Blog

The Economics Credibility Gap

How They Made a Mess of the American Economy, the Dollar, and Your Prosperity – and Gave You a Buying Opportunity at the Same Time!

The Federal Reserve has made a mess of everything.

The American economic establishment has made a mess of everything, too.

But I repeat myself.  The American economic establishment is the Fed’s puppet.  The Fed calls the tune and the establishment dances.

This has been going on for a long time. 

The Fed is awash in high-priced economists and expensive consultants who carry its water and defend the Fed’s decisions and protect its prerogative to create money out of thin air. 

G. Edward Griffin, author of an excellent history of the Fed called The Creature from Jekyll Island, describes how the Fed mobilizes public opinion:

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession….

This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed’s thrall, the economists missed it, too.

Today the Fed has hundreds of economists on staff, while hundreds more receive lucrative contracts to do studies for the Fed.  The Fed’s influence extends over the academic economics departments and the professional economic journals.

So the Washington monetary establishment has a very effective chokehold on the philosophy and opinions people hear about monetary policy.  Dissenters are choked off.  This goes a long way to explain why there were not more warning voices about today’s raging inflation.  

The following chart illustrates the consensus expectations from economists for inflation to have subsided by now, all wildly incorrect.  

The monetary authorities clearly have no idea what they are doing.   So they will try a 50 basis point interest rate increase this month, and then may try another and another after that, as see how things work out.  It’s all hit and miss.

But they have done us a favor.  The Fed’s interest rate increase has spooked Wall Street.  The stock and bond markets have been clobbered, and – at least for now – gold has moved down below its long-term (200-day) moving average, the red line on the following chart.  This gives us an opportunity to buy gold at prices that prevailed early this year.

Silver has corrected as well.  But bear in mind that these charts reflect the prices of “paper” gold and silver.  Real physical silver remains in high demand and in short supply and is only available at significant premiums above the paper or “spot” prices.

Your Republic Monetary Exchange gold and silver professional can provide you with more information and steer your investments in ways that take advantage of this break in prices and meet your individual needs.


More Bad Consumer Price News!

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.


It’s Not His Fault

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. 


Money Supply Explodes!

Just like it did during the Stagflation Decade!

Plus Joe Biden, the fiscal conservative?

Just in time for the 2022 election, President Biden is suddenly trying to re-package himself as a fiscal conservative.

That’s quite a stretch!

Meanwhile, Charlie Bilello, CEO of Compound Capital notes that the US money supply has increased by over 50 percent in the last three years.  That is the largest 3-year increase ever:

The only other times when Money Supply increased by [greater than] 40% in a 3-yr period: 1973 & 1977-78.

Both were followed by high inflation, recessions (1973-75, 1980, 1981-82) and bear markets.

And finally, what has happened to America’s dynamic engine of growth?  David Stockman points out that trend growth in productivity has been weakening for five decades, roughly since Nixon abandoned the gold dollar.

Here’s the breakdown:  

Y/Y Labor Productivity Change, 1953-2022

  • Q1 1953-Q1 1973: 2.72%
  • Q1 1973-Q4 2007: 1.97%
  • Q4 2007-Q4 2019: 1.34%
  • Q4 2019-Q1 2022: 1.13%

So today’s growth trend of 1.13 percent “is barely two-fifths of the 2.72 percent per annum rate which prevailed during the heyday of American prosperity between 1953 and 1973.”

If you would like to know more about America’s declining productivity and wealth, and the crisis of our unpayable federal debt, you will want to read my new book.  

It’s called REAL MONEY FOR FREE PEOPLE: The American Gold Story.  You will learn how to protect yourself from the dollar destruction that is already underway at the hands of the Federal Reserve and has given us the highest inflation in decades.

We have a free copy of REAL MONEY FOR FREE PEOPLE waiting for you.  Stop by Republic Monetary Exchange in Phoenix on Camelback just east of 40th Street.


Revisiting the Dollar

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 1/1900th of a gold ounce. When the 21st century began a dollar purchased roughly 1/300th 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.


The Fed’s Big Day!

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.


Stagflation is Here

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.


Fed Interest Rate Moves Rule the Markets

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.


Time Proves the US Dollar is a Poor Substitute for Gold

The US dollar’s role as a substitute for gold in international affairs, formalized with the Bretton Woods Agreement at the end of World War II, continues to break down.

It was destined to fail because in substituting dollars for gold, participants were asked to trust in the financial integrity of the government.  It was only a question of how long the illusion of trustworthiness would last.

The latest government to peel away from greater reliance on the dollar as a currency reserve is Israel.   The country’s central bank has announced a sweeping change in its reserve disposition, heretofore limited to positions in the US dollar, the euro, and the British pound.

Now Israel is adding China’s yuan, the Japanese yen, and both the Canadian and Australian dollars.

The US dollar’s share of Israel’s central bank reserves falls from 66.5 percent to 61 percent.

Moves away from the dollar will accelerate around the world, now that President Biden has announced that the US will unilaterally grab dollar reserves around the world when it wishes.  See our commentary “Has the Biden Administration Started a Global Currency Crisis?” 

The dollar’s share of global reserve functions has eroded from 85 percent in the 1970s.  It is now down to 59 percent, off seven percent since 2014.  

As the post-World War II monetary system continues to decay, protect yourself by speaking with a Republic Monetary Exchange precious metals professional and taking sensible steps to reduce your exposure to a developing dollar crisis.


German Inflation Redux

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.


Who Is On Your Side During the Inflation Crisis?

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.


The Economy is About to Break!

Wholesale Prices are up 11.2 Percent!

Inflation, foreign war, rising interest rates, food shortages, sanctions, triple-digit oil prices, Fed policy, frantic White House…

Gold gets the picture!

Only one day after reporting consumer prices have risen 8.5 percent over the last year, the Bureau of Labor Statistics reported that the Producer Price Index (wholesale prices) have skyrocketed up 11.2 percent in the same period.

The PPI increase just for the month of March was up 1.4 percent which is an annual wholesale inflation rate of about 17 percent.   

Gold reacted to the news with fresh upside momentum

Producer prices are now like a runaway train of higher prices headed right at American consumers.

The mainstream press prefers not to acknowledge the complicity of the US Federal Reserve is debasing the dollar’s purchasing power, but the Fed has increased the money stock (M2) by 42 percent since the end of 2019.

So in the face of virulent inflation, a monetary disorder that can wipe out the savings of generations – the capital formation that has helped make America prosperous – and can decimate the middle class, what is the Biden administration going to do about it?

We’ll let Vice President Kamala Harris answer that.  Here is her response to a Philadelphia news reporter last week:

I acknowledge one must acknowledge that prices are going up, and that people are working hard and, in many cases, are worried about whether they can get through the end of the month and make it all work.

What I can say is that people deserve to know that their president, that our administration, is concerned enough to do something about it, so that is what we are doing.

And that, ladies and gentlemen, leaves only one thing left to be said.  Buy gold and silver with both hands!


White House Shares Inflation Forecast

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.


Up, Up, and Away

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.


When You Add It All Up…

…It looks like a great time to buy gold and silver!

The Federal Reserve has its sights on the stock market and is about to pull the trigger and bring the bull to its knees.  At the same time, the European war has food prices rip-roaring higher.  Because people would rather pay high prices than starve, just wait until price indices like the Consumer Price Index have to start acknowledging food shortages and the prices they usher in.  And then there is the issue of the dollar’s declining role in the global monetary order.

When you put it all together, it screams GOLD!  Let’s start with the Fed’s plans for the stock market.  Here are a couple of headlines to set the stage:

“Band of America warns ‘recession shock’ coming…”  “Rate Surge Starts to Ripple Through Economy…”  

Bill Dudley, the former president of the New York Fed, is explicit in his warning of pain to come for Wall Street: “It’s hard to know how much the U.S. Federal Reserve will need to do to get inflation under control. But one thing is certain: To be effective, it’ll have to inflict more losses on stock and bond investors than it has so far.” 

Dudley is saying, according to MarketWatch, that the Fed “won’t get a handle on inflation that’s running at around a 40-year high unless they make investors suffer.”

Where does all that Wall Street money go when blood is flowing in the stock and bond markets?  It must go somewhere.  May we suggest gold.

Now let’s turn to one of our favorites, former Reagan budget director David Stockman to get his view on “the coming stock market crash of biblical proportions.

We haven’t been in these kinds of uncharted waters for a long time, not since the 1970s….

If you go back to March 2000, when the dot-com bubble collapsed, the NASDAQ peaked at 4600, and the market dropped by 30% in the next 15 days. And after that bone-rattling drop people said it’s all over. The worst has happened, and you should buy the dip. You’re going to make a lot of money.

And over the next two years, they kept buying the dip, but over the next two years, the NASDAQ went from 4,600 to 3,300, all the way down to 800. An 80% plus decline and all that dip buying resulted in massive losses and pain.

I think we’re going to go through the same thing again.

Meanwhile, you can expect food prices to take a toll on people around the world.  US Senator Joni Ernst, from Iowa, is talking about an “impending famine.”  Here are her remarks on Fox Business News:

About 40 to 45 percent of the production in Ukraine will be decreased this year because of the war and the scarcity of supplies that go into the planting season. And we know that Ukraine also supports about 400 million people around the world with its food products. So, we do see that we have an impending famine. And I’ve heard from David Beasley at the World Food Bank that he’s now going to have to take from the hungry to feed the starving.

Skyrocketing food prices spell higher gold prices as well, especially when global food producers aren’t keen on a failing dollar.  And on that note, we will finish with Ron Paul’s summation of the dollar’s predicament in the global economy:

America may soon pay the price for attempting to fund a massive welfare-warfare state with fiat currency, America’s ham-fisted intervention in the Ukraine-Russian conflict has caused more countries to seek alternatives to the dollar. This increases pressure for the dollar to lose its world reserve currency status. When that happens, the US will face a major economic crisis featuring hyperinflation, massive unemployment, and the growth of authoritarian political movements. The only way these problems can be avoided is if the people demand the federal government stop trying to run their lives, run the economy, and run the world.

Visit with a Republic Monetary Exchange precious metals specialist today to find out more about what will add up to higher precious metals prices.


Inflation Déjà Vu

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.


US Mint Sees Record Gold Demand

…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.”


A Dark Day for Real Money

This Tuesday will be 89 Years Since the Government Criminalized Gold Ownership

 I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations….

Whoever willfully violates any provision of this Executive Order or of these regulations or of any rule, regulation or license issued thereunder may be fined not more than $10,000, or, if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in any such violation may be punished by a like fine, imprisonment, or both.

Franklin D. Roosevelt, Executive Order 6102, April 5, 1933

There are certain dates in American history that deserve to be remembered for events that eroded our Constitutional monetary system.  One of those was 89 years ago this week when the US government made it a criminal offense for Americans to own monetary gold.

Our thanks to Tho Bishop at the Mises Institute for his account of this infamous anniversary.  Bishop writes:

“The order was one of the several disastrous responses to the Great Depression that succeeded in escalating the financial crisis. Later in the year, the US Congress would pass a resolution retroactively supporting the legislation; however, it was the determined autocratic leadership of FDR that made way for these unprecedented measures. It would be a crime for Americans to hold gold for over forty years until President Gerald Ford reversed the order in 1974. 

“This episode has several lessons for the current financial environment, particularly given the acceleration of tyranny-by-expert rule that has taken over much of the worst this past year.

President Franklin Delano Roosevelt

“The underlying legislation that evoked by FDR’s executive order was the Trading with the Enemy Act of 1917—a by-product of World War I—despite the fact that the US was in no way in a period of war in 1932. Similarly, we have seen war on terror–inspired financial legislation increasingly used against American citizens. For example, in the name of “fighting terrorism” the US PATRIOT Act significantly increased know-your-customer laws, empowering federal regulators to use the traditional banking system to better track the economic behavior of American citizens.”

The objective of Roosevelt’s gold grab was twofold: first, to devalue the dollar then and there, and then to get gold out of the way.  Gold’s role in the monetary system acted as a brake on the Fed’s expansion of money and credit and the endless growth of the State.  It was an impediment to deficit spending that had to go.  Gold had to go because it made the individual’s financial well-being dependent upon himself, instead of upon State benefactors and the decrees of the monetary authorities.  It was a bulwark against the erosion of property and individual rights.  Gold had to go.

Roosevelt’s action was a brazen affront to the free American people and an assault on the Constitution itself.

Real Money for Free People: The American Gold Story

To this day it reminds us that private ownership of gold is not just a means of protecting our individual wealth and prosperity.  It is an assertion of liberty that the founders, great men like Washington, Franklin, Jefferson, and Madison intended for the new American republic.

For a compelling review of America’s money, including the confiscation of gold by FDR and other corrupting incidents that have made possible the return of inflation today at levels not seen in decades, read my new book, REAL MONEY FOR FREE PEOPLE: the American Gold Story.

Speak with a Republic Monetary Exchange gold and silver specialist today, or stop by our office for a complimentary copy.


Commodities Do Not Cause Inflation!

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 Consumer’s Perfect Storm

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. 


Inflation Hotspot!

Republic Monetary Exchange is a full-service precious metals brokerage firm with friends and clients just about everywhere.  Because our offices are in Phoenix, Arizona, you won’t be surprised to learn that we have so many clients in Arizona.

Republic Monetary Exchange Office in Phoenix, AZ

Arizona is a beautiful state.  People like living here and are coming from far and wide.

But now our fair state has come in for some unwanted attention.  

Since Joe Biden became president, inflation has catapulted to levels that haven’t been seen in decades.  The fact is the median age of the American people is 37.9 years.  But inflation is at the highest level in more than 40 years.  That means that a majority of Americans have never experienced inflation as high as it is today.  

