summed up this all-to-common confusion about dollar strength this way:  “The dollar might well be king of today’s debased global currencies, but it wears a tin pot for a crown.”

We think this is a good time to keep a close watch on the monetary and fiscal authorities and what they say that is not actually so.

It is also a good time to speak with a Republic Monetary Exchange gold and silver professional about wealth preservation in an age of wealth destruction.

No Resolve to End Inflation!  

The Fed labored mightily, and brought forth…

A mouse!

We’ve adapted the line from one of Aesop’s fables that describe any great effort that delivers very little.

So the Federal Reserve has promised and teased and vowed and threatened for months now that it would get a handle on credit conditions and interest rates at its May meeting.

On Wednesday, the Fed concluded its gathering with this announcement:

The Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1.

So in the face of double-digit inflation, the Fed raised its key rate to around one percent.  It was described as the most significant one-day Fed tightening action in decades.  What is clear is that hving inflated its balance sheet to $9 trillion dollars with its recent money-printing binge, the Fed simply lost its nerve on unwinding this excess.  Along with its 50 basis point increase in the Fed funds rate – which continues to leave the rate deeply negative – the Fed’s apologist widely telegraphed a balance sheet run-off $90 billion a month beginning now, in May.  Instead, it announced a $47.5 billion decrease in June, followed by several months of the same reduced pace.

Some analysts conclude that the Fed has already lost its tightening resolve.  Michael Shedlock says the Fed’s announcement amounts to “baby steps.”   Shedlock says the Fed’s announcement “strongly suggest the Fed will abandon QT as soon as a deep recession or credit market event hits.”

WolfStreet.com observes that the Fed is pushing rates up “too little, too late” after 13 years of rampant money-printing.

The market shrugged off the move, too.  The major stock indices leave and breathe cheap Fed rates, so they all moved higher, the Dow up 900 points.  

Gold and silver both inched higher, too on the Fed’s lack of seriousness.

Just did a quick word search to see how many times we have warned you over the past year about the stagflation headed our way.

The answer is many, many times.

Now the numbers are in and it’s official.  Stagflation is here.  

Let us re-print some of our warnings about stagflation.  We’ll get to the latest numbers.

Since stagflation is a combination of a weak or no growth economy and high inflation, in our post Reminds Us of the ’70s! we described conditions this way:

Weak growth makes it increasingly impossible for debtors – individuals and corporate – to service their massive debts.  That is because sales slow down, margins are squeezed, businesses are forced to cut prices, pay raises do not materialize, and jobs disappear.

At the same time inflation means the purchasing power of the currency falls, interest rates rise in compensation, and saving money becomes pointless.  And it blows up the bond market.  

There is a haven of safety and profit in an era of stagflation:  Gold.

In our piece STAG + FLATION: The worst of both worlds! we cited famed NYU economist Nouriel Roubini who said “a slow-motion train wreck looks unavoidable”:  

He worries that debt ratios are much higher today than they were in the 70s.  Debt ratios are three times higher than in the stagflation decade.  “The stagflation of the 1970s will soon meet the debt crises of the post-2008 period,” says Roubini.  “The question is not if but when.”

Thus, the conditions that propelled gold and silver to new highs in the stagflation decade are assembling again.  We recommend our friends and client take steps now to protect themselves in the time-tested way, with a solid portfolio of gold and silver.

In The New Stagflation Decade, we wrote that the Keynesian economic priesthood that has dominated US economic policy for almost a century, insisted that high inflation and a stagnating economy couldn’t co-exist:

If the economy was stagnating, they believed, then the central bank would just print gobs of new money and – presto! – full employment.

So that’s what they did in the 1970s.  They printed money.  Boy, howdy, did they print money!  Prices took off.  And the economy stood still.  And began to shrink.

Despite the fact that inflation reached 12.3 percent in 1974, economic growth was negative that year and the next, while unemployment rose to 8.2 percent. 

“That’s impossible!” screamed the Keynesian big government economist.  “Print more money!”

And they did.

By 1979, the inflation rate was 13.3 percent.  

And a world-changing gold and silver market was the result.

So here are the latest numbers. You already know that the Consumer Price Index for the 12 months through March was up 8.5 percent, the highest in 40 years.  We know the CPI in some markets like Phoenix came in over 10 percent and believe the real national inflation numbers may be closer to 16 or 17 percent.

And growth?  It is non-existent.  The usual establishment suspects told us that the economy would grow 1.1 percent in the Jan – March quarter.  But the economy is shrinking, not growing.  It contracted 1.4 percent in the first quarter.

The next question is this:  Will the Fed really raise interest rates when the economy is contracting?  For those who know what happened in the 1920s, it doesn’t sound like a good choice.  

But because the geniuses in Washington spent $30 trillion we don’t have, and printed trillions of made-up phony dollars in the last couple of years, there are no good choices left.  Now we have arrived at the reckoning for the madness of our times.  

Buy gold.

Time to be wary!  Move to the sidelines with gold!

Has there ever been so much blather about a Fed interest rates policy change – especially one so long in coming?

In hopes of minimizing the impact of the rate hike when it actually hits, the Fed has been telegraphing its forthcoming decision for months.  The most widely anticipated step is that a 50 basis point (1/2 percent) increase in the Fed funds rate will be announced at the conclusion of the Fed’s May 3 – 4 meeting.  Already the Fed is talking up additional hikes of the same amount in both June and July.

Higher US interest rates have buoyed the US dollar in currency markets recently.  

This is the source of much confusion among the investing public.  It is true that the dollar has risen compared to other currencies.  But the dollar and the currencies that it is compared to are all losing purchasing power.  

Let us restate that:  The dollar is said to be higher.  But in reality, it is lower.  It buys less than it did before.  The dollar index is up about 13 percent over the last year.  But the dollar buys much less – perhaps 10 percent less than it did a year ago.

So, if you are, like the famous Seinfeld character Art Vandelay, involved in some indeterminate importing-exporting business, you may care about the dollar index and your payables and receivables in foreign currencies.  

But if like most Americans, you are paid in dollars, you spend dollars, you save in dollars, and you plan your future in dollars, what really matters to you is the purchasing power of those dollars.

Once again:  THE PURCHASING POWER OF YOUR DOLLARS IS DOWN.

The median age in the US is 38 years.  This chart shows what has happened to the purchasing power of the dollar during this average American’s life span:

What is coming with this new Fed tightening cycle?  David Stockman answers:  “What’s coming down the pike is not your grandfather’s recession. That is, an economic contraction caused by the Fed hitting the brakes on credit growth because the housing and business investment sectors got too hopped up on cheap debt.”

No, this time, “the Fed will be forced to keep on tightening–until real interest rates finally become meaningfully positive. And that will mean that the epicenter of the recession this time around will be Wall Street, not main street.

“As we said, what is coming down the pike is not your grandfather’s recession.”

Pay no attention to the financial news chatter that tells you the dollar is up, or that the Fed has wise policy choices on the drawing board.  

It is all sleight of hand designed to distract y0u from a calamity that we have not witnessed in our lifetimes.  Give all unbacked, digital, and printed fiat money wide berth as they work their way to their ultimate commodity value.  

Which is nothing more than paper and ink.

This is one of the most shocking charts we have seen this year.  It shows that Eurozone Producer Prices, or wholesale prices, have climbed 31.4 percent for the 12 months through February.  

Revolutions have been made of less!

US News reports that “energy prices were up 83.8% from March 2021… The main driver of that increase was the strong price increase in natural gas, which was up 144.8% on the year.”

Germans have long a deep and persistent aversion to inflation, a remnant of the brutally ruinous monetary inflation of Weimar Republic Germany a century ago, the calamity that paved the way for Naziism and Hitler.  

Everyone who want to see how inflation can ruin even a modern, industrial economy should read my new book REAL MONEY FOR FREE PEOPLE:  The American Gold Story.  From the book, here is a short description of events in Germany from the period featuring the Jerome Powell of his day, Rudolf von Havenstein:

At the beginning of the period [in 1919] one gold mark was worth about 100 paper German marks. By November 1923, one gold mark was equal to about 100 trillion paper German marks. It cost 36 billion marks to send a postcard from Munich to Prague. The cost of a loaf of bread, only about one mark before the debacle, eventually rose to 200 billion marks. No wonder: at the peak of the madness there were 30 paper mills, 150 printing firms, and 2,00o noisy printing presses cranking out von Havenstein’s currency. 

It makes today’s quiet and easy electronic money printing look positively sophisticated, although ours is the same old flim-flam dressed up for the digital age. Unbacked currency, whether paper or digital, is not wealth. It is instead only an accounting fraud, one that masks its intended function of transferring wealth. 

Despite the license to print currency without limitation, the German State was so desperate for currency other than its own, that in September 1923 police raided restaurants and nightclubs in Berlin, searching the wallets and purses of customers for foreign cash. 

As conditions deteriorated, one Berlin newspaper asked if von Havenstein understood that Germany’s workers could starve. But Havenstein insisted all along that prices spinning out of control and the mark’s collapsing exchange rate were unrelated to his furious money-printing. At the end of the monetary tragedy von Havenstein died, apparently coincidentally.  

The affair decimated the German economy and radicalized the people. Crime proliferated: gasoline was siphoned from parked cars; prostitution flourished; urban dwellers stormed the farms of the countryside looking for food. With the social fabric shredded, the central bank’s benchmark interest rate at 90 percent, and the unemployment rate nearing 25 percent (soon to be 30 percent), the first of the Nazis’ infamous Nuremberg rallies was held in September 1923. Thirty-four-year-old Adolf Hitler spoke to a crowd a hundred thousand strong.

If you would like to have a free copy of this important book, written to prepare you for what happens next in America’s developing monetary crisis, stop by our offices.  And be sure to speak with a Republic Monetary Exchange gold and silver professional about the steps you must take to protect your family and your wealth.

Not the mainstream media, that’s for sure!

Inflation has been called “the cruelest tax.”  Ruining the currency with inflation is certainly one of the most devious and disgusting things that governments do.  After all, there are procedures for raising taxes, procedures that involve legislation, public debate, and votes.

But inflation is a tax without legislation, without debate, and without votes.  There is no provision in the Constitution that allows bureaucrat to help themselves and their cronies to the public purse without the approval of the people.  So, inflation is all the proof you need that elements called the Deep State, the Invisible Government, the Permanent Government or Insiders, the Governing Classes, or the Washington Bureaucracy control the state without regard to the will of the people.  

The double-digit inflation of the last year has taken trillions from the people and gifted it to the state and its well-connected favorites.  Bloomberg Economics calculates that the average household must pay $5,200 more than last year for the same goods.  

Who speaks up on behalf of the people victimized by this brazen theft?   Here at Republic Monetary Exchange, we do what we can.  But we are not newspaper publishers or a television network.

We think the newspapers and networks should speak up for their readers, viewers, and customers.  But they do not do so.  Instead, they protect the Deep State Money Manipulators at every turn, concealing their larceny.  Instead of pulling back the curtain on inflation’s flim-flam and highlighting the Federal Reserve’s corruption of money’s purchasing power, instead of screaming that the inflation fraud must stop now, they fill their advice columns with absurd advice for consumers to do something… as though the people are responsible for their currency losing its value.

 Here’s an oh-too-typical example.  It is from the Arizona Republic, on Thursday, 4/21/22.  Financial columnist Russ Wiles parrots the Federal Reserve’s self-exonerating assertion that “moderate inflation is normal, desirable.”   Of course, there is no evidence for the claim.  And as you might expect the Federal Reserve does appear anywhere in the entire section of the piece titled, “Who, or what is to blame for this [inflation]?”

 Then Mr. Wiles offers up a few “inflation-fighting tactics”: 

“When driving, consider slowing down, accelerating more gradually, combining trips, and using price comparison apps.  When shopping, clip coupons and substitute lower-cost items for the more expensive ones.  Also, you can wear your shoes a little longer and go a few extra days between haircuts, wash your clothes when electricity rates are off-peak, join shopper-rewards programs, and so on.”

None of these pathetic tips will do a thing to stop the inflation bureaucracy.  Inflation will continue just as long as the authorities expand the conditions of money and credit.

But one thing to be learned from all this and similar flapdoodle is that big media serves big government and not you.

Oh, and one other lesson.  

Buy gold.

WHAT THE HEADLINES SAY NOW:

April 12, 2022

Inflation Rate Surges To 8.5 Percent! 

WHAT THEY WERE SAYING THEN:

WHITE HOUSE BRIEFING, Press Secretary Jen Psaki, July 19, 2021

MS. PSAKI: We take inflation very seriously. It is under the purview of the Federal Reserve. As you know, they have regular quarterly meetings where they put out that information and any considerations publicly.

Their projection continues to be that, while there’s an — a projected increase in inflation this year, it’s expected to come back down to about 2.2 next year. They have not changed that, and that is aligned with a number of outside economists as well.

You’re also correct that when the economy is turning back on from a global pandemic, there isn’t a lot of historic precedent for that.

And certainly, we’re seeing prices go back to pre-pandemic levels in some cases. We’re also seeing a range of factors, including shortages in the supply chain — from chips shortages that are impacting the auto industry to lumber shortages that are impacting the housing industry — that are also factors here as we’re seeing price increases.

But we do look at all of that. We take it incredibly seriously. And we respect the role of the Federal Reserve as well.

Inflation is up, and your dollars’ purchasing power is going away!

Consumer prices have climbed 8.5 percent over the last 12 months.

Stated differently, if you had tucked away $1,000 a year ago – congratulations!  Your purchasing power has shrunk to $850.

In some parts of the country, the inflation rate is now at 10 percent or more.  And in fact, the inflation rate in March annualizes to well over 14 percent.  

Inflation has been spiraling higher month after month, plundering the savings of the American people and decapitalizing them.  

But it’s not just that the monetary authorities are taking wealth from you surreptitiously, without even the benefit of a legislated tax hike.  It’s also about the way the process of destroying the currency is hidden from the people.  

After all, in just the last two years the Federal Reserve has made up $2.6 trillion out of thin air.  But it tends to escape the notice of the financial press.

If the authorities jack the amount of printed money up by 40 percent, do you think it might dilute the purchasing power of all the other dollars that are already out there?  

But the national financial press can’t seem to come to terms with that.  The Wall Street Journal writes that “this bout of high inflation” can be attributed to a strong economy, to Russia, and to supply chain issues. 

See for yourself:

There are several reasons behind this bout of high inflation. First, the economy is strong and employers have been adding more than 400,000 jobs for 11 straight months. Energy prices also soared in early March as Russia’s invasion of Ukraine pushed up crude-oil prices. And food prices are rising rapidly due to higher demand and supply chain issues. The conflict in Ukraine will likely push up food prices further since Ukraine and Russia are major wheat and fertilizer exporters.

Not a word about the Fed.

Canada’s leading business journal, the Financial Post, citing an expert, says the exact same thing.  Once again, see for yourself:

Over the past 30 years globalization, demographics, technological change have driven prices. The Fed cannot do anything about the three of them,” said RSM chief economist Joe Brusuelas. “We are just going through a period of prolonged disruption” that could mean structurally higher inflation as populations age and then save less and spend down assets, and globalization suffers through a series of shocks including the trade war launched by former President Donald Trump, the pandemic, and now the war in Ukraine.

Once again, it is not the fault of the crazed money printers.    

As for the Washington Post, one of its star columnists explains that all we need to do about inflation is have more immigration.  Right.  But at least they are deflecting blame from the Bernankes, Yellens, and Powells in an original way.  

Don’t be deluded by any of this rhetorical sleight of hand.  If you would like to find out more about how our money is being corrupted and learn how to protect yourself with gold and silver, speak with a Republic Monetary Exchange precious metals professional today.

Just like before… only worse!

Ever felt like you’ve been here before?  

We’re having serious inflation déjà vu.   Today’s double-digit inflation is like the 1970s all over again.  We’re getting used to seeing higher prices every time we go to the store.

We’re getting used to the US dollar buying less.

And we’re getting used to seeing the president say it’s not his fault.

Sit back, click below, and enjoy the inflation nostalgia.

The difference between today’s and the Stagflation Decade is that in 1978 the US national debt was “only” $722 billion.  Today it is 42 times that, $30.34 trillion!

In 1978 the US money supply (M1, below) was about $350 billion.  It has increased by 5900 percent.  Today it is $20.641 trillion! 

In 1978 the budget deficit was 2.5 percent of GDP.  In 2020, even before Covid, it was almost 15 percent.  Back in the 1970s, the US was the manufacturing hegemon of the world.  Today our manufacturing is outsourced.  Back then the dollar was “King Dollar.”  Today the dollar’s share of the world’s foreign currency reserves is in decline.  

IN 1978 the US economy (GDP) grew 5.54 percent.  We haven’t seen the economy grow that fast in 38 years.

Today inflation is no laughing matter.  It is making American poorer.   Because inflation is destroying what remains of trust in the dollar around the world, it will continue to lose value.

What can you do to protect yourself, your retirement, and your family?  Do what people everywhere have in times of phony, fiat government money.  Turn to gold and silver for safety and wealth preservation.

Let us answer your questions about the coming monetary crisis.  Contact a Republic Monetary Exchange gold and silver specialist today.

…and Continues to Experience Silver Shortages!

Thanks to double-digit inflation, the policy confusion of the monetary authorities, and political chaos, not to mention a war in Europe, the US mint reports record-setting demand for its gold coins in March.

American Eagle gold coins sales for March soared 73.7 percent over February, from 89,000 ounces to 155,500 ounces.  Sales were up sharply, 136 percent, from their March 2021 total of 66,000 ounces as well.

It was the US Mint’s highest March sales performance since 1999.  

For the first quarter 2022 the Mint’s American bullion demand reached 426,500 total ounces, up 3.5 percent from 2021’s first quarter.

Silver demand was down somewhat for the quarter. The American Silver Eagle sales total of 7,581,500 ounces was 37 percent lower than experienced with the unprecedented demand in the first three months of 2021.

Silver shortages at the US Mint acted to repress silver sales.  Due to an inadequate supply of silver planchets, the Mint announced in March that it would not strike 2022 Morgan and Peace silver dollars.  

Conditions have driven premiums for silver products up, according to Numismatic News, which writes, “The wholesale and retail prices of the bullion issue U.S. silver Eagle dollars have also increased relative to the commodity market silver spot prices…. So long as the market price for physical silver remains consistently higher than the paper commodity contract price, the U.S. Mint is going to continue experiencing difficulty in obtaining sufficient silver.”

In a subsequent piece, Numismatic News pointed to difficulties getting physical silver delivered on commodity exchange contracts.  “In addition to there being difficulties of the U.S. Mint obtaining sufficient silver Eagle dollar planchets from their suppliers, there is also the difficulty of actually obtaining physical silver upon maturity of commodity contracts.”

Money Printing Causes Inflation…

The Mises Institute, Daniel Lacalle Says:  The Ukraine war has created another excuse to blame inflation on oil and natural gas. However, it seems that all those who blame inflationary pressures on commodities continue to ignore the massive price increases in housing, healthcare, and education, as well as in goods and services where there was evident overcapacity. Global food prices show a similar problem…. 

Now the increase in broad money has translated to an explosion in all prices, energy-related or not. Some will blame wages, others will blame the Ukraine war, and others will blame the weak recovery. The fact is that currency destruction is at the heart of generalized price rises everywhere. Everything else is anecdotes or consequences, not causes.

More units of currency are going to scarce assets as investors look for protection against inflation. This is not speculation; it is protection from currency debasement.

The Perfect Storm: Incomes are Lower, Prices are Soaring, and Supply Chains are Fragile

1. Accelerating Inflation Takes Its Toll as American Incomes Continue to Fall

The Wall Street Journal Says:  Personal income increased by 0.5% in February over the prior month, a pickup after it was nearly flat in January, but inflation rose more quickly. Income after taxes, adjusted for inflation, fell for the seventh straight month in February to the lowest level since March 2020. The data add up to a picture of the economy growing as shoppers benefit from a strong labor market and rising wages, but see those gains eroded by rising inflation.

2. Americans Say They’re Feeling Inflation!  You Don’t Suppose?

More than three out of four Americans say they have been impacted by inflation, according to a report published by CNBC.  Of course, wages are failing to keep pace with rising consumer prices.  Last year the survey found that 15 percent of employees regularly ran out of money between paychecks.

Now that number is almost 20 percent.

Gold is the currency of choice in times of inflation and crisis.  Whether it is called a “flight to quality” or a “flight to safety,” gold is the world’s money of choice in times of trouble.  That’s because of its superior qualities as money, qualities that have outlasted every conceivable type of government and countless paper money schemes, and survived world wars and global depressions.

3. Advice to “Entitled” Generation:  Get Used to Shortages.

Are you a member of an entitled generation that has never had to sacrifice?  Rob Kapito, the president of BlackRock, the world’s largest investment firm says, “For the first time, this generation is going to go into a store and not be able to get what they want.”

Buckle your seat belts, warns Kapito.  “’We have a very entitled generation that has never had to sacrifice,” says the head of the $10 trillion dollar investment management company.

We will only note that a firm the size of Blackrock has had the political clout to object to the monetary policies that have brought us to today’s financial crisis.  And one would think the firm had a moral obligation to resist the policies that have plundered their clients’ assets with double-digit inflation. 

If they said to buy gold, we would take them seriously!

War!  Food crisis!   Debt crisis!  And double-digit inflation!

We’re pretty sure that the same people that brought all this trouble on shouldn’t be giving advice about dealing with it.  But they do anyway.  So, the experts are once again giving out free advice on how to deal with inflation.

Teresa Ghilarducci is the Schwartz Professor of Economics at the New School for Social Research.  That name – the school’s not the professor’s – is enough to give us pause.  Justifiably, it turns out.  Its website brags about something called “progressive scholarship.”  We would feel better if it claimed rigorous scholarship.  But let’s just go to the advice Professor Ghilarducci offered on Bloomberg News: 

• To deal with gas prices, take public transportation
• Now may be the time to sell your car
• Tasty substitutes like lentils and beans are healthier and cheaper than meat.
• You may want to rethink costly medical treatment for pets. 

It reminds us of British Prime Minister Gordon Brown who advised fighting inflation in the 1970s by storing your vegetables more carefully.  President Ford went on television about the same time to advise Americans to fight inflation by licking their dinner plates clean.

Oh, and you could send off for a WIN button, “Whip Inflation Now.”

We have a couple of better ideas.  First, Washington could stop spending money it doesn’t have, and the Federal Reserve could stop printing more dollars.  But since they won’t do that, we think you should deal with inflation by owning gold and silver.  

Call us today to find out why that is a far better way of dealing with inflation than just letting your beloved pets die.

Snackers and munchers across the land are deeply disappointed to discover that double-digit inflation has now shown up even in the number of chips in their Dorito bags!

The nacho cheese-flavored Doritos snack bags have been downsized by five chips, shrinking from 9.75 to 9.25 ounces.

It’s just another case of “shrinkflation.”  Manufacturers hide rising prices by reducing package sizes.  Cereal boxes look the same, but they’re narrower and hold less.  A roll of toilet paper has fewer total sheets or is narrower.  Either way, the actual content is reduced.

There are other ways of hiding price increases.  Sometimes cheaper materials are used in manufacturing, reducing the product’s quality.  If a long warranty was standard with a product, it may get shorter or even disappear altogether.  Customer service gets cut back.  Was delivery and set up free for appliances purchases?  Now it may be an extra charge.  

It amounts to a deterioration of quality and our overall standard of living.  But what can the businesses do?  They may be trying to hide price increases, but why are prices rising to begin with?  Prices are rising because our money is being ruined by money printing.  Its purchasing power is being diluted.  It buys less.

The dwindling purchasing power of the dollar affects people differently.  One woman we know was especially aggrieved when what had always been a five-pound bag of sugar shrank to only four pounds.  “That’s just not right,” she said. “Most of the sugar canisters are made for five pounds!”

Others are angered by the incredible shrinking candy bar – more cardboard and wrapping, with less actual chocolate.

The idea of trying to satisfy a Doritos snack appetite with five fewer chips in simply too much for others.  Even Ron Paul noticed.

The former presidential candidate and congressman got right to the heart of the matter:

Congress should also restore a sound monetary policy by auditing, then ending, the Fed, as well as by repealing both legal tender laws and capital gains taxes on precious metals and cryptocurrencies. Ending the era of the welfare-warfare state and fiat currency can lead to a transition to a new era of liberty, peace, prosperity — and full bags of Doritos.

We agree.  But until Congress does what Dr. Paul suggests, you need to protect yourself, your family, your retirement, and your wealth with gold and silver.

Speak with a Republic Monetary Exchange gold and silver specialist today.

Food Prices Racing Higher! Gold and Silver More Critical Than Ever!

Consumer prices are up 7.9 percent over the last 12 months, while wholesale prices are 10 percent higher over the same period as reflected in the following chart:

Many believe that these numbers substantially understate the real price shock Americans are encountering every day.  

Now there is evidence that food prices are racing higher much faster.  

The United Nations Food and Agricultural Organization’s Food Price Index reached an all-time high in February 2022.  As the next chart illustrates, it is up a breathtaking 20.7 percent from a year earlier.

Even that only seems to tell part of the story.  According to a Washington Post account, food prices and shortages are spreading panic in the Middle East:  

Prices of bread and other foodstuffs in Egypt, Syria and Lebanon have been increasing as concern over their availability mounts.

Egyptians have started complaining about the rising cost of food, some posting videos on TikTok to air their grievances. “The government … says merchants can’t raise prices; [that] there is no reason for merchants to raise prices. But the bread has gone up 50 percent, and to’miyah has [doubled] in price,” said one user, Mahmoud Mosa, referring to the cheap, Egyptian falafel-like disc made of fava beans.

Both the prior chart and the following one make clear that the rapid rise in food prices has been underway for years.  It coincides with the unprecedented spree of central bank money printing of recent years and is not merely a consequence of the Ukraine war of the last few weeks.

However, soaring fertilizer prices, due to the war in Ukraine, are expected to exacerbate future food shortages to crisis levels.

Federal Reserve measures to attempt to reign in double-digit inflation all fall under the category of too little, too late.  

We don’t wish to sound apocalyptic, but economic conditions are deteriorating very fast.  We urge our friends and clients to remember that in a crisis, scarce goods, including food, go to those who can pay in something other than a collapsing currency.

Make sure that you have adjusted your portfolio to the times with a new emphasis on precious metals.  Speak with a Republic Monetary Exchange gold and silver professional today.

Demand for gold by the Russian people is so overwhelming that the country’s central bank has backed away from buying so that the people’s demand can be met.

Here’s the lead from a March 15 Reuters account:

The Russian central bank said it will suspend the buying of gold from banks from Tuesday to meet increased demand for the precious metal from households, its latest attempt to weather the storm on Russian markets in the face of Western sanctions.

“Currently, households’ demand for buying physical gold in bars has increased, driven, in particular, by the abolition of value-added tax on these operations,” the central bank said in a statement….

The central bank, which will next meet on rates on Friday, has also been holding daily repo auctions as lending institutions scramble to manage their liquidity.

The bank said it would suspend its gold purchases from banks from March 15, without saying how long the change would last.

Russia is not the only country that has supported the desire of its people to protect themselves with gold.  China has become a power player in the global gold market, generally encouraging its people to own gold.  China is not only the world’s leading gold producer.  It is widely reported to have the world’s largest gold reserves.  In addition to reserves held by the People’s Bank of China, gold is presumably also held in accounts of the Chinese army and several of the communist party organizations.  

Russia is second only to China in gold production, followed by Australia.  

The United States is in fourth place.

Russia’s ruble has tumbled with the invasion of Ukraine.  The currency’s fall has led Russians to convert their ruble holdings into hard assets.  Luxury goods, watches, and other jewelry have been flying off shelves.  They are a poor substitute for gold, the world’s most liquid commodity.  But as inflation continues to climb, at some point people become anxious to convert their failing currency into any tangible good.

Ludwig von Mises calls a breakdown of this kind the crack-up boom:

A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against ‘real’ goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German Mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds.

With Washington having printed $4.7 trillion in two years and spending $5 trillion in deficit stimulus, double-digit inflation was the predictable result.

Can a US dollar crack-up boom be far off?

It’s Not Really Gold Unless…

Financial events in the fallout of the Ukraine war are delivering a powerful message to investors.  It is a lesson we have written about before and one that deserves to be repeated again and again.  It can save investors looking for the safety and protection of gold a lot of loss and heartache.

Remember… it is not really gold unless you can hold it in your hands, take it with you, and access it when you need it most.

The London Metal Exchange is the leading trading center for industrial and strategic metals, including aluminum, copper, zinc, nickel, lead, tin.  Last year saw $15.6 trillion dollars of industrial metals traded on the LME.

This week saw a breakout in the world price of nickel, a consequence of the Russian-Ukraine war.  Nickel soared to $100,000 a ton.  Then the LME unilaterally canceled trades and stopped deliveries in nickel.  Transactions already legally processed were simply canceled.  According to one account, a major Chinese trading company facing $8 billion in losses, was bailed out by the move.  The losses will be shifted to others.

We have seen this before in the commodity exchanges when exchange cronies have been bailed out with unilateral exchange rules changes.

The fallout from the Ukraine war includes frozen payments and failure to settle financial obligations.  Without comment on whether any of these measures are wise or are applied fairly or even-handedly, we do not wish to see our friends and clients left holding the bag is such circumstances.  

Events like these highlight the importance of owning gold, especially in turbulent times.  A defining characteristic of gold that cannot be emphasized enough, is that it does not rely on someone else’s performance or promise.

It has no counterparty risk.  That is just one reason why gold is the world’s money of choice and has been for thousands of years.

The same is of course true of silver, which, like gold, has a long and shining monetary history.

What is counterparty risk?  

It is the risk of nonpayment, default, and bankruptcy by individuals, companies, financial exchanges, institutions, and banks – quite apart from the risk of the Fed’s fiat dollar. 

Gold (and silver) are the only monetary assets that are not someone else’s liability.  They are not dependent on someone else’s solvency, promises to perform, or honesty.  Their value does not depend on the endorsement or propriety of any state or state institution.

But this advantage is only true of real gold and silver. It only applies to physical precious metals, the gold and silver coins, and bullion that you own outright and have taken into your own possession.  It does not extend to paper gold, stocks, and other representations of gold ownership, commodity contracts, or ETFs.  It does not extend to promises of future delivery, title to gold held by others, or any form of unallocated gold.

At Republic Monetary Exchange we make immediate delivery to you, on the spot, of real gold.  Not paper, not some purported interest in or share of gold somewhere else that you cannot get when you need it, or an agreement that can be canceled by government or wars.  

Exchanges, funds, and banks can fail, leaving people holding the bag.  Someday, too, there will be a run on gold, just like a bank run.  “Paper” gold will fail.  People will be unable to get the gold they think they own.  

That is why you must protect yourself with real gold and real silver.

Remember… it is not really gold unless you can hold it in your hand, take it with you, and access it when you need it most.

And that is the way we do business at Republic Monetary Exchange.  Real gold.  Real silver.  Your gold.  Your silver.  Always best practices for the protection of our clients.

When stagflation made gold skyrocket!

I recently heard somewhere that “there may not be a lot of advantages to getting older, but it is a plus for investing”.  

Live long enough and you will have seen the same old flimflams over and over.  Like stagflation.  The last stagflation decade was the 1970s.  The Fed had printed a lot of money for their cronies and power-hungry politicians.  Price inflation skyrocketed.  The Fed was clueless and could not decide from one day to the next what to do about it.  The politicians were clueless, too, and kept spending money the country could not afford.

The parallels are even eerier than that.  Just like Russia today, the Soviets were on the march in the 1970s.  

And oil prices exploded, too!

To learn more about the Stagflation Decade see our prior comments HERE, HERE,  and HERE.

Since stagflation is a combination of a weak or no growth economy and high inflation, we described conditions this way:

“Weak growth makes it increasingly impossible for debtors – individuals and corporate – to service their massive debts.  That is because sales slow down, margins are squeezed, businesses are forced to cut prices, pay raises do not materialize, and jobs disappear.

“At the same time inflation means the purchasing power of the currency falls, interest rates rise in compensation, and saving money becomes pointless.  And it blows up the bond market.  

“There is a haven of safety and profit in an era of stagflation:  Gold.”

Nothing much has changed.  Be aware that higher prices for the essentials of life – like food and energy – meaning that the people have less money left over to save for the future or to spend on non-essentials.  That is tough on the stock price of a lot of companies.

Today’s inflation rate of 7.5 percent is the highest it has been in more than 40 years.  Since the median age of the American people is 37.9 years, most Americans have never experienced inflation this high.  Most have no idea how to navigate and prosper in an inflationary episode.  

One of the most important lessons is to be sure to protect your principal.  Do not be fooled by expressions like “this time is different,” or “it’ll come back” lull you into complacency about the stock market.  Remember that if you do not get out when the market is clearly cracking up, you will be sorry.  Take a good look at this chart which describes how difficult it is to get back to breakeven after suffering a stock market loss.

And to repeat the essential lesson of stagflation, “There is a haven of safety and profit in an era of stagflation:  Gold.”

To learn more about these economic times and how to preserve your wealth and protect your family, speak with a Republic Monetary Exchange gold and silver professional today.

Protect Profits with Gold!

Are you paying attention to stock market values decaying right in front of our eyes?

For those of you who have had a good ride in the stock market during the period that it was levitated by the Federal Reserve’s pumphouse of liquidity, we want to recommend that you prepare for the stagflation developing now and lock in your profits by moving them to gold.  

Here is a sample of informed commentary about the way the stock market’s overextension is playing out.

The title of today’s piece comes from Wolf Richter at WolfStreet.com: “What we’re looking at is how the greatest stock market bubble ever is coming unglued stock by stock, rather than all at once.”

“All these stocks that spiked by 200% or 500% or 1,000% were hyped out the wazoo, often in the social media, and their prices spiked in the shortest time, often multiplying in days. This craze started in March 2020, and peaked in February 2021, and then came unglued.”

Stocks are clearly moving into bear market territory.  Bank of America’s Michael Harnett points out that three out of four Nasdaq stocks and more than half of S&P 500 stocks are already at least 20 percent lower than their 52-week highs.

“Instead of buying the dips, investors should be selling the rips in the stock market as the Federal Reserve begins to raise interest rates into a bear market.  We believe [the] bull era of central bank excess, Wall Street inflation, [and] globalization [is] ending, and [a] bear era of government intervention, social and political polarization, Main Street inflation, and geopolitical isolationism [is] starting,”

He adds that the bearish fundamentals are exacerbated by the war in Ukraine and the prospect of commodity price inflation.  Another red flag is the likelihood of a Fed policy error.  We hardly need to chime in ourselves that Fed policy mistakes are a way of life these days.

And a fundamental reminder from Bill Bonner, Bonner Private Research: 

“The problem with just staying ‘in the market,’ may leave you with a losing position for decades. In the US, after the crash of ’29, it took 26 years for stocks to recover, in inflation-adjusted terms. And in Japan, stocks crashed in 1989; they still have not recovered.”

In that context, we thought we should re-publish this Wall Street Journal chart from a month ago when Meta (Facebook) lost more than $230 billion in market value.

In one day.

The chart details similar share price collapses over the last two years.

Take steps now to lock in stock market profits and breathe easier during the stagflation years ahead.  Speak with a Republic Monetary Exchange specialist about wealth preservation with gold, the world’s enduring money of choice.

People in Ukraine with gold will be better off than people with Hryvnia!

It is said that the first victim of war is the truth.   The war in Ukraine is no exception.

People in Washington – never the brightest bulbs – have been caught cheering stories that didn’t actually happen… Supposed footage from the fighting that is actually footage from something years ago that happened in another country…. Accounts of heroic deeds that are actually doctored up from old video games… Photos of staged weapons that are really from another place and time. 

You would think politicians would be more careful about being taken in by fake news.

We, of course, don’t know how things will play out, who will be up and who will be down when the dust settles in Ukraine.  And we don’t mind admitting it.  But because we are specialists in monetary matters, in gold and silver, there is one thing we do know…

People in Ukraine with gold will be better off than people with hryvnia.

What the heck is a hryvnia, you might ask?  Hryvnia is the national currency of Ukraine.  It is an unbacked currency, either printed on paper or created digitally.  In that respect, it is exactly like the US dollar.  There is no fixed redeemability of either the dollar or the hryvnia to some dependable backing like gold.

Some years ago, Senator Marco Rubio tried to put US taxpayers on the hook to guarantee the value of the hryvnia.  Why he would want to do that, especially since no one guarantees the value of our currency, should be a mystery.  After all, Rubio is a US senator.  He represents Americans.  But we suspect the scheme was designed to bail out international banks that had loaned money to Ukraine.  The American people are often victimized that way. 

In any case, we think the people in Ukraine should be responsible for the value of their own currency.  They are in charge of their central bank, not you.  They have control over their government’s spending, not you.  They are responsible for doing something about rampant corruption in their government, not you.  If Ukrainians want a valuable and worthy currency, they should do something about it.  We suggest they try gold and silver instead of printed or digitally printed money.

So, to restate what we do know:

We are confident that people in Ukraine who exchanged their hryvnia for gold and silver are better off than those who did not.  Especially since the value of the hryvnia has fallen out of bed since Senator Rubio was pushing his big idea.

From the experience of thousands of years and from around the world, we are also confident that people who exchange their US dollars for gold and silver will be better off for it.  

That is because the Fed can’t just print gold! 

Gold and Silver: For When the Government Decides that What’s Yours is Actually Theirs.

The Canadian Truckers’ protest showed, in the words of columnist Eric Margolis, “that less than 100 ZZ Top look-alike truckers could hold Canada to ransom.”

That is a funny line.  But it also showed something far more diabolical.  It showed Big Brother is never far from the surface of even modern, Western governments.

It took Justine Trudeau, the Canadian prime minister who bears an uncanny resemblance to Fidel Castro, no time at all to respond to a peaceful, populist demonstration with all the heavy state artillery he could muster.

Trudeau quickly declared a martial law-like National Emergency on the flimsiest pretext.  After all, in 34 years that power has never before been invoked.  

According to Trudeau, the protestors held “unacceptable views.”  So now the modern state gets to decide which views are acceptable?

Trudeau further claimed that the truckers “do not represent the views of Canadians.”  So said all the arms of state propaganda.  But they sure represented the votes of all the thousands who turned out in the freezing cold to support them.  Do they count for nothing in the Trudeau calculation?  And they sure as heck represented the people who quickly donated C$10 million to GoFundMe to support the truckers.  

(But then GoFundMe decided to withhold the funds.  There should be a special never-to-be-forgotten place in our memories for GoFundMe.)

The Deputy Prime Minister declared that “emergency” measures empowered the state to suspend the truckers’ insurance, and freeze truckers’ and protestors’ bank accounts without court orders.  Law enforcement began targeting people on the grounds that “they were believed to be involved” in the protests.  It wasn’t long before police on horseback waded into the crowds, one captured on video trampling on an old lady using a walker.