The official US inflation rate, the Consumer Price Index, is 7.9 percent.  That number from the Bureau of Labor Statistics means that consumer prices rose 7.9 percent for the 12-month period through the end of February. 

But unfortunately, consumer prices are rising even faster in the Phoenix area.  According to the government numbers, the CPI for Phoenix-Mesa-Scottsdale rocketed up 10.9 percent over the last 12 months.

That is the highest inflation rate in the United States!  The Wall Street Journal calls metro-Phoenix “America’s #1 Inflation Hotspot.” 

None of this should be much of a surprise to our Phoenix-area clients.  Higher prices are evident everywhere.

One of the reasons the Phoenix cost of living is so high is because of real estate.  The Census Bureau reports that during the first full year of the Coronavirus pandemic, from mid-2020 to mid-2021, Phoenix grew by 78,000 people.

Other notable growth cities are Dallas and Houston, growing by 97,000 and 69,000 people respectively.  Both those cities grew by a combination of migration and births outpacing deaths.  But the growth of Phoenix, according to the Associated Press, is driven primarily by people coming from elsewhere in the US.

What cities are the big population losers?  Exactly the places you would guess.

New York lost 328,000 residents.  Metropolitan Los Angeles lost 176,000, San Francisco 116,000 residents, and greater Chicago lost 91,000 people. 

We don’t mind telling you that the official government inflation statistics grossly understate real increases in the cost of living.  The way it under-estimates housing costs is practically legendary.

But no matter how the numbers are totaled, and no matter where you live, inflation is a severe problem today.  Every dollar you have is losing purchasing power fast.  Few people have any idea how to navigate and prosper in an inflationary episode.  

We do.  We are gold and silver specialists.  For thousands of years, people have turned to precious metals to protect themselves from the shady practices of the monetary authorities.

Today is no different.  Why not make an appointment with us today and learn how to protect yourself from inflation, already high and headed higher?


How to Fight Inflation (According to the “Experts”)

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.


Inflation Shows Up Everywhere

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.


Has the Biden Administration Started a Global Currency Crisis?

Here comes the worldwide scramble for gold.

This is big.

In his State of the Union address, President Joe Biden announced measures to make what he called Russia’s $630 “war fund” worthless.

“We are cutting off Russia’s largest banks from the international financial system,” said Biden. 

There is no way to put it nicely.  The Federal Reserve has confiscated Russia’s foreign currency reserves.

As with most acts in life, the important question is what the consequences will be.  And not just the reaction of Russia which must make new and important decisions about energy and other vital resource commerce with the West.  

Just as important is how the rest of the world will respond to the discovery that their US dollar reserve can be grabbed at any time.  Influential blogger Michael Shedlock asks, “If the Fed can do this to Russia, who else?”

Shedlock points out that not only is the asset freeze unprecedented, it is also illegal.  “Nowhere does the act give the Fed the right or power to confiscate the reserves of sovereign nations.  But that is exactly what the Fed did.”

Will China with its huge dollar reserves fail to notice that they are in jeopardy without notice?  Will it care that the US dollar has are now weaponized in a way that puts their trillion US dollar reserves at risk?

Will other foreign nations and central banks fail to notice?

Shedlock puts it this way:

Team Biden just sent an unmistakable message to China, Saudi Arabia, Russia, and, well, actually everyone:

We can make your fiat reserves worthless overnight

– Buy gold
– Buy base metals.
– Hoard things you have everyone needs.

That’s pretty good advice, but you don’t need to bother buying lead, zinc, and other base metals.  In fact, the global base metals market is mired in scandal for the manipulation of markets and trades in nickel.

Gold is the world’s most liquid commodity, serving efficiently as money in good times and bad.  Silver is in second place and has special price advantages since it is trading at half its prior highs.

In either case, the post-World War II monetary system is cracking up.  Protect yourself by speaking with a Republic Monetary Exchange precious metals professional and taking sensible steps to reduce your exposure to a developing dollar crisis.


Hunger Set to Stalk the World

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.


Russians Rushing to Buy Gold

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?


‘Substantial’ Inflation Increase Coming; U.S. Recession Risk as High as 35%

All Signs Point to Stagflation with Higher Gold and Silver Prices

White House expects inflation will ‘substantially’ increase in coming months

Washington Examiner (3/11/22)  –  The White House is expecting “substantially” higher inflation figures in the coming months, even after the February Consumer Price Index posted the highest year-over-year rate since 1982.

Yearly inflation rose to 7.9% in February, which the White House attributed largely to a 3.5% increase in energy prices.

Inflation = loss of Purchasing Power of the Dollar

WolfStreet.com (3/11/22)  –  Inflation is not a sign of growth, and it’s not a sign of anything positive. It’s just a sign of the loss of the purchasing power of the consumer’s dollar, including the purchasing power of dollar-denominated labor. And this is a long-term cumulative and relentless process that started to accelerate last year. In February, the purchasing power of $100 in January 2000 dropped to a new record low of $59.46.

Risk of a US recession as high as 35%, says Goldman Sachs

CNN Business (3/12/22)  –  Europe’s reliance on energy from Russia has jacked up the odds that the region could enter a recession this year as soaring inflation pushes people to cut back spending. The United States is more insulated from the spike in oil and gas prices — but it’s not immune.

What’s happening: Goldman Sachs has downgraded its forecast for US economic growth in 2022. It now sees little to no growth during the first three months of the year.

Goldman’s economists, led by Jan Hatzius, said the chance of a recession in the United States over the next year has risen as high as 35%.

As Inflation Rages, US House Approves MASSIVE Aid To Ukraine! 

Ron Paul Liberty Report (3/11/22)  –  First it was $6 billion, then Biden made it $10 billion, then the US House upped the ante again: more than $13 billion US taxpayer dollars will be shipped to Ukraine. As Americans are ravaged by inflation at the supermarket and skyrocketing gasoline prices, will they still cheer for their money being sent overseas? (View HERE).

UMich Sentiment Slumps In March As ‘Hope’ Plunges, Inflation Expectations Surge

ZeroHedge.com (3/11/22)  –  Following February’s plunge to new post-COVID lows, March’s preliminary University of Michigan sentiment data was expected to fall even further, plumbing new lows not seen since 2011. However, things were much worse than expected with the headline sentiment print dropping from 62.8 to 59.7 (well below 61.0 exp) as expectations plunged (from 59.4 to 54.4) and current conditions slipped from 68.2 to 67.8…

And finally, and perhaps most importantly, inflation expectations soared with the highest 1-year inflation expectations since Dec 1981.

From the Russian Revolution to Vietnam, war has been a reliable precursor to inflation

Wall Street Journal (3/11/22)  –  History may be about to repeat as Russia’s invasion of Ukraine tilts the balance of global political and economic forces toward higher inflation. The main channels: First, more military spending, which strains the economy’s productive capacity. Second, embargoes, sanctions and fighting disrupt supply chains. These factors are clearly at work now.


Lessons from the War in Ukraine

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.


Reminds Us of the ’70s!

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.


Inflation? What Inflation?

When the people in charge are this confused, you need to own gold!

Today’s subject matter comes from the people at Committee to Unleash Prosperity.  

“We’re still scratching our heads,” they confess, “trying to figure out what the White House strategy is for bringing down inflation which is now running between 7 and 10 percent depending on the measure used.”

It seems they watched the State of the Union address recently and thought someone was confused.

Very confused. 

They write:

Anyone with even a slight understanding of how businesses work in the real world (which is quite obviously NOT the brainiacs in this White House) probably fell off their chairs laughing when Biden lectured that to reduce inflation “businesses will have to cut your costs, not your wages.” Brilliant, Joe. They probably never thought of that. It’s also going to be pretty tough to “cut your costs, not your wages” when energy, construction, and labor costs are surging. As one of the late-night comics put it last night: “Well one way to reduce costs would be to fire workers.”

When the authorities speak of inflation but say nothing about the entity that actually inflates the money supply, you are in the spin zone.  The goal is to conceal rather than to reveal.  And so it went with the President.

But the Committee to Unleash Prosperity wasn’t done yet.

Then old Joe told a whopper when he said that new vehicles accounted for a third of all inflation over the last year. New vehicles accounted for only 6% of inflation. Even if you add new and used vehicles together, it accounts for only 17% of inflation, half of what he claimed. Inflation is everywhere right now.

Former US Budget Director David Stockman found a couple more whoppers in the State of the Union including the President’s claim “that he had created a record 6.7 million new jobs during his first year in office, but even that was a lie.” 

Stockman explains:  

The 149.162 million jobs figure reported for December 2021 was actually 107,000 below the level of jobs the Donald had “created” as of August 2018 (149.269 million).

Of course, neither of these hot dogs had anything to do with “creating” jobs. Businessmen, investors, and entrepreneurs operating on the free market do that—even as government endlessly throws regulatory, tax and Nanny State obstacles in their path.

But in this case, Biden’s claims were especially egregious because every single one of those 6.7 million were “born again” jobs—jobs that had existed a few years back and were just now being recovered from the government-imposed Lockdown disaster of 2020.

In fact, the more relevant point is that at the end of Biden’s first year there were still 3.34 million fewer nonfarm payroll jobs than existed at the February 2020 pre-Covid peak. That is to say, we still have a goodly amount of born-again jobs to recapture before anyone can claim “new” jobs, even if they had nothing to do with them.

And then there was the approval-seeking remark from Biden about keeping the economy growing strong.  But the economy is not growing strong.  The latest GDP Now growth estimate from the Atlanta Fed is…  zero.  

That’s right, we are headed for zero growth in the first quarter.   

“And falling fast!”  

That is the add-on comment on the GDP decline from Michael Shedlock.  He says we are “careening towards recession.”

But it is not just recession.  It’s an inflationary recession

Better known as stagflation!

Do you own enough gold?


Stocks Coming Unglued

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.


One Thing We Do Know

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.

Ukrainian 1000 Hryvnia bills

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. 

gold coins

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! 


Ukraine, the Dollar, and Gold

But don’t just take it from us…

This blog and commentary are devoted to providing you with information that will help you profit and protect yourself from a decaying monetary and financial environment.

Obviously, we represent your first line of defense: gold and silver.  That, as they say, is our wheelhouse.  It is our expertise.  We point repeatedly to historical precedents for asserting the primacy of precious metals, as well as the unfolding policy decisions that are undermining our money and your prosperity.

Now that Russia has invaded Ukraine, it is important for our friends and clients to consider the potential impact of this warfare on the US dollar. 

With a few lines transcribed from his Fox News show on Thursday (2/24/2022) as the Russian air and ground campaign was underway, Tucker Carlson provides this perspective:

In this country, control of the US dollar is the key to our wealth.  Our entire financialized, debt-based economy rests on the unique privilege of issuing the world’s reserve currency.  If the US dollar is ever replaced, we are in legitimate trouble.  Our debt will come due, our government will go bankrupt, and millions of Americans will become poorer immediately.

So, this is the main thing we ought to be worried about and there is a greater risk now than ever before.  Sanctions are an emotionally satisfying way to punish someone like Vladimir Putin who clearly does deserve to be punished.  No one is really against sanctions.  But the question is, do they work?  Clearly, multiple sanctions did not prevent last night’s invasion of Ukraine.  Let’s start there.

At the same time, sanctions give Russia and many other countries across the world a strong incentive to dump the US dollar, which is the means by which we enforce sanctions.  

So last summer for example, in a story that most people didn’t pay enough attention to, Russia, in response to sanctions, completely removed the US dollar’s assets from its sovereign wealth fund, its national wealth fund….

So, we should be watching attacks on the primacy of the US dollar globally every bit as intently as we watch the coverage currently on television of the hot war.  If at the end of this conflict, whenever that is, countries around the world come to see the Chinese yuan as a stronger, more stable currency than the US dollar, then this country will have lost more than we understand.

Tucker Carlson, 2/24/22

Much of this, including Russia de-dollarizing its sovereign wealth fund, we have written about before (see HERE and HERE).  Carlson says that de-dollarization will make millions of Americans poorer.  To avoid being victimized by this inevitable development, let a Republic Monetary Exchange professional help you design a gold and silver portfolio that is right for you.


Are We Next?

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.  

Manitoba supporters show their support as the convoy passes through winter prairies

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.


Commodity Prices Ripping Higher!

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!


Best Practices for Gold and Silver Buyers

As if inflation isn’t enough, now war drums are pounding, too.

No wonder more people are thinking about protecting themselves with gold and silver.  No wonder gold and silver are moving up.  After the tremendous run that took gold over $2,000 in August 2020, gold has been mostly consolidating its gains, trading in a narrowing sideways range.

Now it has hit an 8-month high.

At Republic Monetary Exchange, we’re always surprised to learn that some people buy gold and silver from nameless, faceless voices somewhere.  That must take a lot of guts… to send money off to a boiler room 800 number somewhere.

But it seems to happen when gold is showing new strength. Calls from boiler rooms, splashy TV ads, companies that just opened their doors or just got a post office box, emails from people you don’t know, phone calls during dinner.  

We recommend best practices for your protection when you invest in precious metals.  At Republic Monetary Exchange we are the industry leader in best practices for our clients.  

We always make sure to have inventory on hand for your purchases.  Other dealers have made their clients wait for weeks on end to get delivery.  We don’t do that.  We make delivery immediately.   No delays.  No excuses.

Same thing when you need to sell.  We make immediate payment.  

Republic Monetary Exchange Offices in Phoenix, AZ
Republic Monetary Exchange’s Office in Phoenix, AZ

It’s what sets us apart.  Best practices for our clients.  