One case involved a single mother who donated $50 to the protestors.  That was the extent of her participation, all entirely legal.  But her ability to provide for her children was kicked to the curb when her bank account was frozen.

The lesson from this experience in Canada is that your ownership of your financial resources is fiction.  The moment it is not convenient for the state, the fiction is exposed.

“If you are involved in this protest, we will actively look to identify you and follow up with financial sanctions and criminal charges,” said Ottawa’s chief of police Steve Bell.

Is this an operating manual for the Biden administration in the days to come?

What happens when our own truckers reach Washington?   

Or when people begin to protest energy prices or Bidenflation?  Or the next Deep State war that makes no sense?  What happens when people decide to drop out of the phony money and crony state game?  When the ruling classes decide to drop one of the Bill of Rights (Second Amendment, we’re looking at you)?  When Washington reneges on its debts or can’t pay Social Security recipients in money of lasting value?     

Of course, the US Constitution does not allow Washington to do the kinds of things that Trudeau and his minions did to our Canadian cousins.  But it has been a long time since anyone in government paid much attention to the Constitution.

For that matter, if the Constitution still prevailed here in the 50 states, gold and silver would still be money as the founders intended.  And we wouldn’t be in this mess of inflation and unpayable debt.  And since Congress hasn’t declared war since World War II, despite the Constitution’s clear language that it must, there wouldn’t have been an endless series of elective regime change wars that have left American buried in %30 trillion in debt.

But for now, it is up to you to protect your own wealth.  Get resources off the grid that can be frozen or nationalized when the government decides what is yours is really theirs.

Call or stop by Republic Monetary Exchange for a private no-obligation consultation.  And learn why gold and silver are the money of free people.

Take a good look at this chart.

It is the Commodity Research Bureau’s index of global commodity complex prices.  Rather than equity (stocks) or bonds, it represents real things, tangible goods that make the things we consume.  It consists of 19 global commodity prices.  Energy contracts are 39 percent of the index, while agriculture commodity prices are 41 percent, industrial metals represent 13 percent, and precious metals are 7 percent.

Commodity prices are ripping higher!

This is a five-year chart.  You can see the collapse of prices in early 2020, the result of the global economy being widely shut down by the pandemic response.  Prices recovered in 2021, but thanks to unprecedented money printing, the index is rocketing to new highs.

The index is now 40 percent above its 5-year average.  It is up 13.5 percent just since the first of this year.

It reflects global price inflation and the US dollar’s purchasing power.  It means that things we eat, things made from raw materials, and activities that require energy will cost more.  It means virtually everything will cost more. 

What can you do to protect yourself?  People have learned the lessons of these commodity price explosions over and over.  They are not rare historical events.  They are common because all governments given monetary authority will eventually misuse them.  

The lessons learned from Argentina to Zimbabwe, from ancient Rome to modern Europe and the US, and from countless banana republics in between, is to move your money out of the depreciating local currency and into gold.

Don’t wait, because here we go once again!

Here are some top-of-the-page news alerts on the popular Drudge Report this past week, (including the photo of the smiling but clueless Treasury secretary Janet Yellen:

YELLEN: DON’T WORRY, BE HAPPY!

Janet Yellen is “concerned” about inflation, but she assures us that the Federal Reserve will act in an “appropriate way” to contain inflation.  We wonder why the Fed didn’t act in an appropriate way to keep inflation from exploding to begin with… but who are we to ask?

61% of Americans now living paycheck to paycheck…

That 61 percent of Americans are living paycheck to paycheck is self-explanatory, but the story explains that real wages aren’t keeping up with inflation.  

Mortgage rates soar…

The cost of the average 30-year fixed rate mortgage is up well over a percent from a year ago. 

Here comes $7 gas?

Brace yourself for another surge in gas prices, warns a leading energy price tracker.  He says oil could shoot to $150 a barrel.  Well, that’s the sort of thing that happens when the currency loses its purchasing power (and when you go to war with energy producing nations!)

Why runaway inflation has middle class so on edge…

White House economists push back against pressure to blame corporations…

Gold nears all-time high…

Let us provide you the quick digest of each one, in order.

• Janet Yellen is “concerned” about inflation, but she assures us that the Federal Reserve will act in an “appropriate way” to contain inflation.  We wonder why the Fed didn’t act in an appropriate way to keep inflation from exploding to begin with… but who are we to ask?

• That 61 percent of Americans are living paycheck to paycheck is self-explanatory, but the story explains that real wages aren’t keeping up with inflation.  

• The cost of the average 30-year fixed rate mortgage is up well over a percent from a year ago. 

• Brace yourself for another surge in gas prices, warns a leading energy price tracker.  He says oil could shoot to $150 a barrel.  Well, that’s the sort of thing that happens when the currency loses its purchasing power (and when you go to war with energy producing nations!)

• With prices rising, regular people worry about making ends meet and their financial future.  Go figure.

• There are fights within the White House about who to blame for inflation and what to do about it.  This is no surprise since nobody there has a clue about the nature of money and prices, much less economics as a whole.

• Gold has moved higher.  Of course, it has.  After all, the Fed actually printed $4.7 trillion in the last two years!

Now we would have written about each of these bullet points ourselves since that is what we do to keep our friends and clients informed.  But today we’d like to thank the Drudge Report for doing our work for us!

Buy gold now because the Fed is about to get even worse!

US wholesale prices are racing higher at a breathtaking rate.

For the month of January, the Producer Price Index was up a full one percent.  For the 12-month period ending in January, the PPI was up 9.7 percent.

From the Wall Street Journal:

U.S. suppliers sharply boosted prices last month, in a sign upward pressure on already high consumer inflation continued to build at the start of the year. The Labor Department on Tuesday said the producer-price index, which generally reflects supply conditions in the economy, rose a seasonally adjusted 1% in January from the prior month, the sharpest rise since May 2021. The gain reflects pandemic-related disruptions from the Omicron variant of Covid-19 at the start of the year and continued strength in consumer demand, economists said. Producer prices rose 9.7% on a 12-month basis, nearly the same as the prior month.

For the same 12-month period consumer prices are up 7.5 percent.  Rising producer (wholesale) prices) inevitably must work their way into consumer prices.  

Note that the above explanation does not deal directly with the Fed’s frantic creation of trillions of digital dollars in the last two years.  To be more precise, from mid-February 2020 until today, mid-February 2022, the Federal Reserve has purchased $4.7 trillion dollars of financial assets, mostly US Treasury bonds and mortgage securities, with money that it simply created digitally.  It is unbacked, irredeemable, fiat money that is not the result of wealth production.  It is simply created with a couple of computer keystrokes.  

It looks like counterfeiting, it walks like counterfeiting, and it quacks like counterfeiting.  But it is legalized counterfeiting.

Gold up 11 of the last 13 days, surging above both its 50-day- and 200-day-moving averages.

While some – ourselves included – are looking at the lunatic money printing and the prospects for another war as the primary forces driving gold today, it is worth noting that the Senate Banking Committee is soon sending to the full Senate for confirmation a slate of Biden nominees for the Federal Reserve Board, including a second term for Jerome Powell as chairman.  

This slate alone is a sufficient reason to doubt the future prospects of the US dollar.  Missing the resurgence of inflation and then pronouncing it “transitory” is the least of their shortcomings.  Among the nominees are those who believe climate change is part of the Fed’s charter.  The Fed can’t maintain stable prices as it is tasked with doing, but it wants to manage the solar system.  Another nominee’s chief academic accomplishment is a research study so riddled with error that she has been accurately described as being “innumerate,” which is basically incapable of arithmetic.  Great.  Put here in charge of the money supply.

But at least it will be a “diverse” Fed.

Buy gold while you can!

It’s not a surprise to Republic Monetary Exchange friends and clients!

The inflation rate keeps powering higher and higher.  

Consumer prices have climbed 7.5 percent over the last 12 months, according to the Bureau of Labor Statistics.  That is the most in 40 years.

Inflation ran even hotter than that in the mountain states, including Arizona where Republic Monetary Exchange is headquartered and where many of our clients live.  Mountain states inflation came in at 9 percent.

Let us backtrack a bit.  A year ago, the Federal Reserve showed no concern at all about inflation, while we warned there would be severe price consequences to the Fed’s money printing spree.  When inflation’s presence became undeniable, the Fed insisted it would be transitory.

It has not been transitory.  Instead, it has kept climbing into the banana republic danger zone.  

At the end of October, the annual inflation rate was 6.2 percent.

By the end of November, we were looking at annual inflation of 6.8 percent.

And it just kept climbing.

At the end of last year, 12-month inflation has risen to 7 percent.

Now, with the numbers in for January, the 12-month inflation rate has climbed to 7.5 percent.  

What this means it that since January 1, 2000, the US dollar has lost 40 percent of its purchasing power.  Gold, on the other hand, began the new millennium at about $280.  It has gained some 550 percent while the dollar lost 40 percent of its purchasing power.  That is the sort of thing to be expected with the Fed printing dollar by the trillions.

You did not need to hear a government report to know that inflation is running red hot.  It is the talk of people everywhere we go these days.  The official numbers are notoriously sketchy, and we believe they understate real inflation.  We cannot say what the official numbers will be next month.  They can come in higher or lower at any time.

But we can tell you that the purchasing power of the dollar will be even lower next month than it is right now.

And that is why you need to protect yourself from the destruction of the US dollar by owning gold and silver. Speak with a Republic Monetary Exchange professional today to create a plan to protect your wealth and your family.

If you’re like the rest of us, you’re probably hearing more and more complaints about rising prices.

Well, get used to it.  

Washington could have done the right thing, but it never does.  Politicians are too busy buying votes with giveaways and thanking lobbyists for contributions with crony legislation.  

It’s been going on for a long time, and now – just days ago – the US national debt reached the unthinkable level of $30 trillion!

Where is this debt crisis headed?  Here’s a guess from the Peterson Foundation, one that we think is a quite modest projection of future debt.  That is because Washington is liable to usher in a recession in the next few years.  In a recession, government revenues fall, while government social spending rises.  

And the debt widens.

Our recent history is clear.  As the debt widens, the Federal Reserve steps in to make up much of the shortfall with a gusher of printed money.  It attempts to inflate the debt away.

Such inflation extremes are the ruination of countless governments and the source of incalculable suffering by the people.

Inflation at ten percent devalues a $30 trillion government debt by $3 trillion a year.  Except for an outright default, that is the only way out for Washington.  

If you would like to learn about the calamity that results when governments try to inflate their debt away, read Jim Clark’s new book REAL MONEY FOR FREE PEOPLE: The American Gold Story.  

It is vital that you have this information.  Stop by Republic Monetary Exchange on Camelback just east of 40^th Street and we’ll be happy to give you a copy.  No cost.  No obligation.  

We just urge you to inform yourself before it is too late.

We’re writing this post on Thursday (2/3/22), the day Facebook, or more properly its parent company Meta Platforms, lost more than $230 billion in market value.

In one day.

The Dow Jones Industrial Average fell 518 points, while the Nasdaq market was down 538 points, or 3.7 percent. 

This isn’t the first time we’ve seen a jumbo-size train wreck like this. Here’s a Wall Street Journal graphic detailing similar collapses over the last two years.

As you can see, Apple, Amazon, Microsoft, and Tesla have been slammed this way before.  

These things happen because the markets have been in a speculative fury while the Federal Reserve has been pumping trillions of dollars to Wall Street.  Think about this.  Last time we saw the numbers broken out, just a few months ago, 21 percent of the capitalization of the S&P500 was concentrated in these five high-flyers: Facebook, Apple, Amazon, Netflix, and Google.  

It has driven those stocks to the moon, but all that Fed money sloshing around still must spill over elsewhere, and because it is cheap and easy-to-come-by for the Fed’s cronies, it has funded all kinds of things at levels that have no rational economic underpinnings.  Things like crazy crypto currencies (have you ever heard of Fonziecoin, PotCoin, or Pizzacoin?).  And equally crazy NFTs, non-fungible tokens.  Like the recordings of rude body sounds.

This is the age of stupid money.  But it is not the first time.  In his play Pericles, Shakespeare holds up a famine in Tarsus, which had been proceeded by an inflation characterized by rank excesses.

One former Federal Reserve official, Richard Fisher, asked a couple of years ago what the markets will do when the Fed stops giving them “monetary cocaine.”

For some reason we think about Rudyard Kipling’s line, “If you can keep your head while all about you are losing theirs…”

We’ll adapt it and finish it for our age of wanton currency destruction.

If you can keep your head while all about you are losing theirs, and during some of the most ridiculous financial behavior ever seen, then surely you will invest in gold… And keep not just your head, but your wealth, too.

Wow! $30 Trillion! That’s a Surefire Calamity!

The US national debt just set a new world indoor record.  The official, on-the-books national debt reached $30 trillion on January 30.  

The national debt has grown by almost $7 trillion in the last two years.  Oh, brave new world!  That’s more than $90,000 per American or $360,000 for a family of four.

If the dollar were a reliable unit of accounting, the debt would be unpayable.  But since the dollar is not a reliable unit of accounting, the debt can be paid.  All it takes is for the dollar to be inflated into near worthlessness.  It may seem like that would take a lot of money printing, but it is not a big challenge for the monetary authority, the Federal Reserve.  It has a lot of experience in currency debauchment.   Since 1913 it has destroyed 97 percent of the dollar’s purchasing power.  Since the money is all “printed” digitally these days, it takes no time at all.  And they don’t have to fool around with all the mess of paper and ink!

So, printing the money into near worthlessness works for Washington and the monetary authority.  It just doesn’t work well for you if your savings and retirement are all denominated in dollars.  It doesn’t do much for American prosperity either.

Financial blogger Wolf Richter (WolfStreet.com) provides this 10-year chart of the national debt.  As you can see, he labels where we go from here as “Debt out the Wazoo!”

That is a good description!

Note all the flat spots labeled “debt ceiling” where the debt appears to stop growing.  That is another Washington flim-flam.  The spending goes right on as usual, but they use accounting gimmicks to pretend that the debt isn’t growing.

As Richter says, “Each time after a Debt Ceiling charade is resolved in Congress, the administration is then free to borrow the money that Congress told it to spend, and the US national debt spikes to make up for the flat spots. The one thing the Debt Ceiling never does is slow down the growth of the US national debt.”

We can’t stop this government train racing to calamity.  It was inevitable that it would come to an unhappy end on the day the Federal Reserve was created.  But you can make sure your own personal wealth doesn’t crack up in the process by preserving it in real money:  gold and silver.

If you would like to know more, speak with a Republic Monetary Exchange precious metals professional today.  

Oh, and one more thing.  $30 trillion is only part of the US national debt.  It is the part that shows.  The hidden debt that no one likes to talk about much is around $164 trillion.  That’s five and a half times the size of the visible debt.

But gold is a different story!

It doesn’t matter whether the government’s unbacked, fiat, made-up money is printed or a mere digital bookkeeping entry, it will always end up worthless.

It has happened in more times and places than we can recount.  The latest is in Venezuela where the money ends up as roadside garbage. This is what hyperinflation in Venezuela looks like.

But don’t take it from us.  Have a look yourself:

You will note, by the way, that nobody ever throws their gold and silver away along the side of the road.  

The last time we wrote about Venezuela’s currency calamity HERE, we noted that faced with a worthless currency, in the mining areas of the country, gold was beginning to reassert itself as a reliable unit of value.  Miners pay workers in bits of gold.  They in turn break off flakes of gold to pay for lodging, in bars, and even for haircuts.

One of the great ironies of the story is that they are using the worthless paper currency, the government’s bolivars, to wrap paper to wrap up and protect the bits, flakes, and nuggets of gold they carry in their pockets and purses.  

So, I guess paper money isn’t entirely useless!  

If your finances, your savings, and your retirement funds are all in unbacked, fiat, made-up digital or paper currency, we recommend you let the fact that we are experiencing the highest US inflation in 40 years spur you to take steps to protect yourself and your family.

The first step is to speak with a Republic Monetary Exchange gold and silver professional.  There is no charge or obligation.  Learn how to protect your hard-earned wealth from the common fate of funny money everywhere.

But read every word!

We’re busy watching the carnage in the stock market this week as gold works its way higher, just as we have written about so many times.  

So today we want to share with you a tweet from Marc-André Fongern (@Fongern_FX), a British foreign exchange analyst.  It is a short and succinct summation of the Federal Reserve’s accomplishments, and we don’t want to dilute its impact with any unnecessary verbiage.

So here it is:

More states are expected to recognize Constitutional money as, well, Constitutional money in 2022.

That is according to the Sound Money Defense League, an organization that tracks state-level sound money – gold and silver — legislation across the United States. 2021 was a good year for advancing the interests of gold and silver, says the League; 2022 could be even better.

Imagine the absurdity of the following situation.  You ask the bank to give you five twenty-dollar bills in exchange for a one-hundred-dollar bill.  The teller does so, but only after deducting sales tax, for example, 8.6 percent which is the prevailing sales tax rate in Phoenix, Arizona.  

In that case, the bank would take your $100 bill and give you $91.40.

As we have discussed often, money cannot function in such an environment.  Without getting too technical a functional currency cannot have a bid-ask spread.  And whether tax-hungry officials like it or not, the US Constitution provides for gold and silver to serve as money.

There is no sales tax on precious metal coins and bullion in Arizona.  The formal language of this exemption is found in Arizona Revised Statutes 42-5061.

Issuers of fiat currencies are always hostile to gold and must suppress it at the first hint of a challenge.  After all, the money printing flim-flam works by the State appropriating some of the value of the currency.  If people are wise to the game and refuse to hold the State’s currency, there is no one to fleece.  

That is why tax policy is hostile to gold and silver.  They represent superior competitors to dollars that roll right off the digital printing press by the trillions with nothing more than a computer keystroke.  

As we are becoming fond of saying, they cannot print gold and silver!  

In any case, more states are lining up to remove sales taxes on gold and silver, while other states are taking steps to eliminate capital gains taxes.

According to the Sound Money Defense League:

More than a half dozen states are now considering legislation that rolls back discriminatory taxes and regulations on the sale, use, and purchase of gold and silver.

To date, 42 states have removed some or all taxes from the purchase of gold and silver. And there are new bills pending now in five of the eight remaining states, i.e., Tennessee, Mississippi, Kentucky, Hawaii, and New Jersey.

The problem of unsound money cannot be entirely eliminated by the legislative action of individual states. 

The League concludes that: 

The root of the problem is the Federal Reserve, U.S. Treasury, and Congress who have fully embraced fiat money and abandoned monetary restraint.

With the Consumer Price Index running at its highest rate in 40 years, inflation is becoming the most pressing economic issue of our time.

While federal policymakers are exacerbating the problem, some states are thankfully stepping up to give their citizens some tools to protect themselves.

Bullish Figures for Gold!

It has been a while since we have focused on the price charts, but this would be a good time.  On Tuesday, the Nasdaq tumbled 2.6 percent for its lowest close since October, while the Dow dropped 540 points on the day.  

Gold has been trading mostly sideways this year, and now has held over $1,800 an ounce for more than a week.

We note as well that gold is trading above its 50- and 200-day moving averages, both of which are moving higher as well.

Because this move defies the conventional wisdom, with the prospect of the Fed raising interest rates several times this year and with the yield on the 10-year Treasury pushing higher as well (and also trading over its 50- and 200-day moving averages}, we consider this picture for gold especially bullish.

Here is a five-year chart of oil prices (West Texas Intermediate Crude).

Oil has marched determinedly higher since its lockdown low nineteen months ago.  It is now trading above its 50- and 200-day moving averages.  That may be an indicator as well of an environment bullish for gold.   It is also likely that oil prices are firming in anticipation of armed conflict.  The standoff over Ukraine grows more intense with each passing week.  Any such conflict, needless to say, is hyper-bullish for gold. 

Finally, just a remark about our impression of conditions in America in January 2022.  Store shelves are sporadically empty, retailers’ product inventories appear to be narrowing, many doctor’s offices are acutely understaffed, and emergency room waiting times appear to be growing.  With inflation at seven percent and wholesale prices rising at almost ten percent annually, we think it fair to judge that the monetary system is in crisis.  Thus, we must repeat the time-worn observation that when the monetary system goes, everything goes.

Comrade Lenin would have been proud!

Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at the confidence in the equity of the existing distribution of wealth.

– John Maynard Keynes

This Bidenflation has gone way too far!

The Labor Department reports that the consumer-price index, said to measure what consumers pay for goods and services, was up 7 percent in December from the same month a year ago.  

That is the highest inflation rate since 1982.  A CNN anchor even said, “Yikes!”

President Biden tweeted that, “inflation numbers show a meaningful reduction in headline inflation over last month. We are making progress in slowing the rate of price increases.”

Having tracked the numbers ourselves, we are at a loss to understand where a meaningful reduction is to be found.  It may be he is trying to lipstick the Biden Inflation pig by referring to month-to-month changes, but “headline inflation” traditionally refers to the 12-month rate, which is now 7 percent.  

Through November the 12-month CPI rate came in up 6.8 percent, so it just keeps climbing no matter what POTUS says.  

In fact, it is the third straight month in which the 12-month inflation rate was more than 6 percent and the highest of the three months. 

Meanwhile, real hourly wages accounting for the impact of inflation, continue to come in well below the rising cost of living.  And that is the formula for wiping out the middle class.

Or as Lenin is thought to have said, “The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.”

Watch out ahead!  The Biden Brigade is headed straight for the millstones!  Speak with a Republic Monetary Exchange gold and silver professional today and create a sensible plan to protect and preserve your wealth.

There probably are not a lot of places in the real world where one can massively, spectacularly mal-perform – we’re talking world-class failure – and keep a coveted position as the head of an enterprise.

Football coaches with losing records get fired.  Movie directors with a string of failures do not often get invited back to sit in the director’s chair.  Salespeople who do not meet quotas… pilots who land at the wrong airport… auto mechanics who cannot make cars run… All these would soon find themselves in professional jeopardy.

Public policy positions and government are conspicuous exceptions to normal accountability.

Confirmation hearings this month for Federal Reserve chairman Jerome Powell have us wondering about this.  After a badly bungled first term, President Biden has nominated Powell to serve another four years.

Readers of this blog do not need a lengthy recitation of Powell’s failures and monetary mishaps.  But even those who pay no attention to monetary policy, investments, or America’s economic challenges are liable to be aware of Powell’s spectacular failure to foresee and manage inflation’s debilitating reemergence in 2021.

Powell may have been advised that it was a good opening to announce to the Senate on the first day of his hearings that “the Fed works for all Americans.”  But it is only further evidence of his disconnectedness.

That is because the wealth gap is visible to just about everyone now.  Fed policy has so aggressively favored the wealthy that Bill Gates and Warren Buffett and their “class” mates have done exceptionally well.

Not so much your typical, average American.  Their incomes are not keeping up with the cost of living.  They and their “class” mates are falling further and further behind.  

CNBC:

Over the past two years, median income fell 3% while the cost of living rose nearly 7 percent, due, in part, to rising housing and medical costs….

The average U.S. household with debt now owes $155,622, or more than $15 trillion altogether, including debt from credit cards, mortgages, home equity lines of credit, auto loans, student loans and other household obligations — up 6.2% from a year ago. 

So, things are not working out too well under Mr. Powell’s watch.  But, like so many in government, he will be allowed to “fail up” and will be confirmed.  

By now Americans should begin to suspect that it is the monetary system itself that is failing, the handiwork of the issuers of made-up money.  For that is what inflation is: the failure at one rate or another of the money itself.

We do not think Powell should be reconfirmed.  We do not think incompetence should be rewarded.  But in the long run, it won’t matter much if he is.

The only real protection from central banking failures is a good portfolio of gold and silver.

A Record Year for Global Demand!

With inflation’s roaring return, investors purchased US American Eagles gold coins like hotcakes in 2021.  

The US Mint reports sales of 1,252,500 ounces in one ounce and other gold Eagle denominations last year.  That is the most since 2009 and represents a 48.4 percent increase from 2020 sales.  

The biggest sales month in 2021 was January with 220,000 ounces of gold Eagles sold, according to the Mint.

The Mint reports that American Buffalo gold coins in 2021 recorded their highest sales total since the coins were introduced in 2006.  Gold Buffalo sales reached 350,500 ounces.  

While gold coin sales climbed to highs not seen in over a decade, silver coins fell short. Total sales of US American Eagle silver coins reached 28,275,000 in 2021.  That was off 6 percent from 2020 sales of 30 million ounces.  

Meanwhile, the Silver Institute reported in December that 2021 would set a record for global silver demand.  It projected year-end total demand of 1.029 billion ounces.  That would be the first time silver demand has exceeded a billion ounces since 2015.   

According to the Institute, “Physical investment in 2021 is forecast to increase by 32 percent, or 64 million ounces, year-on-year to a six-year high of 263 million ounces.  The strength will be driven by the United States and India.  Additionally, on top of solid gains last year, U.S. coin and bar demand was expected to surpass 100 million ounces for the first time since 2015.

Powered by a 13 percent increase in photovoltaic demand to more than 110 million ounces, industrial silver demand was projected to reach a new high of 524 million ounces in 2021. 

With pandemic shutdowns coming to an end at mining operations around the world, 2021 mined silver production was expected to rise by 6 percent to 829 million ounces.  

The Silver Institute’s year-end report forecast a modest 2021 physical silver deficit of 7 million ounces, the first deficit since 2015.

An important gold price forecast, top-heavy stock market action, and an important book waiting for you…  Along with our best wishes for your prosperity in 2022, here are five things we want to share with you at the beginning of this New Year.

1.

Investors will stampede to precious metals in 2022 for protection from a sketchy stock market and inflation.  That’s the forecast from Brian Wien.  He’s the Vice Chairman of Blackstone, the giant investment management firm that runs almost three-quarters of a trillion dollars.  

Wien expects gold to surge 20 percent this year, putting it at a new all-time high of more than $2,160 an ounce.

He even says, “Gold reclaims its title as a haven for newly minted billionaires” in 2022.

2. 

Speaking of the stock market, things are getting dangerously concentrated.  Veteran stock analyst David Rosenberg writes a word to the wise: “I see in today’s Financial Times a factoid showing that one–third of the stocks in the NASDAQ are down over 50 percent from their 200–day moving averages (!).  Since April, five stocks (Microsoft, Alphabet, NVIDIA, Tesla and Apple) have accounted for over half of the S&P 500’s total return. In fact, we haven’t seen market concentration this acute since 1969, never mind 1999. We know what history reveals in the aftermath of such a narrowly based (and overvalued) excess.”

3.

The US national debt finished the year at $29.617 trillion.  It grew $1.87 trillion in 2021.  

One word:  Wow!

4.

The US dollar’s share of global currency reserves continues to erode.  In the third quarter, the dollar share fell to 59.15 percent.  The people may not know how the money-printing games devalue their money, but the central bankers of the world know and are lightening their dollar positions even as many began to build their gold reserves.

5.

Skyrocketing prices, massive new spending programs, debt ceiling puppet shows, money printing, debt up the wazoo!

How did we get here?  Where is all this headed?  

You’ll find the answers to those questions and more in my book REAL MONEY FOR FREE PEOPLE: The American Gold Story!

Just stop by Republic Monetary Exchange and let us give you a copy of REAL MONEY FOR FREE PEOPLE!

No cost.  No obligation.

You’ll learn exactly why the Founders insisted on gold and silver and even wrote them into the Constitution.  Wait until you read about the time the government stole the people’s gold.  It is one of the great swindles of all time!  

Where are we today and how does it all end?  REAL MONEY FOR FREE PEOPLE covers that, too, and explains why gold and silver are your best protection from the monetary imbecility and ruination of our time.

We have a free copy waiting for you.

More things said about gold, silver and sound economics worth remembering in 2022!

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

– Ludwig von Mises

Gold is a hedge on government authorities making poor economic choices. Inflation is usually the result of those poor decisions, but people confuse cause and effect here. Gold is a hedge on policy makers screwing up, and there has been a lot of screwing up in the last 20 years.

– Jared Dillian

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.

– Ernest Hemingway, Notes on the Next War: A Serious Topical Letter

I think there is a question mark over the durability of any power that relies as heavily as the United States on importing capital and borrowing from abroad.

—Niall Ferguson  

Fiat money will be a passing fad in the long-term history of money.

—Jim Reid, Deutsche Bank

[Government debt] allows for present consumption, while shuffling the bill off to future generations.  Normal, healthy people try to leave something for their children and grandchildren.  The Framers of the Constitution wrote that their aim was to “secure the Blessings of Liberty to ourselves and our Posterity,” for those to come.  But a perverse generation burdens little children who have no say-so in the matter with debt that they must bear all their lives at the expense of their own prosperity.

– JIm Clark

Governments lie; bankers lie; even auditors sometimes lie. Gold tells the truth. 

— Lord Rees Mogg

We live in a technological golden age but in a monetary and fiscal dark age. While physicists discover the so-called God particle, governments print and borrow by the trillions. Science and technology may hurtle forward, but money and banking race backward.

James Grant, Grant’s Interest Rate Observer

You can’t keep printing trillions of dollars without getting serious inflation. There’s no getting around it

The people making these decisions know that perfectly well. But thats the secret: They want inflation. In fact, they need inflation. Why? Because they’ve gotten rich from debt. That’s the real economy. Leverage is their entire business model. So for the finance class, inflation is the only way out of all that debt. When money is worthless, you owe less. Meanwhile, hard assets — like upscale real estate on Martha’s Vineyard — will be worth more.

So inflation may crush you, but it will make the people making the decisions richer. Everyone else — regular wage earners, people living on fixed income, every middle-class retiree in the country,  anyone who bothered to live like a responsible person and save money —  will be in serious trouble when inflation arrives. 

That’s not speculation. It’s coming, and anyone who’s paying attention knows it’s coming.

Tucker Carlson, Fox News

The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine and to process; and that it cannot be created by political fiat or caprice.

— Henry Hazlitt

The Golden Rule: He who has the gold makes the rules. 

– Attributed to a 1967 Wizard of Id comic strip

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.

 — Alan Greenspan

Good money is coined freedom.

  — Swiss proverb

The Fed took a dollar and eliminated 98% of its purchasing power and they’re doing that more rapidly than ever but it just hasn’t been fully discounted. When it is, gold is going to be much, much higher.

– Ron Paul

Here are a few observations about gold and silver that we have been collecting to share with out friends and clients!

People are frustrated with the economy, because they worry about how everything is getting much more expensive, and they’re blaming the government and politicians because that’s what they’re being asked about, and they’re not blaming the Fed, because the polls never ask about the Fed, and because many people don’t even understand what the Fed does and how it does it.”

– Wolf Richter

Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labor bestowed in procuring them, and the value of the capital employed in the mines which produce them.

— David Ricardo
British political economist (1772-1823)

A U.S. dollar is an I.O.U. from the Federal Reserve Bank. It’s not backed by gold or silver. It’s a promissory note that doesn’t actually promise anything. 

— P.J. O’Rourke

To some it may appear melodramatic to announce that we are at a monetary endgame.  But it is clear-eyed realism that follows from the historical precedents.  And from the hard accounting.

— Jim Clark

Ask anyone in Germany what they associate with gold and, more often than not, they will say that it is synonymous with enduring value and economic prosperity. Ask us at the Bundesbank what our gold holdings mean for us and we will tell you that, first and foremost, they make up a very large share of Germany’s reserve assets … [and they] are a major anchor underpinning confidence in the intrinsic value of the Bundesbank’s balance sheet.”

— Jens Wiedmann
President, Bundesbank

I grew up in a purely urban family. We had no relatives in the country. I’m born in 1944. When I was a baby, my mother could only buy food because she still had some gold coins. Without gold, I would have starved. She always told me that. Therefore, this generation already has a certain gold affinity. In extreme times of crisis, this is one of the few things left to be accepted. Gold was the only thing left to the people of the city at that time. Before the silver cutlery was also traded at the farmer.

— Ewald Nowotny
Former European Central Bank governor

Gold is an investment in monetary disorder, which is what we have.

— James Grant

The gold standard makes the determination of money’s purchasing power independent of the changing ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence.

— Ludwig von Mises

With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people.

— F. A. Hayek

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: “Account Overdrawn.”

 — Ayn Rand

Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted.

Alan Greenspan

(They’re Between a Rock and a Hard Place)

It is better to not get started using addictive drugs.  Ask any addict.  Their trouble does not start when they try to stop.  The trouble starts when they start using.

It is the same with fiat (legalized counterfeiting, money-printing) monetary policies.  The trouble started when they started.  But the politicians want the cheap high, the something for nothing policies, and all the votes they can buy with promises of free stuff.  And, frankly, the authorities either are not smart enough or are not capable of stopping them.

That is why the Founders insisted on a sound – gold and silver-based – monetary system for the new Republic.  That is why they wrote gold and silver money into the Constitution.  So that the fiat, funny money addiction could not get started.  It was a good idea.  But one that would work only if the governing classes abided by their oath to support and defend the Constitution.  

They did not do that.

We do not know how many elected officials have betrayed that oath, but probably most of them.  Enough that Constitutional money was long ago replaced by the Federal Reserve.  The dollar was once as good as gold.  Now the dollar is as good as paper.

But enough lamenting what happened.  Now the nation, the elite, and the governing classes are addicted to fiat money.  And there is no easy way out.  Now they cannot quit distorting interest rates.  They cannot quit printing money.  They cannot let conditions return to normal.

We will let newsletter writer Bill Bonner explain why.  He points to a measure of the value of stocks compared to the nation’s total productivity, the Gross Domestic Product.  That measure shows that stocks are generally equal to about 80 percent of GDP.

But today that ratio is at an all-time high – 213 percent of GDP!  That is not just above the long-term average… It is in the stratosphere.

So, the Fed policy has driven inflation to its highest in 40 years.  Well, why doesn’t the Fed just stop and return to normal, sensible monetary practices”

Bonner:

If the monetary policy would go back to normal, stock prices would go back to normal, too…

With U.S. GDP at about $23 trillion right now, that would put the total value of all stocks – mostly owned by the top 10% of the population – at around $18.5 trillion… or about $30 trillion lower than they are today.

Almost all of the losses would come out of the pockets of the elite.

The elite would lose power, too. The ruling party would be voted out of office… And those who take over would be warned: Don’t cut off the money.

There is no easy way out.  No addict wants to suffer withdrawals. It would have been better not to start down the fiat money desolation road in the first place.  The Founders knew that.  They wanted a Constitutional government that would protect the money and your wealth with gold and silver.

But now you must protect your own wealth.  We are here to help.  Call or stop by and speak with a Republic Monetary Exchange gold and silver specialist.  Find out how to survive and prosper now that Washington’s fiat money addicts are between a rock and a hard spot. 

Inflation fight lost before it starts!

Buy gold now.  The Federal Reserve’s response to the highest inflation in 40 years, inflation that already has many Americans struggling with sharply rising grocery bills, is to serve up a giant nothingburger.

Fed Chairman Jerome Powell said on December 15th that the Fed is keeping interest rates near zero, but is speeding up the reduction in its asset purchases.

So interest rates, for those that can borrow at favored insider rates, are less than negative five percent.  Yet the Fed intends to leave those rates in place while producer prices have moved within a whisker of double-digits over the last 12 months.

Meanwhile, the Fed says that it will reduce the rate at which it purchases US government and mortgage securities.   It purchased securities with made-up money at the rate of $120 billion a month throughout most of 2020 and 2021.  In November it announced it will taper the pace of those purchases by $15 billion a month.  But with the latest surge in inflation, it announced today that it would taper at a rate of $30 billion a month instead.

As for interest rate increases, the Fed signaled that it is prepared to increase benchmark rates as many as three times next year, to cool high inflation.  But nothing now.  It apparently doesn’t think that the highest inflation in 40 years needs cooling now.

Market commentator Michael Shedlock was withering in dismissing today’s policy announcement, calling it “wimpy,” and a “clown act.”

We agree that the Fed’s policy response is not serious and expect more policy pivots at any time.

A CNBC reporter wrote recently, “The Powell Fed, in fact, has become almost as known for its abrupt changes in direction as it has for the unprecedented levels of stimulus it has provided during the pandemic.” 

Just like inflation, the financial strain it causes is on the rise. These pair of polls tell the story.

A majority of people say inflation is causing them financial strain, according to a new Wall Street Journal poll.

56 percent of respondents say that inflation is rising and that it is causing them financial strain.  Half of them categorize the financial strain as “major.”

Grocery and gas prices are the primary concern of more than half.  Others list housing and utility expenses.

Elsewhere in the financial world, banks are assessing their readiness for inflation’s impact on their customers.  

“Senior bankers are increasingly concerned that higher inflation could impact borrowers’ ability to pay back loans, slow U.S. economic growth, and destabilize stock markets,” reports Reuters.  

“Bank of America CEO Brian Moynihan said his bank was running internal health checks to ensure its portfolios could withstand a return to 1970s-style inflation.”

Here’s a headline from Yahoo News:  “77% of Americans now say inflation is personally affecting them — and 57% blame Biden.”

More respondents named inflation as “the most important issue facing America,” in the Yahoo poll than any other choice.

People are struggling to find out what is happening with prices and their purchasing power. Searches for the word “inflation” on Google are at record highs.

There are too many unanswered questions about who has title to and controls the gold. 

We think it is important to be good stewards of our resources.  And that includes the American peoples’ gold held by the government and/or by the Federal Reserve.  We have long supported the Audit the Fed measure championed for so long by Congressman Ron Paul.  After all, even the smallest of public companies must be audited each year by independent auditors.

Yet the Fed bitterly resists submitting to an audit.  We must wonder why.  We desperately need an audit of US gold reserves as well.  One congressman, Alex Mooney from West Virginia agrees.  But he has run into a wall of non-responses and obfuscation from the Biden administration.

Their non-responsive response has us wondering if someone is up to no good.  Here are details from the folks at the Gold Anti-Trust Action Committee.  They write:

Recent correspondence between U.S. Rep. Alex X. Mooney, R-West Virginia, and the U.S. Treasury Department suggests that the department has given the Federal Reserve and International Monetary Fund unfettered control of a substantial portion of U.S. gold reserves.

In a letter to Treasury Secretary Janet Yellen on June 9 this year Mooney posed many questions about the U.S. gold reserves, which are owned by the Treasury.

A reply dated September 29 from the Treasury Department’s deputy assistant secretary for appropriations in the department’s Office of Legislative Affairs, Angel Nigaglioni, obtained by GATA this week declined to answer most of Mooney’s questions, suggesting that the congressman pose them to the Fed and 

the IMF, though the gold belongs to the Treasury Department itself.

Particularly, Nigaglioni replied, the Treasury Department won’t say:

Nigaglioni did say that the Treasury Department and U.S. Mint do not engage in gold or gold derivatives transactions through the Bank for International Settlements, other central banks, or governments. But this did not exclude the Federal Reserve’s use of Treasury gold for such transactions 

Since Mooney’s questions involved the Treasury’s own gold, the Treasury surely knows or should know the answers, or else the Treasury is a negligent custodian of national assets. That the Treasury won’t answer Mooney’s questions is more evidence that it and the Federal Reserve are using U.S. gold reserves for surreptitious interventions in the gold market.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

We take it as a given that an audit of US gold will reveal substantial malfeasance and suspect the title to the people gold may have been compromised, pledged, or hypothecated without authorization or transparency.  