In fact, for our Arizona clients, we give you delivery right face-to-face.  On the spot.  For others, we ship immediately.  Our signature service includes five-star packaging, fully insured, and expedited shipping.  No delays.  No waiting.

You deal one-on-one at Republic Monetary Exchange with your own personal precious metals professional.

So, if you already know y0u should own gold and silver, if you’ve been buying from someone who knows where, and then waiting and waiting to get your gold, you need to start using best practices from the leader in best practices for gold and silver investors.  

For those who would like to learn more about investing in precious metals for wealth protection and profit, speak with a Republic Monetary Exchange gold and silver professional today. 


Gold Steals the Headlines

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!


Prices Screaming Higher

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!


The Government’s Inflation Rate vs. the Real Inflation Rate

THERE’S THE GOVERNMENT’S INFLATION RATE…

… and there’s the Real Inflation Rate! Try 15 Percent!

The US government’s official inflation numbers are bad enough.  But what if they also badly understate the real rate of increasing prices?

If the books are cooked, it will have a lot of unhappy consequences.  Among them are programmed benefit increases like COLAs, cost of living adjustments.  Social Security benefits are adjusted each year, increasing payments to offset the destructive effect of inflation on recipients.  

But what if inflation is higher than the official numbers used to calculate those adjustments? 

The government inflation number has been ratcheting higher and higher each month.  But John Williams says the real inflation rate is higher than the Consumer Price Index reports.

Much higher.  Williams says the current consumer price inflation rate is not 7.5 percent.  It’s 15.63 percent.  That means prices are rising at twice the rate the government reports.  It is the higher inflation in 75 years.

Let’s review.  For the twelve months ending last in October, the CPI was reportedly up 6.2 percent.  The next month the annual CPI was 6.8 percent.  One month later, at the end of December, the government reported consumer prices had risen 7 percent.  Now, annual inflation through the end of January is reported to be 7.5 percent

Balderdash, says economist John Williams

 “The quality of government reporting has deteriorated sharply in the last couple of decades. Reporting problems have included methodological changes to economic reporting that have pushed headline economic and inflation results out of the realm of real-world or common experience….”

“In the early-1990s, political Washington moved to change the nature of the CPI.  The contention was that the CPI overstated inflation (it did not allow substitution of less-expensive hamburger for more-expensive steak).  Both sides of the aisle and the financial media touted the benefits of a “more-accurate” CPI, one that would allow the substitution of goods and services.”

Williams created a tracking service called ShadowStats (Shadow Government Statistics, here) to use the calculaton basis that prevailed before political forces began altering the research away from being a reliable measure of the cost of living and began allowing substitutions.  

It is always wise to be wary of government numbers.  It reminds me of the old line that there are “lies, damned lies, and government statistics.”

But whether the real inflation rate is 7.5 percent or 15 percent, the purchasing power of the US dollar is inarguably being debauched by the central bank.  And we can all agree that you must take steps to protect your wealth, your family, and yourself with gold and silver.  Because government policy is not going to protect you.

Speak with a Republic Monetary precious metals specialist today, and create a solid plan for wealth preservation.


Inflation Keeps on Climbing

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.


American debt

Inflating the Debt Away

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 40th 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.


The Full-Tilt Crypto Boogie, Part II

Own gold (because the Fed never stops scheming!)

It has been a while since we updated you on the Federal Reserve’s leading-edge plan to control the people, and increase their dependency on Washington.

But we learn that the Fed is still moving ahead on what we had dubbed “The Full-Tilt Crypto-Boogie”.

There is no better name for the Fed’s own digital-crypto-central-bank-block-chain-wallet-Fed-coin-currency.  

The Fed has done such an admirable job managing the existing US dollar, that now it is ready for bigger and better things: full-spectrum dominance of every commercial and monetary transaction in America.

It will give Washington prior restraint, complete approval, total veto power, punitive oversight, and unlimited surveillance of everything. 

We repeat …EVERYTHING!

It amounts to nothing less than a Chinese-style social credit system.  Say something, read something, do something, associate with someone the State doesn’t approve of and find yourself unable to function in modern life:  unable to buy or sell, have a bank account or credit, own property, drive, fly, be insured, access medical care… and so on.

The Fed has published a new report titled “Money and Payments: The U.S. Dollar in the Age of Digital Transformation.”  We aren’t encouraged to note the first bullet point in its introduction explains that the Fed “conducts the nation’s monetary policy to promote maximum employment and stable prices in the U.S. economy.”

Stable prices?  How has that been working out for us?

Inside the report, you will discover the brazen acts of public relations spin.  The Fed appears to have adopted a term being used by the President’s Working Group on Financial Markets (we call that the plunge protection team), along with the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and others for new central bank digital currencies tied to the dollar.

They are calling it…

Wait for it…

Okay.  They are calling it “Stablecoin.” 

Ha, ha, ha!

The Fed urges Congress to get ahead of the stablecoin curve for now.  At the same time, it is seeking public comment about the ultimate structure of its central bank digital currency, the full-tilt crypto-boogie.

We will revisit the issue before long to illustrate in some detail the kind of authoritarian and socialist control its latest monetary scheme will vest in the central bank.

But for now, it is about the best damn reason that we have ever seen to buy more gold and silver!

Things Happen Fast in the Financial World

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.


Just Look at the National Debt!

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.


Gold Bars and Nuggets

Notes and Nuggets About Gold, the Fed, and the Economy

Raising the gold price target, more debt, and a confused Fed!

Goldman Sachs:

“In our view, this combination of slower growth and higher inflation should generate investment demand for gold, which we consider to be a defensive inflation hedge. In addition, we expect continued growth in [emerging market] dollar-wealth and a rebound in consumer and central bank demand for gold. As such, we are raising our 12-month gold target to $2150 an ounce from $2000 an ounce.” 


From CNS News:

When President Joe Biden was sworn in on Jan. 20, 2021, the federal government’s debt stood at $27,751,896,236,414.77.

When his first year in office ended on Jan. 20, 2022, it stood at $29,867,021,509,573.92.

That means that during Biden’s first 12 months in office, the federal debt grew by more than $2 trillion — or $2,115,125,273,159.15 to be exact.


US Mint 2021 Annual Report:

Demand for gold bullion ounces remained strong in FY 2021 compared to FY 2020. Sales increased by 580.0 thousand ounces (67.4 percent) to 1,440.0 thousand ounces, with a 70.5 percent increase in American Eagle gold bullion coin ounces sold and a 57.1 percent increase in American Buffalo gold bullion coin ounces sold…

Silver bullion ounces sold increased 12,202.0 thousand ounces (51.3 percent) to 35,999.0 thousand ounces in FY 2021, with a 62.4 percent increase in American Eagle silver bullion coin ounces sold…. 


Steven Roach, Australian Financial Review:

The current upsurge in inflation is not transitory or to be dismissed as an outgrowth of idiosyncratic COVID-19-related developments. It is widespread, persistent, and reinforced by wage pressures stemming from an unprecedentedly sharp tightening of the US labor market.

By now, it is passé to warn that the Fed is “behind the curve.”

In fact, the Fed is so far behind that it can’t even see the curve… 

In the meantime, financial markets are in for a very rude awakening.


The Wall Street Journal:


Reuters:

China’s 2021 gold consumption rose by over a third from the previous year, as its economy rebounded from the coronavirus impact, the China Gold Association said on Thursday. [Led by gold jewelry, 2021 gold consumption rose to 1,120.9 tons versus 820.9 tons in 2020.]  

Michael Shedlock:

Jerome Powell and the Fed are delusional. To state that asset bubbles are only “somewhat elevated” shows the degree of delusion. 

This is undoubtedly the biggest financial bubble in history. Consumers appear to be in good shape only because of the asset bubbles


When Cash is Nothing But Trash

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.


Our Shortest Post Ever

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:


Jeremy Granthan has Turned Apocalyptic on the Stock Market!

We think it is a good time to park your wealth – at least the part of your wealth you want to hold on to – in gold and silver.

We have detailed the reasons in these posts and invite our friends and readers to review what we have been writing.  Those reasons have to do with things like the debt and deficits, spending and taxation, fiat money and the Fed, and a world that is growing increasingly dangerous and disconnected from reality.

Now we would like to share Jeremy Grantham’s concerns about the stock market bubble.

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.”

We last wrote about him in September when he said that 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”

Grantham thought in the fall the investors might have a little more time – months not years – to take their profits and head to safety.  “A bust might take a few more months,” he said then, “and, in fact, I hope it does, because it will give us the opportunity to warn more people.”

Now those months have passed and it does not sound like Grantham thinks it is wise to wait any longer.

Grantham’s new client advisory was published on Thursday (1/20/22).  Note the title: “LET THE WILD RUMPUS BEGIN!”  The subtitle is just as revealing: “Approaching the End of) The First U.S. Bubble Extravaganza: Housing, Equities, Bonds, and Commodities.”

Grantham begins by describing “superbubbles” of the past including “in the U.S. in 1929 and 2000 and in Japan in 1989. There were also superbubbles in housing in the U.S. in 2006 and Japan in 1989. All five of these superbubbles corrected all the way back to trend with much greater and longer pain than average.”

“Today in the U.S. we are in the fourth superbubble of the last hundred years.”

One of the characteristics of the bubbles gone by is that end with blow-off tops.  Grantham describes that as “an accelerating rate of stock price growth to two or three times the average of the preceding bull market.” He provides these graphs as examples:

As we have said before, when the bubbles pop, there will be a stampede to the safe havens of gold and silver.  We recommend you take advantage of today’s prices and beat the rush.

Learn more by speaking with a Republic Monetary Exchange gold and silver professional.


Sound Money Measures to Advance in 2022

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.


Trendlines

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.

Americans Don’t Like Bidenflation

Wholesale Prices Jump Nearly 10%!

It is clear that the American people are not pleased with President Biden and the price inflation that is slamming them at the gas pump and in grocery stores.

Here is a depiction:

Now there is even more for them to be unhappy about.  Hard on the heels of the Bureau of Labor Statistics report that consumer prices rose seven percent in 2021, comes the next report that shows producer (wholesale) prices are rising even faster.  For the entire year 2021, the Producer Price Index is up 9.7 percent. 

With inflation continuing to surge we suggest our friends and client review their portfolios to make sure they are sufficiently invested in gold and silver for the Bidenflation age of currency depreciation.  Speak with your Republic Monetary Exchange gold and silver specialist and get an inflation checkup today!


Inflation Just Keeps Coming

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.


Failing Money

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.


Stock Market Warning

Fed Policy Reversal May Pull the Plug

The Federal Reserve is starting to act like the pinball in an old-fashioned arcade game.  It is bouncing off everything, reversing policies, and changing directions at a frenzied rate.

Ding! Ding! Ding!!!

Surprised and discredited by its own cluelessness about surging inflation, the Fed is now going to react with fresh interventions in the interest rate markets, interventions that promise vulnerability for stock markets.

The recent release of the minutes of its December policy meeting, the Wall Street Journal wrote,  showed “officials believed that rising inflation and a very tight labor market could call for lifting short-term rates ‘sooner or at a faster pace than participants had earlier anticipated.’

Stock prices have been elevated to unsustainable levels by decades of Fed interest rates manipulation.  So with the coming policy changes, we think it is time to issue a warning about stocks now trading at nosebleed altitudes.

The following chart shows the yield (in red) on US 10-year Treasury notes since the double-digit interest rate levels in the early 1980s.  The rise of the Wilshire 5000 stock index is shown in blue.  It is not a mere coincidence that lower rates have enabled higher stock prices throughout the era.

But now the worm is about to turn.  The Fed’s contrived interest rates are generating consumer price inflation – and bubbles just about everywhere, so the Fed has signaled a tighter monetary policy and higher rates beginning this year.

We believe it would be wise to take stock profits now and move to gold and silver as shelter from the financial storm to come from the policy changes.

We are not alone in spying storm clouds on the stock market horizon.  Here is Bill Bonner, from the Bonner Private Wealth Substack newsletter:

Taken as a whole, if the stock market were to go back to normal range, about $20 -$30 trillion would go away. That’s based on the historic mean of Warren Buffett’s famous market-cap to-GDP indicator, which is 86%. In other words, with GDP around $23.2 trillion today, stocks would be worth around $29 trillion. The total market cap of the Wilshire 5,000—the broadest measure of US stocks—hit $48.7 trillion earlier this week.

You do the math. Or we’ll do it for you. Stocks would lose around $28.8 trillion if they declined from 211% of GDP to 86% of GDP. Give or take a couple of trillion, given how markets tend to overcorrect.

How much liquidity would you have then?

Not much.

Bill Bonner

Watch for gold to be the beneficiary of a scramble for real liquidity when the stock market begins to crack.  That’s because it will take a lot of unsound financial institutions down with it.  And speaking of Warren Buffett, we never tire of repeating his observation that you don’t know who has been swimming naked until the tide goes out!

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


American Gold Eagle Coin Demand Surged in 2021

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.


Five Things You Should Know Heading into 2022

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.


Ten Things That WON’T Happen in 2022!

Predictions for the New Year that WON’T Happen:

Below are our predictions for the New Year.  Read all ten 2022 predictions and at the end, you’ll discover a little surprise about our list!

10. 

The Federal Reserve won’t stop managing the monetary system to benefit the banks that created it to serve their interests in the first place.

9. 

Foreign central banks won’t increase their dollar holdings, although they will increase their gold holdings.

8.

Congress won’t reduce federal spending; it won’t stop creating trillion-dollar deficits, and it won’t make a serious attempt to reduce the $29.3 trillion debt.  (This prediction is probably a little bit unfair since Washington already raised the debt ceiling in the middle of December to almost $31 trillion, so we sort of knew!)

7.  

The Washington establishment won’t hold most of its members to the same legal standards that it applies to ordinary people.