The American people will be shocked as well, to learn what the Federal Reserve has done in their name and with their currency.  For example, Senator Bernie Sanders wrote that a 2011 Government Accounting Office inquiry found that the Fed:

… provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression…The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo.  The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.

Even a US congressman can’t get straight answers for the Treasury about our gold.  But Republic Monetary Exchange’s team of gold and silver professionals is willing to answer all your questions about protecting your wealth, yourself, and your family with gold and silver.

And what happens to gold?

Here’s one of those issues that should not need extensive polling and surveys.  It should be self-evident.  

But let’s back into it.

JPMorgan analysts say the price of oil will test $125 a barrel next year, on its way to $150 in 2023. 

Their analysis HERE finds that producers OPEC and Russia “have returned to a position of positive leverage.”   

Speaking of things that are self-evident, that should have been foreseeable on inauguration day in January, when President Biden canceled the federal permit for construction of the Keystone XL oil pipeline.  Keystone was expected to deliver 800,000 barrels per day from Canada to the US.  

So, if the price of gasoline doubles or more, who is hit hardest?  People already struggling with high gas prices and fearing winter’s energy bills?  Or the rich, people whose wealth will suffer negligible impact?

Sorry for asking the obvious.  But it came to mind when we saw this report on a new Gallup survey about inflation:  “45 percent of American households report that recent price increases are causing their family some degree of financial hardship. Ten percent describe it as severe hardship affecting their standard of living, while another 35 percent say the hardship is moderate.”

The report finds that poorer people are hit harder by inflation than the rich.  For example, “Seventy-one percent of those living in households making less than $40,000 a year say that recent price hikes have caused their family financial hardship. That compares with 47 percent of those in middle-income households and 29 percent in upper-income households.”

We would not have known what those percentages were in advance, and they will change, but it is only obvious that those with less money will have a harder time absorbing the impact of inflation.  

It is only obvious as well, that if JPMorgan analysts are right about oil running up to $150, it is the poor and middle class that will feel it the most.  

A better question is this:  What will $150 oil do the inflation rate?  Everything made, everything consumed, everything transported to a store or to your home has an energy component.  Noting escapes energy costs.  Nothing.  

Here’s a long-term chart of both oil and gold prices.  We can not say they move in lockstep, but they tend to move in a tandem direction.

That is to be expected since they are both natural resources that must be recovered from the earth at substantial expense.  

We think it is also self-evident that if the analysts are correct and oil prices double from here (likely, given Biden’s energy policies) it will increase price inflation throughout the economy.  

And it will pull the gold price much, much higher. 

This is going to be one heck of a gold and silver bull market!

The Misery Index is at Carter’s presidency levels.  Consumer confidence is at a decade low.  And inflation is at a 30 year high.

Not good.

The Misery Index is the sum of the inflation rate and unemployment.  It’s at 10.8 percent.  Sure, it was higher during the lockdown.  But that’s because everything was, you know, locked down!

Writing for the Mises Institute, economist Daniel Lacalle says, “United States consumers have been able to endure this period thanks to prudent saving and moderating consumption levels, but the cushions that have allowed them to get through these months are vanishing. Time to stop the spending, deficit, and printing lunacy, or the stagflation of the seventies will not be a risk, but a reality.”

And wait until you see what happens with prices in 2022.  According to a General Mills memo to retailers reported by CNN, the company is “raising prices in mid-January on hundreds of items across dozens of brands. They include Annie’s, Progresso, Yoplait, Fruit Roll-Ups, Betty Crocker, Pillsbury, Cheerios, Cinnamon Toast Crunch, Lucky Charm’s, Wheaties, Reese’s Puffs, Trix and more…”

“For some items, prices will go up by around 20 percent beginning next year.”

20 percent is a big jump!

But it’s not just the US that is experiencing inflation.  The inflation rate in Hungry is 6.6 percent; in Poland, it is 6.4 percent.  Germany’s inflation in November spiked to 6 percent.   Both Spain and Belgium report 5.6 percent inflation.

High inflation is the story at every turn.  Producer prices in Japan rose by 8.0 percent in the 12 months ending in October.  China’s producer price roared ahead 13.5 percent in the same period.  

Baby boomers have some memory of the inflation crises of the past, but it is all new to the millennials.  It takes a while for consumers of every generation to realize that it is not just prices going up, but that the money itself is losing value.   There is always a leading-edge that gets it first.  They are buying gold and silver today.  At first a few wake up; others figure it out more slowly.  

It takes a while sometimes for the masses to catch on, but global inflation will eventually drive people everywhere to the safety of gold and silver.

Joined by investors and common folks around the world, it is going to be one heck of a bull market!

“WE’RE LIVING THROUGH THE GREATEST TRANSFER OF WEALTH FROM THE MIDDLE CLASS TO THE ELITES IN HISTORY!”

Just a few observations about money and the economy we’re been bookmarking lately, thinking that our readers will find them interesting.

Let’s start with Ayn Rand, The Ayn Rand Letter:

“Inflation is not caused by the actions of private citizens, but by the government: by an artificial expansion of the money supply required to support deficit spending. No private embezzlers or bank robbers in history have ever plundered people’s savings on a scale comparable to the plunder perpetrated by the fiscal policies of statist governments.” 

TRANSITORY?  ARE YOU KIDDING?

From Stephen Roach, Interest.co.nz.

The transitory inflation debate in the United States is over. The upsurge in US inflation has turned into something far worse than the Federal Reserve expected. Perpetually optimistic financial markets are taking this largely in stride. The Fed is widely presumed to have both the wisdom and the firepower to keep underlying inflation in check. That remains to be seen.

For its part, the Fed counsels patience. It is so convinced that its bad forecast will eventually turn out to be correct that it is content to wait….  In doing so, the Fed indicated that it was prepared to forgive above-target inflation to compensate for years of below-target inflation. Little did it know what it was getting into.

INFLATION MALARKEY!

From Jacob Hornberger, Future of Freedom Foundation.

Just recently I was thinking that at the very least, libertarians have made progress in causing people to see that inflation is caused by the government — specifically the Federal Reserve — and not by the private sector.

And then President Biden comes forward and damages my optimism! 

According to an article in the Washington Post, Biden is “considering whether to escalate an attack on parts of corporate America over rising prices…. The administration would amplify criticisms of large firms in heavily concentrated industries for passing higher prices on to consumers as they benefit from high profits”…

All we need now are Richard Nixon-era wage and price controls and Gerald Ford-era “Whip Inflation Now” buttons and the inflation problem will be resolved. And just think — we can have those long lines at the gas stations all over again, just like in the 1970s.

THE STOCK MARKET BUBBLE!

From John Hussman, Ph.D., Hussman Funds

Market capitalization isn’t “wealth.” It’s the latest price, times shares outstanding. Blotches of ink on paper. Flashing pixels on a screen. If a dentist in Poughkeepsie buys a single share of Apple at a price that’s 10 cents higher than the previous trade, $1.6 billion in market capitalization emerges from thin air. If a single share trades 10 cents lower, $1.6 billion evaporates just as quickly. Whatever happens, every security in existence has to be held by someone until it is retired….

Ultimately, the wealth inherent in a security is the future stream of cash flows… Investors have never paid higher prices for those future cash flows or accepted prospective returns so low.

Put simply, the bubble hasn’t changed the wealth, and a collapse won’t change the wealth. What will change is the market cap. I suspect that the erasure of market cap in the coming years, and possibly the coming quarters, may be brutal. 

FED MONEY PRINTING FAR OUTPACES GROWTH OF THE ECONOMY!

From David Stockman, Contra Corner

The central banking Doomsday Machine will crank on until the level of financial asset inflation and manic speculative excess finally collapses on its own weight.

Fed Balance Sheet Versus Nominal GDP

And finally, this classic observation from Ludwig von Mises:

“The gold standard makes the determination of money’s purchasing power independent of the changing ambitions and doctrines of political parties and pressure groups. This is not a defect of the gold standard; it is its main excellence.”

If you would like to learn more about protecting yourself and your family with gold and silver, speak with a Republic Monetary Exchange precious metals professional today.

This would be a very good time to park your wealth in gold and silver!

Well, we missed the boat on that one!

We ventured a month ago that President Biden would not reappoint Federal Reserve Chairman Jerome Powell for a second four-year term.

Our reasoning was simple enough:  Powell would be made the fall guy for the inflation that has the American people very unhappy.

It is actually disappointing that the Biden administration doesn’t feel someone should take the blame for consumer prices up 6.2 percent and wholesale prices up 8.6 percent over the last 12 months.  

It’s almost like they don’t feel inflation isn’t bad enough to need a fall guy.  It’s true that many in the governing classes aren’t feeling the pinch the way that regular people are.  Some of them have been saying that inflation is good for us.

There was more to our guess that Powell would be out.  The scent of the Fed’s insiders trading scandal is floating around the Marriner Eccles building and maybe even around Powell, too.

And there was one more thing.  Have you noticed that the Biden team always prefers the left-most alternative?  You don’t have to look too closely to see that a lot of their nominees – like Saule Omarova for comptroller of the currency – are way out in left field.

So, Biden could have turned to the progressives’ preferred candidate, Lael Brainard.  If you don’t think Powell is inflating enough, she’d be your pick.  Although it would be quite a feat to out-print Powell.  Since he took office in February 2018, the Fed has printed a heretofore unthinkable $4.25 trillion dollars.

Ultimately though, Wall Street wanted more of Powell and Wall Street generally gets its way.  With all that money printing, Powell has been as good for them as baseball has been for Chico on Saturday Night Live. 

Still, some think Biden will make Powell the fall guy if the democrats get shellacked at the polls in 2022.

Biden will soon be able to fill three more seats at the Fed.  In the meantime, Biden is signaling a hard left turn at the Fed.  He named Brainard Vice-Chair, making her the heir apparent when Powell goes.  Popular blogger Michael Shedlock, MishTalk, says, “One way or another, Progressives rate to get their wishes for more regulation as well as more climate activism.  Look for the supposedly independent Fed to turn markedly Left.”

Meanwhile, the president said Powell’s reappointment would enable them to attack inflation.  If you are waiting for the Fed to stop inflating, you’d better park your wealth in gold and silver while you wait.

It’s going to be a very long time.

Recovering from pandemic conditions, global silver demand is forecast to reach 1.29 billion ounces this year.  Led by demand of more than a half-million ounces from the industrial sector, 2021 silver demand will exceed a billion ounces for the first time since 2015, according to a report from the Silver Institute.

Physical investment demand is surging as well.  US coin and bar are expected to surpass 100 million ounces for the first time since 2015.  The trade industry report says it expects physical demand to have increased by 32 percent by year-end, to a total of 263 million ounces.   

The growth in investment demand is coming from both the US and India, according to the new report.  “Growth began with the social media buying frenzy before spreading to more traditional silver investors.  Indian demand reflects improved sentiment towards the silver price and a recovering economy. Overall, physical investment in India is forecast to surge almost three-fold this year, having collapsed in 2020.”

“This year, the silver price has built on its 2020 gains and has continued to strengthen,” according to the Institute’s news release.  “Through to November 10, prices have risen by 28% year-on-year. This follows a 27% rise for the annual average price in 2020. The upside reflects healthy investor inflows into silver, on the back of supportive macroeconomic conditions, notably the persistence of exceptionally low-interest rates, concerns about uncontrolled fiscal expansion and, most recently, growing concerns about rising inflationary pressures.”

The increase in silver industrial demand is broad-based across market segments, with investors keeping a close eye on the growth of silver usage in the solar industry.  “Photovoltaic demand will rise by 13 million ounces, to over 110 million ounces, a new high and highlighting silver’s key role in the green economy. This will also underpin much of the forecast 10 percent gain in electrical/electronics offtake. Finally, brazing alloy and solder demand is set to improve by 10 percent in 2021, helped by a recovery in housing and construction, although this will still fall short of pre-pandemic levels.”

The report concludes that silver mining production will rise by six percent this year.  “Overall, the silver market is expected to record a physical deficit in 2021, albeit modestly. At 7 million ounces, this will mark the first deficit since 2015,” it says.

You know Washington.  They want to spend more on everything.  If the sun goes down at sunset, they’ll spend a billion dollars to try to do something about it.

Do you know why they want to spend so much?  It’s the source of their power.  It’s how they buy votes.  It’s how they raise money from lobbyists.

But this really takes the cake.  Now they want to spend more to fix inflation.  Seriously!

Never mind that deficit spending is the source of all this inflation.  Funding this spending has the digital-money printers at the Fed printing money over time. 

“Inflation is high right now, and it is affecting consumers in their pocketbook and also in their outlook for the economy. But those concerns underscore why it’s so important that we move forward on the Build Back Better legislation,” says Brian Deese, the head of the president’s National Economic Council.

President Biden, and all his flacks.  Chuck Schumer in the Senate and Janet Yellen at the Treasury.  They all say if we just spend more, we can fix this inflation thing.

It’s more than ridiculous.  Look at what they’ve already spent!

Stephen Moore, who might have been on the Federal Reserve Board but for the massive attack launched on him by Washington’s big spenders, provided us this note and chart, putting the Biden Spending Blow Out In Perspective,

Add it all up:  $1.9 trillion for the blue state bailout $1.2 trillion for the infrastructure/green new deal bill $3.5 trillion for the Govzilla social welfare bill $6.0 trillion annual budget request Nothing else even comes close!

Add it all up: 

• $1.9 trillion for the blue state bailout
• $1.2 trillion for the infrastructure/green new deal bill
• $3.5 trillion for the Govzilla social welfare bill
• $6.0 trillion annual budget request

Nothing else even comes close!

We’re coming up on $30 trillion in US debt.  Washington will raise the debt ceiling again in a couple of weeks.  Inflation is roaring along near double-digits, impoverishing Americans along the way.

And gold and silver are both climbing higher and higher.  Of course, they are.  Because rather than fixing inflation, deficit spending makes the dollar worthless and gold and silver worth more!

Speak with a Republic Monetary Exchange gold and silver specialist today and be ready because, as sure as the sun rises in the morning, Washington will spend this country into virtual bankruptcy!

The “Wall Street is starting to get antsier about inflation” reads the YAHOO! News headline.  “Investors are more worried about inflation than the Fed seems to be…”

Then, as the inflation numbers are coming in huge — at the same time along comes some genius at MSNBC to inform us that all this inflation isn’t a bad thing, after all.  In fact, a Fox News accounts of this balderdash headlines it this way: “MSNBC columnist says current inflation crisis is actually a ‘good thing.’”

What, me worry about inflation? the columnist seemed to ask.  

It was simply MAD!

It was not a swell time for this particular set of opinions to appear because on the same day the Bureau of Labor Statistics reported that the Producer Price Index was up 8.6 over the twelve months ending in October.  

And that is uncomfortably close to double-digit inflation.

According to MSNBC’s own headline their columnist James Surowiecki, the MSNBC columnist, explains “How Covid became the unlikely hero of our inflation crisis.”

Enough of the battling headlines.  Surowiecki explains “Historically, recessions have left Americans poorer, not better off. But the Covid recession was different. As people shifted their habits drastically in response to the pandemic, they spent much less and saved more. Even though millions of Americans lost their jobs, enhanced unemployment benefits and stimulus payments left many of them better off, not worse. And the stock market, after initially falling, boomed.

Employment benefits and stimulus payments left much better off?  And the stock market boomed?  Well, congratulations to the monied classes.  Never mind the millions who lost their jobs.  Or the family businesses that closed taking the savings of perhaps generations with it.  MSNBC sees it differently.  

We barely have the patience to explain that the money for employee benefits and stimulus payments actually comes from somewhere.  The governments that write those benefit and payment checks don’t create any wealth.  So, their checks must be covered by someone else.  From people who are productive.  It will come from taxation, borrowing (that must be paid back), or by destroying the purchasing power of the currency.

Or as Milton Friedman said, “There ain’t no such thing as a free lunch.”  Stated differently, what distinguishes a responsible commentator on economic things from an MSNBC or an irresponsible one (do we repeat ourselves?) is that the responsible ones know that are two sides to the balance sheet.  Of course, the people who receive “free” money like it.  Except that it is not really free.  And inflation, so benign as it scatters its “blessings,” actually destroys savings and frays the social fabric.  It cripples capital formation which is the engine of future growth and polarizes the poles of the wealthy and the impoverished.  It undermines people’s natural propensity to prepare for the future and collapses entire nations.  

As for Mr. Surowiecki, he is concerned that TV news stories about rising prices are “likely to confuse and frighten viewers rather than enlighten them.”

Right. It’s funny that in enlightening people himself, he doesn’t say a word about the trillions in fiat money the Fed has “legally counterfeited” lately.  Quite an oversight.

The public sees the prices at the grocery store and at the gas pump Mr. Surowieki.  They are not confused about the damage inflation is doing to their pocketbooks, their savings, their household budgets!

The only thing confusing is why hack commentators try to run interference for the bunglers in Washington and soft-pedal the news of their malperformance.  

As long as people like Surowiecki, apologists for the Deep State Money Manipulators, are prominent in the public debate, buy gold and silver.

With both hands!

“WE’RE LIVING THROUGH THE GREATEST TRANSFER OF WEALTH FROM THE MIDDLE CLASS TO THE ELITES IN HISTORY!”

Today we push back from the keyboard.  Maybe we’ll go fishing.  Or see a movie.  

That’s because what we would like to have said about America’s historic wealth transfer and power concentration out of the hands of the middle class and into those with political power and connections has been written by someone else.

In fact, that very phrase, “the historic wealth transfer” are her words and not mine:

“When historians look back on the decisions made beginning in March 2020 and still going strong, this period will be remembered as the ‘Great Consolidation’—the acceleration of a historic wealth transfer and power concentration out of the hands of the middle class and into those with political power and connections.”

“Her” is Carol Roth, a former investment banker and author of the new book The War on Small Business.  The piece we are citing appeared in Newsweek of all places.  If you would like to know why you need to own gold and silver in an economy that is rigged against you, read it.  Here’s a link.  

We can’t just reproduce the whole article, but here are a few snippets to give you an idea of what is going on:

• Prior to COVID, more than 30 million small businesses accounted for about half the GDP and jobs in America; the other half of the economy was concentrated in 20,000 big companies. So you might have expected that small businesses would have had an equal amount of negotiating power when the pandemic hit as big companies. You would be wrong.

• As a result, big firms were deemed “essential” and allowed to stay open during the pandemic, while small businesses were subjected to punishing lockdown orders and forced to close, in part or completely. Many of the examples were doubly infuriating given the absurd hypocrisies they presented. For example, big box pet retailers like PetSmart that groomed pet hair and nails were deemed essential—while salons owned by small business owners that served humans were not.  The LA-area Pineapple Hill Saloon and Grill was forced to close their outdoor dining—while a movie production not only operated but hosted a catering tent serving food to crew in the same parking lot that the restaurant had been forced to abandon.

• Meanwhile, the Federal Reserve was pumping trillions of dollars into the markets, helping to inflate stock valuations. Hundreds of thousands of small businesses were murdered in just a few short months—by government edict—while seven tech companies gained $3.4 trillion in market value….

• If you were able to access capital—which is code for already being big or wealthy, even if you weren’t in some cases financially sound—it was plentiful and, for debt capital, available at historically low interest rates. 2020 became a record year for IPOs and for other capital-raising vehicles like special purpose acquisition companies. And some of this capital was likely used to compete with your local small businesses.