6.

Washington Republicans and Democrats won’t stop trying to divide the people to win elections.  They will, however, concentrate their attention on smaller divisive issues while the fundamental issues of America’s freedom and prosperity go unaddressed.  

5.

The establishment’s lapdog press won’t bother to report accurately on the fate of the dollar.  Nor will their reporting on gold be accurate.

4.

The establishment lapdog press won’t blame the nation’s monetary problems on the Federal Reserve and the nation’s money manipulators.  It will blame the people instead.   

3.

While Washington may commission a study, launch a new bureau, or even appoint a bureaucrat, nothing meaningful will be done about the declining lifespan of the American people. 

2.

Monetary and fiscal policy won’t stop shrinking the American middle class.

1.

In a crisis, you won’t see people standing in line to exchange their gold for paper money like dollars.  It’s always the other way around.


Now here is the surprise.  

These are the exact same predictions we made last year, at the beginning of 2021.  And the year before that, at the beginning of 2020.  And at the beginning of 2019!  

Well, actually, they aren’t exactly the same.  As the debt continues to climb, we have to make a change every year to number 8.   This proves the point of the prediction, that Washington won’t stop creating trillion-dollar deficits!

Because these predictions have worked out so well, we dusted them off to re-issue them for 2022.  How accurate do you think these predictions will be when we look back on the next year?  

In the meantime, all we can say is buy gold, and have a Happy and Prosperous New Year!


This is What They Said About Gold

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

gold and silver portfolio

Things Worth Remembering About Gold and Silver

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

This Special Time of Year

This time of year, with holiday gatherings and celebrations, many of our thoughts center on family.    

For wealth protection, from generation to generation, nothing endures like gold.  In fact, someone called gold and silver “the superheroes of wealth preservation.”

Gold is one of the least reactive chemical elements;  it does not tarnish or rust.  It is handy to think of that as a metaphor for the fact that gold’s core value is impervious to corruption by the actions of its issuer.  The value of an ounce of gold is not dependent on whose picture or name is inscribed on it.  Nor does it depend on any government; governments come and go, but the value of gold persists.

If you had your choice of putting some government’s paper money in a box under the Christmas tree, or gold, to pass along to your children and grandchildren, you would be wise to choose gold.  This is especially true today, now that the Biden inflation brigade has unleased the highest inflation in 40 years and has even raised the debt ceiling to accommodate its endless spending.

Gold ownership has traditionally been prized as a means of passing wealth along in families, indiscreet, private ways.  

It is the only financial asset that is not someone else’s liability, not dependent on someone else’s promises.  

Gold’s special virtues have been recognized around the world and throughout the centuries.  So honored is gold that the wise men who followed a star made it among their gifts to a child born in a stable more than 2,000 years ago.

So, this time of year, while so many of our thoughts center on family, choose to protect your family and all that you’ve worked for.  Find out why gold is the money of the ages, and why it makes a perfect gift for family members and loved ones.  

Speak with an RME gold and silver expert today.  

And Merry Christmas from all of us at Republic Monetary Exchange!


Federal Reserve Eagle

Why the Fed Can’t Normalize

(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. 


The Fed Serves Up Another Nothingburger!

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.” 


Biden Inflation is Sizzling Hot!

Got Gold?

Last month we reported the inflation had reached the highest level in 30 years. 

 But that was last month.  Now we have the highest inflation in 40 years!

On Friday (12/10) the government reported that consumer prices have risen 6.8 percent over the last 12 months.  

Few have wasted time dubbing this the Biden Inflation.  

Many close inflation critics believe the Bureau of Labor Statistics Consumer Price Index actually understates the real pace of rising consumer prices.

For the month of November alone consumer prices rose 0.8 percent which compounds to within a whisker of double-digit inflation at 0.096 percent.  November was the fifth straight month of inflation registering more than 5 percent.

Inflation this hot doesn’t happen by accident.  It requires criminally reckless money printing and crazed deficit spending.  At the same time the news broke of the frightening inflation numbers, the Wall Street Journal reported this:

“The Senate overcame the biggest hurdle to raising the debt ceiling Thursday, with more than a dozen Republicans joining Democrats to help clear legislation crafted to avert a government default.”

And this:

“The U.S. federal budget deficit is expected to widen to $195 billion in November from $145 billion one year earlier.”

Few are prepared for rampaging inflation and a currency crisis.  The Committee to Unleash Prosperity points out that half of Americans were born after 1980, which means that they have no experience with this kind of dollar destruction.  But there should be one question on everyone’s lips:

“Got gold?”

This is an ideal time for you to review the steps you have taken to prepare for rising inflation.


The Financial Strain from Inflation

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.


Why We Need to Audit the Fed and the American Peoples’ Gold

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:

  • How much of its gold is kept at the Federal Reserve Bank of New York.
  • Why Treasury gold is kept at the New York Fed.
  • Whether any of the Treasury gold at the New York Fed has recently been audited, assayed, or inventoried.
  • Whether the Treasury gold held at the New York Fed is segregated from gold vaulted there by other nations.
  • How much Treasury gold is part of the IMF’s gold holdings, nor where Treasury gold assigned to the IMF is kept, and won’t explain the purpose of the assignment of Treasury gold to the IMF.

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.

What Happens to Inflation if Oil Hits $150?

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. 


Misery, Confidence, and Inflation!

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!


Inflation is No Longer Transitory

Stop the presses!

This just in!

Inflation is no longer transitory!

Not only that, but the risk for even higher inflation has increased.  

Like we’ve been saying…

In congressional testimony, Tuesday (11/30) Federal Reserve chairman Jerome Powell said it is a good time to “retire” the word “transitory” which he has used all year to minimize the impact of Fed-created inflation or dollar depreciation.

Since Powell has been wrong about the duration of surging inflation, we suggest that it might be a good time to actually retire not just the word, but Powell himself, the biggest money printer in the history of the money printing Fed.  

Not going to happen.  President Biden has just reappointed Powell for another four years.

We want our friends and clients to know that it is not anything personal with Powell.  We also wished for the sudden retirements of other Fed chairmen like Yellen and Bernanke.  It is not who they are that troubles us.  It is what they do.

If we can reduce it to its simplest terms, take out the professional jargon and the academic pretense, it becomes clear that their whole operation is nothing more than legalized counterfeiting.

A free and prosperous society depends on people exchanging goods with one another in an honest way.  We acquire the things we desire in life by creating things or producing services that others want.  We give something of value for something else of value.   In this way – in actually serving others – we seek to meet our own needs and advance our individual objectives.  

Now plug the money printing Fed into the equation.  It creates purchasing power for itself and for its cronies, for which nothing valuable has been produced.  When that money is spent, someone is getting something for nothing.  The price is ultimately borne by the other holders of its currency.  Value is quietly taken from them to the extent of the Fed and its circles are given unearned value.  And that is not consistent with a fair and honest economy.

That is why we champion gold.  Its value is real.  It cannot be printed.

We’d like to share a piece by newsletter writer Bill Bonner that makes the same point.  He notes that since March 2020, consumer spending has risen by 13.5 percent “thanks to the feds’ giveaways, stimmies, non-repayable loans, deficits, and other money-shuffling claptrap.”

So nothing of value was produced that enabled all that spending. 

Says Bonner:

Real demand (purchasing power) comes from the output. In other words, you gotta have something to spend. And you get it by having something to sell (labor, product, service, etc.).

In the same period, real output (real personal income fewer transfer payments) went up, too – but by less than 1%.

So demand (based on phony money-printing, not output) rose more than 13 times faster than supply.

What should happen under these circumstances? Prices should rise. Which is exactly what happened. 

This monetary gamesmanship eventually destroys the currency, in this case, the dollar.  As more and more people figure out the game, the currency loses value faster and faster.  Which is where we are today.

This is also why we recommend you speak to a Republic Monetary Exchange gold and silver specialist.  Make sure the Fed does not flimflam you with its something-for-nothing fraud.  Preserve your wealth and profit in this era of no-longer transitory inflation.


More News Nuggets for Gold Silver Investors

Catching up on information too informative and interesting to pass up:

Bloomberg:

The Federal Reserve’s talking point about transitory inflation is “going to go down in history as one of the worst inflation calls.”  

So says famed portfolio manager Mohamed El-Erian.

“They got stuck on the narrative and held on to it for too long,” El-Erian says in an interview with Bloomberg. “The result of which is they’re looking at inflation that is much higher than they ever expected … much broader than they expected … and that’s going to last even longer than they expected.”

But we all knew that already, didn’t we?

Industrial metals supplies tight, prices soaring

Bloomberg:

“For the first time in more than a decade, six of the world’s most vital industrial metals are flashing a rare synchronized warning over tight supply, as logistical turmoil and strong demand spark anxiety among buyers. 

“From aluminum to zinc, spot prices for base metals on the London Metal Exchange are all soaring above futures — a condition known as backwardation — for the first time since 2007. Buyers are paying a premium for access to metal against a backdrop of plunging exchange inventories, supply-chain delays, production hiccups and surging demand for industrial commodities in everything from construction to consumer electronics.”

Give that to us again:  Wasn’t inflation supposed to be transitory?

Somehow the Dollar and a Quarter Store doesn’t have the same ring to it!

AP:

“Faced with the rising cost of goods and freight, discount retail chain Dollar Tree said Tuesday it will raise its prices to $1.25 for most of its products.

“Dollar Tree said the reason for raising its prices to $1.25 was not due to “short-term or transitory market conditions” and said the price increases were permanent.”

Thanksgiving Leftovers

The media offers us advice for adjusting our holidays to accommodate Washington’s inflation.

Tweet:

“NBC’s Vicky Nguyen tell viewers to combat inflation-spiked Thanksgiving by ditching the Turkey & charging guests.”

“Maybe you do an Italian feast …If you tell everyone you’re having Thanksgiving without turkey, some guests may drop off the list & that’s a way to cut costs too.”

Meanwhile, the St. Louis Fed suggest switching from turkey to tofu:

From the FRED Blog: “A Thanksgiving dinner serving of poultry costs $1.42. A soybean-based dinner serving with the same amount of calories costs 66 cents and provides almost twice as much protein.”

Our suggestion:  Just get rid of the Fed turkeys.

For advice on protecting your family, your wealth, and your retirement from inflation, speak with a Republic Monetary Exchange precious metals consultant today.   He will help you create a sensible portfolio that meets your individual needs.


I Wish I’d Said That, Part II

“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.


Fed Turns Even More Left

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.


Thanks Fed… for the Most Expensive Thanksgiving Ever!

Well, what did they think was going to happen?  Jerome Powell and the rest of the Federal Reserve money manipulators, we mean.

They printed almost $5 trillion dollars in just over two years.   And, yes, for those of you new to these comments, welcome, and we know they don’t literally “print” all that money these days.  Instead, they just strike a few keys on a computer somewhere in the Marriner Eccles building in Washington, hit enter, and send some electrons whiriling their way to make a new bookkeeping entry, creating money electronically.

Actually, printing money is so yesterday.  Digital money “printing” is so much more efficient.  So, with almost no trouble at all, no truckloads of linen stock, messy barrels of ink, and noisy printing presses, the Fed digitally created almost $5 trillion in just over two years.

(See the following chart of Fed Assets.  This represents the government bonds and other securities that the Fed purchased with absolutely no money over the past couple of years.  The Fed’s assets have grown from $3.85 trillion in September 2019 to $8.67 trillion today.)

Well, what did they think was going to happen?  Didn’t anybody pause to think that all that money had to go somewhere?  And that it would drive prices higher?  

And give us the most expensive Thanksgiving in history?

The New York Post:  

“Americans can expect to shell out 14 percent more for Thanksgiving dinner costs this year than they did last year, making this year the most expensive Thanksgiving on record, according to the American Farm Bureau.”

“The Labor Department’s Consumer Price Index, which measures a basket of goods and services as well as energy and food costs, jumped 6.2 percent in October from a year earlier, the biggest one-year spike in over 30 years.”

Inflation is at a 30 year high.  And consumer confidence is at a 10-year low.

That is only the beginning of the inflation the Fed is sending our way.  And it is why we hope you are protecting your family and your wealth with gold and silver.

We hope that you can count the health and safety of your loved ones as among your greatest blessings of this difficult year.  

We are grateful for all our clients, new friends and old, in 2021.  After enjoying Thanksgiving, make plans to visit with us at Republic Monetary Exchange and be sure you are prepared for the coming year. 

Silver Demand Booming

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.

stacked silver bars

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.


Spend More to Cure Inflation

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!


Preparing for the New Age of Inflation

With US inflation rates approaching double-digits once again, you need to take steps to protect yourself, your family, and your hard-earned wealth.

The background briefing on gold and silver as the world’s time-tested haven against out-of-control government spending is available to you now in a short and easy-to-understand book I have recently released.

REAL MONEY FOR FREE PEOPLE: The American Gold Story will prepare you for the next stages of today’s inflationary crisis.  It pulls back the curtain on the “monetary madmen” destroying the purchasing power of the dollar and charts the reckless trajectory of today’s Federal Reserve policies.

Here are a couple of brief excerpts from REAL MONEY FOR FREE PEOPLE:

The Federal Reserve has taken this country’s economy into extremely dangerous territory.  It is not enough for us to say that we do not believe the Federal Reserve has any idea what it has done with these policies.  It is better that you should know that the Fed itself admits it does not know what it has done.

We will simply quote Fed chairman Jerome Powell as the 2020 [money pumping] operation was underway:

“We’re not even thinking about thinking about the consequences of our actions.”

[Government debt] allows for present consumption, while shuffling the bill off to future generations.  Normal, healthy people try to leave something 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.

The monetary system of fraudulent, legalized counterfeiting has now been allowed to reach its logical extreme and it will now collapse of its unrestrained excesses and deceit.

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.

Americans across the land are wondering what to do now.  Hard on the heels of a national lockdown and the shuttering of thousands of businesses and the loss of untold jobs, inflation has roared back into our daily lives.  REAL MONEY FOR FREE PEOPLE will help you understand and prepare for the economic turmoil facing us today.

If you would like a free copy for yourself or share it with friends and family, stop by our offices in Phoenix or call and speak with one of our precious metals professionals.

There is no cost and no obligation. REAL MONEY FOR FREE PEOPLE: The American Gold Story is an important briefing.  We want as many Americans as possible to be prepared so that we come out of this crisis-free and prosperous!

What, Me Worry?

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!


Inflation Roars! Gold Surges!

Market Alert!

Consumer prices have risen 6.2 percent over the last 12 months.  

Gold rocketed higher on the news.  The market saw it coming and began climbing days in advance of the reports.

But spiking consumer prices tell only part of the story.  It gets worse.

Wholesale prices have risen 8.6 percent in the past year.

We are dangerously close to double-digit inflation!  

It is not only dangerous, it is a national disgrace.

Here are the ugly details.  The Bureau of Labor Statistics reported Wednesday (11/10/21) that its Consumer Price Index rose 6.2 percent in the 12 months through October.  That is the highest inflation rate since 1990.  

The energy component of the CPI was up 4.8 percent in just the last month!

The CPI is the headline story.  It is the most reported price index.  But it the background is the Producer Price Index.  It reports on wholesale prices.  Over the last year, ending October 31, wholesale prices rose 8.6 percent.   That number is not a fluke.  Wholesale prices were up 8.6 percent for the 12 months ending in September as well.

We called the Federal Reserve’s policy announcement about inflation one week ago “a big, fat nothing burger.”  More spin than substance.  Now the gold market has ratified our view.  From a low 0f $1758 on the day of the Fed’s press conference, gold has moved up $90 an ounce.  It has been four uninterrupted days in a row of higher prices.

That is not a vote of confidence in the Deep State Money Manipulators.

With some urgency, we advise our friends and client to take steps now to fortify their portfolios with gold and silver.  Please call and speak with one of our gold and silver professionals today.

We are dangerously close to double-digit inflation!


You Can Always Trust the Fed

…to print more money!

We have to take issue with most Americans.  They don’t trust the Federal Reserve.  

Two Ipsos polls this year, commissioned by Axios, show that a majority of the people, ranging from 53 percent to 60 percent, don’t trust the Fed.

The numbers might have been higher, but the polling was done before all the stories broke about possible insider trading at the Fed. 

After the failures of Bears Stearns and Lehman Brothers in 2008, the Federal Reserve secretly committed the American people and the US government to $29 trillion in bailout commitments.  No debate, no legislation, to authorization.  $29 trillion!  Wall Street on Parade notes that with the Fed has gone to court for three years to keep the American people learning the details of these crony deals, it has lost all credible claims to the trust of the American people.

But there is one thing you can trust the Fed to do:  print more money.  That is the sole source of its power.  That is why it was created.  That is what it does.  And frankly, that is all it does.  Oh sure, it has a couple of other functions like running the check clearing operations between banks.  But that could easily be done, and probably at much less cost, by private companies.  

None of this should be a surprise.  You can learn more about the Fed and money printing in my new book REAL MONEY FOR FREE PEOPLE:  The American Gold Story.  Stop by our offices and pick up a copy.  There is no cost and no obligation.  We just think that the more people who know what is happening to our money, the better off we will all be when the crisis comes!

So with the American people getting the idea that inflation, now at a 30 year high, is going to be with us for a while, the Fed delivered a long-awaited announcement last week explaining what it was going to do about it.

It turned out to be a big, fat nothing burger.  

Did the Fed announce it was going to stop inflating?  No.  But it says it will slow down.  At least for now.  Although it might change its mind.  But it certainly isn’t going to raise interest rates.

So the Fed will still enter 2o23 printing about $3 billion a day!

As we said, the big announcement responding to unacceptable inflation amounted to a big, fat nothing burger.  The markets yawned.   

If the Fed tapers its money printing at the schedule the Fed suggested, here is what happens to the Fed’s assets, all the money that it has printed to buy things like government debt and mortgage bonds:

It remains bloated beyond belief.   As we reminded you recently, Nobel-prize winning economist Milton Friedman pointed out that there is a time lag between increases in the money supply and it showing up in rising consumer prices.  Some economists now believe that time lag can last a year or two.  The incredible amount of money the Fed has printed since 2020 will be showing up in rising prices for a long time to come.

And at the first sign of trouble on Wall Street, the Fed will crank the digital printing presses right back up.  

Because you can always trust the Fed.

To print more money.


I Wish I’d Said That!

“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.

Carol Roth (@caroljsroth) / Twitter

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.


Cashing In

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.

The Fed says they might raise rates...again

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.

Gold Money Reappears Amidst the Ruin of Venezuela

Q:  How long does it take people to turn to gold and silver when their government’s unbacked, fiat, irredeemable paper money collapses?

A:  It takes almost no time at all.  Just look at what is going on in Venezuela right now.  The money-printing madmen have made the national currency, the bolivar, into a national joke.

Recently President Nicolás Maduro had six zeroes knocked off the old bolivar notes.  The one million bolivar note was replaced with a new one bolivar note.  Stated differently, if you had 100 million bolivars, now you would have 1 bolivar.  

The idea was that with a loaf of bread costing seven million bolivars, carrying around that much currency and all the accounting at those large numbers was a nuisance.  So the State, which had inflated the old currency into near worthlessness, would do the people a favor with the new more convenient government paper money.

There was of course more to it than that.  By this time inflation had been plaguing Venezuelans for so long – the IMF estimated that Venezuela’s inflation would run about 5,500 percent this year – no one trusts the currency.  No one wants to hold it or save with it.

So the State hopes that there are some simple, unsuspecting people asleep at the switch who will believe the new bolivar means a real and lasting currency reform.  Those people would hold and save the new “reformed” bolivar, enabling the government to defraud them all over again with a new round of money printing.

Venezuela Bolivar Hyperinflation
The previous hyperinflated Bollivars compared to a US Dollar.

But when a government’s currency begins to fail, at first a few people realize what is going on.  Others may think prices are going up, but those who have watched the State money manipulators soon realize that it is the money itself that is failing.  

Those who converted their paper money and bolivar savings to gold early in the inflation era are counted as the lucky ones.  Small amounts of gold and silver have made many wealthy among the general impoverishment of the Maduro regime.

But others learn the lessons of fake money soon.  In no time at all the informed are followed by the less informed.  They, too, switch out of the government money both for their savings and for taking in payment for goods and services.

And where do they turn?

To gold and silver, as we said at the beginning of these remarks.

Now Bloomberg News reports that in places in Venezuela, gold has reappeared in daily commerce.  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 this development is that people use the old, virtually worthless paper bolivars to wrap up and protect the shards, flakes, and nuggets of gold in their pockets and purses.   

An empty food market in January 2018- Caracas, Venezuela

Scraping off flakes of gold so small they can barely be measured may seem a little primitive, but it is far better than being fleeced by unbacked printing press money.  As gold commerce becomes more common, improvements appear.  Joseph Salerno is academic vice president of the Mises Institute, writes about what needs to happen next:

“For gold to become a full-blown currency that can viably compete with depreciating dollars and other foreign currencies, the raw nuggets need to be minted into convenient shapes and sizes and their weight and fineness certified by reputable firms. This means that any legal barriers to private mints must be eliminated. In addition, sales and capital gains taxes on gold must be abolished. Since it is highly unlikely that these measures will be implemented by the Maduro government, we can only cheer on the inroads made by the people’s gold flake currency.”

Fortunately, our friends and clients at Republic Monetary Exchange don’t have to resort to backward practices to deal in gold.  No need to resort to hand tools to scrape flakes off of nuggets for commerce.  We deal in the world’s most widely recognized and desirable gold and silver coins and bullion products of well-established and reliable weight and fineness, like the one-ounce American Gold and Silver Eagles coins and other forms of gold and silver that are popular with investors.  Your Republic Monetary Exchange advisor will be happy to show you a variety of highly recommended coins and bars and discuss the merits and advantages of each.

No matter which you choose, they are all better than depreciating paper money!

What is the Fed Hiding?

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.

yellen printing money
Janet Yellen, former head of the Federal Reserve

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.

Head for the Hills

…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.”

gold moves

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.

Goodbye Middle Class, Hello Grim Economic Outlook

News you need to know about money and gold

Today’s key stories have to do with how American workers and consumers are doing, and where global inflation is the highest.

The wage statistics just released by the Social Security Administration show that the median wage for 2020 was just $34,612.04.

That means 50 percent of all workers made that or less last year, which prompted economic blogger Michael Snyder to say, “Goodbye middle class.”


Along the same lines, we ran across a story on CNBC with “tips for grocery shopping on a budget now that prices are going up.”  Among the tips: “Buy less meat.”

Gee, thanks.


Here’s a chart showing some of the consumer price changes over the last twelve months:

Stephen Moore, who President Trump nominated to the Federal Reserve Board in 2019, but who withdrew his name from consideration, passed along some numbers about working Americans’ declining earnings.

Median weekly earnings in the third quarter,2021 were $1,003 – just 0.7 percent higher than a year earlier ($996). Inflation was 5.3% over the same period. 

So, Moore writes, after adjusting for inflation workers are losing $50 a week under Biden. 

And that is before adding in the rising costs of gas and groceries. 


Billionaire hedge fund manager Paul Tudor Jones says inflation is here to stay and that it poses a major threat to the U.S. markets and economy.

On CNBC last week (10/20) Jones said, “I think to me the No. 1 issue facing Main Street investors is inflation, and it’s pretty clear to me that inflation is not transitory.”

Jones said, “It’s probably the single biggest threat to certainly financial markets and I think to society just in general.”


A new CNBC poll finds that 79 percent of respondents judge the economy as just fair or poor.  That’s the most since 2014.  46 percent believe the economy will get worse in the year ahead, the grimmest outlook in the poll’s history. 


And finally, a few words about the gold standard from Ludwig von Mises:

“The gold standard did not collapse. Governments abolished it in order to pave the way for inflation. The whole grim apparatus of oppression and coercion, policemen, customs guards, penal courts, prisons, in some countries even executioners, had to be put into action in order to destroy the gold standard.”

We hope you recognize that the US economy is at a dangerous inflection point.  Speak with a Republic Monetary Exchange precious metal professional to find out more. 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.

Waiting for the Government to Stop Inflating?

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?

Daniel Lacalle

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.

It’s Yesterday Once More!

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.

News Nuggets for Gold Investors

$100 OIL?  Markets Insider: 

Brent crude, the global benchmark oil price, could surge above $100 per barrel for the first time since 2014, in the event of another cold winter, according to a note by Bank of America Friday….

Higher oil prices could spark inflation analysts led by Francisco Blanch said.  “Oil prices could spike and lead to a second round of inflationary pressures around the world.  Put differently, we may just be one storm away from the next macro hurricane.”


GOLD FOR WEALTH PRESERVATION!  Alan Greenspan:

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


MORE THAN ECONOMISTS EXPECTED!  Wall Street Journal:

U.S. inflation accelerated last month and remained at its highest rate in over a decade…. The Labor Department said last month’s consumer-price index, which measures what consumers pay for goods and services, rose by 5.4% from a year earlier. That is the same rate as in June and July as the economy reopened, and slightly higher than in August. The so-called core price index, which excludes the often-volatile categories of food and energy, in September climbed 4% from a year earlier.


BREAK OUT THE SWEATERS, SAVE MONEY!  Wall Street Journal:

A winter of giant gas bills is coming.  According to the Energy Information Administration, nearly half of U.S. households that warm their homes with mainly natural gas can expect to spend an average of 30% more on their bills compared with last year.


DID SOMEONE SAY TRANSITORY?  Breitbart.com:

Federal Reserve Bank of Atlanta President Raphael Bostic said Tuesday that inflation is likely to last longer than expected and should no longer be called “transitory.”

Bostic is the first Fed official to so clearly break from the central bank’s leadership on inflation. Fed chair Jerome Powell has insisted for months on describing inflation as transitory, although he recently admitted that it could last into next year.


DON’T THINK THERE’S A PROBLEM?  The Daily Mail:

Frustrated shoppers share photos of bare aisles in stores across the country…

Frustrated shoppers complaining about shortages of everyday products in their local stores are attacking President Joe Biden online with the hashtag ‘Empty Shelves Joe’ as the US faces severe supply chain problems that could stretch into the new year. Dozens of cargo ships carrying hundreds of thousands of containers of goods from China and Asia are waiting to dock in California as concern grows about likely Christmas shortages. Some retailers such as Costco and Walmart are limiting sales of toilet paper in some areas and toy company CEOs are telling parents to buy their kids’ Christmas gifts now to avoid disappointment.


Stag+Flation

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.

Real Money for Free People

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.

Taking Inflation Seriously!

Watch out for 20% – 25% inflation over the next few years, says Wharton professor!

Leading establishment economists are finally starting to take inflation seriously. 

About time.  Especially since the Federal Reserve has conjured up $4 trillion out of thin air in just the last 18 months.

And it’s pretty hard to deny that inflation has returned, especially for anyone who has visited a grocery store lately.

“Inflation, in general, is going to be a much bigger problem than the Fed believes!” That is according to Wharton finance professor Jeremy Siegel.  He told CNBC, “We’re headed for some trouble ahead.” 