We highly recommend this piece. Other than mentioning the Fed pumping money to its cronies, Roth doesn’t say much about monetary policy.  But we cover all that in detail and we encourage you to share our blog posts with your friends and family members.

And if you have any questions or want to learn more about protecting yourself and your family with gold and silver, speak with one of our precious metals professionals today.

Forbes reports that Treasury Secretary Janet Yellen’s net worth is about $2o million.  That’s a lot of money for a college professor and occasional bureaucrat.  According to Forbes, Yellen “built up her small fortune over time, through years in academia and government, cashing in most clearly after she left her position as Fed chair in 2018.”

Speaking fees from Google, Goldman Sachs, Citi, and Barclays during the lockdown added an estimated $7.2 million to her portfolio.  

Well.  Those of us who have heard her speak are scratching our heads.

Yellen is not the only one cashing in at the Fed.  A couple of Fed bank presidents suddenly resigned last month.  Questions are being asked about the trading activities of still others.  Even Chairman Jerome Powell can’t duck the stench.  According to Wall Street on Parade, “Powell had sold between $1 million and $5 million of the Vanguard Total Stock Market Index Fund on October 1, 2020, the same day that Powell had been on four phone calls with Treasury Secretary Steve Mnuchin, who was coordinating the White House response to the financial crisis resulting from the pandemic.”

Have you ever wondered why Wall Street hangs on every word uttered by Fed officials like Yellen?  They dot plot their votes, eagerly await the release of the old minutes of their Fed meetings, and pay them well for every word and inside tip they provide.

Should the resilience of the American economy depend on the productivity of the people, their innovation, their savings and capital formation, and their well-being?

Or should it depend on the deliberations and machinations of a bunch of mostly nameless, faceless bureaucrats who stovepipe billions to one favored constituency after another?  The blind-leading-the-blind decisions of a board of unelected professors who have boomed and busted the economy over and over again?

We might as well ask if interest rates shouldn’t reflect the real conditions of the supply and demand for capital – so that no one is misled by artificial rates designed to help some beneficiaries at the expense of others not as well-positioned.

You see where we’re going with this.  Shouldn’t money be something of value, something liquid that the entire world prizes?  Or should it be something of no enduring value, printed digitally by bureaucrats?  Which of those will inspire more stability and long-term confidence?

Of course, the answer is available for all to see in the history of money.  Because all unbacked, paper money currencies eventually fold, while gold and silver have endured as valued monetary assets for millennia.

Republic Monetary Exchange’s gold and silver professionals can help you design a precious metals portfolio that meets your needs for wealth preservation and profit.

And don’t forget to pick up a copy of my new book Real Money for Free People at our offices.

No cost or obligation.  Just vital information.

Something is up at the Federal Reserve.  Consider this:

The inflation that Fed officials didn’t foresee and then called merely transitory has become a problem…  for Fed officials.  We can safely predict that Chairman Jerome Powell will not be appointed for another term in February.  The inflation debacle is one reason.

His predecessor at the helm of the Fed, Janet Yellen is not taken seriously by anybody.  For several reasons.  One reason is the inflation debacle.

If the Fed is feeling the heat from the inflation debacle, why doesn’t it stop inflating?  That is the heart of the mystery.

Both Powell and Yellen now say that the inflation debacle will continue into next year.  Yellen says until the middle of next year.

Nobel-prize-winning economist Milton Friedman pointed out that there is a lag between increases in the money supply and it showing up in consumer prices.  He said in the 1960s that lag was some six to nine months.  Today some say the time lag is longer.  

But the Fed continues to print money today.  If inflation is a problem today, and Powell and Yellen see it continuing into next year, why don’t they stop now so we can be done with this inflation plague?

Real Investment Advice asks the same question in a pointed way: “What is the Federal Reserve Hiding From Us?”  It cites hedge fund manager Paul Tudor Jones on CNBC calling this “the most inappropriate monetary policy that I’ve seen maybe in my lifetime.” 

What is the Fed hiding?

RIA offers two suggestions.  First of all the stock market bubble.  The Fed is afraid of the stock market’s fragility.  “The last thing the Fed wants to do is pop a bubble, especially since they blew it up.”

The other is the debt bubble.  It, too, is fragile and the Fed knows it.  “Without extremely low-interest rates to make the new and existing debt affordable, economic growth would disappear, and financial defaults would be plentiful.”

In other words, the Fed is like a junkie that has to have another fix.  Withdrawal is too painful.  So the printing presses roll.

But the stock and bond market bubbles will pop, just like the junkie needing ever bigger doses will eventually overdose.

The Fed, the US government, and Wall Street are addicted to easy money.  The only thing you can do to avoid the coming monetary calamity is to get out of the way.  

You do that with gold and silver.  Speak with a Republic Monetary Exchange professional today.  Make sure you have limited your exposure to the reckless behavior of the monetary addicts.

…and take all of the gold you can get your hands on!

We have been seeing a lot of stories lately that make us think it is all over for the American dream.  Things going on that are so destructive we would not have believed them possible just a few years ago.  

They are coming thick and fast in this administration – a plague of policies so boneheaded that they must be designed to cripple American prosperity for a very long time to come.  

There is the micro-snooping the Treasury wants to implement.  And the really lethal proposal to tax unrealized capital gains.  

But here is the one that convinces us that the Biden people are serious about turning American into a third-world country.  We want to give credit to the Wall Street on Parade that brought this story to our attention.

President Biden has nominated a woman named Saule Omarova to head the Office of the Comptroller of the Currency, the Federal regulator of banks.  Omarova was born in Kazakhstan attended Moscow State University on a Lenin Scholarship.  Now, armed with a Ph.D. and a law degree, Omarova is a professor at Cornell law school.

In writing about Omarova’s policy papers, the Wall Street Journal described her preferences this way: “Ms. Omarova advocates central political control of capital, credit, and wages, and she has praised the Soviet-era economic system.”

The Vanderbilt Law Review published a paper by Omarova this month called “The People’s Ledger: How to Democratize Money and Finance the Economy.”  It proposes to shift all commercial deposits at banks to what she calls “FedAccounts” with the Federal Reserve.  With deposits safely in the Fed’s hands, she proposes that the Fed then be empowered to confiscate the FedAccounts as a tool of monetary policy.  

Her wholesale undoing of private property is only a start.  Omarova further proposes that the New York Fed be enabled to speculate in the stock market, specifically to short stocks that it deems to be in a bubble.  The Fed, she writes, “would conduct regular purchases and sales of a broad range of securities and other tradable financial assets with an explicit view to modulating volatile swings.”

What do you think?  Are they really trying to destroy what is left of the American economy?  Are they just egghead intellectuals dreaming up ideas like this – and like taxing unrealized gains – without any idea of their consequences?  Or are they undoing the economy by design?

What do you think?  And doesn’t it make you want to grab all the gold you can before they are done?

One more thing.  When people note the sheer cluelessness of Omarova’s ideas, she falls back on the current woke excuses.  “I am an easy target,” she says. “An immigrant, a woman, a minority. I don’t look like your typical comptroller of the currency. I have a different history. I am easy to demonize and vilify.”

Right.  Like it’s not her Marxist ideas.

Grab all the gold you can.  These are the people in charge.

Don’t Hold Your Breath!

“One of the things that surprises citizens in Argentina or Turkey is that their populist governments always talk about the middle classes and helping the poor, yet inflation still soars, making everyone poorer.”

-Daniel Lacalle

So, if you are waiting for the government to stop inflating, you would be wise to park your money in gold and silver while you wait!

After all, if you had a money printing press and could print all you want without legal consequences, would you stop?

That’s why at one level or another inflation persists under the president of both parties, during Congresses dominated by Republicans and Democrats alike.  They can get away with it, even though it is one of the great flimflams of all time.  They get away with it.  That’s why Federal Reserve chairman like Alan Greenspan and Ben Bernanke are appointed and reappointed by presidents of both parties.  Greenspan was originally appointed by Reagan, reappointed by first Clinton, and then again by W. Bush.  Bernanke was appointed first by W, then reappointed by Obama.

Jerome Powell was appointed by Trump.  He had the support of Biden and most Democrats until recently; the oddsmakers thought he would be reappointed at first, but his cluelessness makes him a perfect fall guy for the administration to blame for our rising inflation and other economic difficulties.  That plus the scent of Fed insiders trading fast and loose may even attach to Powell.

But the point is that Washington and the Deep State always have one of their guys in charge of money printing.  That money funds political promises to get office holders reelected.  It funds elective wars.  (And they are elective wars; if they were existential wars, we would not have risked leaving unknown billions of dollars of military hardware behind in Afghanistan!)  And it is the way $30 trillion dollars in unpayable US debt will be devalued over time – ruining what’s left of the dollar and your dollar savings along the way. 

And that is why “no government looking to massively expand its size in the economy and monetize a soaring deficit is going to act against rising prices, despite claiming the opposite,” says Daniel Lacalle.

In a new piece for the free-market Mises Institute, Governments Love Inflation, and They Won’t Do Anything to Stop It, Lacalle writes,

Inflation does not happen the next day you print money. It is a slow process of gradual erosion of the purchasing power of the currency that started years ago and culminated with the insane decision to implement monster demand-side policies (huge government spending and money printing) in the middle of a lockdown.

But why do governments ignore it? Why do they not act? Surely it is in their best interest to keep prices low and consumers—voters—happy. The answer is simple: because governments are the biggest beneficiaries of inflation. They collect more receipts from indirect taxes and their soaring debt is slowly eroded by inflation.

Furthermore, governments never act against inflation, because they benefit from it and, more importantly, can blame it on everyone except their policies. Even in Argentina, where inflation is higher than 50 percent and ten times higher than in neighboring countries, citizens are slowly convinced that there must be other causes than money printing. Even when presented with the evidence of a central bank that has raised money supply more than 120 percent in two years with diminishing demand, the press and politicians blame inflation on “multicause” effects.

So, the media can cover for the Deep State Money Manipulators.  But it can’t very well hide the rising cost of living you see all around today.  Just remember those rising prices are simply the value of the dollar eroding away. 

And while it erodes, be sure to have your money parked in gold and silver.  Because they don’t erode.

What the 1970’s Stagflation Was Really Like!

It was a few small, still voices at first.  Warning that the Federal Reserve was creating another stagflation decade like the 1970s.  It is not yet a chorus, but other voices are joining in, singing that old song:

Just like before

It’s yesterday once more.

Stephen Roach, former Morgan Stanley Asia chair, now at Yale University writes that “Echoes of an earlier, darker period of economic history are growing louder.”

So, what was the Stagflation Decade really like?  The decade really began with a massive devaluation when Nixon abandoned the dollar’s gold backing in 1971.  From that day to this the dollar has been a fiat currency which means it is only money because the government says it is money. 

Here are a few bullet points:

• The average inflation rate for the 10 years of the decade was 6.85 percent.  Many were unprepared because that was almost three times the average inflation rate of the prior two decades.

• Like other inflations, price increases throughout the 1970s were uneven across goods and services.  Some would rise rapidly, and others moderately for a time, and then the rates of increase would change as lagging prices played catch-up.

• Three separate years of the decade experienced double-digit price inflation:  1974, 1979, and 1980.  In the first half of 1980 the Consumer Price Index annual inflation rate rose to 14.8 percent.
  

• In a brazen effort to shift responsibility for inflation, which was entirely the State’s doing, to the public, the Ford administration created a public relations campaign centered around the distribution of buttons bearing the word “WIN.”  It stood for “Whip Inflation Now,” as though inflation was something that needed to be fought by the people instead of stopped by the authorities.  Later Fed chairman Alan Greenspan, who was Ford’s head economic advisor, said he thought at the time that he thought it was “unbelievably stupid.”  But he did not say so when it mattered.

• The stock market lost almost 50 percent of its value in a mere 20 months.

• Unemployment rose to 9 percent.

• Oil rose from $3 a barrel to $35 in 1981.

But of course, the big winners of the Stagflation Decade were those who turned to gold and silver for protection from the destructive activities of the Deep State Money Manipulators:

• Gold began 1971 below $38 an ounce.  Its average price that year was just over that $40 per ounce.  At the end of the Stagflation Decade, in January 1980 it reached $850. 

• Silver traded in 1971 between a low of $1.30 to a high of $1.80 per ounce.  At the beginning of January1980 it reached $50.

We urge you to speak with a Republic Monetary Exchange gold and silver specialist today and take steps to protect yourself from renewed inflation.

The Worst of Both Worlds!

We have warned several times about the return of stagflation to the US, most recently in July.   (See The Mother of All Stagflationary Debt Crises!)

But back then most people seemed to believe the Fed’s insistence that inflation itself was not much to worry about.  It was only a passing phenomenon.  And since stagflation is an economic environment that combines troublesome elements of both stagnation and inflation, or weak on non-existent economic growth, accompanied by rising prices, if the Fed were right about inflation not rising to the level of an actual, you know, economic problem, we couldn’t have stagnation.

But the folks in the marbled halls of the Marriner Eccles building in Washington were wrong again.  (We wonder:  don’t they ever tire of being wrong about almost everything?)  And now, just a few months later inflation is suddenly at a 30 year high, and alarms about stagflation are being sounded far and wide. 

A new report from the World Gold Council, Stagflation rears its ugly head (10/12/21), explains why we call stagflation the worst of both worlds: 

Over the past two months, economic growth has disappointed even as inflation has exceeded expectations. A real risk of stagflationary conditions, with rising costs amid lower growth, appears to be on the cards.

Stagflation, if severe, can be damaging to both the economy and financial markets. But we don’t need a repeat of the 1970s for assets to be affected.  Our analysis shows that even mild stagflationary conditions can have similar asset impacts to those in more severe stagflations.”

Stagflation has historically hit equities hard. Fixed-income returns have been variable, while both commodities and gold have fared well. Gold’s historically strong performance can be attributed to higher inflation and market volatility supporting capital preservation motives, and lower real interest rates supporting both opportunity cost and growth risk motives.

-World Gold Council

Others are commenting on the oil price shocks of the 1970s.  They contributed to stalling business conditions in the stagflation decade.  Now, with inflation undeniable, oil is rising again and has broken above $80 a barrel, the highest price since 2014, which could lend to a slowdown in growth.

Last summer we cited famed NYU economist Nouriel Roubini who says “a +slow-motion train wreck looks unavoidable.”  He worries that debt ratios are much higher today than they were in the 70s.  Debt ratios are three times higher than in the stagflation decade.  “The stagflation of the 1970s will soon meet the debt crises of the post-2008 period,” says Roubini.  “The question is not if but when.”

Thus, the conditions that propelled gold and silver to new highs in the stagflation decade are assembling again.  We recommend our friends and client take steps now to protect themselves in a time-tested way, with a solid portfolio of gold and silver.

Republic Monetary Exchange precious metals professionals are available to help you implement a sensible strategy for wealth preservation in inflationary and stagflationary times.

We want to give you a free signed copy!

Skyrocketing prices, massive new spending programs, debt ceiling puppet shows, money printing, debt up the wazoo!

How did we get here?  Where is all this headed? 

You’ll find the answers to those questions and more in my new book REAL MONEY FOR FREE PEOPLE!

It tells the entire American gold story in a clear and easy-to-understand way!  And because it is information you need for the challenging times coming our way, I want you to have a copy absolutely free!

REAL MONEY FOR FREE PEOPLE is a fast-paced review of why the Founding Fathers, to assure a free and prosperous America, built the new republic on a solid monetary foundation of gold and silver.  Learn how later politicians, those of lesser character, have abandoned that foresight by handing America’s future and prosperity over to self-serving bankers and money manipulators.

In this book, I pull back the curtain to reveal what the mainstream media conceals:  how the unsustainable and reckless policies of the Federal Reserve are destroying the dollar and your savings.

Just stop by Republic Monetary Exchange and let us give you a copy of REAL MONEY FOR FREE PEOPLE!

No cost.  No obligation.

You’ll learn exactly why the Founder insisted on gold and silver and even wrote them into the Constitution.  Wait until you read about the time the government stole the people’s gold.  It is one of the great swindles of all time! 

And you won’t want to miss the chapters called Goodbye to Gold and So Long, Silver.  They tell the diabolical story of the way paper money took the place of real money!

Where are we today and how does it all end?  REAL MONEY FOR FREE PEOPLE covers that, too, and explains why gold and silver are your best protection from the monetary imbecility and ruination of our time.

We have a free signed copy of REAL MONEY FOR FREE PEOPLE waiting for you. Stop by Republic Monetary Exchange at 4040 East Camelback Road in Phoenix, 85018.

President Trump has issued a stark warning for Americans to take rising inflation seriously.

“It looks to me like inflation is going to ravage our country,” Trump said in an exclusive interview with Yahoo Finance.

Trump pointed to surging oil prices, now at their highest level since 2014, as evidence of inflation’s return.

“It’s very scary when you look at gasoline from $1.87 a gallon when I was president, it went from $1.87 and now it’s well over $5 that it’s going to go a lot higher,” he said.

Inflation is one of the issues that will figure in his decision whether to run for president again in 2024, said Trump. 

On the same day he was inaugurated, January 20, 2021, President Biden canceled the federal permit for construction of the Keystone XL oil pipeline.

The pipeline was expected to deliver 800,000 barrels per day from Canada to the US.  TC Energy, which runs the pipeline immediately announced the termination of 1,000 jobs. This chart shows the rise of oil prices (the WTIC benchmark price) trending higher through much of 2021.

“What it’s going to be at a year from now, I think is going to be much higher than” current levels, said Trump of future energy prices.

Yahoo Finance will release its full interview with Trump on Monday (10/11/21).

Thanks to vital applications in technology and consumer connectivity, expect industrial silver demand to grow ten percent over the next few years.

That is according to the new report, “Silver and Global Connectivity,” published by the Silver Institute, a trade association. 

From the report: “With the highest electrical conductivity of all metals, silver is a component in almost all electronic devices we use daily. But silver isn’t just vital today; the next generation of technological advancements, especially those related to global connectivity expansion, will rely on the white metal’s inherent properties throughout the 21st century.  As a result, the use of silver in electronics and electrical applications (excluding photovoltaics) is forecast to rise from 224 million ounces in 2020 to 246 million ounces in 2025, reflecting a 10 percent increase, underscoring silver’s role in emerging technologies.”

The Internet of Things – basically physical objects like buildings, machines, wearables, traffic control systems, your home appliances and much more – is growing fast.  The interconnectivity it demands depends on silver in circuit boards.

5G communications networks will be responsible for increased silver usage.  “For example, a network carrier, such as AT&T, Telefónica or Vodafone, will reportedly need at least 400 more transmitters in an area compared to current 4G towers.”

Over the next ten years, the report highlights growing silver demand for radio-frequency identification (RFID) tags, which track and monitor goods and inventory. 

The report also highlights burgeoning silver demand in the automotive industry and aviation industries:

• “Forty percent of a vehicle’s cost is accounted for by electronics, a substantial increase from historical levels: in 1990 this number was just 15 percent.  Silver is used extensively in electrical contacts throughout vehicles’ electronic systems in switches, relays, connectors, breakers, and fuses. Silver is used in automotive glass to defog and defrost the windows…” 

• “A rapidly growing subsector of the aviation industry for silver demand growth is unmanned aircraft systems (UAS), commonly referred to as drones. Almost 900,000 recreational and commercial UAS (weighing more than 0.55 pounds or 250 grams) are registered with the FAA as of September 2021. These are finding applications within a wide range of industries including construction, fire monitoring, insurance, utility, and law enforcement. For example, telecoms and aviation industries use drones for beyond-visual line-of-sight capabilities. Drones mapping and surveying, and aiding in visual inspections, currently account for the majority of commercial drone applications….”