At a Forbes Top Advisor Summit in Las Vegas just days ago, Siegal projected 20 to 25 percent inflation over the next few years. 

The question has always been when does all the Federal Reserve’s Quantitative Easing money printing enters the consumer economy.  If the Fed prints money and leaves it shrink-wrapped in a basement somewhere, it will not drive consumer price inflation.

But now Siegal says, the Powell Fed’s QE is getting out!

“Quantitative easing is important but if that quantitative easing gets in the money, watch out,” he warned.  “I never predicted inflation from the quantitative easing of [Former Federal Reserve Chair] Ben Bernanke, but I am predicting inflation from the quantitative easing that Jerome Powell and the Federal Reserve is doing now.”

Siegal says that inflation may play out in the form of five to seven percent annually over the next few years.

Siegel also says that gold is relatively inexpensive.

To economist Stephen Roach it also looks like we are headed into a 1970s-style stagflation. 

“It’s worrisome for the overall economic outlook and raises serious questions about the wisdom of central bank policies — especially that of the Federal Reserve,” said Roach, also on CNBC. 

The inflationary conditions that economists Siegal and Roach are now noticing will drive a stampede of gold buying when it becomes apparent to more average consumers.  That day is drawing close now.  For shoppers, it is impossible to miss higher prices at the grocery store.  The United Nation’s Food and Agricultural Organization’s index of international prices of commonly traded food commodities showed a big jump in September, up 32.8 percent from September 2020.

That is a big jump!

We strongly advise our friends and clients to add to their gold and silver positions now. 

Trump Warns That Inflation Will “Ravage” the U.S.

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).

Oh, That Inflation!

Inflation? What Inflation? Oh, That Inflation!

Federal Reserve Board Chairman Jerome Powell is “frustrated.”   And no wonder.  He has no clue what is going on.

Two of his central bank minions have suddenly resigned amid reports of activities that look like insider trading ducks, walk like an insider trading ducks, and quack like insider trading ducks. 

It actually makes you wonder if they are insider trading ducks.

Meanwhile, and even though he has done everything in his power to manage the US dollar the way leftists like Hugo Chavez and Nicholas Maduro managed Venezuela’s currency, America’s leftists want Biden to replace Powell with an even more extreme inflationista.  Never mind that those are policies that have three out of four Venezuelans living in extreme poverty.

That is not all.  There is that talk from the Chairman about inflation’s transitoriness – well, the poor Chairman (actually because “man” is a dirty word these days, they actually call Powell the “Chair,” like he’s a piece of furniture) has had to walk all that talk back.

And no wonder.  Inflation, according to the Fed’s favorite measure, has reached a 30 year high, “with all signs pointing to price pressure snaking into next year,” writes MarketWatch.

More:

The personal consumption expenditure price index climbed 0.4% in August, the government said Friday. It was the sixth straight big increase.

The rate of inflation in the 12 months ended in August edged up to 4.3% from 4.2% — the highest rate since 1991, when George H.W. Bush was president.

 Until very recently, Federal Reserve leaders insisted inflation would start to fall back to toward pre-pandemic levels of 2% or less by the end of this year.

Yet in the past week, senior central bank leaders acknowledged inflation could remain high well into 2022 because of ongoing shortages of crucial business supplies and even labor.

The Chair says all that inflation is related to “supply constraints meeting very strong demand….  It’s very difficult to say how big those effects will be in the meantime or how long they will last.”

Funny, not a word in the Chair’s remarks about the $4 trillion the Fed has digitally printed in the last 18 months.  This is an ideal time for you to review the steps you have taken to prepare for de-dollarization and rising inflation.  Consult with a Republic Monetary Exchange gold and silver specialist today.

Watch Silver Demand Grow

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.

Scandal at the Fed!

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.

Beware the Stock Market Bear!

Warnings about a steep stock market sell-off are piling up.

Morgan Stanley is cautioning its clients about a plunge of more than 20 percent.  CNBC recently surveyed four hundred chief investment officers, equity strategists, portfolio managers and CNBC contributors who manage money. Seventy-six percent of the respondents said now is a time to be “very conservative” in the stock market.

Investment legend Jim Rogers is warning now of the worst bear market of his lifetime.   

“Nearly every government,” says Rogers, “every central bank in the world has been printing huge amounts of money.  And borrowing and spending huge amounts of money.  It has never happened like this in the history of the world, never in recorded history have we seen so much excess…. Be worried.”

So where to turn during what Roger says will be the worst bear market of his lifetime? 

“Silver – I own silver – is down 60 percent from its all-time highs,” says Rogers.  “Look out the window.  What do we know that is down 60 percent from its all-time highs?” Today much of the investment world is looking at problems in China.  No one can know how the fallout from China’s Evergrande credit crisis will spread.  “These things snowball,” says Rogers.  “They start where we’re not looking.  It may have already started.”

But one need only factor in US problems, a debt ceiling standoff, massive new spending  initiatives, and growth issues, to recognize a dangerous environment for stocks.  More important still is the troublesome return of inflation.  Indeed, another survey, this of clients of Swiss banking giant UBS Group list hyperinflation as their top economic concern.  Gold and silver stand out as go-to refuges in an era of systemic risk, just as they were when the failures of Bear Stearns and Lehman Brothers brought on the mortgage meltdown and the Great Recession and set gold marching higher for three straight years.

But one need only factor in US problems, a debt ceiling standoff, massive new spending  initiatives, and growth issues, to recognize a dangerous environment for stocks.  More important still is the troublesome return of inflation.  Indeed, another survey, this of clients of Swiss banking giant UBS Group list hyperinflation as their top economic concern.  Gold and silver stand out as go-to refuges in an era of systemic risk, just as they were when the failures of Bear Stearns and Lehman Brothers brought on the mortgage meltdown and the Great Recession and set gold marching higher for three straight years.

There is a Lot of Financial Risk Wrapped Up in That Evergrande Burrito!

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.

More Big Brother

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.

gold and silver investments

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.

Wobbling Debt Structure

“The most insane accumulation of debt… ever imagined!”

Total world debt is now approaching $300 trillion.  And it continues to grow at a breathtaking pace.

The Institute of International Finance’s latest Global Debt Monitor reports that the world’s wobbly debt structure grew by $4.8 trillion in the second quarter of this year to total $296 trillion.

The report totals government, household, and corporate and bank debt.

There have been almost 50 sovereign nation bond defaults since 2000.  At least a half-dozen countries are in default today. 

As for the US, former Reagan budget director David Stockman says, “They [Federal Reserve policymakers] have fostered the most insane accumulation of debt in all sectors of the US economy ever imagined, even as they have staked their credibility on a lowflation/transitory inflation thesis that is getting blown to smithereens by the day.’

With the world is awash in debt, much of it unpayable, it must be noted that it rests dangerously on a base of very little real liquidity.  Stated differently, the debt structure is like an inverted pyramid, an enormous mass of debt all balancing precariously on a teeny-tiny tip of gold, which is real liquidity, real money.   Be sure you have a base of gold (and silver) to support your financial structure in the tumultuous days ahead.  Speak with a Republic Monetary Exchange precious metal professional to review your portfolio today.

gold charts up

Notes and Quotes for Gold Investors

Rising Prices, More Gov Borrowing, Illusory Growth, Inadequate Cost of Living Adjustments.  And So It Goes!

“The last 50 years is the first time we’ve seen such a broad upswing in the global price level across multiple countries.”

  • Jim Reid, Chief Credit Strategist, Deutsche Bank

  • “A new CNN poll finds that 74% of U.S. adults now say they are ‘very or somewhat angry’ about the way things are going in the U.S. today — that includes 88% of Republicans, 70% of independents and even 67% of Democrats. But wait, there’s more.

    “Another 69% of U.S. adults now say that things are going ‘pretty or very badly’ in the country these days — that includes 91% of Republicans, 72% of independents and 49% of Democrats.”

  • CNN

  • “Prices of goods online have now risen for an unprecedented 15 consecutive months, following what was a historical period of declines, according to a new report from Adobe Digital Insights.

    “Inflation is hitting categories including pet products, nonprescription drugs, apparel, furniture and flower arrangements, the report said….

    “The price gains are happening during a period that normally sees prices drop, Adobe pointed out in its report. Retailers tend to use heavy promotions to clear out excess merchandise at the end of the summer and to win customer loyalty as they complete their back-to-school shopping.

    “Not this year.”

  • CNBC

  • “Global food prices were up 33% in August from a year earlier with vegetable oil, grains and meat on the rise, data from the United Nations Food and Agriculture Organization show. And it’s not likely to get better as extreme weather, soaring freight and fertilizer costs, shipping bottlenecks and labor shortages compound the problem. Dwindling foreign currency reserves are also hampering the ability of some nations to import food.

    “Adjusted for inflation and annualized, costs are already higher now than for almost anytime in the past six decades….”

  • Bloomberg

  • “[Any]economic growth we’re seeing isn’t really economic growth. It’s just spending funded by massive amounts of tools and devices The Fed has used.

    “I don’t think the history book will say inflation was transitory.”

  • Jeffrey Gundlach, DoubleLine Founder

  • “The United States borrowed over $2.7 trillion in the first 11 months of fiscal year 2021, including $173 billion in August….

    “’We’ve borrowed $247 billion per month so far this year,’ said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, ‘a staggering amount that would have previously been unthinkable.’”

  • CRFB

  • ‘Social Security Cost of Living Allowance for 2022 to be Near 5.8%, Could Match 2009, Biggest since 1982.

    “While this type of COLA will provide some relief from the price increases that have been gnawing away at fixed incomes, it will still be insufficient to compensate for the surging costs that individuals may face in housing and other major expenses, depending on their situation and location.”

  • WolfStreet.com

  • Social Insecurity

    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.

    Is Inflation “Transient”?

    Even Establishment Figures Aren’t Buying It!

    Producer prices in the month of July rose 0.7 percent.  Over the past 12 months, producer price have risen 8.3 percent. 

    The Federal Reserve’s insistence that the inflation we are experiencing is merely transient is cracking up on the reefs of widespread disbelief. 

    Even leading establishment economists find it hard to believe. 

    We might ask how inflation can be transient when the Fed is still printing $120 billion a month.  A long time ago Nobel prize-winning economist Milton Friedman pointed out that there was a lag, perhaps 12 – 18 months, between when the new money enters the economy and when it shows up in consumer prices.

    So, today’s higher consumer prices were created a long-time ago, just as we will be experiencing the effects of today’s money printing in higher prices way down the road.

    That hardly sounds like today’s inflation is transient. 

    But even leading establishment figures are having a hard time buying the Fed’s party line.  Most were initially silent, but some are now starting to speak up.

    There are few more establishment figures than Larry Summers.  He is a former World Bank and US Treasury official and senior economic advisor in the Obama administration. 

    Summers recently tweeted this: “Every time you hear that inflation is transitory remember that double house price inflation hasn’t yet shown up in the indexes. Housing represents 40 percent of the core CPI.”

    Translation:  Home and rental prices are about to drive consumer inflation numbers even higher.

    Then there is Ken Rogoff.  He’s a former IMF and Fed economist, now at Harvard.  He has been pointing to the “unsettling parallels,” with the “perfect storm” that produced the high inflation of the 1970s and today’s conditions.

    And Niall Ferguson.  His resume includes the Hoover Institution at Stanford University, Harvard, and the London School of Economics.   Ferguson says, ““How long is transitory…?  My sense is that we are not heading for the 1970s, but we could be rerunning the late 1960s, when famously the Fed chair then, McChesney Martin, lost control of inflation expectations.”

    In short, whatever the Fed is selling, they aren’t buying any.  And neither should you!

    Biden’s Total Financial Surveillance

    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.

    How to Survive a Crack-Up Boom

    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.

    gold and silver investments

    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.

    Are You As Smart As a French Peasant?

    It’s an old expression among people who understand gold: “Are you as smart as a French peasant?”

    Of course, it has its roots in the monetary history of the French who have suffered brutal monetary frauds and inflations, including both the Mississippi Bubble scheme and the Reign of Terror inflation.  The government’s attempt to enforce the acceptance of its increasingly worthless paper currency in the latter period even saw it decree the death penalty for any merchant who, not wanting to be swindled with a worthless currency, even dared ask if a customer was paying with gold and silver or with paper.

    The French suffered destruction inflationary episodes with the world wars of the last century and other episodes of dishonest monetary policies, as well.  

    Little wonder the French – peasants or not – have learned through the generations to keep gold and silver on hand.

    The old expression came to mind just the other day with the news that inflation in France is cranking up again, along with reports that their neighbors in Switzerland and Germany are stepping up their physical gold purchases.  In Switzerland, we learn, it is ordinary people rather than speculators who are behind the new gold buying.

    The great inflation of Germany a century ago is still the stuff of family legends in that country, so with the central banks of the world flooding the globe with digital money printing, it is no surprise to see the recent Bloomberg News headline that says “Inflation-Wary Germans Are Loading Up on Gold.”

    Bloomberg:

    “Demand for physical bullion in Germany, traditionally the biggest coin and bar buyer in Europe, was the highest since at least 2009 in the first half, World Gold Council data show. While purchases in other Western markets have also been strong, Germans, in particular, are pouring into the metal as a hedge against rising inflation — and dealers say business remains good.”

    Meanwhile, central bank gold purchase remained positive in July.  It was the sixth month in a row of net purchases as well, after a few intermittent months of net liquidations during the worst of the Covid lockdowns. Leading the net 30 tons of purchases in July were Brazil, Uzbekistan, India, Turkey, and Russia.

    The lessons that French peasants and German families have learned about the importance of gold and silver will have to be learned again here in the US.  But for those that don’t want to experience that suffering firsthand, Republic Monetary Exchange gold and silver professionals are available to help you create a sensible plan of monetary protection that suits your needs.

    Billionaire Roundup

    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.

    Revealing Headlines!

    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. 

    A Wrecking Ball

    …Coming Soon to an Economy Near You!

    Washington is a clown car full of geniuses who are now trying to remake the American economy. 

    From top to bottom.  And they are not even trying to conceal it.

    The New York Times, the house organ of the new socialist America, is explicit.  An 8/26/2021 story is brashly headlined “Remaking the economy.” It reports that Biden’s agenda is on track:

    House Democrats resolved a procedural spat this week, and they and Senate Democrats are now turning to the substantive work of putting together a sprawling bill meant to slow climate change, reduce poverty and expand pre-K, college financial aid and Medicare benefits.

    The package represents Biden’s most ambitious attempt to reshape the American economy — more so than either the large infrastructure bill also making its way through Congress or the pandemic-relief law that Biden signed in March. The newest bill is likely to be larger and longer lasting, and would affect many aspects of daily life, like education, health care and perhaps even the weather.

    Seriously, would you let the master planner of the Afghanistan exit “reshape the American economy”?

    Parts of the master plan, according to the Times:

    • Subsidizing the use of solar, wind, nuclear and other forms of clean energy while financially penalizing the use of dirty energy like coal (Solyndra, anyone?).
    • Help families pay for electric cars and energy-efficient homes. 
    • Medicare would expand to include dental, hearing and vision coverage for Americans over 65.
    • Make prekindergarten available to every 3- and 4-year-old, likely by subsidizing the state programs that more than half of them already attend. The federal government would also try to make community college universal, by expanding financial aid to cover both tuition and living expenses.
    • A national program of paid leave — worth up to $4,000 a month — for workers who take time off because they’re ill or caring for a relative.
    • Subsidies for child care.

    It’s a total remake of the once most powerful engine of prosperity the world has ever known

    It’s an overhaul only Hugo Chavez could love.

    It’s a renewal in the US of the economics of East Germany, and the Soviet Union.  Of North Korea, Venezuela.

    Seriously, how many time does the world have to let the socialist wrecking ball do its work?

    The US government doesn’t have the money to pay for any of this stuff.  But that won’t stop it.  Afterall, it didn’t have the trillions of dollars in flushed down the Afghan rathole.  So, when it doesn’t have the money, what does it do?

    All together now:

    “IT PRINTS THE MONEY!”

    Eventually, the exit from the dollar will look like the exit from Kabul.  Don’t wait around thinking you can be the last person out.  Protect yourself now with gold and silver. To find out more, speak with one of Republic Monetary Exchange’s precious metals specialists.

    Toppling King Dollar: The Afghan Lesson

    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.

    Prices Keep Heading Higher!

    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.

    What Ronald Regan Told Ron Paul About Gold!

    You’ve got to love Ron Paul!  There simply hasn’t been a national political figure like him! 

    A couple of examples:

    When Dr. Paul was running for president, someone (probably an opposition candidate) discovered that some purportedly disreputable fellow had made a contribution to his campaign.  If you follow politics, you know the standard political playbook says the candidate must apologize profusely and then return the money.

    When confronted with the facts of this donation, a reporter asked the expected question:  Are you going to send the money back?

    “No, I’m not.”  said Dr. Paul.  “You just told me he’s an unsavory character.  Why should I return the money?  He might use it for an unsavory purpose, while I’m going to use the money to advance the message of freedom.”

    The reporters all sputtered and fumed.  They don’t like getting the “wrong” answer!

    We remembered another moment this week when we saw the report that 61 percent of Americans paid no income taxes in 2020.  A similar story appeared during his presidential campaign, which reporters brought to Dr. Paul’s attention.  They posed the issue about people with a zero percent tax rate in the expected way:  shouldn’t they be made to pay? 

    But Ron Paul said, “I won’t rest until everybody is taxed at that same rate.”

    ron-paul-stock-market-bubble
    Ron Paul

    We don’t remember if he mentioned that the country got along just fine – in fact had some of its most impressive growth – before the income tax first appeared in 1913.

    You know of course that we are sharing these tales because we want to get to gold, in this case something Dr. Paul wrote the other day about gold. 

    It is an editorial piece in the New York Sun called “The Secret Ronald Reagan Told Me About Gold and Great Nations.” It marked the US abandoning the gold standard 50 years ago this month.  

    Congressman Paul writes, “America’s experiment with fiat has led to an explosion of consumer, business, and — especially — government debt. It has also caused increasing economic inequality, a boom-bubble-bust business cycle, and a continued erosion of the dollar’s value.”

    Dr. Paul reveals, “Ronald Reagan once told me that no nation has abandoned gold and remained great.”

    “Fifty years after Nixon closed the gold window, prices are heading toward 1970s-era increases. Yet the Fed cannot increase interest rates as long as the politicians keep creating billions of new debts.

    “It is clear that America is heading toward another Federal Reserve-created economic crisis. The good news is the impending crisis gives us an opportunity to spread our message, grow our movement, and finally force Congress to audit and end the Fed.”

    The founders intended that America would operate on a reliable monetary system based on gold and silver.  The intended for Constitutional provisions to safeguard your money.  But that all ended 50 years ago.

    Now you have to safeguard your money and protect your wealth and your family for yourself.  The system is not going to protect you. 

    But we can help.  We are gold and silver specialists.  Call or stop by Republic Monetary Exchange to learn more.  There is no obligation.

    Even More Gold News and Nuggets

    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.

    Trillions of US Dollars. Does not include People’s Bank of China.

    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?

    Who Are These People?

    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.

    When Gold and the Dollar Parted Ways, Part II

    Looking for Part I? Click Here.

    It was a fateful decision fifty years ago today, one that spelled a slow unwinding of the US dollar’s value and undermined America’s unique financial position in the affairs of the world.

    That it has taken fifty years is a testament to the might that America’s free economy had achieved on an honest monetary standard.  But as we have pointed out, America’s productive engine has slowed and almost stalled since the dollar parted ways with gold on August 15, 1971.  To be specific, for the two decades prior to Nixon’s severing the last link of the dollar to gold, US productivity was growing at an average of 3.72 percent a year.

    Now, in the binge money printing era of 2007 – 2020, growth has slowed to only about a third that rate, to a mere 1.28 percent per year.

    This chart further illustrates the damage done by abandoning gold.  It shows fifty years of the collapsing purchasing power of the dollar and 50 years of rising gold prices.

    We think the day deserves to be marked as a black-letter day in America.  Here are some other observations about this date fifty years ago today.

    Thorsten Polleit, the Degussa Report:

    The monetary system in the world was fundamentally changed in one fell swoop. In fact, all currencies became non-redeemable paper money, or: “fiat money,” money that can be increased in any amount deemed politically desirable at any moment in time. The preferred method of producing new fiat money is through credit expansion on the part of central banks and commercial banks. Unsurprisingly, chronic inflation came with fiat money: the phenomenon that the prices of goods and services keep rising over time. 

    What is more, the issuing of fiat money through bank lending causes recurring waves of speculation, bubbles, and financial and economic crises. Most notorious are the so-called “boom and bust cycles.”

    David Stockman, Stockman’s Contra Corner:

    It is perhaps fitting that on the 50th anniversary of Richard Nixon’s dirty deed in August 1971, the US Senate saw fit to pass a budget resolution that will add $3.5 trillion of additional girth to the nation’s already bloated and unaffordable Welfare State.

    William L. Anderson, The Mises Institute:

    The collapse of the monetary order in 1971 reflected the massive dislocations and malinvestment of resources that ultimately turned the decade into one crisis after another, and the current economy is facing risks of even greater magnitude. Unfortunately, Keynesians rule the day, just as they did fifty years ago. As Charles-Maurice de Talleyrand wrote of the Bourbons in the years after the French Revolution, “They learned nothing, and they forgot nothing.” One can say the same for the Keynesians. A half-century after The Crisis, Keynesians seem hellbent on creating new crises and printing money to “fix” them.

    Steven Forbes, The New York Sun:

    We are still suffering today from the baleful consequences of August 15, 1971, when President Nixon ended the convertibility of United States dollars into gold.

    If after that fateful day the United States had maintained the average rate of economic growth that it had achieved over the previous 180 years, when it operated under a gold standard, the economy would be at least 50% larger than it is today.

    Ponder that for a moment. The median, pre-pandemic American household income in 2019 would have been $100,000, not the actual $66,000.


    When Gold and the Dollar Parted Ways

    50 Years Ago this Week!

    Gold moved out 50 years ago this week.  

    That is when the paper dollar moved front and center in the US economy on August 15, 1971.  

    Of course, Americans had paper dollars before that date.  But nobody assumed that some fancy linen stock, engraved scrollwork, and official signatures gave that paper its value.  The paper dollars were only warehouse receipts or claim checks for gold. The value was in gold. The paper claim notes were only a convenience.

    America’s gold standard had been under attack before 1971. President Franklin Roosevelt had made American’s ownership of monetary gold a felony decades before.  Imagine that:  you could be imprisoned for owning gold.

    But at least foreigners could redeem their paper dollars for gold. Well, at least there was a pretense that they could, although in practical terms they really could not.  They would wait in long lines to press their claims, often in vain.  A few days before August 15, fifty years ago, the British ambassador showed up at the Treasury Department to convert $3 billion in paper to gold. Of course, it was a futile effort. There was not enough gold to redeem all the dollars that the US had printed.

    Days later, on August 15, President Nixon slammed the gold window shut, severing the last link of the dollar to gold.

    That means that there was not even any remaining pretense that paper dollars had any objective value.  The dollar, quips James Grant, is now as good as paper.

    As crazed as was the money-printing and deficit spending that followed in the 1970s, it is nothing compared to today’s money printing and deficit spending.  

    Over the fifty years since Nixon’s act, the value of the dollar is down precipitously.  The US national debt was less than a half-trillion dollars.  In fact, it was only $400 billion. Today it is closing in on $29 trillion.  The national debt under the gold standard was only about a third of US GDP. Today it is 120 percent of GDP.  

    Freed from the enforced discipline of the gold standard, dollars will eventually be printed into worthlessness. That is the fate of paper money.  When asked how many paper currencies have failed throughout history, we like to answer all of them.  Those that are still in circulation today are zombies, the living dead.

    The dollar and its value have been unwinding for fifty years. As Hemingway wrote, about going bankrupt, it starts out gradually and then happens suddenly.  We think it is important for you to protect yourself as the dollar – in its present incarnation – races to its grave.

    The debt skyrockets. The digital dollar printing screams ahead. And inflation is rearing its ugly head. Do not wait for higher prices.  Speak with a Republic Monetary Exchange gold and silver professional and take advantage of today’s precious metals buying opportunity.

    > > Continue to Read Part II of “When Gold and the Dollar Parted Ways”

    Curious Notes for Gold Investors from our Notebook

    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.

    Thoughtful Observations About Inflation

    “Dollar’s Purchasing Power Gets Zapped. And It’s Permanent!”

    Wolf Richter from WolfStreet.com point out that the Fed’s “transitory” inflation claim is a joke”

    “Inflation means that the dollar loses its purchasing power. It means that labor loses its purchasing power. In other words, people have to work more the maintain their standard of living. Or people can work the same and cut their standard of living.

    “And people who get performance-based pay raises, and think that this greater performance is going to allow them to raise their standard of living, they find out that all or much of that performance pay raise just allowed them to keep up with the loss of the purchasing power of their labor dollar.

    “There’s another way, the Federal Reserve’s preferred way. This inflation is not an accident. The Fed was the primary engineer of this inflation with its policies, dominated by the biggest money-printing event in modern times and by 0% interest rates. Now the Fed wants people to make up for the loss of purchasing power of their labor by borrowing more.

    “The Fed keeps insisting over and over again that this inflation that it is largely responsible for is “temporary” or “transient.” But there is nothing temporary or transient in the loss of the purchasing power of the dollar, including of the labor dollar.

    “These prices of consumer goods and services that have jumped aren’t going back to where they were two years ago.”


    “Reliable, meaningful, dependable.”  Sounds like she’s talking about gold!

    Economist Judy Shelton is a senior fellow at the Independent Institute and author of “Money Meltdown.”   She has urged a role for gold in our monetary system.  Here are comments from a recent piece in the New York Sun:

    “Money is meant to be a reliable measure, a meaningful unit of account, and a dependable store of value. When those qualities are undermined — especially by government — for purposes of redirecting economic outcomes at the risk of global financial instability, the dynamism and productive potential of free-market forces is diminished.”


    Freudian slip (or Jungian Lapse)?

    Michael Shedlock is among those who caught the Fed chairman in an embarrassing and revealing slip:

    “In a news conference following last Wednesday’s FOMC meeting, Fed Chair Jerome Powell inadvertently admitted “Inflation is half our mandate.” 

    “He quickly corrected that to ‘Price stability is half our mandate.’  

    “The second statement is factually correct but in practice the Fed follows Powell’s first statement.”


    Sen. Manchin (D-WV) worries about inflation, writes the Fed chairman! 

    “With the recession over and our strong economic recovery well underway, I am increasingly alarmed that the Fed continues to inject record amounts of stimulus into our economy by continuing an emergency level of quantitative easing (QE) with asset purchases of $120 billion per month of Treasury securities and mortgage-backed securities.

    “The Fed has sustained $120 billion per month in asset purchases since June 2020, despite increasing vaccination rates to combat the virus and additional fiscal stimulus from Congress in the ARP.

    “The record amount of stimulus in the economy has led to the most inflation momentum in 30 years, and our economy has not even fully reopened yet.”


    Inflation Invites Danger!