• “Connectivity is critical to the successful deployment of drones in all of these commercial activities for the direct control of the drone itself, for the feedback from the drone of any collected data, and for the monitoring of its payload.”

These applications will provide a rising floor under silver prices in the years ahead.  But as our readers know, it is the world’s awakening to silver as a monetary commodity in the developing financial and monetary crisis that we expect will drive the price of silver to unimagined heights.

Is anyone surprised?

Insider trading practices that are rightly being called scandalous have led to the resignations of the presidents of the Federal Reserve banks of Dallas and Boston. 

But they are not among the greatest of the Federal Reserve’s scandals.

Both Eric Rosengren, head of the Boston Fed, and Robert Kaplan head of the Dallas Fed, announced their resignations this week after disclosures of their extensive trading in stocks that were the beneficiaries of Fed interventions. 

It is not the first scandal at the Fed.  And it is certainly not the biggest. According to Ron Paul, that title goes to the Fed for its “impoverishment of ordinary Americans.”

That is the result of inflationary monetary policies, says the former Congressman and presidential candidate:

Rising prices that diminish the average American’s standard of living are not the only result of the Fed’s manipulation of the money supply. The manipulation distorts economic signals, producing results including booms, bubbles, and busts.

Inflation has always benefited the well-connected elites who receive the Fed’s newly created money before the new money causes widespread price increases. The true motivation behind Fed policies was revealed by former Fed official Andrew Huszar in 2013. Huszar, writing for the Wall Street Journal, confirmed that quantitative easing kept stock prices high, instead of helping Americans struggling with the aftereffects of the 2008 meltdown.

Other beneficiaries of the Fed are big-spending politicians. The Federal Reserve’s purchase of federal debt instruments keeps the federal government’s debt servicing costs manageable. This is why, despite Chairman Powell’s recent suggestion that the Fed will soon begin “tapering” its purchases of Treasuries, the Fed is unlikely to significantly reduce its purchase of Treasuries or allow interest rates to significantly increase.

The destruction of 93 percent of the dollar’s purchasing power with these inflationary practices is scandalous enough for one institution.  But another Fed scandal involves risking the solvency of the American people by extending trillions of dollars of credit and loans to favored banks, including foreign banks, during the Panic of 2008.  The Fed became almost militant in seeking to keep these loans concealed from the American people.

Little wonder that Dr. Paul lists Fed secrecy as another major scandal, citing “Congress’ refusal to pass the Audit the Fed bill and let the American people know the truth about the Fed’s operations. Audit the Fed authorizes a Government Accountability Office (GAO) audit of the Fed’s dealing with foreign governments and central banks, the Fed’s discount window operations, reserves of member banks, securities credit, interest on deposits, and open market transactions. Audit the Fed would finally reveal the truth about the Fed’s operations.”

There are countless potential Fed scandals over its century-plus of existence that will never be fully revealed.  Anyone with inside knowledge of interest rate decisions from the Fed’s Open Market Committee would be in a position to make fortunes in the bond markets.  But you don’t suppose the Fed, or its officials, would ever be doing secret favors for the crony banks that created the Fed to serve its interests in the first place, do you?

Yet a clear leak of insider information in 2012 to a private investor newsletter resulted in an investigation.  Yet after six months of investigating itself, the Fed could not find who leaked the confidential information. 

And by the way, we have White House tapes revealing President Nixon and the chairman of the Fed coordinating Fed policy to help assure Nixon’s reelection in 1972.

The Fed’s history may be thick with criminal malfeasance.  But it should also be beyond dispute that it has established a long track record of policy failures, from the Great Depression and Great Recession to currency destruction and clueless interest rate manipulation. Now it is clear, with Fed official’s cavalier treatment of their ethical obligations and with what in the private sector would be considered insider trading, we would be better off without the Fed.

In China, local government officials are buckling up for what could be a bumpy ride in Evergrande Group’s insolvency.

Evergrande is a Chinese real estate developer that, riding the country’s property bubble, has amassed $305 billion in outstanding debt that it is now unable to service. 

A default of such a gargantuan borrower has the potential of spreading across the land and indeed beyond China.  A substantial amount of the company’s debt is denominated in US dollars.  The damage cascades far and wide when a debtor like Evergrande fails to pay its creditors, who then, in turn, are unable to meet their obligations to other companies, suppliers, and employees, who then fail to meet their own payments.  The failure of Lehman Brothers figured prominently in the housing market collapse that cost millions of Americans their homes just over a decade ago.

The world’s financial markets are much more highly leveraged today than they were in 2008.  And Evergrande is much bigger than.

China’s central party government is calling on local governments and state-owned agencies to be prepared to deal with the fallout from Evergrande’s expected collapse.

Whether such measures will be sufficient to contain the crisis or if it will spread like a Wuhan contagion remains to be seen.  But already, the prospects of depressed real estate development in China have set the price of iron ore tumbling.

The crisis comes on the back of the existing Covid economic stress and the Fed’s new inflation burden. 

A report from Reuters on Evergrande wraps up with a report from typical Chinese workers on its impact.  “At an eerily quiet construction site in eastern China, worker Li Hongjun said Evergrande’s crisis meant he will soon run out of food while Christina Xie, who works in the southern city of Shenzhen, feared Evergrande had swallowed her savings.”

“‘It’s all my savings. I was planning to use it for me and my partner’s old age,’ said Xie. ‘Evergrande is one of China’s biggest real estate companies … my consultant told me the product was guaranteed.’”

Of course, he did.

The only global financial instrument that is not dependent on someone else’s promise or performance is gold.  Physical gold that you own yourself has no counter-party risk.

Gold needs no guarantee.  It guarantees itself. Speak with a Republic Monetary Exchange precious metals professional today.

No wonder people seek the privacy of owning precious metals!

This is an update to our commentary two weeks ago in which we described the Biden administration’s total financial surveillance as becoming quite serious.

“Not only is Big Brother watching you,” we wrote, “he is also getting bigger every day. “

In its most recent budget proposal, the US Treasury Department has proposed requiring financial institutions to report to it money coming into or going out of accounts of only $600 or more. 

Politifact describes the proposal this way: “If you had at least $600 in your bank account, the bank would be required to report the amounts of any debits or credits to that account to the IRS.  If the debits and credits that flow through the account add up to at least $600 — including deposited paychecks or electronic payments through smartphone apps tied to the account — those totals would have to be reported, too.”

The government already makes intrusive and burdensome demands under the Bank Secrecy Act, including so-called “suspicious persons reports” to the Financial Crimes Enforcement Network.

The IRS has a history of failing to protect private information.  It has a history of data breaches and the illicit use of its records on citizens.  The new rules threaten to expose people to more abuses before its prior abuses have been addressed.

The State ceaselessly lobbies for wider snooping authority, camouflaging its efforts as something essential to “get drug dealers” and other criminals.  But in practice the measures allow illicit snooping on people who are acting prudently in trying to keep their affairs private in an era of identity theft, widespread account hacking, and data breaches.  Meanwhile, the drug crisis that the measures are said to address simply get bigger each year.  In 2020, US fentanyl deaths jumped 30 percent from the year before, to 93,000, while the border which those drugs enter the country remains porous.

The proposed new measures are another addition to the government’s war on cash, an attempt to have veto power over individual autonomy.  It is another tool in creating a “social credit system” like that in China in which the people are made to acquiesce to actions of the State and in which dissent is quashed.

In addition, the Treasury’s proposal adds substantial burdens on businesses, making them bear the additional expense of endless petty record keeping and reporting.

Yet even as the authorities hope to increase their surveillance of the people, their own ranks grow thick with abuse.  Only recently have we learned that the president of the Dallas Fed, Robert Kaplan, with firsthand knowledge of, and hands-on influence over non-public, market-moving policies, was nevertheless speculating to the tune of tens of millions of dollars of individual stocks and highly leveraged financial instruments.

We know as well that Fed chairman Jerome Powell owned the same type of municipal bonds that the Fed was driving higher by purchasing them in the open market.

The stench of cronyism, corruption, and plain, ordinary mismanagement wafts from the decaying monetary system even as it grows more intrusive by the hour. 

No wonder informed people are moving assets out of it and into gold and silver.

Gold or a Government Program that is Headed Towards Insolvency?

What do you think is more reliable for your retirement?  Gold and silver, which are not dependent on politicians’ empty promises?

Or the government’s Social Security program?

If you answered Social Security, here are a couple of things you should consider.

First, Social Security is only 13 years from insolvency.  The new report from Social Security’s trustees says that the old age and survivor insurance trust fund – that’s the main component of the program – will be insolvent (that’s another world for bankrupt) by 2034.  That is a year earlier than had been expected.

Second, the money you have paid in all your working life has already been spent.  It is gone.  There is no money in the trust fund.  Your congressmen spent it.  So even if things are jiggered around the edges with later eligibility ages and some means-testing, the problem of Social Security insolvency doesn’t go away.  Congress will have to figure out somewhere to get the money.  But there really is nowhere to get it.  Already the US has an explicit debt nearing $30 trillion.  That debt gets “paid” first. 

Third, Social Security was always actuarially sketchy.  It was part of the great electoral game of seducing the people with promises that they could live at someone else’s expense.  But the numbers don’t work.  For example, in 1945 there were 41 workers paying into the system for everyone drawing benefits.  Today the load falls heavily on fewer workers per retiree.  There are only 2.7 people expected to pay for one retiree.  Before long it will be only 2 workers per retiree.

That is only part of the actuarial picture.  Americans live longer and therefore draw retirement benefits longer than they did at the program’s inception.  The life expectancy of a 65-year-old today is 20 more years.  In 1940 it was just 14 years. 

Roughly 3 million baby boomers retire each year.  And their Social Security is just one of the burdens that they expect Millenials and others to pay.  Medicare is another.

There is another name for schemes like this, in which paying returns to some investors today depends on bringing in new victims tomorrow. 

It is a Ponzi scheme.

There will be an intergenerational war over this.  While the economy is growing by leaps and bounds as it did in the 1950s and 1960s, nobody much notices unfair burden-sharing.  But in an era of shrinking expectations, it becomes social dynamite. 

Of course, the government’s go-to solution to problems like this is money printing.  But what good is the monthly Social Security check they promised when the price of grocery and heating and cooling your house has gone through the roof?

We think it is only prudent to face the problems squarely and make sure you provide for your own retirement with money the government can’t just print into worthlessness.

Let a Republic Monetary Exchange gold and silver professional help you chart a course to retirement security with real money.

It’s starting to get serious!

We have strongly urged our friends and clients to have some assets off the grid.  See here and here.

It has always been the prudent thing to do.  But now it is becoming imperative!

Reason Magazine reports:

Imagine living in a world where every one of your non-cash financial transactions—a restaurant meal, a Venmo transfer to a friend, maybe some bitcoin bought on the dips—was automatically reported to a beefed-up, audit-hungry IRS.

That dystopia will become a reality if President Joe Biden gets his way. Biden, Treasury Secretary Janet Yellen, and key Capitol Hill allies such as Sen. Elizabeth Warren (D–Mass.) are pushing a vast, intrusive financial surveillance system in the name of closing the “tax gap.”

Here’s a snippet from A Treasury Department press release:  “The Administration’s proposals call for significantly increasing the IRS budget, specifically $80 billion of investment over the coming ten years in enforcement, IT, and taxpayer services generating an estimated $320 billion in additional tax collections over the next ten years.”

The Treasury is justly concerned that the plan, “The American Families Plan Tax Compliance Agenda,” will drive people to engage in more cash transactions.  That means that the government’s war on cash, already underway, will have to be shifted into overdrive.  As we wrote a year ago, “Cash is anonymous.  So, Washington doesn’t like it.  In fact, you may have noticed that Washington wants full access to everything you do, while it wants everything it does to be secret.”

Gold and silver are anonymous as well, which is intolerable to authoritarian governments.  We always recommend that people keep assets off the grid, especially in this age of rising crime, large-scale cyber hacking, and snooping big tech firms. 

More on the Biden plan from Reason:

The administration’s proposed “comprehensive financial account reporting regime” would dramatically increase the types of financial institutions and transactions exposed to the feds’ prying eyes. “All business and personal accounts from financial institutions, including bank, loan, and investment accounts,” would be forced to “report gross inflows and outflows” to the IRS. And not just bank accounts: The dragnet would now include PayPal, settlement companies, and “crypto-asset exchanges,” for starters.

The new domestic surveillance program, which requires congressional approval, is one prong of a tripartite strategy for transforming the entire global financial system into a harmonious, haven-free collection funnel to the IRS. The second part, which has taken up the bulk of Biden’s multilateral diplomacy thus far, is getting the industrialized world to agree on a global minimum corporate tax of 15 percent while setting up a system to prevent multinational companies from registering their profits in the lowest-tax jurisdictions.

Not only is Big Brother watching you, he is also getting bigger every day. It is only prudent to want to protect your privacy in this digital age.  Gold and silver are the single best means of getting your wealth off the grid and away from hackers, identity thieves, and other prying eyes.

Start with Gold and Silver!

After witnessing the hyperinflation of the 1920s in Germany and Austria, the great free-market economist Ludwig von Mises coined an evocative term for the last stage of a currency breakdown.

He called it the Crack-Up Boom.  In German, it is “Katastrophenhausse,” a catastrophe boom.

US monetary policies ensure that something like a crack-up boom is fast approaching today.  Because we think our friends and clients will need to know, from his work Human Action, here is Mises’ description of the breakdown of a currency:

The characteristic mark of this phenomenon is that the increase in the quantity of money causes a fall in the demand for money…. The monetary system breaks down; all transactions in the money concerned cease; a panic makes its purchasing power vanish altogether. People return either to barter or to the use of another kind of money.

The course of a progressing inflation is this: At the beginning the inflow of additional money makes the prices of some commodities and services rise; other prices rise later. The price rise affects the various commodities and services, as has been shown, at different dates and to a different extent.

This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.

But then finally the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against “real” goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German Mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last.

Recently Ron Paul, a student of Austrian school economics and sound money, dedicated an episode of his Liberty Report to How to Survive a Crack-Up Boom.

It is a wide-ranging discussion, beyond only the protection of wealth, to include the importance of a community of like-minded people, the challenges of production and provisions, and more.  But for those things that one cannot provide for himself, nothing is more important than purchasing power, says Dr. Paul.

And that is where we come in.  Speak with a Republic Monetary Exchange gold and silver professional before the crack-up boom. Afterward is too late.

Today we want to sample some billionaires’ views.  But not just any billionaires. 

There is no reason to think billionaires are generally wiser or morally superior to other people.  Bill Gates and Mark Zuckerberg loom large among the billionaire class.  Their opinions about software marketing and social media respectively may be worthwhile.  But there is no reason to think either one has given any serious thought to the fiscal and monetary issues that are important to our clients.

So, for this roundup, we turn to billionaires who have paid attention professionally to these things.

First on our list is billionaire Mark Mobius. 

Mobius retired from Franklin Templeton Funds in 2018 after more than 30 years, where he was executive chairman of Templeton Emerging Markets Group.  He is the founder of Mobius Capital Partners.

Today Mobius recommends that investors buy gold now as protection from the currency devaluation next year that is the inevitable result of rampant central bank money printing.  He recommends one have 10 percent of his portfolio in gold.  He is specific in recommending ownership of physical gold in one’s possession and not gold shares or gold ETFs.

“It is going to be very, very good to have physical gold that you can access immediately without the danger of the government confiscating all the gold,” Mobius said in a recent Bloomberg News interview.

“Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed,” said Mobius.

Next is billionaire John Paulson. 

Paulson heads the investment management firm Paulson & Company and is noted for making one of the biggest fortunes in Wall Street history by spotting the housing and mortgage bubble.  He personally made $4 billion when the bubble popped.

Paulson believes now is the time to buy gold, which “does well in times of inflation.”

In times like these, says Paulson, as in the 1970s, there will be an enormous amount of financial assets hungry for a much smaller pool of gold.  “The reason why gold goes parabolic is that basically there’s a very limited amount of investable gold. It’s on the order of several trillion dollars, while the total amount of financial assets is closer to $200 trillion. So as inflation picks up, people try and get out of fixed income. They try and get out of cash. And the logical place to go is gold. But because the amount of money trying to move out of cash and fixed income dwarfs the amount of investable gold, the supply and demand imbalance causes gold to rise.”

And finally, billionaire Jeremy Grantham.

Grantham is co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO), a Boston-based asset management firm. Wikipedia says that “Grantham has built much of his investing reputation over his long career by claiming to identify speculative market ‘bubbles’ as they were unfolding.”

Grantham says all the Fed liquidity and the Biden stimulus money are “violating a cardinal rule.”  They are “bubbling” stocks, bonds, and real estate all at the same time.

He told Reuters recently that “this bubble is the real thing, and everyone can see it. It’s as obvious as the nose on your face”

“A bust might take a few more months, and, in fact, I hope it does, because it will give us the opportunity to warn more people.”

We hope our friends and clients will take these warnings seriously and take steps to protect themselves and their families.  Big financial events are gathering.  Speak with a Republic Monetary Exchange gold and silver specialist today.

Four headlines all in a row on the Drudge Report one day last week tell the whole story of US fiscal and monetary policy today.  It is an alarming line-up that will have informed people moving to profit and protect themselves with gold and silver now!

INFLATION 30 YEAR HIGH…

FED KEEPS PUMPING…

STOCKS HIT MORE RECORDS…

DEBT NEARS $29 TRILLION…

Let’s take these headlines one by one:

1. INFLATION 30 YEAR HIGH… 

The core personal consumption expenditure price index is the metric that the Federal Reserve prefers to use in its policy decisions.  For July it showed an increase of 3.6 percent over the prior July.  It’s the biggest increase in 30 years!

If you exclude increases in food and energy, the index rose 4.2% year over year. 

For the same twelve-month period, through July, the more commonly followed CPI was up 5.4 percent.  The three-month CPI annualized rate, after an 0.6 percent increase in May, 0.9 percent increase in June, and July’s 0.5 percent increase, is 8.1 percent. 

The headline has it right.  Inflation is high.

2. FED KEEPS PUMPING…

Quantitative Easing is a euphemism for the massive money-pumping that began with the bursting of the housing and mortgage bubble in 2008.  It continues today with the Fed printing $120 billion a month.  That’s $1.4 trillion a year in made-up money. 

The story refers to a speech by Powell intended for an audience of central bankers in which he shot down any expectations that the Fed would halt QE.  Characteristically of Fed chairmen, Powell played fast and loose with reality, suggesting that even when it slows down its money-printing, perhaps later this year, it doesn’t intend to raise interest rates.

Yet money-printing is precisely how the Fed suppresses rates.  The headline has it right.  The Fed doesn’t want rates to rise, so it will keep pumping.

3. STOCKS HIT MORE RECORDS…

This CNBC story, from last Friday (8/27/21), reported that “the Dow Jones Industrial Average gained 242.68 points, or 0.6 percent to 35,455.80.  The S&P 500 rose 0.8 percent  to hit a new high and closed at 4,509.37. The Nasdaq Composite added 1.2 percent, also hitting a new record during the session, closing at 15,129.50.

Wall Street knows well that stock averages are floating on a sea of Fed money printing.  That is why it threatens another “taper tantrum” a sharp sell-off if the Fed allows interest rates to rise. 

But at some point interest rates rise despite the Fed’s efforts – or more precisely because of the Fed’s efforts to hold them down by printing more money.  Famed investor Mark Mobius says to expect currency devaluations next year because of all the central bank money printing.  His advice is for investors to have ten percent of their assets in gold, physical gold, not paper gold substitutes like ETFs.

4. DEBT NEARS $29 TRILLION…

This link takes you to the national debt clock which shows the national debt at $28.7 trillion and climbing fast. 

The Washington uniparty has much bigger debt numbers in our near future, with massive unfunded spending measures advancing at every turn.

However, the headline is not quite complete.   Follow the link to the national debt clock and you will see that unfunded US liabilities, the portion of the debt that is off the books, like Medicare and Social Security liabilities, are a staggering $156 trillion dollars.

The four stories paint an accurate picture of the US today:  Inflation is high, ultimately robbing your dollar savings and dollar investments of purchasing power.  This happens because Washington spends money it doesn’t have, the Fed prints dollars to help the Treasury fund the debt, stovepiping the money first to Wall Street cronies.  Meanwhile the debt reflects out insolvency along the way. It’s a vicious circle.  The best way to avoid the dizzying madness is to step out of the game by converting ill-fated dollars to gold and silver. 

We have written many times about the impact on you – and on supercharging gold prices – as the dollar loses it privileged position as the world’s reserve currency.  See here, here, and here.

But we have never stated the case quite a dramatically as was done by Erik Prince on Tucker Carlson’s show this week for a conversation about the impact of the White House’s bungling on Afghanistan.

Prince is a former Navy Seal and a founder of the private security firm Blackwater.  Blackwater was the recipient of billions of dollars of US government security contracts from the CIA, the Pentagon, and the State Department from 1997 to 2010.

Carlson said Prince is “one of the most knowledgeable people in the world on the subject of Afghanistan”.

This Afghan calamity spells the end of NATO said Prince.  Forget about Democrats complaining about Trump damaging NATO.  “This will destroy what’s left of NATO,” he said, pointing to the cluelessness and unilateralism of US actions that have seen the US rebuked in Parliament for the first time ever.

“We have shattered the confidence of our European allies and every other ally around the world.” 

The international privilege that the dollar enjoys is co-extensive with the US empire, so Prince’s observations about NATO were only an entree to his observations about the dollar. 

“The dollar is the world’s reserve currency,” said Prince, “because it is underpinned by the notion of US military strength….”

“We deficit spend and we can keep doing that since we can just print more and more dollars.  As Pax Americana goes away, and people don’t have confidence in the dollar, it has massive trickle-down implications to our economy and to our way of life.”

It will mean the abolition of the welfare state, Prince predicted, “Massive, massive changes, far greater convulsions than the Great Depression or any other civil unrest we have had in America.”

We have identified the ending of the dollar’s reserve currency status and the corollary move of foreign central banks to converts reserve assets to gold, as the most important monetary mega-trend of our times.

The suddenness of Afghanistan’s collapse reminds us of Ernest Hemingway’s observation that bankruptcy happens in two ways.  “Gradually, then suddenly.”

Don’t wait for “suddenly” to take steps to protect yourself and your assets with gold and silver.

Less Bang for Your Buck

Rapidly rising prices are hitting Americans hard. 

A recent Fox News poll reveals that 83 percent of Americans are now “very” or “extremely” concerned about inflation. 

That concern is not just theoretical.  Rising grocery prices are already causing financial hardship for 70 percent of voters.  29 percent say their families are experiencing “serious” hardship.

Concern cuts across party lines, with inflation topping the list of concerns among both Democrats (80 percent) and Republicans (88 percent). The hardships are not limited to rising grocery prices, according to the Fox national poll.  “The pocketbook pain is the same for gas prices, currently averaging $3 a gallon nationally, with 68 percent saying it is a hardship.  That includes 29 percent who say it is a “serious” hardship.  Some 57 percent call increases in health care costs a hardship and 45 percent say the same about mortgage/rent.”

Are more price increases ahead?  Supply chain confusion and policies that pay workers not to work are cast a shadow ahead.  A Zero Hedge story with the headline “Largest US Food Distributor Having Trouble Keeping Shelves Stocked; Price Shock Imminent,” says that “food inflation is about to soar.” 

“The company [Sysco] said prices for key goods such as chicken, pork, and paper products for takeout packaging are climbing amid tight supplies. In particular, production has slowed for high-demand, labor-intensive cuts like bacon, ribs, wings, and tenders, Sysco said. And if intermediate and final wholesale prices are ‘rising’, just wait until they emerge on the consumer side.”

Employers having difficulty attracting workers will pass higher pay along in the form of higher consumer prices.  In Britain, the Sun reports that supermarket executives are warning of shortages in food supplies for Christmas:

“Poultry farmers warned they cannot get enough staff and will produce 20% fewer turkeys this Christmas.

“Vegetable farmers face problems too. They are short of workers to pick produce and also face higher costs to pack cabbage, broccoli, and sprouts plus longer delivery times due to a lack of drivers.”

Meanwhile, “shrinkflation,” marketing goods in smaller packages to conceal price increases, is spreading. 

The website Mouse Print reports these examples:

• Bounty paper towels:
  Triple rolls of Bounty paper towels lost 18 sheets per roll going from 165 sheets to just 147.
  
• Costco’s toilet paper:
  The new roll went from 425 sheets down to 380 sheets, a total loss of over three rolls in each package.
  
• Dial Body Wash:
  Bottles recently lost almost 25% of the contents, going from 21 ounces to only 16, a 25 percent reduction.
  
• Ziploc freezer bags:
  From 54 bags last year, the packages are now just 50 bags. this year.
  
• Quaker Instant Oatmeal:
  Some varieties have shrunk from 10 packs last year, to just 8 this year.

Hi-Tech Billionaire’s Company Buys $50 million in Gold Bars!

Concerned about a coming unexpected, high-impact event, “a black swan,” Palantir Technologies, a  software company co-founded by billionaire Peter Thiel, purchased $50.7 million in 100 ounce gold bars.

Thiel is a forward-looking entrepreneur.  He was an early investor in Facebook and a co-founder of PayPal. 

Palantir co-founder Joe Lonsdale created a stir recently when he said that “idiots are running the Fed.”  Chief Operating Officer Shyam Sankar said the move to gold “reflects more of a worldview…. You have to be prepared for a future with more black swan events.”

The company also announced that it intended to accept payment in gold and cryptocurrencies. 

Palantir’s gold bars are stored at an undisclosed vault.

Soaring Food Prices – A Global Phenomenon

Families far and wide are being forced to scrimp at the dinner table thanks to rapidly rising food prices.

Global food prices in July were up 31 percent from the same month a year earlier according to UN reports.  A Bloomberg News story says, “Whether at supermarkets, corner stores, or open-air markets, prices for food have been surging in much of the world, forcing families to make tough decisions about their diets. Meat is often the first to go, ceding space to less expensive proteins such as dairy, eggs, or beans. In some households, a glass of milk has become a luxury reserved only for children; fresh fruit, once deemed a necessity, is now a treat.”

Just the four largest central banks, the US Fed, the European Central Bank, and the central banks of Japan and China, have inflated their balance sheets from $4.9 trillion to $29.3 trillion since 2007. 

How difficult is it to understand that when the major central banks of the world have digitally printed $24 trillion dollars worth of money backed by nothing, that prices would go up?

No wonder government likes to report on so-called “core inflation” which excludes the rising prices in food and energy.  After all, who would rely on food or energy to sustain life?

Republic Monetary Exchange Pop Quiz

See if you can guess who said the following: 

“There was nothing that I or anyone else saw that indicated a collapse in 11 days”

Was it:

(A) Chairman of the Joint Chiefs of Staff General Miley, speaking in August 2021 about the collapse of Afghanistan?

-Or-

(B) Federal Reserve Chairman Jerome Powell speaking in November 2021 about the collapse of the stock market?

How Different is 20 Years of Afghanistan from 13 Years of Quantitative Easing?

WHO ARE THESE PEOPLE?  The Deep State geniuses behind our foreign and monetary policies?

It was reported that just days before the 2003 invasion of Iraq, President Bush knew nothing about Sunnis and Shia.  “I thought Iraqis were all Moslems,” said the president according to a US ambassador.

Now a correspondent wonders whether the people making all the decisions about Afghanistan over the past 20 years know the difference between a Pashtun and a Tajik?  Or going a step further, how much do members of our permanent foreign policy establishment know about the history that gives Afghanistan its name as “the graveyard of empires?”  About Alexander on his way to India, the British experience, the Soviet’s misadventure, and now America’s calamity?

We prefer to leave these questions unanswered.  Our specialty is money, and it is all any one person can do to keep up with the authorities’ malperformance on that front.  But it does have us wondering: 

Are the Deep State authors of monetary policy any more competent than those who gave us decades of the Afghan money pit? 

We don’t see any reason to think so.  Just as they foreign policy mandarins have littered the trail with costly regime change wars that end badly (for us), the money manipulators have left behind the wreckage of one financial bubble after another:  the dot com bubble, the housing bubble most memorable among them.

Now we have another bubble, one fueled by trillions of dollars of made-up money, reaching its inevitable end.  And true to form, the later this bubble’s hour, the more frantic the bubble blowers become.  Never mind that US debt, now $28.5 trillion, has grown by an incredible $5 trillion in just the last 17 months, there is more spending where that comes from.

There is the $3.5 trillion Jobs Act.  And the budget resolution measure.  And the biggest bump in food stamp spending in history, a 27 percent jump for 42 million Americans.  And all this inflation lately means a Cost-of-Living jump in Social Security payments right around the corner; 69 million people receive Social Security benefits.

Where will all that money come from?  The US government is already borrowing $2 million a minute!  And who is it borrowing most of that money from these days?  The Federal Reserve.  And where does the Fed get the money it lends the government?

You know the answer.

We’re in a mess.  You must take steps to protect yourself and your family with gold and silver. Don’t wait for a C-17 transport plane to lift you off the tarmac when the fiat money game is over.  Or for a helicopter to lift you off the roof when the next bubble pops.

Inflation, Anyone?

The official inflation numbers for July continue to show persistently climbing consumer prices.  The Labor Department’s Consumer Price Index rose 0.5 percent in July.  

For the twelve-month period, the CPI was up 5.4 percent.  The three-month annualized rate, after 0.6 percent increase in May, 0.9 percent increase in June, and July’s 0.5 percent increase, is 8.1 percent.  

The so-called core price index which excludes food and energy prices, was up 0.3 percent in July.  

Big Spending, Anyone?

The US Senate looks increasingly like the Roman Senate during that empire’s last days.

JusttheNews.com reports that the Democrat-led Senate approved more than $4 trillion of spending in less than 24 hours between the mornings of Tuesday (8/10) and Wednesday (8/11).

“The Senate passed a $1.2 trillion infrastructure bill, which includes $517 billion in new spending and a reauthorization of funding from the highway bill, at 11:17am on Tuesday. 

“The Senate moved to debate on the Democrats’ filibuster-proof $3.5 trillion budget reconciliation proposal. The framework for the plan authorizing that level of federal spending passed in a 50-49 vote early Wednesday morning at 3:50am.”

The Roman Emperor Caligula is said to have made his favorite horse a senator.  Our senators lack even horse sense.

Gut Check, Anyone?

The US government is borrowing at the rate of $2 million a minute.

A Sign of Inflationary Times, Anyone?

We frankly admit it is something we had never thought of, and it is not among our biggest concerns, but now we wonder if inflation will kill the dollar stores?

A Deutsche Bank equities analyst has downgraded the stock of dollar store chain Dollar Tree.  After all, what happens to a dollar store’s marketing position when inflationary pressure cause goods to break the buck?  

“Accelerating cost pressures… particularly in light of the Dollar Tree banner’s fixed $1 price point… limits its ability to absorb higher costs through price increases, putting margins at risk.”

We suppose the dollar store will go the way of the ten cent stores of yesteryear.  And the nickel candy bar.

The body of work of George C. Scott, who won an Oscar for his unforgettable portrayal of World War II General George Patton included films like Anatomy of a Murder and Dr. Strangelove.   

Less well known is his starring role a few years before in a film called The Flim-Flam Man, a comedy about a con man who traveled the southern states running scams and fleecing the wide-eyed innocents.

Although some of his schemes are quite brazen, nothing in the world is quite as audacious as what governments get away with in their money manipulation.

Today the news brings the announcement that on October 1, Venezuela will cut six zeroes off its currency the bolivar.  

“All monetary amounts expressed in national currency will be divided by one million,” the central bank announced.  That is a time-tested flim-flam: governments print so much money that the currency becomes virtually worthless, so they lop off a bunch of zeroes on the denominations, and issue a new currency, one that they will eventually print into worthlessness all over again. 

So, if you have a one million bolivar bill, it will be replaced by a new one bolivar bill. That is a common government flim-flam, an attempt to disguise their intentional currency destruction.  

But let us describe the monetary flim-flam the goes on today here in the US.  

The government borrows money by selling bonds.  This is what really happens.  Since Covid, Washington has borrowed and spent trillions of dollars by selling bonds.  But who buys those bonds?  

The Federal Reserve bought most of them.  Since Covid, the Wall Street Journal reports that the Federal Reserve has purchased 76.4 percent of all those US bonds.

But wait a minute!  Where did the Fed get the trillions of dollars to buy all those US government bonds?

Simple.  It just printed the money.  Digitally, of course, but it made the money up out of nothing.  Dollars that did not exist in the morning were created out of nothing but a digital bookkeeping entry in the afternoon.

That is a flim-flam so audacious that Hollywood probably would not even put it in a movie.  But that is how inflation is created, and how the purchasing power of the dollar is destroyed over time.  

The Fed and its crony banksters deserve an academy award for selling this racket to the wide-eyed American people.  

As for the few that can see through governments’ monetary con games, they protect themselves by investing in gold and silver.  Since gold and silver are honest money, con men and flim-flam artists always hate them.

Protect yourself.  Speak with a Republic Monetary Exchange precious metals specialist today.

The US national debt ceiling, suspended by Congress two years ago, kicked back in on July 31.  That left federal debt capped at the current $28.5 trillion level.

The Treasury will employ a full suite of measures, moving money around and borrowing from account to account, to avoid default for now.  It can use accounting manipulations until October or November, but in the meantime, the US Treasury is prohibited from issuing more debt and borrowing until the statutory debt ceiling is raised.

The Committee for a Responsible Federal Budget writes that the debt ceiling has been modified almost a hundred times since the end of World War II:

During the 1980s, the debt ceiling was increased from less than $1 trillion to nearly $3 trillion. Over the course of the 1990s, it was doubled to nearly $6 trillion, and in the 2000s it was again doubled to over $12 trillion. The Budget Control Act of 2011 automatically raised the debt ceiling by $900 billion and gave the President authority to increase the limit by an additional $1.2 trillion (for a total of $2.1 trillion) to $16.39 trillion. Lawmakers have suspended the debt limit seven times since February 2013. The most recent suspension began on August 2, 2019, and will end on July 31, 2021.

One of Washington’s oldest tricks is to use the debate about raising the debt ceiling to bloviate about fiscal responsibility.  Measure that we are told will reign in the exploding debt down the road are loudly trumpeted, but it is generally just sound and fury signifying nothing, and the debt continues to grow year after year.

Now the rate of increase in the debt has accelerated.

Debt addiction isn’t limited to Washington.  US consumer debt has climbed to $15 trillion.

The biggest borrowers always seen to believe that there will never be a day of reckoning.

But the gold market is not so easily fooled.  We believe this chart showing the rise in US debt and gold makes clear where gold is headed as the growth of US debt accelerates.

To learn more about the dollar, debt, and sensible ways to protect yourself, your family, and your wealth, speak with a Republic Monetary Exchange precious metals professional today.

China is still gobbling up much of the world’s gold.  

China is the world’s largest gold producer, with more than twice the annual gold production of the US.  It is also the largest gold refiner.

Much of China’s gold position is kept under wraps.  It reports its gold reserves occasionally but will go for years without providing any updates.

China’s official gold reserves have grown from 395 tons in 2000 to 1,948 tons in 2020.  

But even official reports don’t tell the whole story.  We wrote recently (See GOLD: Behind the Curtain) that China’s actual gold holdings may be secreted away in separate accounts, including army and communist party accounts.  So, it may be sitting on more than ten times the officially acknowledged gold reserves.

Now Reuters reports that China’s gold imports through Hong Kong jumped nearly 42 percent in June.  For the month it imported 30.88 tons.  That compares with May imports through Hong Kong of 21.78 tons.

It means that China moved aggressively to take advantage of the correction in gold from over $1,900 in late-May, seen in the chart below.

We believe that is a wise move.  We recommended buying the dips – particularly with the return of US inflation – earlier this year, 

Reuters notes that “the Hong Kong data do not provide a complete picture of Chinese purchasing as gold is also imported via Shanghai and Beijing.”

Meanwhile, other central banks are climbing aboard the d-dollarization express, diversifying their reserves into gold.  In June, Brazil, grew its gold reserves by 52 percent, purchasing an additional 41.8 tons. 

We recommend you add to your personal gold reserve as well.

David Stockman shows up on the financial news shows a fair amount.  But I don’t remember any of them asking him about gold.

Of course, they don’t.  That’s the mainstream media for you.  Mostly they practice a form of journalism you might describe as news reporting by government handouts.  

But they should ask him about gold.  David Stockman is one smart cookie.

He proved it when he was a member of Congress, representing a district in Michigan.  When Ronald Reagan was preparing for his presidential campaign debates, someone had the wisdom to ask Stockman to play the part of John Anderson during that three-way race.

He wowed ‘em.  The next thing you knew, Stockman was Reagan’s Budget Director.  In that role, he fought the good fight.  And much of what he described as the runaway government to come has proven accurate.

Now Stockman has had a chance to say a few words about gold.  USA Watchdog’s Gregg Hunter gave Stockman that opportunity the other day.  

“The only asset that has held its value over time is gold,” said Stockman, recommending that everyone hold some gold as insurance against the coming “reset.”  

The reset, he says, is the inevitable bursting of the Federal Reserve is the Wall Street bubble.  “This is not the time to be invested in the [stock] markets . . . . A reset is just a pleasant name or a clinical name for a crash of epic proportions, which we will have because the markets are so inflated.  There are trillions of dollars that are at risk.  To put a dimension on this thing or a way of sizing this, is we have a $60 trillion bubble on the balance sheets of 130 million people in American society, but especially in the top 5% to 10% that own a huge share of the assets. . . . I have no thought about how big the correction will be, but if it were just back to the norm . . .  it would be a $60 trillion correction, and that is a pretty big hole in the bucket.  If $60 trillion disappears (out of the U.S. economy), it changes everything.  It turns the financial system and economic reality upside down.”

Stockman doesn’t pull any punches about the Deep State Money Manipulators responsible for this precarious state of affairs.  “When central banks start to inflate like crazy, you first inflate financial assets.  It eventually works its way into goods and services, and that’s where we are now.  You get the second stage of inflation as well.  There has never been a small group of government officials, unelected at that, who have done more damage, more wanton harm to the economy and to the lives of ordinary people than (Fed Head) Powell and his merry band of mad money printers.  This is really an outrage.  I say these people are damn near criminally incompetent given what they say about the world, which is totally wrong, given what they’re doing, this massive money printing, which is totally unjustified. . .”

“This is the last moment in time to be greedy or aggressive or to be overly optimistic about the future.  The future is being driven by the policymakers . . . . The whole system is being run by Washington.  The Federal Reserve totally dominates the financial markets. . . . The Fed has printed $6.5 billion a day for the past 688 days. . . . They have printed more money in the last 688 days than the Fed did in the first century of its existence.”

“Preserve your assets,” advises the former Reagan budget director.

Good advice!  Let a Republic Monetary Exchange gold and silver professional help you design a precious metals portfolio that meets your individual needs.