    From newsletter writer Bill Bonner:

    Describing inflation as ‘just another tax’ is like saying an intentional famine is ‘just another diet program.’ Like other taxes, inflation takes wealth from some and gives it to others. But it is often fatal to the civil society that produces it.

    “How can you run a business when your costs change almost daily… and you have no idea what your receipts will be worth? How can you plan for retirement? How can you save money or make wealth-creating, long-term investments?

    “You can’t. As it runs its course, inflation staggers and discombobulates an economy. Eventually, though still not understanding how they are being ripped off, people get sick of it… and they welcome scoundrels in uniform who promise stability.”


    The Big Flim-Flam!

    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.

    US Debt

    More Dollar Debt

    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.

    Global Demand for Gold Coins and Bars Continues to Grow

    The World Gold Council reports that gold bar and coin demand for the 2021 April-May-June quarter grew by 56 percent over the same quarter a year earlier.

    For the quarter demand measured 243.8 tons.  

    Altogether bar and coin demand in the first half of this year was the strongest since 2013, at 594 tons.  In terms of total dollar value, it is the highest gold demand total since 2013.

    The second quarter saw gold demand from central banks reach 200 tons.  WGC cites large-scale purchases by Hungary, Thailand, and Brazil.  For the first half of 2021, central bank gold buying was 39 percent higher than the five-year average for the years’ first half and 29 percent higher than the ten-year first-half average.

    Gold demand for both jewelry and technological applications continues to recover from slower COVID lockdown levels.  For the second quarter, WGC reports:

    Jewelry demand (390.7t) continued to rebound from 2020’s COVID-hit weakness, although remained well below typical pre-pandemic levels, partly due to weaker Indian demand growth. Demand for H1, at 873.7 tons, was 17 percent below the 2015-2019 average… 

    Gold used in technology continued to recover from the 2020 lows: Q2 demand was 18 percent higher y-o-y at 80 tons – in line with average Q2 demand from 2015-2019 of 81.8 tons. H1 demand (161t) was fractionally above that of H1 2019 (160.6 tons).

    Gold outflows ETFs from the prior two quarters reversed to show modest inflows in the second quarter.  The price of gold ended the second quarter of this year higher than its January 2020 price in the dollar, euro, yen, yuan, and rupee.

    China gold buying spree

    China Serious About Gold

    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.

    how to invest in gold silver

    The Only Asset that Holds Its Value

    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.

    The Dollar’s ‘Sell By’ Date

    “The dollar is doomed!”  

    So says bond market guru Jeffrey Gundlach.

    Well, of course, it is.  

    Throughout history thousands of paper currencies and have come and gone, all failures eventually.  It is the common fate of fiat money, money that is decreed to have value by the state, the king, the central bank, or some other institution.

    Nobody ever has to decree that gold has value.  Its value is intrinsic.  That is why gold is the world’s go-to money in a crisis.  Politicians come and go. Monetary bureaucrats change places.  Governments rise and fall.

    But the value of gold and silver endures.

    As for the dollar’s long-term prospects, Gundlach, says “I don’t want to be overly dramatic, but I will use the word ‘doomed.’” 

    In a recent CNBC appearance, Gundlach pointed out that the Fed’s promise that inflation was only “transitory,” has been disproven. Originally, Fed officials suggested “transitory” meant one or two months.  ‘Now,” says Gundlach, “transitory is six to nine months.”

    “Jay Powell is still wishing, hoping, praying that this [inflation thing] goes way,” Gundlach said.  

    If Powell wants inflation to go away, all he has to do is stop the digital-dollar printing presses.  Just stop inflating.  But it still has the pedal to the metal.  The Fed is currently printing $120 billion a month, more than $1.4 trillion a year.

    Because the Fed doesn’t create any actual wealth – it doesn’t build any houses, bake any bread, or perform any labor – all the new dollars it creates can only take on value by depreciating the value of the dollars we have already.  Dollars of less value mean higher prices.

    And that, dear readers, is inflation.  

    Instead of wishing, hoping, and praying that inflation goes away, Chairman Powell should speak to us and learn how to protect himself and his wealth from the results of his own destructive policies.

    Meanwhile, with every turn of the Fed’s printing press, the dollar gets closer to its sell-by date.

    Bubble Spotting

    Three Financial Bubbles at Once is Playing with Fire!

    Jeremy Grantham has appeared in these comments several times over the years.  He is a co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO), a Boston-based investment firm with some $62 billion under management.

    Much of Grantham’s reputation and success rests on his track record of identifying speculative financial bubbles, among them Japan’s stock market bubble of the 1980s, the dot com bubble, and the housing bubble.

    In letters to GMO clients, Grantham has often wondered how such bubbles are missed. “I described it as being like watching a train wreck in very slow motion…. It’s more or less guaranteed that every time we get an outlying, obscure event that has never happened before in history, they are always going to miss it. And the three or four-dozen-odd characters screaming about it are always going to be ignored…”

    We wrote about Grantham’s latest bubble-spotting just last week.  Featured on the PBS Frontline documentary “The Power of the Fed,” Grantham said, “They [the Fed] have the housing market, the stock market and the bond market all overpriced at the same time, and they will not be able to prevent, sooner or later, the asset prices coming back down. So, we are playing with fire because we have the three great asset classes moving into bubble territory simultaneously.” 

    Now, thanks to a Reuters interview this month, we can share more of his insights about today’s precarious stock market bubble.  This, he says, “could well be the most important event of your investing lives.”

    When Do They Pop?:

    “Bubbles are unbelievably easy to see; it’s knowing when the bust will come that is trickier. You see it when the markets are on the front pages instead of the financial pages when the news is full of stories of people getting cheated when new coins are being created every month. The scale of these things is so much bigger than in 1929 or in 2000.”

    Today’s Stock Market Valuations:

    “Looking at most measures, the market is more expensive than in 2000, which was more expensive than anything that preceded it.

    “My favorite metric is price-to-sales: What you find is that even the cheapest parts of the market are way more expensive than in 2000.”

    What Pops the Bubble?

    “Markets peak when you are as happy as you can get, and a near-perfect economy is extrapolated into the indefinite future. But around the corner are lurking serious issues like interest rates, inflation, labor and commodity prices. All of those are beginning to look less optimistic than they did just a week or two ago….

    “What pricks the bubble could be a virus problem, it could be an inflation problem, or it could be the most important category of all, which is everything else that is unexpected. One of 20 different things that you haven’t even thought of will come out of the woodwork, and you had no idea it was even there.”

    What Will It Look Like When the Bubble Pops?

    “There will be an enormous negative wealth effect, broader than it has ever been, compared to any other previous bubble breaking. It’s the first time we have bubbled in so many different areas – interest rates, stocks, housing, non-energy commodities. On the way up, it gave us all a positive wealth effect, and on the way down it will retract, painfully….

    “But this bubble is the real thing, and everyone can see it. It’s as obvious as the nose on your face.”

    Isn’t it time to get some of your wealth off the bubble grid?  When the bubble pops there will be a stampede to the safe-havens of gold and silver.  We recommend you take advantage of today’s prices and beat the rush.

    Transitory

    The Fed insists inflation is transitory.  

    But what does that mean?  Well, it does not really say.  

    Month after month now inflation has been running hotter than expected.  Some of our friends and clients may remember Fed chairman Powell’s telling a Senate committee in February that inflation would not be a problem.

    But when the evidence of higher prices became impossible to ignore, the Fed tried a new dodge:  inflation is only transitory.

    We are not sure that is working now.  Last week Powell returned to the Senate and confessed that the Fed does not understand the prevailing inflation.

    After months of higher-than-expected inflation, we will tell you what is transitory:  the Fed’s credibility.

    It is not just we who say so.  Here are a few snippets of comments from members of the Senate Banking Committee during Powell’s latest appearance:

    Senator Bill Hagerty (Tennessee):

    “I’m very worried that the Fed’s continued level of asset purchases and balance sheet expansion is facilitating this runaway spending that the Democrats are imposing upon us, and adding to the inflationary pressures that these trillions of additional dollars are going to continue to add to our economy and continue to add to the debt that our children are going to continue to bear…”

    Senator Thom Tillis (North Carolina):

    “I’ve got to beat the inflation drum for just a minute here. The FOMC members insist inflation is transitory, but it hasn’t inspired a lot of confidence in me.”

    Senator Pat Toomey (Pennsylvania):  

    “The Fed’s policy is especially troubling because the warning siren for problematic inflation is getting louder. Inflation is here, and it’s more severe than most, including the Fed itself, expected….

    “For the third month in a row, the Consumer Price Index was higher than expectations. Core CPI… was up 4.5% in June; the highest reading in almost 30 years….

    “Now, the Fed assures us that this inflation is transitory, but its inflation projections over the last year have not inspired confidence. Last June, the Fed projected that PCE… would be 1.6% for the 12 months ending 2021. Then in December, the Fed raised that figure up to 1.8%. And how the Fed’s most recent PCE forecast for 2021 year-end is 3.4%.”

    As we have explained many times, like all unbacked, irredeemable fiat currencies, the US dollar is a confidence game.  When confidence begins to fail, the currency loses value, slowly at first and then accelerating.

    Confidence in the Fed’s policies is cracking like thin ice on a pond.  It is losing confidence not simply domestically among members of the political classes and the public, but internationally, too.

    Confidence is won by performance, honesty, and reliability.  For thousands of years and around the globe, no monetary unit has inspired more confidence than gold.  Unlike paper money, real gold is not corrupted by governments, central bankers, or politicians.

    No wonder that when confidence in the paper money begins to crack, gold represents the best possible alternative for wealth protection and profit.

    Has the Fed Gone Too Far? (Part II)

    “Money is gold, nothing else.” – JP Morgan

    In our last post we called your attention to a PBS Frontline documentary called “The Power of the Fed” that premiered on Tuesday, 7/13/2021.  

    We had no expectation that the program would provide a satisfactory critique of the Federal Reserve’s destructive activities.  For example, we did not hear a word about the Fed’s destruction of the dollar’s purchasing power.  Nor a word about gold, the money system upon which our free Republic was founded, the monetary system that would have precluded the Fed’s follies in the first place.

    So great are these oversights in the context of an examination of the Fed’s power, that we thought we may have missed something.  So, we pulled up the transcript and searched. 

    We had missed nothing.  

    The program’s focus was limited to the Fed’s tender affection for Wall Street and its undisguisable cronyism, run quite out of control with quantitative easing.

    Still, as we expressed in Part 1 of this commentary, we had no expectation of a thorough indictment of the Fed.  We thought instead that the program’s significance was that the Fed’s mal performance should be addressed at all on government television (remember that the Corporation for Public Broadcasting is a creature of Washington and survives on your tax dollars).

    So near are we to a reckoning for the Fed’s wanton money-printing and cronyism, that this show and other developments have us wondering whether “some of [the Fed’s] usual supporters may be scurrying away to avoid blame for the coming calamity.”

    With that said, HERE is a link for you to view the entire program.

    Before we leave the topic, we thought it would be valuable to provide you with a Viewers’ Guide to “The Power of the Fed,” by briefly identifying two of the commentators you will see in the film.  

    Neel Kashkari is the President and CEO of the Minneapolis Fed and is the Fed’s primary defender, Chairman Powell apparently being unwilling to appear.

    Kashkari misses the mark badly.  He is truly an idiot and we do not say that not lightly, but on good evidence.  He is incapable of seeing any link between the Fed’s interest rate manipulations that allow companies to borrow money for what amounts to not much more than a rounding error, and the explosion of corporate stock buybacks that the documentary finds so damning.

    Kashkari, working for Treasury secretary Hank Paulson, both from Goldman Sachs, oversaw the $700 billion Bush bailouts.  How did he arrive at that figure, $700 billion?  Kashkari pulled it out of the air.  He did the math right on his BlackBerry. “We have $11 trillion residential mortgages, $3 trillion commercial mortgages. Total $14 trillion. Five percent of that is $700 billion. A nice round number.”

    A nice round number?  And that is what passes for intellectual rigor at the Fed.

    No wonder people are scurrying away from the Fed.

    Kashkari does not mind at all that Fed policies are driving a wealth gap heretofore unseen.  If the One Percent, the very richest, are getting richer, says Kashkari, it is only a side effect of the Fed’s being so attentive to everybody else and their jobs.

    Right.

    But consider:  The Fed does not create any real wealth itself.  It does not bake any pies.  So, if Wall Streeters and banksters are getting richer, getting greater and greater slices of the wealth pie, it means that the rest are left with a smaller slice of the pie, a smaller share of real wealth. 

    And indeed, this is true.  The economic pie isn’t getting bigger at the rate it did before the Fed became today’s economic leviathan.  The more interventionist the Fed since leaving the gold standard, the more US GDP growth shrinks, decade after decade.

    Certainly, the wisest voice in the program is that of legendary investor Jeremy Grantham who sums up cronyism and distortion the Fed has wreaked on the economy this way:

    “In my career in America, the percentage of GDP that goes to finance has gone from 3 1/2 to 8 ½.  We’re—in a way we’re like a giant bloodsucker and we have more than doubled in size and sucking more than twice the blood out of the rest of the economy. And we do not generate any widgets. We do not generate any real increase in income. We are just a cost….

    “They [the Fed] have the housing market, the stock market, and the bond market all overpriced at the same time, and they will not be able to prevent, sooner or later, the asset prices coming back down. So, we are playing with fire because we have the three great asset classes moving into bubble territory simultaneously.

    All in all, it appears that we are awfully close to a meltdown from the Fed’s frenzied money-printing.  There is no bailout waiting in the wings for you when this happens.  You must take steps to protect yourself from a nuclear-scale monetary event.  Speak with a Republic Monetary Exchange gold and silver specialist about a protection portfolio for your wealth.